Modifications and ongoing maintenance required to meet the Americans with Disabilities Act (ADA) standards for accessibility in commercial buildings. ADA-related costs may include ramp installations, restroom modifications, signage updates, and parking space striping.
ADA compliance in commercial real estate covers Title III requirements for places of public accommodation, including accessible routes, door hardware, restroom fixtures, signage with Braille, parking space count and dimensions, ramp grades, and elevator accessibility. Routine ADA maintenance (restriping accessible parking, replacing tactile signage) is an operating expense. Major barrier removal projects and structural accessibility retrofits are capital expenditures. Lease language varies on who bears ADA costs: some leases assign them entirely to the landlord, others pass them through CAM.
A landlord retrofitted the building entrance and parking lot for ADA compliance at a cost of $180,000. The full amount was included in CAM as "compliance maintenance." Under the tenant's lease, structural modifications for code compliance were the landlord's sole responsibility and explicitly excluded from pass-through expenses.
Check your lease for language about who bears code compliance costs. Many leases exclude government-mandated capital improvements from CAM. If ADA retrofit costs appear on your reconciliation, verify whether your lease permits the landlord to pass them through and whether the amount should be amortized.
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