29 March 2009
Hotel Lawyer and Timeshare Lawyer in Orlando at the ARDA Conference.
Hotel Lawyer: Exit strategies of repositioning can create ADA issues you need to watch. Timeshare lawyer David Sudeck is in Orlando at the ARDA Conference right now, comparing notes with others in the timeshare business. Many see conversion of hotel or condo projects to timeshare as an alternate exit strategy for their investment, but are missing some important issues, as he writes for www.HotelLawBlog.com.
Distressed hotels looking to convert to timeshare. Others repositioning.
As a sign of the times, we are working with the owners of several distressed branded and independent hotels (particularly extended stay hotels) and condominium hotels to explore whether a conversion to timeshare or fractional may be a preferable use. Although the timeshare receivables financing market has been crushed by the general credit crisis, there are still limited sources of qualified consumer financing available for timeshare acquisition purposes, and even with downward pricing pressure on timeshare sales, the economics of timeshare properties in certain locations may be more attractive than continued operations of distressed hotel properties.
Whether we are advising our clients regarding the conversion of an existing hotel project to vacation ownership use or the conversion of a hotel property from one brand to another, the rebirth typically involves some renovation or modification. Whether a renovation is necessary due to conversion, a product improvement plan or otherwise, the owner and operator of the property need to be cognizant of the issues outlined in the article below. The article below was written by our own hotel and time share lawyer, David Sudeck, in consultation with JMBM’s ADA expert Marty Orlick.
Hotel and Timeshare Lawyer: When you renovate or
reposition your hotel (or timeshare property),
understand ADA implications!
By David Sudeck and Marty Orlick
Global Hospitality Group® Hotel Lawyers
The Global Financial Crisis is motivating lenders, developers and operators to get creative. We at JMBM are busy looking at opportunities with our clients to purchase and/or reposition distressed hotel properties, unsold condo hotels or condo hotel inventory (see articles on how to “uncondo” a condo hotel elsewhere on www.hotellawblog.com), and unsold timeshares and timeshare inventory. Some of these properties will need to be renovated and repurposed to compete in this difficult market. It is important to understand what physical modifications to a timeshare, hotel or other facility may involve upgrades under the Americans with Disabilities Act and applicable state disabled access laws.
How can you determine if your property is compliant with applicable access laws?
Title III of the Americans with Disabilities Act prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges,
To determine whether a modification to a structure is an “alteration” under the Americans with Disabilities Act, the following are considerations:
- The aggregate cost of the modification relative to the physical and financial characteristics of the structure
- The physical scope of the modification (e.g., What specific portions of the structure were modified? Did the modification affect only the structure’s surfaces or did it affect the structural components? Did the modifications affect only personal property or did it affect fixtures that are considered realty? Did the modifications affect the “usability” of the building or facility?)
- The reason for undertaking the modification (e.g., maintenance? improvement? to change the purpose, function, or use of the structure?)
Basically, as the cost, degree, and scope of the modifications increase, the ADA Standards may change. However, even an inexpensive or minor modification to an important accessible element of a property may be regarded as an “alteration” if it fundamentally changes the use or “usability” of the facility.
advantages, or accommodations of any place of public accommodation”. See 42 U.S.C. § 12182(a). If the property in question is older and currently “grandfathered in” under the ADA, the property may currently comply with the Act even though the physical characteristics of the property would not comply if built today. However, if the property is renovated, certain areas may need to comply with the alterations standards of the ADA and state laws.
In determining whether a property complies with the requirements of the ADA, compliance authorities (e.g., building and safety officials in connection with the issuance of a building permit) will likely focus in part on whether the inaccessibility of a property to a disabled person constitutes discrimination. Keep in mind that neither the issuance of a building permit by a department of building and safety or its equivalent nor the preparation of design plans by a licensed architect is a guarantee that a property complies with state and federal requirements relating to disabled access. In particular, out-of-state and international architecture firms may not be sufficiently familiar with accessibility requirements to serve as a meaningful resource in this regard. You should have an expert attorney (like those at JMBM), along with an experienced local site-adapt architect or access consultant, conduct an overview of the plans
What is the “Path of Travel” and must it be accessible?
Title III of the ADA, under certain circumstances, requires that altered portions of public accommodations be made accessible to the disabled, but this does not apply if the property has not been altered after January 26, 1992.
Relevant provisions of the ADA provide that “discrimination” includes, “a failure to make alterations in such a manner that, to the maximum extent feasible, the altered portions of the facility are readily accessible to and usable by individuals with disabilities, including individuals who use wheelchairs. Where the entity is undertaking an alteration that affects or could affect usability of or access to an area of the facility containing a primary function, the entity shall also make the alterations in such a manner that, to the maximum extent feasible, the path of travel to the altered area and the bathrooms, telephones, and drinking fountains serving the altered area, are readily accessible … where such alterations … are not disproportionate to the overall alterations.” That being said, the Department of Justice in its implementing regulation does recognize that normal maintenance and certain upgrades that do not affect the “usability” of the building or facility are not alterations.
