MARCH 26, 2015

OFF ON THE RIGHT FOOT: SEVEN STEPS TO A

SUCCESSFUL OFFICE LEASE March 26, 2015

216 Park Road, Burlingame, California 94010(650) 342-9600

carr-mcclellan.com

MARCH 26, 2015

Off on the Right Foot - Seven Steps to a Successful Office Lease

Presentation to Association of Corporate Counsel

March 26, 2015

Redwood City, CA

The San Francisco Bay Area office market is booming and there is increasing pressure to lock down space quickly. It can be overwhelming for tenants to evaluate possible premises and associated economic deal terms and finalize a lease. This engaging workshop will provide practical guidance to in-house counsel on how to navigate through the commercial real estate lease process. Topics to be covered will include the current state of the San Francisco Bay Area office leasing market, assembling the leasing team, letters of intent, due diligence checklists regarding feasibility of premises for tenant’s proposed use, ensuring data security/privacy, and effective use of brokers and outside counsel.

Introduction

1. Broker’s Point of View – State of the Market

2. Feasibility/Due Diligence

3. Identify the Key Decision Makers in the Leasing Process

4. Letters of Intent

5. Condition of Premises

6. Interplay Between Rent Commencement and Construction of Tenant Improvements

7. Security Access

Exit Strategies – Preview of Next Leasing Workshop

MARCH 26, 2015

KEY EXPERTISE

Office Leasing

Investment

Tenant Representation

ACADEMIC CREDENTIALS

University of California, Los Angeles

Joining the San Francisco Peninsula office of Avison Young in September 2013, Tim brings 35 years of experience in marketing, branding, design consulting, leasing and selling office properties throughout California. Tim is highly valued as both a Landlord and Tenant representative providing

perspective and knowledge from both sides of the table to assist his clients in achieving their goals. His extensive background and close attention to detail allows Tim to provide a full suite of services including:

› Strategizing and implementing creative solutions for both emerging and established occupiers

› The creation and follow through of marketing programs for existing office product, sublease opportunities as well as ground-up major office developments

› Repositioning institutional grade assets to maximize utilization, income and/or disposition

Prior to joining Avison Young, Tim was a Senior Vice President with CBRE in two markets. He was an office market leader in Ventura County, CA from 1981 to 1997 when he then relocated to the San Francisco Peninsula market. Since that time, Tim has leased 5 million square feet and conducted $1.7 billion in total lease and sale transactions on the Peninsula. Tim began his career leasing office product in Newport Beach and Irvine from 1978 to 1981.

TIM GRANTSENIOR VICE PRESIDENT, AVISON YOUNG

MARCH 26, 2015

KEY AREAS

Multi-million dollar commercial leases, subleases, assignments, ground leases and licenses (domestic and international)

Commercial real estate acquisitions and dispositions

Business entity formation

Tax-deferred (1031) exchanges

Real estate financing and opinion letters

Broker agreements

Options, CC&Rs, easement agreements, rights of first refusals

Insolvency and bankruptcy

Workouts

INDUSTRIES

Financial services

ACADEMIC CREDENTIALS

J.D., University of California, Los Angeles

B.A., summa cum laude, University of California, San Diego, Phi Beta Kappa

ADMISSIONS

All California state courts

CIVIC AND CHARITABLE

Caminar, Vice President & Board Member

Second Harvest Food Bank, Board Member, Program & Services Committee Member

“My approach to practicing law always starts with my client’s goals. Then I find a way to achieve those goals through the law.”

For years, clients have come to Jennifer Johnson to seek counsel from one of

the most sophisticated and effective real estate and bankruptcy attorneys in the Bay Area. Her clients appreciate how she brings an efficient, responsive and business-oriented approach to resolving their problems. With a personal touch and commitment to client service, Jennifer makes each of her clients feel like they are her only client.

Jennifer is privileged to enjoy long-term business relationships with her clients, who include Fortune 100 and Fortune 500 companies, investment funds, established non-profit corporations, developers, local businesses, entrepreneurs and investors.

Jennifer is an expert in leasing and has represented both landlords and tenants in office, industrial, mixed-use, grocery store, retail, medical and shopping center leases. She is one of few leasing lawyers who have an international leasing expertise, and she has helped her clients lease space and expand their presence around the world, including in Australia, Canada, England, Poland, South Africa and Turkey.

With a sub-specialty in insolvency law, Jennifer offers her clients a one-of-a-kind bankruptcy and workout perspective to her real estate transactions. This background informs her real estate transactions, specifically leasing transactions. In addition, she represents creditors and trustees in bankruptcy cases and related adversary proceedings.

REPRESENTATIVE MATTERS › Served as primary real estate counsel to Fortunate 500 company in multi-million dollar Class A office leasing and subleasing both domestically (in all states such as California, Florida, Florida, Utah, New York and New Jersey)

JENNIFER C. JOHNSONDIRECTOR

MARCH 26, 2015

and internationally (in countries such as England, Poland, Australia, Canada, Turkey and South Africa)

› Represented multi-state bank with over 700 branches to sell over $100 million in commercial properties in the last two years. Properties included vacant land, office properties, apartment buildings, retail space, industrial facilities and medical condominiums.

› Represented Bay Area investment fund in acquiring and financing over $40 million of properties throughout the United States, including the purchases of retail malls and an office building in Seattle.

› Represented local grocery store and multi-state grocery chain in leasing and subleasing of its stores, including licenses for use of space within the stores.

› Consummated over $100 million of 1031 exchanges for high net-worth individuals. The purchase and sale of these properties are located all throughout the US, from California to Utah, Florida and beyond.

› Served as bankruptcy advisor and strategist for local public authority in developing high-profile property in the Bay Area.

› Represented landlord of a ground lease in the Borders bankruptcy case to prosecute and settle a dispute concerning a contingent proof claim and achieve expeditious rejection of lease.

› Successfully defended multi-million dollar adversary proceedings on behalf of creditors (such as a Fortune 100 telecommunications company), including fraudulent transfer and preference actions, resulting in settlements for pennies on the demand or a full dismissal of all claims.

PROFESSIONAL ORGANIZATIONS › California Women Lawyers, Board of Directors › Santa Clara Bar Association, member of the Executive Committee of the Women Lawyers’ Section

COURTS AND FORUMSAll California State Courts

PUBLICATIONS › Top Five Leasing Tips for Technology Companies (05/05/14) › The “Google Effect:” How High-Tech Companies Are Impacting Building, Architecture and Design (04/30/13)

› Liquidated Damages In Residential Real Estate Transactions: A Trap For The Unwary (06/01/11)

MARCH 26, 2015

PRACTICE AREA

Real Estate

ACADEMIC CREDENTIALS

M.A., University of California, Los Angeles, U.S. History (with an emphasis on Native American, Gender & Legal Studies), 1993

J.D., University of Pennsylvania Law School, Philadelphia, Pennsylvania, 1986 (Articles Editor, University of Pennsylvania Journal of Capital; Market and Comparative Business Law, 1984-1986)

B.A., Dartmouth College, Hanover, NH, U.S. History (Minor in Women’s Studies), 1983

CIVIC AND CHARITABLE

Volunteer, Humane Society Truckee-Tahoe, Truckee, CA

Jo Ann is an experienced commercial real estate leasing lawyer who undertakes complex real estate lease transactions for large institutional landlords as well as retail, life science and high-tech tenants. Her clients include large institutional landlords, high tech companies and small retail

tenants. Jo Ann routinely prepares a wide range of lease documents including industrial, office and retail leases, form leases, amendments, lease modifications, assignments, subleases, estoppel certificates, landlord lien waivers and SNDAs.

REPRESENTATIVE MATTERS › Drafted and negotiated leases and related lease documentation for institutional landlords controlling over 2,000,000 square feet of industrial, office and retail space throughout California

› Negotiated lease (on behalf of Landlord) with a national retailer in downtown Berkeley

› Negotiated lease for an extended warranty service provider for consumer electronics for its new headquarters located in the SOMA district of San Francisco

› Headed complex sublease negotiations for new Mission Bay headquarters (over 100,000 square feet of space) for a large life sciences company

› Negotiated multiple leases for artisan coffee roaster and retailer throughout California and in New York City

› Handled all aspects of initial leasing of Ford Point, Richmond, CA (former Ford Motor Company factory).

