There is no better time and place for a sales pitch than when prospective home buyers are examining the model unit. However, this sales approach in the model home may leave developers vulnerable to the slew of litigation that has been rampant in the Central Valley for the past few years.
This article serves as a warning to those developers using model homes simultaneously as product and sales office, to make sure the model home is in compliance with the requirements for public accommodations in the Americans with Disabilities Act ("ADA").
When the ADA Applies to Model Homes
The ADA prohibits discrimination on the basis of disability "in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation"1.
The categories of facilities qualifying as "public accommodations" under Title III of the ADA are to be construed liberally so as to afford people with disabilities equal access to the wide variety of establishments available to the non-disabled.2 For our purposes, and in pertinent part, the ADA's definition of public accommodation, includes a "sales or rental establishment."
Although "model homes" are not expressly listed in the ADA's definition, the Department of Justice, the agency charged with promulgating regulation under the ADA,3 has explicitly stated that model homes come within the crosshairs of the ADA, under the term "other sales or rental establishment," if used as both a model home and sales office.4 This is true even if only one room in the model home is used as a sales office, if sales efforts are conducted onsite, and regardless of whether or not the model unit will ultimately be sold as a private residence.5
Even if no sales are actually conducted inside the model home, the ADA regulations will apply where a sales representative is present in the model home, he or she approaches prospective purchasers inside the model home, and information about the housing development is kept inside the model home.6 The courts have found that these sales activities occurring inside the model home are sufficient to categorize the model home-turned-sales office as a place of public accommodation, even though no actual sales or transactions occurred within and even if a separate sales office exists7.
Compliance Is Necessary to Avoid the Harsh Penalties for ADA Violations
The remedies available under the ADA vary according to the claims alleged, and are more frequently discussed in an employment context where the discriminated employee is permitted to receive back pay, front pay, attorney's fees, compensatory and punitive damages.8 Outside the employment context, a plaintiff's remedies, absent a physical injury attributable to the non-ADA complaint facility, are limited to an injunction mandating the facility's compliance with the requirements of the ADA and the plaintiff's attorney's fees.9 However, certain states, including California, have enacted legislation granting plaintiffs monetary awards from defendants for ADA violations, and thereby providing an incentive to pursue excessive litigation.
For example, California's Unruh Civil Rights Act entitles plaintiffs to receive a minimum of $4,000 to a maximum of three times the amount of actual damages for each violation of their rights under the ADA plus attorney's fees10. The threat of these mandatory minimums, and of paying the plaintiff's attorneys' fees under a statute that does not depend on any showing of fault, has brought about an exponential increase in ADA litigation in states like California, Hawaii, Illinois and Florida.11
The requirements of the ADA are numerous and complex. The money
remedies and defense costs for such suits make prevention vitally
important. Developers, especially in those states (like California)
that allow suits for monetary awards, who conduct any sales
activity inside the model units would benefit from a consultation
with and/or inspection by a Certified Access Specialist
("CASp"). A CASp inspection will identify all areas
inside and outside the model home that need to be brought into
compliance. For those in the Central Valley, Lars Andersen &
Associates, Inc. is a good choice. Alternatively, strict separation
of sales activities from the model homes is essential.
Footnotes
1. 42 U.S.C. § 12182(a).
2. Bauer v. Muscular Dystrophy Ass'n, Inc. (D. Kan., 2003) 268 F.Supp.2d 1281.
3. Tatum v. Nat'l Collegiate Athletic Ass'n (E.D. Mo., 1998) 992 F.Supp.1114.
4. Sapp v. MHI Partnership, LTD (N.D. Tex., 2002) 199 F.Supp.2d 578, 586.
5. Id.
6. Id.
7. Id.
8. (ADA Title I).
9. (ADA Title III).
10. Cal. Civ. Code § 52(a).
11. Stateman, Alison (December 29, 2008). "Lawsuits by the Disabled: Abuse of the System?". TIME. http://www.time.com/time/nation/article/0,8599,1866666,00.html. Retrieved 2010-09-14.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.