As 2013 winds to an end, it’s once again time to review a couple of the newer laws in construction:

Changes regarding ADA accessibility:  Beginning in July 1, 2013, California commercial leases and rental agreements must include a disclosure regarding whether the property being leased has been inspected by a Certified Access Specialist (CASp) and, if a CASp inspection has occurred, whether the property being leased has met all construction-related accessibility standards under current law.  A CASp refers to any person who has been certified pursuant to Section 4459.5 of the California Government Code.

Changes regarding Retention Fees:  Retention is a tool that allows a project owner to withhold some payment to contractors until the entire project is complete and a certificate of completion or certificate of occupancy has been granted by the local authorities. In the past, the “normal” retention fee for contractor’s work was approximately 10%. The new law, California Public Contract Code Section 7201, provides new limits on retention, including five percent of any payment and an overall cap on total retention of five percent of the contract price.

Make sure you check the State of California website: for all the new laws that affect your particular business.

Beginning July 1, 2013, two new disclosure requirements take effect for California Real Estate Transactions:

  1. California Civil Code Section 1938 requires that leases for ALL commercial properties entered into on or after July 1, 2013 state whether the subject premises has been inspected by a “Certified Access Specialist” and if so, whether the property has or has not been determined to meet all applicable construction related accessibility standards pursuant to California Civil Code Section 55.53.California Civil Code Section 55.53, et seq., addresses the role of the Certified Access Specialist, including the preparation of a written assessment of whether the assessed site meets all applicable construction-related accessibility standards or if corrective actions are required. Such assessment will hopefully curtail construction related accessibility lawsuits (including claims alleging violations of the Americans with Disabilities Act) as such written assessments would serve as evidence of compliance (or non-compliance) with applicable accessibility laws.
  2. New Mandatory Energy Use Disclosure Requirements: Nonresidential Building Energy Use requirements set forth in California Public Resources Code Section 25402.10 which require all owners who are going to sell, lease, or finance “Nonresidential Buildings” which are 50,000 square feet or more located in California to disclose the property’s energy use data for the most recent 12 months. Similar disclosure requirements for smaller properties will take effect in 2014.

Compliance schedule:

  • July 1, 2013: Buildings with a total floor area exceeding 50,000 square feet.
  • January 1, 2014: Buildings with a total floor area measuring more than 10,000 square feet, but not more than 50,000 square feet.
  • July 1, 2014: Buildings with a total floor area measuring at least 5,000 square feet, but not more than 10,000 square feet; buildings with a total floor area measuring less than 5,000.

What it means to you:

  • More red tape: Additional mandatory disclosure requirements in selling, leasing, or obtaining financing.
  • More potential liability: The failure to make such disclosures could be the source of potential claims by buyers, tenants, and lenders.
  • Additional due diligence/value measure: New system allows buyers to compare a building’s energy consumption and efficiency should prompt prudent owners to evaluate how they may make their building more “competitive” and prudent buyers to review this as part of their due diligence and number-crunching.
  • Risk of Delay: Failure to commence the disclosure process well in advance of the transaction could result in closing delays.

At the end of each year, it’s always a good idea to review the newest rules and regulations that become effective in January.

One such regulation that takes effect in January 2013 is The California Energy AB 1103, which requires the owner of a non-residential property with California, in advance of certain financial transactions, to benchmark the building’s energy use using the U.S. EPA Portfolio Manager system and to disclose statements of the building’s energy usage to potential buyers, lessees, and lenders.

Make sure you check the State of California website: for all the new 2013 laws that affect your particular business.

2012 has been one of our busiest in the last few years, and we take it as a promising sign that things are finally starting to turn around in the real estate market.

We look forward to working with you and your clients next year and for many years to come.

Best wishes for good health, happiness, and prosperity in the coming year.

With over $580,000 in work scheduled for the next few weeks, we are doing everything from a substantial remodel project at 439 College Avenue for Santa Rosa Memorial Hospice – to ADA repairs on Santa Rosa Avenue – to Medical & Business Office remodels.

If you are thinking about remodeling or making repairs, now is the time to get it on the schedule books. We can work up an estimate and schedule the work to be done.