PROFESSIONAL ORGANIZATIONS › International Council of Shopping Centers › Queen’s Bench › The Club: An Incubator of Women Leaders › Crew (Commercial Real Estate Women) › American Business Women’s Reno Tahoe Express Network

ADMISSIONS › California Bar

JO ANN WOODSUMSENIOR COUNSEL

MARCH 26, 2015

KEY EXPERTISE

Real Estate Litigation

Partnership and shareholder disputes

Government law

Appeals

PRACTICE AREAS

Business & Corporate

Business Litigation

Real Estate

ACADEMIC CREDENTIALS

J.D.,University of Virginia Editorial Board, Virginia Law Review Order of the Coif

B.A., Denison University

CIVIC AND CHARITABLE

San Mateo-Foster City School Board

San Mateo County Committee on School Distric Organization

Burlingame Downtown Specific Plan Citizen, Advisory Committee

San Mateo Superior Court Arbitration Panel

HONORS AND AWARDS

AV® Preeminent™ Martindale-Hubbell

Selected to the 2008 Northern California Super Lawyers® list for Land Use Planning

“When a new matter comes in, my first thoughts are, What is the best, realistic outcome for the client? How can we get there efficiently? What point of law could decide the case? Only after due consideration of these

questions can our representation begin.”

Mark Hudak is a seasoned litigator who for 30 years has helped clients resolve their disputes in court, in arbitration and in mediation. His practice is focused on real estate litigation and disputes between business owners, and he brings his significant expertise to each matter to develop creative, effective solutions.

Mark works closely with the firm’s Real Estate Group on land use and planning matters. He appears frequently before city councils and planning commissions. Mark is the Assistant City Attorney for Hillsborough and General Counsel to Sequoia Healthcare District.

REPRESENTATIVE MATTERS › Recovered $4.3 million stolen from §1031 exchange accounts. › Won a jury verdict in favor of his clients in a toxic contamination case.

› Defended Hillsborough against a challenge to its General Plan and permit approvals for a new gymnasium at a private school.

› Obtained the reversal of a judgment against the seller of a mobile home park.

› Successfully defended a real estate partnership in a dissolution action.

› Obtained approvals for renovations and additions to a historic commercial building.

› Won an arbitration award against a former partner for breach of noncompetition provision.

PROFESSIONAL ORGANIZATIONS › State Bar of California › San Mateo County Bar Association › Litigation Counsel of America, Fellow

MARK D. HUDAKDIRECTOR

MARCH 26, 2015

DUE DILIGENCE CHECKLIST

MARCH 26, 2015

1. Premises

› Condition of Premises › Building operating systems in good operating condition › Path of travel/other ADA issues › What is the rentable square footage? › What is the load factor? › BOMA measurement › Does Tenant have a remeasurment right ? 2. Permitted Uses of the Premises

› Any zoning concerns › Density concerns 3. Utilities:

› Is the electrical capacity sufficient for tenant’s needs › If leasing an entire building, has landlord provided you with historical utility date pursuant to Section 25402.10 of the California Public Resources Code (see attached, Handout 1A) › Direct supply or individually metered? › Method of computing payment? › What are the building operation hours? › What are after-hours charge for HVAC? › Can HVAC support required density? › Availability of internet/telephone service & providers 4. Security:

› What types of building security are offered? › Is there roaming security in the parking lot/garage/common areas?

COMMERICAL LEASE PREMISES DUE DILIGENCE CHECKLIST

MARCH 26, 2015

5. Compliance With Law:

› ADA inspection of premises – any concerns with regard to path of travel? Accessibility to premises? › Title 24 – New Energy Efficiency Requirements (see attached, Handout 1B & Handout 1C) › Will landlord warrant that the premises are in compliance with applicable law? › If tenant is obligated to comply with applicable law, does it exclude matters that should more properly be the responsibility of the landlord (e.g., asbestos problems, disability access)? › Is landlord obligated to comply with all laws applicable to its control of the building?

6. Signage:

› What signage is the tenant allowed to put in or about the building and premises? › Any monument signage › Exterior rooftop building signage

7. Amenities:

› What amenities are offered? › Is there a charge for any of the amenities? › If amenities are under construction – what is time for completion › Are the finishes of such amenities sufficiently described 8. Parking:

› How many parking spaces will be available to the tenant? › At what cost? › Any reserved spots? › Does tenant want parking spaces in a particular location › Validated parking for clients/invitees

MARCH 26, 2015

NONRESIDENTIAL BUILDING

ENERGY USE DISCLOSURE PROGRAM

California Energy Commission

REGULATIONS

NON RES I D ENTlWiB U l~td'i~~\\~fi~~hv :~~ usE DISCLosuR~'PRoGrii~~~?tl :f~.i~

CALIFORNIA ENERGY COMMISSION OCTOBER 2013

Edmund G. Brown Jr.1 Governor CEC-400-2010-004-CMF-REV

CALIFORNIA ENERGY COMMISSION

Justin Regnier Project Manager/Mechanical Engineer

Craig Hoellwarth Supervisor

Eurlyne Geiszler Office Manager High Performance Buildings and Standards Development Office

Dave Ashuckian Deputy Director Efficiency and Renewable Energy Division

Robert Oglesby Executive Director

DISCLAIMER

Staff members of the California Energy Commission prepared this report. As such, it does not necessarily represent the views of the Energy Commission, its employees, or the State of California. The Energy Commission, the State of California, its employees, contractors, and subcontractors make no warrant, express or implied, and assume no legal liability for the information in this report; nor does any party represent that the uses of this information will not infringe upon privately owned rights. This report has not been approved or disapproved by the Energy Commission nor has the Energy Commission passed upon the accuracy or adequacy of the information in this report.

Nonresidential Building Energy Use Disclosure Program

California Code of Regulations Title 20. Public Utilities and Energy

Division 2. State Energy Resources Conservation and Development Commission Chapter 4. Energy Conservation

Article 9. Nonresidential Building Benchmarking and Disclosure Sections 1680-1684

October 18, 2013

Section 1680. Purpose

This article implements procedures, pursuant to Public Resources Code Section 25402.10, for disclosing energy use data and ENERGY STAR® Scores for nonresidential buildings in California.

Note: Authority cited: Sections 25213, 25218(e), 25402.10, Public Resources Code. Reference: Section 25402.10, Public Resources Code.

Section 1681 . Definitions

The following definitions apply to this article:

(a) "Building Owner" means a person possessing title to a nonresidential building, or an agent authorized to act on behalf of a person possessing title.

(b) "Data Verification Checklist" means a report generated by Portfolio Manager that summarizes a property's physical and operating characteristics.

(c) "Energy Provider" means an entity providing sources of energy other than electricity or natural gas that are recognized by Portfolio Manager.

(d) "ENERGY STAR® Score" means an energy efficiency measurement created by Portfolio Manager, represented on a scale from 1 to 100 and normalized for a building's characteristics, operations, and regional weather.

(e) "Energy Use Data" means a record of kilowatt hours, therms, or any other measure of energy recognized by Portfolio Manager.

(f) "Nonresidential Building" means a building of occupancy type A, B, E, I-1, I-2, M, R1, S, or Type U parking garages, as defined in the California Building Code, Title 24, Section 302 et seq. (2007).

(g) "Portfolio Manager" means the U.S. Environmental Protection Agency's ENERGY STAR® program online tool for managing building energy use data.

(h) "Prospective buyer" means a person who has submitted a written offer to purchase a building.

1

(i) "Prospective lessee" means a person who has submitted an application to lease an entire building.

(j) "Prospective lender" means a person who has received an owner's application to finance an entire building.

(k) "Utility" means an entity providing electricity or natural gas to a nonresidential building owner or tenant.

Note: Authority cited: Sections 25213, 25218 (e), 25402.10, Public Resources Code. Reference: Sections 25402.10, Public Resources Code.

Section 1682. Schedule of Implementation

A building owner shall comply with this article according to the following schedule:

(a) On and after July 1, 2013, for a building with total gross floor area measuring more than 50,000 square feet.

(b) On and after January 1, 2014, for a building with a total gross floor area measuring more than 10,000 square feet and up to 50,000 square feet.

(c) On and after July 1, 2014, for a building with a total gross floor area measuring at least 5,000 square feet and up to 10,000 square feet.

Note: Authority cited: Sections 25213, 25218(e), 25402.10, Public Resources Code. Reference: Section 25402.10, Public Resources Code.

