Second Circuit Clarifies ADA Obligations

Plaintiffs in this case, an individual disabled guest and a potential guest who discovered that the facilities were not sufficiently accessible to host a conference that she planned to sponsor, brought this action contending that when the co-operative corporations embarked on a program of renovating bathrooms and kitchens for the 2001 summer season, the corporations altered the facilities within the meaning of the ADA, and the alteration triggered accessibility requirements that the corporations did not satisfy. A federal district judge concluded that there was no evidence that the resort underwent any alteration after 1992, and the plaintiffs appealed.

What Is an Alteration?

In reversing, the Second Circuit first noted that the ADA does not expressly define the word “altered,” and then concluded that the factors relevant to determining whether a modification should be treated as an alteration include: 1) the cost of the modification relative to the size of the facility or relevant part thereof; 2) the scope of the modification; 3) the reason for the modification ' whether the modification was for maintenance or improvement; and 4) whether the modification affects only the facility's surfaces or whether it also affects structural attachments and fixtures. The court then indicated that plaintiff bears only the burden of identifying a modification and making a “facially plausible” demonstration that the modification is an alteration. The defendant, who has greater access to information about costs and feasibility, then bears the burden of proving that the modification is not an alteration.

As is often the case, however, the devil is in the details. When the court applied this standard to Royal Atlantic, it focused not on the individual units as a whole, but on the kitchens and the bathrooms ' the only areas of the units that were modified. The court pointed to minutes of a board meeting indicating that the bathrooms were to be gutted to the studs, and that each bathroom would cost $3,740. The court did not, however, compare that cost with the cost of the unit as a whole, nor did it compare the size of the bathroom with the size of the unit as a whole. By focusing on the narrowest possible definition of the facility modified, the court made it easy to conclude that the modification was great compared to the size and cost of the facility as a whole.

Accessibility

When a building has been “altered” within the meaning of the statute, the facility must be made accessible to the “maximum extent feasible.” On this issue, the Second Circuit concluded that cost is essentially irrelevant; the defendant is excused from the statutory requirement that the facility be made accessible only if accessibility would be “virtually impossible,” not if the cost would be prohibitively expensive. On this issue, once a plaintiff identifies some manner in which alteration could have been made readily accessible, the defendant bears the burden of proving that plaintiff's proposal would have been virtually impossible. The court indicated that the district court, on remand, should consider whether defendant has met that burden, but expressed serious doubts that Royal Atlantic could meet that burden.

Ownership Structure

The ADA does not require that every unit be made handicap accessible upon alteration of the facility. Instead, the court held that the Royal Atlantic could have satisfied its statutory obligation by assuring that a small percentage of the units were made wheelchair accessible. The resort argued, however, that in light of the proprietary leases, the co-op corporations lacked unilateral power to mandate that any particular unit be made accessible. The court rejected the argument, conceding that ownership structure might be considered in evaluating the feasibility of compliance, but concluding that it would be “a rare case where such limitations could excuse the ADA's accessibility requirement.”

The court noted that the co-op corporations could have made some units wheelchair accessible by offering to purchase units as they were offered for sale, by asking for volunteers, or by offering additional compensation to those who volunteered their units. That is, even within the existing ownership structure, it would have been feasible for the co-op corporations to comply with ADA requirements. The court never addressed what rules would have applied if the individual units had been held in condominium ownership, or if the proprietary lessees had made separate decisions to renovate their own bathrooms and kitchens, but the court's opinion at least suggests that ownership structure is not, by itself, a bar to application of ADA requirements. Roberts, then, serves as a cautionary tale for a large-scale owners that embark on significant renovation projects.

Stewart E. Sterk is Editor-in-Chief of this newsletter.

What building modifications trigger an obligation to comply with the accessibility requirements of the Americans with Disabilities Act (ADA)? The Second Circuit addressed that question in Roberts v. Royal Atlantic Corp., NYLJ 9/24/08, p.26, col. 1, and reached a number of important conclusions. First, the court held that in an action to enforce ADA accessibility requirements, the defendant bears the burden of proving that a modification is not an “alteration” within the meaning of the statute. Second, once a modification is treated as an alteration, the defendant bears the burden of proving that accessibility would not be technically feasible; high cost is not a defense. Finally, the court concluded that the ownership structure of a co-operative complex did not excuse the co-op from an obligation to make some number of units accessible.