Where certain alterations are made, it is possible that the “path of travel” to the altered area must also be made accessible for the disabled, and the defined “path of travel” may be much broader than you would expect. However, the cost of modifying a “path of travel” may be considered, when it was the alteration of a portion of a property that triggered the additional requirement to make the path of travel to the altered area accessible. Specifically, a proportionality requirement (looking at the cost of modifying the path of travel in proportion to the cost of the unit alterations) can limit the extent to which a supporting area must be made accessible. A different standard may apply when architectural barriers exist that limit accessibility. This analysis is complex, and you should be sure to have competent counsel and consultants review the standards and the facility with you.
Where certain alterations are made, it is possible that the “path of travel” to the altered area must also be made accessible for the disabled, and the defined “path of travel” may be much broader than you would expect.
Should you be concerned?
The Department of Justice and local Attorneys General offices are stepping up the enforcement of federal and state accessibility requirements. The factors relating to compliance requirements are not straightforward, but JMBM’s attorneys have deep experience in this area of the law, and you should consult with ADA counsel in connection with any renovation that you are contemplating or undertaking. Our ADA attorneys also work with other experts to conduct independent surveys of our client’s hotel and resort properties to assess the level of accessibility and recommend cost-effective ADA compliance strategies.
Other articles on ADA and Timeshare
If you found this article of interest, you may want to check out some of the other articles on this topic on www.HotelLawBlog.com which can all be found under the “HOTEL LAW TOPIC” of “ADA” at the top of the home page (or by clicking here(http://hotellaw.jmbm.com/ada/)). The following are titles and links to some of those articles:
- ADA Compliance and Defense Lawyer: Starwood Hotels and The Phoenician get an expensive (and unnecessary) lesson in ADA compliance. Who’s next?
- A blast against frivolous, serial ADA lawsuits in striking the right balance
- ADA defense lawyers: When disabled hotel guests’ needs go beyond the norm for typical guests, what do hotel owners and managers have to do?
- Hospitality Lawyers: ADA Sweeps by U.S. Department of Justice — Coming to a theater district or Hotel near you soon? How to get ready before it’s too late.
- Hotel Lawyers: Americans with Disabilities Act — How recent ADA developments can affect your hotel. Are you ready for a class action ADA lawsuit because of your hotel website?
- Hospitality Lawyer with urgent ADA warning: You won’t believe what they want to do with ADA now
- Hospitality Lawyers: Defending ADA lawsuits. How your hotel website can make you a target for ADA lawsuits
- Hotel Lawyer: How hotel swimming pools may spawn ADA lawsuits and what to do about it.
- Hospitality Lawyer — Who’s crying “Woof”? What you must know about the ADA requirements for disabled guests and their service animals
- Hospitality Lawyer — Landmark ADA case could provide relief for California hotels.
- Hospitality Lawyer: ADA Update — Federal Courts Denying Plaintiffs’ Attorneys’ Fees
- Hospitality Lawyer: Big ADA Changes Coming to Hotels
- Hotel & Timeshare Lawyer: Does the timeshare exit strategy or repositioning your property create ADA problems?
You can access David Sudeck’s articles on timeshare and vacation ownership under the “Timeshare” HOTEL LAW TOPIC — one of the tabs at the top — at www.HotelLawBlog.com or by clicking here. (http://hotellaw.jmbm.com/timeshare/).
- Global Hospitality Advisor®: Opportunistic investment alert! What to watch for when buying distressed debt on timeshare, fractional and vacation club developments
- Vacation Ownership Properties 101: What are they? How do they work? How are they regulated?
- Hotel and Time Share Lawyer Insights on special implications of “the downturn” for Vacation Ownership
- 3 Keys to Survival for Vacation Ownership Developers as the Financial Crisis bites deeper
- Hotel & Timeshare Lawyer: Does the timeshare exit strategy or repositioning your property create ADA problems?
If you are, or are considering, developing a timeshare, fractional interest or condominium hotel project or if you are considering modifying the project documentation of an existing project, please contact David Sudeck, a senior member of JMBM’s Global Hospitality Group®. David can be reached at firstname.lastname@example.org or 310.201.3518. Look for David’s timeshare articles under the “Timeshare” HOTEL LAW TOPIC tab at the top of the home page on HotelLawBlog.com.
This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We’ve done more than $50 billion of hotel transactions and more than 100 hotel mixed-used deals in the last 5 years alone. Who’s your hotel lawyer?
Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $50 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at email@example.com or 310.201.3526.
Jim Butler is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” or “hotel mixed-use” or “condo hotel lawyer” and you will see why.
Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last 5 years alone, Jim and his team have assisted clients with more than 100 hotel mixed-use projects — frequently integrated with energizing lifestyle elements.
Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.