Section 1683. Disclosure&

(a) A building owner shall disclose the Data Verification Checklist for the building to:

(1) A prospective buyer of the building, no later than 24 hours prior to execution of the sales contract.

(2) A prospective lessee of the entire building, no later than 24 hours prior to execution of the lease.

(3) A prospective lender financing the entire building, no later than submittal of the loan application.

(b) Nothing in these regulations permits an owner to use tenant energy use data for purposes other than compliance with Public Resources Code, Section 25402.10.

(c) A building owner may supplement the above disclosure with forms from other sources, such as the ASTM International (formerly known as the American Society for Testing and Materials) checklist E2797 -11 (2011 ), the Standard Practice for Building Energy Performance Assessment for a Building Involved in a Real Estate Transaction.

2

Note: Authority cited: Sections 25213, 25218(e), 25402.10, Public Resources Code. Reference: Section 25402.10, Public Resources Code.

Section 1684. Data Releases, Report

(a) At least 30 days before a disclosure is required by Section 1683, a building owner shall open an account or update an existing account for the same building on the EPA's ENERGY STAR® program Portfolio Manager website, and within the account:

(1) Provide the owner name and the owner e-mail address; (2) Provide the building name, the building street address, city and ZIP code, and

the year in which the building was constructed; (3) Identify all sources of energy use data for the entire building, for at least the most

recent 12 months; (4) Provide space use characteristics as specified by Portfolio Manager for all space

types in the entire building; and (5) Request all utilities and energy providers serving the building to release energy

use data for the entire building from at least the most recent 12 months for specified meters or accounts to the owner's Portfolio Manager Account; or, the owner may manually enter all energy use data for the entire building from at least the most recent 12 months to the owner's Portfolio Manager account.

(b) As soon as practicable and no later than 30 days after receiving a request under subdivision (a) of this section, a utility or energy provider shall upload all energy use data for the entire building from at least the most recent 12 months for the specified meters or accounts to the building owner's Portfolio Manager Account. If a building has a utility or energy provider account for which the owner is not the customer of record, the utility or energy provider shall aggregate or use other means to reasonably protect the confidentiality of the customer. A utility or energy provider may verify a request or ask for clarification before releasing data.

(c) After all utilities and energy providers serving a building have complied with subdivision (b) of this section, and before the disclosure required pursuant to Section 1683, the building owner shall generate the building's Data Verification Checklist from Portfolio Manager and electronically submit the Data Verification Checklist to the Energy Commission. The Data Verification Checklist shall expire 30 days after it is generated.

(d) In the event that the Energy Commission accesses the data submitted pursuant to subdivision (c) of this Section, the Energy Commission shall treat the data as confidential consistent with state and federal laws.

(e) If there is information missing from a disclosure, and if the owner has made a reasonable effort to ascertain the missing information, the owner may then use an

3

approximation of the information, provided that the approximation is identified as such, is reasonable, is based on the best information available to the owner, and is not used for the purpose of circumventing or evading this article.

Note: Authority cited: Sections 25213, 25218(e), 25402.10, Public Resources Code. Reference: Sections 25216.5(d), 25320, 25402.10, Public Resources Code.

4

MARCH 26, 2015

SAN FRANCISCO GREEN BUILDING CODE

San Francisco Green Building Code I sfenvironment.org- Our Home. Our City. Our Planet Page 1 of2

San Francisco Green Building Code Topics

Buildings &

Environments

lhttp://www.sfenvironment.ar

g/buildings-environments\

Green Building lhttp·l!wwwsfenvironmen

t.org/buildings­

envtronments/green­

building\

Green Building

lhttp://www.sfenviron

mentoralbuildings­

environments/green­

buildinq/qreen­

buildinq-basicsl

Policy Incentives and Resources /http://www.sfenviron

mentorg/bui!dinqs­

environmentslqreen­

buildlngfpolicy-

Goals and Outcomes rhttp://www.sfenviron

ment.org/bUIIdings­

environments/green­

building/goals-and­

outcomes)

City Government Buildings /http:l/www.sfenviron

ment.org/buildings­

environments/green­

building/city­

government­

buildings\

Urban Forestry rhttp://www.sfenvironmen

environmentslurban­

forestrvl

Urban Agriculture lhttp://www.sfenvironmen

torg/buildings­

environments/urban­

agriculture)

Natural San Francisco (http://www.sfenvironmen

environments/natural-

Climate Change

lhttp:/!www.sfenvironment.or

glclimate-changel

Education & Equitv

lhttp:l/www.sfenvironment.or

g/education-eguity)

Energy

rhttp:/lwww.sfenvironment.or

~

Toxics & Health

lhttp:/fwww.sfenwonment.ar

g/toxics-health-oldl

Transportation

(http:l/www.sfenvironment.ar

g/transportationl

Zero Waste

fhttp:/twww.sfenvironment.ar

glzero-wastel

"""WV''"'"""'•WV"''''"'"''''''"'

I Newslet1er

Email

First Narne ]

To ensure that all buildings are healthy, sustainable places to live, work, and learn,

the ;;?.mn . .f.n~n~~t~.£~1 .. 0l:f:t.sm .. S..~H9.!DH .. C9.9.~

f=tdrttJbtt>n:tfn"'d<!!fmJI\".htmS1.D$vicl"'-<Hn!w.J<•l:san!hlndt>o<J ca) (if the direct link does not work you

can navigate to the code !1S~.\J,"t . .UJ!\l?.iZ~'i:i::':N.,.m:nJ.§£!iaL.\~gJntl\\1.:iiU:~f.llR\t~£D.ft:1l!.l!r.\l?£!?.,~Jl.\ml1J requirements

reduce energy and water use, divert waste from landfill, encourage alternate modes of

transportation, and support the health and comfort of building occupants in San

Francisco.

The ordinance was infonned by the recomrnenda.Hon.s of the Mavor's Task Force on

0..C§.~.D.Jl.!,;~H_Q).(}fl1H!lltn:L!.\~f.~'f.!.{.,§.f!t.D.Y.iU?.nEl:g_u~,:?.W!.r:9Y.{J]!S:~.f!!.m.\~.~E~.\?.~!!1.9iEHU9.~~-~~.fY.r.Q~.::r.~~.9.~ll!lJ~.D.fi£1~9.G§./..tO

reduce the impacts that buildings in San Francisco have on the environment, local

infrastructure, and public healh Adopted in 2008, the city's groundbreaking green

building requirements apply to newly constructed residential and commercial buildings,

as well as major renovations to existing buildings. California's Building Standards

Commission subsequently developed.II!!.~ .. i'.1 .. .f:'m:LJ.:L..lll~ .. G.t1!if.9m!.~J)I§?.!JJ'JL:JI<:Eng .9.tsill.tiards Code. or "G,l\LGreen." (htlD:/!wwvv.bsG.GCU!OV!HomejQALGJeen.asp.:\ Green building

requirements were updated in 2010 to combine the mandatory elements of the 2010

California Green Building Standards Code with stricter local requirements, and updated

again in 2013 to incorporate changes to California's Green Building Standards and

f;D_grg:Lftfic].©.!Jro?J®.ct..~.~llU.H~ .. 2.4 .. E.?IL9 ... ::.2DJ.}.LfllQQd.t.~m§.rm,~:r~~L\\ll..~.~~t.

New construction in San Francisco must meet all applicable California codes, provide on­

site facilities for recycling and composting, and meet city green building requirements tied

to the LEED and GreenPoint Rated green building rating systems.For details on these

requirements and tools to help document green building accomplishments, please see

the .;;L4Jli£.QUI?:lli.~QJ1ftP2l!!DQnt nf B~!U9.tn.9..lD2J.}SJ..9.1l2.tl}_Admin.1-:.traHy..t__Builetin_AB-093:

Jm1?.l§m§.n!e1!.mLQJ..Qr.~ .. ?..n .. ~hL!l.9Jng . .R~nh!l.s!i9JJ.~., . .\:':lt:tP..;fL}.\s\!?.\,£r.0~~§!.\~.§f.§ff!.~LR.mt.mf~!.~.~-:.Qg2.~(i! ~1!llilfJit~Lt~.Q.Qf.:L~L1&illL These regulations include summary documents and forms which

integrate many .~u.ytgt.nm.~r.Jt~~ .. P..QE~;h~§ . .§.mi9.t~9 ... R.Y.Jll!?. ... Q!1Y. .. ?..n9 ... ~~:;.!1!D1Y. . .QJ..8.gn . .En?Jl~.t§09. iD .. ?_0.QltLQIUQ.11Qt?JjQS~_QJQ .. §!stt0 .. f::9Jlli.£Jltlif~LL'fD':!':lY.&f~nviroJ1m.?nt.olJl&i!lklin:;m.±D.~S~1~lL'ii.!RQ.illJ.::

What am you !o~kin Advanc.£!1 S~;'<arc!).

file:/ I /C :/Users/TEMP. CMITH. 005/Downloads/San%20Francisco%20Green%20Building ... 3/18/2015

MARCH 26, 2015

WHAT’S NEW IN 2013 CODE?

