By Minh N. Vu

Owners of commercial facilities and developers of multifamily housing should take note of an alarming trend:  Some courts are not allowing owners and developers to sue their architects and consultants for designing facilities that do not comply Americans with Disabilities Act (ADA) and Fair Housing Act (FHA) accessibility requirements.

The most recent case on this subject is Rolf Jensen & Assocs. v. Dist. Ct., 282 P.3d 743 (Nev. 2012).  The casino owner sued its ADA consultant under their contract and state law after the Justice Department required the owner to make more than $20 million in retrofits to comply with ADA requirements.  The Nevada Supreme Court dismissed the owner’s claims, finding that allowing these claims to move forward would frustrate the objectives of the ADA.  The court said that allowing an owner to “completely insulate itself” from liability for an ADA or FHA violation by contract or through state common law principles would diminish an owner’s incentive to ensure compliance.  The court emphasized that owners have a non-delegable duty to comply with these statutes that cannot be shifted to third parties.  Although the court did acknowledge that the ADA explicitly allows landlords and tenants to allocate responsibility for violations among themselves, it viewed this explicit exemption as further proof that there was no Congressional intent to allow such allocation between owners and architects/designers.

The Federal Court of Appeals for the Fourth Circuit reached the same conclusion in Equal Rights Ctr. v. Niles Bolton Assocs., 602 F.3d 597 (4th Cir. 2010).  The multifamily housing developer there sued the architect of 15 apartment communities which needed over $2.5 million in retrofits to comply with ADA and FHA requirements.  The Fourth Circuit dismissed all of the owner’s claims against the architects under the same theory that the Nevada Supreme Court adopted.  Federal district courts in Maryland, Mississippi and Tennessee have also dismissed claims by owners against their architects applying the same rationale.

While courts in many jurisdictions have yet to address this issue, property owners may want to rethink how they draft their contracts.  For example, alternative provisions that would require design professionals to share in the responsibility of a non-compliant design — as opposed to assuming all of it under an full indemnification provision — might give owners more options for recourse.  (The primary rational for rejecting the owners’ claims in the Rolf Jensen and Equal Rights Ctr. cases was the fact that enforcing the owners’ contractual rights would shift all responsibility for non-compliance to architects and/or consultants).

In addition to rethinking the contract, these disturbing court decisions also make clear that property owners cannot passively rely on their design professionals to get it right.  We often remind our clients that if all architects actually knew how to design to the federal accessibility standards, we would have very little work to do.  The level of understanding of federal accessibility requirements among design professionals varies greatly.  Thus, it is important for owners to be proactive about accessibility issues.  Designating a point person to oversee accessibility compliance for an entire project, asking the right questions to make sure accessibility is being considered, having plans reviewed by an independent and reputable accessibility specialist, and doing as-built accessibility inspections as soon as the project is completed are some of the ways to achieve this result.  Doing nothing on the front end may prove to be quite – unexpectedly – costly on the back end.