The Roberts Case

The Royal Atlantic resort consists of 137 apartment units located in an 11-building complex in Montauk. Each unit has a bathroom and a small kitchen. Although the buildings all have two stories, none has an elevator. There are ramps leading from the parking lots to the buildings, but the ramps are too narrow to accommodate wheelchairs and are not ADA-compliant. The resort is organized as two distinct residential co-operative corporations. Although the two corporations own the buildings, they are bound by proprietary leases to shareholders, many of who rent out their units to members of the general public during the summer.

Plaintiffs in this case, an individual disabled guest and a potential guest who discovered that the facilities were not sufficiently accessible to host a conference that she planned to sponsor, brought this action contending that when the co-operative corporations embarked on a program of renovating bathrooms and kitchens for the 2001 summer season, the corporations altered the facilities within the meaning of the ADA, and the alteration triggered accessibility requirements that the corporations did not satisfy. A federal district judge concluded that there was no evidence that the resort underwent any alteration after 1992, and the plaintiffs appealed.

What Is an Alteration?

In reversing, the Second Circuit first noted that the ADA does not expressly define the word “altered,” and then concluded that the factors relevant to determining whether a modification should be treated as an alteration include: 1) the cost of the modification relative to the size of the facility or relevant part thereof; 2) the scope of the modification; 3) the reason for the modification ' whether the modification was for maintenance or improvement; and 4) whether the modification affects only the facility's surfaces or whether it also affects structural attachments and fixtures. The court then indicated that plaintiff bears only the burden of identifying a modification and making a “facially plausible” demonstration that the modification is an alteration. The defendant, who has greater access to information about costs and feasibility, then bears the burden of proving that the modification is not an alteration.

As is often the case, however, the devil is in the details. When the court applied this standard to Royal Atlantic, it focused not on the individual units as a whole, but on the kitchens and the bathrooms ' the only areas of the units that were modified. The court pointed to minutes of a board meeting indicating that the bathrooms were to be gutted to the studs, and that each bathroom would cost $3,740. The court did not, however, compare that cost with the cost of the unit as a whole, nor did it compare the size of the bathroom with the size of the unit as a whole. By focusing on the narrowest possible definition of the facility modified, the court made it easy to conclude that the modification was great compared to the size and cost of the facility as a whole.

Accessibility

When a building has been “altered” within the meaning of the statute, the facility must be made accessible to the “maximum extent feasible.” On this issue, the Second Circuit concluded that cost is essentially irrelevant; the defendant is excused from the statutory requirement that the facility be made accessible only if accessibility would be “virtually impossible,” not if the cost would be prohibitively expensive. On this issue, once a plaintiff identifies some manner in which alteration could have been made readily accessible, the defendant bears the burden of proving that plaintiff's proposal would have been virtually impossible. The court indicated that the district court, on remand, should consider whether defendant has met that burden, but expressed serious doubts that Royal Atlantic could meet that burden.

Ownership Structure

The ADA does not require that every unit be made handicap accessible upon alteration of the facility. Instead, the court held that the Royal Atlantic could have satisfied its statutory obligation by assuring that a small percentage of the units were made wheelchair accessible. The resort argued, however, that in light of the proprietary leases, the co-op corporations lacked unilateral power to mandate that any particular unit be made accessible. The court rejected the argument, conceding that ownership structure might be considered in evaluating the feasibility of compliance, but concluding that it would be “a rare case where such limitations could excuse the ADA's accessibility requirement.”

The court noted that the co-op corporations could have made some units wheelchair accessible by offering to purchase units as they were offered for sale, by asking for volunteers, or by offering additional compensation to those who volunteered their units. That is, even within the existing ownership structure, it would have been feasible for the co-op corporations to comply with ADA requirements. The court never addressed what rules would have applied if the individual units had been held in condominium ownership, or if the proprietary lessees had made separate decisions to renovate their own bathrooms and kitchens, but the court's opinion at least suggests that ownership structure is not, by itself, a bar to application of ADA requirements. Roberts, then, serves as a cautionary tale for a large-scale owners that embark on significant renovation projects.

Stewart E. Sterk is Editor-in-Chief of this newsletter.