CHANGES TO MANDATORY TITLE 24

LIGHTING REQUIREMENTS

California's new Building Energy

Efficiency Standards take effect

in 2014; They improve the energy

efficiency ofhomes by 25 percent

and make nonresidential buildings

30 percent more efficient than

the previous 2008 standards. This

brief guide offers an overview of

important requirements and major

updates to the lighting code.

New requirements for lightng controls consttute one of the biggest changes to Title 24 standards. The latest version of the standards also includes more stringent requirements for the testing and certification of controls commissioning.

All lighting control systems with two or more components-in both residential and non-residential spaces-must meet the requi1·ements of 2013 Title 24

standards, Section 110.9. Both stand-alone and luminaire-integrated lighting controls, such as vacancy sensors and photocontrols. must now comply with Title 20 regulations.

All interior luminaires in non-residential buildings must have manual on! off controls, and each area must be independently controlled. Dimmer switches must allow manual on/off functionality, with some exceptions such as public restrooms with two or more stalls, which do not need a publicly accessible switch.

MULTI-LEVEl liGHTING CONTROLS In areas larger than 1 00ft2 , installed luminaires must:

Incorporate multi-level lighting controls or continuous dimming, depending on the lamp type

Meet the uniformity requirements in Table 130.1-A

Have at least one of the following types of controls for each lumina ire:

Manual continuous dimming and on/off control (Section 130.1(a))

Lumen maintenance (Section 100.1)

'Tuning (Section 100.1)

Automatic daylightng controls (Section 130.1{dll

Demand response controls (Section 130.1(e))

Classrooms are one of the rare exceptions to the multi-level requirements. Instead, if they have a connected general lighting load o;; 0.7 \/V /ft 2 , they must have at least one control step between 30% and 70% of full-rated power.

CALIFORNIA LIGHTING TECHNOlOGY CENTER UNIVERSITY OF CALIFORNIA, DAVIS CLTC.UCDAVIS.EDU

AUTOMATIC DAYUGHTING CONTROLS Under Section 140.3 (c) of the 2008 code, just 50% of the floor area in buildings over 8,000 ft2 was required to be in dayl!ghting zones. Section 140.3 (c) of the 2013 code requires that floor plans have 75% of their total area in daylight zones, and it applies the rule more

broadly, to buildings> 5,000ft2.

In these daylighting zones, controls requirements have also become more stl·ingent. Before, only sky-lit spaces 2 2,500 ft 2 and side-lit spaces 2 250 ft 2 had to have daylighting controls. Section 130.1 (d) now requires multi-level automatic daylighfng controls in all sky-lit or side-lit zones where the installed general lighting

power is 2120W.

New claylighfng controls requirements for parking garages are addressed on page 4 of this guide.

OCCUPANT-SENSING liGHTING CONTROlS Section 130.1 of the 2013 code requires occupant­sensing controls that automatically turn oft all lighting in the following areas during vacant pe1·iods:

Offices o;250ft2

Conference rooms of any size

Multipurpose rooms < 1000 ft 2

Classrooms of any size

Secondary spaces

Indoor parking areas

Indoor parking areas, including parking garages, and secondary spaces are new additions.

NEW !1\l THE 2:013

More retrofit projects will be required

to meet new-construction standards

for both lighting power density (LPD)

and controls. The only exceptions are

buildings with fewer than 40 ballasts

being replaced and spaces where less

than 10% of the lighting is affected.

SECONDARY SPACES Under the 2013 code, occupant-sensing controls must automatically reduce lighting power by 50% in these areas when they are unoccupied:

Corridors and stairweils

Warehouse aisles and open areas

Library book stack aisles 2 ·10ft in length and accessible frorn only one end and those 220ft in length and accessible from both ends

SECURITY AND EGRESS liGHTING Under the 2008 code, most buildings had a lighting allowance ot 0.3 W /ft2 for security and egress purposes, at all times. Section 130.1 of the 2013 standards includes the follovving new requirements:

\!laximum security and egress lightng allowance of 0.2 W /ft2 when a building is occupied

General and egress lighting must be shut off during unoccupied times

Exception Offices are allowed up to 0.05 W /ft2 tor !ighting during unoccupied periods, but only along emergency egress areas designated on the building plans.

NON·RESIDENTIAID MUI.l'J'l-EEV:Eil EIGI:IirJNG CDNTROES AND UNIEDRMI111¥' REQUIREMENIS

Luminaire Type Minimum Required Uniform level of Control Steps Illuminance Shall Be (Percent of Full Rated Power) Achieved by:

Line-voltage sockets except GU-24 ..

Low-voltage incandescent systems

Continuous dimming 10-100% LED luminaires and LED source systems

. GU-24 rated for LED

GLJ-24 sockets rated for fluorescent> 20 W

Continuous dimming 20-100% Pin-based compact fluorescent> 20W

GU-24sockets rated for fluorescent s 20W ·Stepped dimming or

Pin-based compact Minimum one between ·Continuous dimming or fluorescent s 20 W 30-70% • Switching alternate '-r..-

Lnear fluorescent and U-bent lamps in a luminaire

fluorescents 13W ..

·Stepped dimming or Minimum one step in each range: ·Continuous dir1rming or

Linear fluorescent and U-bent 20-40% ·Switching alternate lamps

fluorescent> 13W 50-70% in each luminaire, having 80-85% a minimum of 4 lamps per

100% luminaire, illuminating the same area and in the same manner

. ·Step dimming or

Minimum one step betvveen • Continuous dimming or

Track lighting 30-70%, ·Separately switching circuits in multi-circuit track with a minimum of t'v\!o circuits

HID >20\N ·Stepped dimming or

·Continuous dimming or Induction > 25 \J\1

·Switching alternate lamps Minimum one step between 50-70% in each luminaire, having

a minimum of 2 lamps per Other light sources luminaire, iiluminating the same

area and in the sarne manner

GHAI\!GES

DEMAND RESPONSE CONTROLS The 2008 code only required DR capability in retail buildings with sales floor areas :o: 50,000ft2. The 2013 code expands this considerably, requiring that all non-residential buildings :0:10,000 ft2 be capable of automatically responding to a DR signal, so that:

• Total energy use for lighting can automatically drop to a level at least 15% below the building's maximum total lighting power

Ughting is reduced in a manner consistent with requirements for uniform iliumination levels (listed in Table 130.1-A)

Non-habitable spaces must not be used to cornply with this requirement, and spaces with a lighting power density o: 0.5 W /fF are not counted toward the building's total lighting power. Designers are still responsible for specifying automated controls that are compatible with the local utility's DR protocol.

PARKING GARAGES & AREAS Parking garages are classified as indoor spaces under Title 24 lighting regulations and must comply with Section 130.1(c)7B. Top-level roof areas are the exception; these are classified as outdoor hardscape and must comply with the applicable provisions in Section 130.2. The following regulations are new for parking garages:

In parking garages, other indoor parking areas, and loading and unloading areas, general lighting must be controlled by occupant-sensing controls having at least one control step between 20% and 50% of design lighting power

In a parking garage area with a conlbined total of 36 ft 2 or more of glazing or opening, luminaires providing general lighting that are in the combined primary and secondary sidelit daylit zones must be contro!led independently by automatic photocontrols

Automatic daylighting controls rT;ust be multi-level, continuous dimming or on I off

When primary sidelit zones receive sufficient daylight to reach illuminance levels above 150% of that provided by electric lighting when no daylight is available, controls must reduce lighting power consumption to zem

Outdoor lighting must be circuited and independently controlled from other electric loads.

All outdoor luminaires rated for use with lamps ?: 150 W rnust comply with the IES BUG system for assessing and limiting uplight and glare. There are no backlight requirements in this iteration of the code. This marks a change from the cutoff system used for the 2008 standards, which only applied to luminaires :o: ·:75W.

AUTOMATIC DAYLIGHTING CONTROLS Title 24 2008 required photocontrol devices for all outdoor lighting. In addition to photocontrols, the 2013 standards require automate scheduling controls; astronomical time-switch controls that automatically turn lights off during dayjight hours are allowed as an alternative to photocontrol devices. Section 130.2(c) addresses these requirements.

LUMINAIRES MOUNTED,; 24 FEET ABOVE THE GROUND In addition to photocontrols and automatic scheduling, Section 130.2(c) also requires occupant-sensing controls for certain outdoor lighting applications. No more than 1,500 W of lighting power may be controlled together for outdoor lighting of this type. Automatic lighting controls for these luminaires must:

Utilize motion sensors or another automatic lighting control system, in addition to photocontrols and automatic scheduling controls (or astronomical time-switch controls)

Be capable of automatically reducing the lighting power of each lurninaire by at least 40%, but not more than 80%, or provide continuous dimming through a range that includes 40-80%, during vacant periods

Switch on autornatcally when the area becomes occupied

Exceptions These types of lighting constitute exceptions to the above requirements:

Pole-mounted luminaires with a maximum rated wattage of 75 W

Non-pole-mounted luminaires with a maximum rated vvattage of 30 W

Linear lighting with a maximum wattage of 4 W per linear foot of luminaire

Outdoor sales: frontage, lots and canopies

372 GWh/year The amount of electricity that can be saved by the 2013 improvements to non-residentiatstandardsalone.* Ca!lfornlB- f=_nergy CornrnL~slon Staff Presentation 31, 20121 *Includes HVAC, ·,vater heating, etc; 1n addition to

OUTDOOR SAlES liGHTING The 2013 code adds occupant-sensing controls to the requir·ements for outdoor sales lighting for frontage areas, lots and canopies. l.ighting controls in these areas must meet the requirements that apply to a! I outdoor lighting, and they must automatically:

Reduce lighting power by at least 40%, but not more than 80%, dur·ing vacant per-iods

Switch to the higher lighting level when the space becomes occupied

BUILDING FACADES, ORNAMENTAl HARDSCAPE & OUTDOOR DINING AREAS Like outdoor sales areas, these areas must have lighting controls that reduce energy use during unoccupied periods and automatically increase light levels when the space becomes occupied. One or both of the following control strategies is allowed:

Motion sensors capable of automatically reducing lighfng power by at least 40%, but not more than 80%, during vacant periods

,t;, centralized time-based zone lighting control capable of autmnatically reducing lighting power by at least 50%

Wall packs (defined by the IES Handbook as outdoor wall-mounted luminaires having a bilaterally symmetric distribution) must comply with the applicable requirernents in Section 130.2(c)3 where the bottom of the lumina ire is mounted s 24ft above the ground.

OUTDOOR INCANDESCENT liGHTING Per Section 130.2{a), all outdoor incandescent lurninaires rated over 100W installed for non-residential use must be controlled by a motion sensor.

Title 24 now requires that a commissioning report be completed and provided to each building owner. This includes reports on all functional performance tests completed as part of the acceptance test process.

Projects issued a building permit on or after January 1, 2014 rnust undergo acceptance testing for:

Automatic daylighting contmls

Automatic time switch controls

Occupancy sensors

Outdoor lighting shut-off controls

Outdoor mot.ion sensors

Demand response {DR) controls

Testing of DR controls is a new requirement under Title 24 2013. Building cornmissioning requirements are addressed in Section 120.8.

As soon as July 1, 20-14, lighting contmls acceptance test technicians will have to be certified through an approved training program, such as the California Advanced Lighting Controls Training Program (CALCTP), and registered with the State of California. Technicians' employers will also have to be certified. Technician training and certification requirements are addressed in Section 13.11 (page 1 049) of the Non-Resicientiai Compliance Manual.

The 2013 residential code increases energy efficiency standards for skylights and windows, and it updates and clarifies requirements for lighting in kitchens, bathrooms, garages, utility rooms, and other spaces. The new mandatory requirements are outlined in this section.

ElECTRONIC BAllASTS Ballasts for fluNescent lamps rated ? 13 W must be electronic and have an output frequency 2:20 kHz.

HIGH EFFICACY CRITERIA To qualify as high-efficacy, luminaires must be certified to the California Energy Commission. Luminaires that can accept low-efficacy larnps and LED luminaires that have not been cer·tified do not qualify as high efficacy. With the exception of decorative, monochromatic LEDs, Joint Appendix JA8 requires that LED luminaires designed for indoor residential use have a minimum CR I of 90 and a CCT of 2700K -4000 K in order to qualify as high efficacy. Full criteria are in Table 150.0-A and Joint Appendix JA8.

Luminaires not described in Table 150.0-A must meet high-efficacy requirements listed in Table 150.0-B:

<;5\;V 30 lm/W

>5W-15W 45 lrn/W

> 15VV- 40\.rV 60 lrn/W

>40W 90 lrn/W

Joint Appendix JAB of the 2013 code sets new quality standards

for LED luminaires designedfor

general irydoor residential lighting.

To qualify as highefficacVt these sources must offer accurate color

rendering$ with a CRI :::: 90, and a CCT of 2700K -4000K.

SWITCHING DEVICES AND CONTROLS The following are mandatory requirements:

High-efficacy luminaires must be switched separately from low-efficacy luminaires

Exhaust fans must be switched separ·ately from lighting systerns

Luminail·es must be switched with readily accessible controls that permit manual on I off svvitching

No controls may bypass a dimmer or vacancy sensor function where that dimrner or vacancy sensor has been installed to comply with Section 150.0(k)

BATHROOMS Section 150.0(1<) requires at least one high-efficacy luminaire in each bathroom. All other lighting must be high efficacy or controlled by vacancy sensors.

KITCHENS A minimum of 50% of the total rated vvattage of permanently installed lighting in kitchens must be high-efficacy lighting.

Lighting permanently installed inside cabinets may use a maximum of 20\fJ per linear foot of illuminated cabinet.

Regardless of the number of shelves or doors per cabinet section, the length of an illuminated cabinet n1ust be deterrnined using one of the following measurements:

One horizontal length of illuminated cabinet

One vertical length per illuminated cabinet section

No more than one vertical length per every 40 horizontal inches of i!luminated cabinet

GARAGES, LAUI\IIJRY ROOMS AND UTILITY ROOMS Lighting installed in attached and detached garages, laundry rooms and utility rooms must be high-efficacy and controlled by a vacancy sensor·.

OTHER AREAS Lighting installed in any rooms or areas other than those above must be high efficacy or must be controlled by either dirnrners or vacancy sensors.

Night lights permanently installed or integral to installed luminaires or exhaust fans must be rated to consume no more than 5 VJ of power per lumina ire and may not be controlled by vacancy sensors.

CONTROlS For single-farnily residential buildings, outdoor lighting permanently attached to a residential building or other buildings on the same lot must generally be high efficacy.

Low-efficacy outdoor lighting must be controlled by all of the following:

A manual on/off switch that does not override to on

A motion sensor not having an override or bypass switch that disables the motion sensor, or a motion sensor with an override svvitch that temporarily bypasses the motion sensing function and automatically reactivates the motion sensm within 6 hours

A photocontrol, astronomical time clock or energy management control system that does not have an override or bypass switch dit>abling the control and is programmed to automatically turn the outdoor lighting off during daylight hours.

lED O.UAUTY REQUIREMENTS Outdoor LED luminaires do not have to meet the CRI requirement in Joint Appendix JA8, but those permanently attached to residential buildings must have a CCT of 2700K- 5000K in order to qualify as high efficacy. Decorative, monochromatic LEOs are the exception to this rule. LED landscape luminaires are also not required to be certified to the Commission for cornpliance with Joint Appendix JAR

CALIFORNIA ENERGY COMMISSION

For nearly 35 years, the California Energy Commission has saved Californians more than $66 billion in energy costs through its standards for energy-efficient buildings and appliances. These same standards have improved windows, lighting, air conditioning and insulation while reducing greenhouse gas emissions by more than 250 million metric tons.

CALIFORNIA'S 2013 BUILDING ENERGY EFFICIENCY STANDARDS: AN !I\IFOGRAPHIC

• A. quick look at of some of the most important changes to both the residential and non-residential standards.

FREO.UEI\ITlY ASKED QUESTIONS

Answers to some of the most commonly asked questions about the Building Energy Efficiency Standards.

e substitute Ior the cocfe

CoiT!f.Jjiance

2013 BUIUIING ENERGY EFFiCIENCY STANDARDS

The most up-to-date version of the 2013 Building Energy Efficiency Standards: Title 24, Part 6, and Associated Administrative Regulations in Part 1.

ADOPTW!I! HEAFI!NG PRESENTATION

A 1·ecent presentation on the new standards' potential impacts and their benefits to Caiifomians .

CAUFORNIA liGHTING TECHNOLOGY CENTER

Visit the CLTC website for additional resources Title 24, including technology updates and lighting design guides for retail, office and residential spaces.

ABOUT THE CAliFORNIA LIGHTING TECHNOLOGY CENTER: The California Lighting Technology Center was created in 2003 by the California Energv

Commission in collaboration with the U.S. Department of Energy and the National Electrical Manufacturers Association. Part of the Department of Design at

the University of Caiifornia, Davis, CLTC is dedicated to accelerating the development and deployment of energy-efficient iighting and daylighting technologies.

MARCH 26, 2015

SAMPLE LETTER OF INTENT

MARCH 26, 2015

Date:

Tenant Name:

Re: [Delineate Premises]

Dear ___________________:

The purpose of this letter is to outline certain basic terms pursuant to which ____________________ (“Landlord”) would be willing to consider leasing the Premises (as defined below) to ____________________ (“Tenant”).

The fundamental economic terms and conditions for Tenant’s leasing of the Premises would be as follows:

Building: ____________________________

Premises: Approximately __________ rentable square feet comprising a portion of the __________ floor of the Building as identified on the attached Exhibit A and based upon a mutually acceptable plan.

Term: The Term of the Lease would be __________ months commencing on the earlier date of (i) when a temporary certificate of occupancy (or its substantive equivalent) for the Premises is issued by the City of ____________________ and Tenant can use the Premises for its intended business purpose or (ii) when Tenant or any other person with Tenant’s permission commences business operations from the Premises (with such earlier date being the “Commencement Date”).

Prior Occupancy: Tenant would be permitted to enter the Premises prior to the Commencement Date for the limited purposes of installing its furniture, fixtures and equipment. Such entry would be in accordance with the Building’s rules and regulations and not unreasonably interfere with Landlord’s construction and completion of the Tenant Improvements (defined below).

Base Rental Rate: The following Monthly Base Rent would apply on a full service gross rentable basis: Monthly Base Rent Months Per Rentable Sq. Ft. 1-12 $____________

SAMPLE LETTER OF INTENT

MARCH 26, 2015

Provided Tenant is not in default of the Lease, the Monthly Base Rent would be abated for the first _____ days of the Lease Term. Monthly Base Rent would be increased by _____% on each anniversary date of the initial Lease Term.

Operating Expenses and Base Year: Tenant would pay its pro rata share of Operating Expenses and Real Property Taxes for the Building over and above Operating Expenses and Real Property Taxes payable for the Base Year. The Base Year would be the 201__ calendar year.

Tenant Improvements: Landlord would contribute up to (but no more than) $__________ per (rentable) (usable) square foot of the Premises toward the cost of construction of Tenant’s interior improvements (“Tenant Improvements”) within the Premises (the “Landlord’s Contribution”). Subject to the foregoing, Landlord would construct Tenant’s Tenant Improvements in a good and workmanlike manner and in compliance with all codes and laws, utilizing Building standard materials and in accordance with a space plan mutually approved by Landlord and Tenant. The costs of the space plan, construction drawings, permits, materials, labor, construction and management administration fees would be included as part of the cost of construction of the interior improvements and be subject to Landlord’s Contribution. All such costs in excess of the Landlord’s Contribution would be payable by Tenant. Landlord would utilize its own contractor for the construction of the Tenant Improvements.

Use: Tenant would use the Premises solely for general office uses and related purposes.

Option to Renew: Provided no default had occurred by Tenant under the Lease, Tenant would have the right to renew the Lease for __________ additional __________ year terms at the then fair market rental as mutually agreed upon by Landlord and Tenant or by fair market arbitration. Tenant would provide Landlord with not less than nine (9) months prior written notice of Tenant’s intent to exercise such renewal.

Parking: Unreserved parking would be provided at the rate of three (3) spaces per 1,000 rentable square feet of the Premises.

The following rate schedule would apply to Tenant’s Parking:

Months Parking Rate 1-12 $__________ per car

13-__ Prevailing rate of the Building as determined by Landlord from time to time

The City of _______________ parking tax would be in addition to the rates set forth above.

Building Access: Subject to damage and destruction and force majeure events, Tenant would have access to the Building and the Premises twenty-four (24) hours per day, three hundred sixty-five (365) days per year.

Assignment and Subletting: Tenant would have the right to assign this Lease or sublease all or any portion of the Premises upon Landlord’s prior written approval which would not be unreasonably withheld or delayed. Subject to the terms and conditions of the Lease, Tenant could assign the Lease or sublease the Premises to an affiliate of Tenant or to a successor of Tenant by merger or consolidation without Landlord’s consent.

MARCH 26, 2015

Landlord would be entitled to retain fifty percent (50%) of any rent received from a subtenant in excess of the rent then being paid by Tenant to Landlord after deducting Tenant’s reasonable costs of subleasing (including brokerage commissions, reasonable attorneys’ fees and subtenant improvement costs).

Landlord would have the right to recapture that portion of the Premises proposed to be subleased or assigned if such portion of the Premises exceeded fifty percent (50%) of the entire Premises.

Security Deposit: Tenant would pay a security deposit equal to __________ month’s base rental upon Lease execution.

Lease Execution: Tenant would pay the first (1st) month’s base rental upon Lease execution.

Building Directory: Tenant would be entitled to display its name on the directory board of the Building.

Insurance: Insurance requirements would be referenced in the Lease.

Security and Access: The Lease would address Tenant’s needs for the security of Tenant’s confidential and critical information.

Cancellation Option: At any time after three (3) years following the commencement of the initial term of the Lease, Tenant may terminate the Lease upon not less than 120 days prior written notice and payment to Landlord of the unamortized portions of any leasing commissions and tenant improvement allowances.

Rooftop Rights: Tenant will have the right to install telecommunications, internet or other electronic or communications systems servicing the Premises, subject to the approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. Landlord will make available to Tenant, at no additional charge by Landlord, an area of the roof of the Building sufficient to accommodate satellite dishes or antennae, and will permit Tenant to install, at no additional charge by Landlord, wiring and cable through Building conduits and risers and related equipment within Building telecommunications rooms. Tenant will have reasonable access to the roof and Building telecommunications rooms to install, service and maintain such equipment.

Non-Binding Proposal: This letter is merely an expression of the basic terms that might be incorporated into a binding lease agreement between Landlord and Tenant for the leasing of the Premises. This letter is not a lease, offer, contract, option or commitment and creates no legal rights or obligations of any nature whatsoever. Both parties understand and agree that neither party shall be bound to proceed with the contemplated lease until such time as a final written lease and other necessary written agreement(s) have been prepared by legal counsel, approved by each party’s respective board of directors, LLC members or general partners, and executed by an authorized officer, member or partner of each party. Both parties reserve the right to negotiate with other parties and to change or refine these business terms or add additional terms as this proposed lease transaction is further negotiated and documented. This letter shall not be construed in any way as creating any agreement which can be specifically enforced and neither

MARCH 26, 2015

party shall have any liability to the other for breach of any covenant to negotiate in good faith. If either party elects in its sole and absolute discretion to discontinue further discussions at any time or for any reason, neither party shall have any rights or obligations pursuant to this letter or otherwise.

This letter shall expire if not accepted in writing by Tenant within ten (10) days of the date of this letter.

Sincerely,

__________________________________________

__________________________________________

By: _____________________________________

Its: _____________________________________

AGREED AND ACCEPTED:

__________________________________________

__________________________________________

By: _____________________________________

Its: _____________________________________

Date: ___________________________________

MARCH 26, 2015

“NEW ACCESSIBILITY DISCLOSURE IN

COMMERCIAL LEASES” (2015)

BY LISA STALTERI, CO-CHAIR,

REAL ESTATE PRACTICE GROUP

MARCH 26, 2015

As of July 1, 2013, California Civil Code §1938 required all commercial leases to state whether the premises have been inspected by a “Certified Access Specialist” (“CASp”) and, if so, whether the premises has or has not been determined to meet all applicable construction-related accessibility standards per California Civil Code §55.53. California Civil Code §55.53 sets forth the criteria for a written assessment of whether a site meets all applicable construction-related accessibility standards or whether corrective actions are required. California Civil Code §1938 does not require that a CASp accessibility assessment actually be performed. Rather, it requires disclosure of whether one has been performed and its results.

California Civil Code §1938 is silent as to whether an owner is permitted to qualify the disclosure to be to the owner’s actual knowledge. An owner may not know whether a CASp assessment has been performed with regard to its current property holdings.

Most of the commonly used pre-printed commercial lease forms now include the required disclosure. If you are using a pre-2013 form or using your own form of commercial lease, revise it to include a statement as to whether a CASp accessibility assessment has been performed on the premises and, if so, its results. If the assessment was performed on the exterior and common areas of the building and not the interior of the premises, make that distinction in the disclosure. When purchasing commercial property, add CASp assessments to your list of requested documents and to your list of requested representations from a seller.

The decision to perform a CASp inspection should be carefully considered. The inspection could identify items of non-compliance that are costly to correct and could have negative implications if not corrected if you are later served with an ADA accessibility lawsuit. If a CASp inspection is performed and identified items of non-compliance are corrected, you will be entitled to certain benefits if you are later served with an ADA accessibility lawsuit – a 90 day stay of the action, a type of early settlement conference and reduced penalties.

If you have any questions, please contact Lisa Stalteri at lstalteri@carr-mcclellan.com or at (650) 342-9600.

NEW ACCESSIBILITY DISCLOSURE IN COMMERCIAL LEASES

MARCH 26, 2015

SAN FRANCISCO DISABILITIES ACCESS

SAMPLE LEASE LANGUAGE

MARCH 26, 2015

Before you, as the Tenant, enter into a lease with us, the Landlord, for the following property [INSERT DESCRIPTION/ADDRESS] (the “Property”), please be aware of the following important information about the lease:

You May Be Held Liable for Disability Access Violations on the Property. Even though you are not the owner of the Property, you, as the tenant, as well as the Property owner, may still be subject to legal and financial liabilities if the leased Property does not comply with applicable Federal and State disability access laws. You may wish to consult with an attorney prior to entering this lease to make sure that you understand your obligations under Federal and State disability access laws. The Landlord must provide you with a copy of the Small Business Commission Access Information Notice under Section 38.6 of the Administrative Code in your requested language. For more information about disability access laws applicable to small businesses, you may wish to visit the website of the San Francisco Office of Small Business or call 415-554-6134.

The Lease Must Specify Who Is Responsible for Making Any Required Disability Access Improvements to the Property. Under City law, the lease must include a provision in which you, the Tenant, and the Landlord agree upon your respective obligations and liabilities for making and paying for required disability access improvements on the leased Property. The lease must also require you and the Landlord to use reasonable efforts to notify each other if they make alterations to the leased Property that might impact accessibility under federal and state disability access laws. You may wish to review those provisions with your attorney prior to entering this lease to make sure that you understand your obligations under the lease.

By signing below I confirm that I have read and understood this Disability Access Obligations Notice.

Signed: ____________________, Tenant

Signed: ____________________, Landlord

(c) If the Commercial Landlord does not ensure that existing public restrooms, ground floor entrances, and ground floor exits are accessible as provided in subsection (a)(1) and instead proceeds under subsection (a)(2), the Commercial Landlord shall include the following statement in Disability Access Obligations Notice required under subsection (b):

“PLEASE NOTE: The Property may not currently meet all applicable construction-related accessibility standards, including standards for public restrooms and ground floor entrances and exits.”

SAN FRANCISCO DISABILITIES ACCESS

DISABILITY ACCESS OBLIGATIONS UNDER SAN FRANCISCO ADMINISTRATIVE CODE CHAPTER 38

MARCH 26, 2015

(d) The Commercial Landlord must sign, and obtain the Small Business Tenant’s signature on, the Disability Access Obligations Notice under subsections (b) and (c) on or before execution or amendment of the Lease and shall provide the tenant with a copy of the Small Business Commission’s Access Information Notice as defined under Section 38.6 in the tenant’s requested language.

MARCH 26, 2015

SAN FRANCISCO DISABILITIES ACCESS

BROCHURE

MARCH 26, 2015

Effective January 1, 2013, San Francisco law requires property owners of a commercial space of 7,500 square feet or less to provide a “Disabled Access Obligation Notice” before entering into or amending a lease.

[see attached]

SAN FRANCISCO DISABILITIES ACCESS NOTICE

PROTECT YOUR BUSINESS FROM POTENTIAL ADA LAWSUITS

Certified Access Specialist (CASp) Signed into Jaw on September 28, 2008, 58 1608 a Certified Access Specialist

(CASp) report provides a defense against lawsuits, but only if the business

obtained a CASp report BEFORE being sued. With a CASp report in hand,

businesses may request a 90-day stay (a temporary stop) of the lawsuit

filed in State Court and an Early Evaluation Conference {EEC) to explore fair

settlements. A Certified Access Specialist {CASp) is a person that has been

tested and certified by the state as an expert in disability access Jaws. A

business that hires a CASp to inspect their buildings helps ensure compliance

with disability access standards. After inspection, the CASp writes up an

inspection report as proof that the business hired a CASp. A CASp should

help your business-identify "'readily achievable~ barriers for removal.

COMPLIANCE VS. LAWSUIT Compliance iS-a r~comrnended i0vestment aS not only will your business be·!e:ss vulnerable wttr_iye-by fawsult:<>,._but you gain a gro~ing market of seniors, fam~ies Wfth _baby strolfe_rs, and persons With disabilities. ~ost_will ~epend on the- type-of alt-erations, and on w~at is_affordable a~ the pres~Ot.and future, If you ~~?~i_de to

do nothing and rely on"luck"'that you Will· not be sued, consfderthe-poterrtial costs afbefng an"unlucky""defen?ant:The ~a!itytOdaif.is: that moreADJ\ !O?\'~!ts" aie targeting smalf stwes_and minority-owned business@$ becaUse they are l!kely~o settle-rather than fncur the costsal"!d_ r!s_ks_9f li~fg!l:tioil.. The average cost tO-COmply with a plaintiff's reques.te"d barrie:r removal isles:s. than $:4,00(),. ac~or-dfng t-o amicus cUriae brfeffilEd.in the Ninth Circl.iit-Of.APpeai~J_ff/Y'[;fa(a_ri- V...OetTacQ.Inc.Flght!ng

a lawsuit indudin9: paying a settlement may-cost around ~3~,000, according to OS~~ ~~~stin~ in ~ertified Ac~S:sfnsp~ct!on and"readlty:~~hi~3_~l€',Cci!!lp!iaincE befoi-e a lawsuit is "the best way to pro~ecty9ur business from -exp~nsive lawsuits.

BUSINESS RESOURCES

office·or-smalt BtiSiiless City HaM, room l1 0 1 Carlton B. Goodlett Place Sanfrandsco, CA 94102 415-554-6-134, www.sfgav.org/osb

Certified Access Speda:tfsts www.sfgov.org/osb

Asian Neighborhood Design 1245 Howard Street San Francisco, CA 94103 415·575·0423, wW'N.andnet.org

sF Shines.- Office of E-conomic. Workforce Development Cfty Halt, ro<.;~m 448-1 Carlton B. Goodfett Place Sao Francisco, CA 94102 415~554-6969, www.oewd.org

San Francisco Bar A:ssodation The Lawyer Referral and Information Service {lRIS} program offers businesses legqf qssistance ftom their panel-of experienc~d lawyer~. www.sfbar:org/lawyerreferr?!~Jndex. a5p;:s: . . ..

BUSINESS RESOURCES

Department of JustfC~ f:.DA Guid.eforSmaU Businesses : ···: ."·· ,:· '. Business: Bri'efs www.ada.gov/busirless.f}tm#anchor-tibr!efs-

ADA GU.icte for Small Businesses: www.ada.gov/publicat.htm#Af1chor-ADA-3532:5

DOJ toll-free ADA Information line 80D-51~0301

Department_of Buflding ~nspe.ttiort"" Technical Services Division DBl staff persons. are available to review state aCcess re-qufremeots.vtsit 16150 MisslonStreet~4th floor to request a review of your-business plans. · :- : .. ' 415-55&6084, www.sfgov-.org/dbt

San Francisco

There are two different bodies of law in California that regulate disab-ility

~ci:ess: a state bf:~ilding code,. ard ~ fed~! cirJlrightsla\•~<1he state

buflding code requirements- for access-are located_ip tl)e California Code of

Regu!atlons, Tftle24, Part_~ afl(fa"re commonly ~ferred __ to asTltle 21:·

;The Am~icans with Disabili~!es A~t 6f"-1~9o tADAJ rs·a sweeping federal ~vfl rights. law which prohibits _dlscriinination_agafnst persons with disabilities:

Specfficat!Yr Titte i!rof the ADA requires publicaccommadittions to prov-Ide goods: and .services: to- people vyith disabilities on an equal basis with the

~e_st oftfle genera~ pubfic.. "The !Jr:tlted States-!?~paftrnent Of Justice_(DQ))

e-nforces the ADA.

Being corripln~ntto-_the- regulatiOns of one taw does.not !'el1~"{_eyour respof)sibilities to be cOmpliant with the Other sa~ Of lawS.

Non· Ctimptiance If the buitding i.s not coinpliant with Califoi-nia: Title 24, the:_ citizen_ Ca!}lpJaint

···!smuted tOtl:te Depart_m_ent~f8ttfldin9 lnspe~tion (DBt).D~!__~-vll) sert(fsti:l:ff

to·visl~ t~e.site-ailct.p€:rforffi iio in~pectton, and if necesSary,: the mspector will init!a~e..ac~!ons to require the ownefto correct the· p~blem:

ffthe citi~en's:·coffiplalnt Is: ADA driven, the plaintiffcan take-the business

to civ-ll c-ou~_fof·r~medy-The federaf ADA does not ~ave:~n "inspection~

ma:harlism, a:O.d _private l~wsu~~~ .can. b~ -fi1~ ~~r~l?( _in-~de.TJ:ll c~ur~ by

~ps~ who belie\'€ their-civil dgh~s _}-la'{e bee.n violated.

Wni> is Requiredto Remove!larriers? Barriers·:qre defl~~~ ~X.~~ AbA=~s-Obstildes to accEss1bi!ity:.S~ch0bst:3de5 ma~e it diffituft .. : .... :s:On;~efim~s impo~ible- forpeopteo\~i~h fl!s~~jnties_to do· th~-thin11s: _roost of us_ take. for grante9 :....:.things like going-shopping,

working, .?!n~':l9 in a restaurant or taking pub-lic transit: If your business

provides gt.'dds-and services:- to the public,_ you ilreiequir.ed to remove

b"arr1e:rs: if dofng so. is:uread!!y a~hievable~' S~ch_ a.s busineS-s is called a public qCcommod:atlon because i~ :s.ei"ves the p~;~blTc If your business is: not open tO ~he publl<7-{no adjacent r€~il o:r open to touis), buds.-~nfy a place of

efrfpl_oyment like- a wa~ho-Us:e:, manufatt\.Trin_g .fadti"o/ ot offii:e buifcfl~_g, t0~-~ _thiire are fe\'rerr~~-rl~i~erTieirits: t9 rem9y€:baqier.s_,o~Uctra f~CiHt)l iS called a commercial. fai:!iity~ While the operator Of a Cominerdal f<tcalty. ~as diffeienfrequttements to· re-mov€: barriers, ';ou must corrip!y.wltf]; the A_DA

Starid_aiq?~fiif. f\cs:~?~J.ble £?esign V>?hen yOti alter, renoYa~ ~f. e~p~nd your facility.

' 'obstad€S to itCC'25~i~ri~/t~i-~re'ritfiJO~ ci~d LOW BARRIERS mostlikely<ani>e'rea&iyaC:hle,vaollc"'

A,

A

entrance

sink has a built-in

base that does not provide required knee

clearance

travel

operable without pinching or grasping

COMMON MISCONCEPTIONS

i am. ~xe.rnpt from compHai1ce or-"grai1dfather.ed" Th~ ansW-er iS-~NO": A place ofpubl_ic acc:ommodation must r-emo.ve barrierswh~n itts''readil}i?chievable"~? do~!?- Ait_hOUgh thefacil1tymay be "~randfatJ:tered"'accordlng to the iq<al bol!ding- i:ode, the federal ADA does. not have a ·provtsiop.to,;'g~~mdfathe_r"'a faCility. While a local building authority maY not requirE! any niOdifications to _Orfng a -~Uildlng"up to code"' urytH-~ renovatiori or major alteration Is. done, the federal ADA requires-that a Place -or public accorriinodatioir remOve bafriers tf:\at are readilyachtevabf~­e.ven when no: alterations or renO-Vations ar~ plaQ.ne:d. As-a business you have an· on~goingpbtrgatiOn to b~kng your: busine~s int9 cornp!i.ance_

tarn exempt sincernybuilding has historic designatiOn ~ieith~r State nor federal !a\~ ~~:efnpt h1sto.O:cafbu1!ding~ fro£!! compliaty;e_.

> butthere are sp~c_!~c guidelines_ !n San FranciSco, any building over 50 years old is:considef!ec! as·a potentlafly.s.ignlfi~ant historical resour-c:e~Access.ib!lity (mprovernentsto the entran~e or exterior of the.s~ buildings may require. additional=r~vi~w by Hi~:oric P_rese~ation sta~ and m.ay-lengthen the

permitting. prOcess..AnothE:i common ·mfsconi:epti~n is ~hat.Gty staff

wH! deny youi applica.t}o.n jfthe: buil~l!19 _is conside(e_fl h_j~toric, This is extreme!)' rar~. thol!gh dui-irig t~e reviewp(o(ess yoU_Yf!t!_pe=~~~_t~ed_to find alternatives that respect hlstcirl~ desig~S-afld rnater!af~ :#hi!ea!so providing disabled access. Histo~ic<!l_lY ~n¥itive acc~slbil~ty 1rilprovements. may add .cq~!-o you_~ pro}ectbu:t are:gen~raUywoith the -investment OVer the tong t-tJO,

Sett!ing-thl?·lav.r~uit will relieve me: Of my responsibilities· B:u5!nesS·owners ri;?:ed to kn.owthatihe.ADA ls n.ow .a part of our society. ·and thatthereJs no limit to the nUmber of times a business can be sued reg~rding .a·cce~~ib!e barriers,_The ~st soltitlon is to rn~ke the"re·adily

achiev~ble,..physical c~anges:and t~ u_nders~and tha~ compliance is ongoi!lg, !fa business is .s-ued over a· physical barrier(-s} tO <H.::<:essibil!ty, they. can still be

Tenant vs_Landlord (0\r</ner) The federafADAlav{Stit.?~:tfiata;nypr~vate eritity ~vho _o~ms .. leases;fease.s

to, or oper3tes: a ptace·of pllbHc_,accomrryodation sbai'es in the obllgatlon to -remove barrie-rs. Tena~)~ and:p~operty oWners,also sha're _in_th~ obligation,

sO qften times a ne9otiati0n in!,~~ take placet!:;> determ_!ry~ whO pays what costs, or perc:entag.e-OfdJ~s fOf.access.compl~ance an~ib~ litigation defense. Effectfve}anuary.l, 2~13,.5an Fr.an0sca law r-t;qiiires prOperty_~'A_'ne_r.s ~a ccimtn~"i'cj3J space of 7,5i.)O square feet or less tt> provide a:"Qisabl~d ~.ccess Obtigatior'fNotkl(b.::~ore entering· into or amehdirlg a h~ase, :Effective: July 1~ 2013~ S.tate law-reqJ.!ir~s a c;omril_erdal J?roper:t)f· owt:terto state Ofl a lease

~r rental agr~ement 0-heth~rthe-Propert>£ has 9!1dergo_n_fi! inspectiofl by a ·certi(jed access specialist (CASp}~ The<.:e two)a'.\'s. were Passed to help

-_~f.15tlf~ bl,.sinesses_ are-informed of their on4 goiog obllgatio:n and atd in the

· Pf€-vention ·of laws_\lits-. There are alSo tax benefits that are aVailable to each ·

·paey in some case$ to help pay for barrier removaL