This week I'd like to share another piece from Don Zech, commercial real estate guru, on ADA lawsuits and small businesses dealing with inflation...enjoy.
Cheers, JR
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How to help avoid an ADA Lawsuit and what are small businesses doing about inflation?
Well three 75 basis point hikes by the Fed would seem to be sending the message that fighting inflation is job number one. They are going to whack markets down until everyone believes the narrative. Unfortunately, inflation is not just a number nor is it just the cost of gas or dollars per hour wage. It’s an attitude. I remember the late 1970s and early ‘80s, when Paul Volcker struggled to tame inflation. Despite double digit interest rates, it wasn’t until he realized he had to change how people and companies thought until he had success. Right now, people think they have to pay more or charge more or make more.
People say things are different this time. Investors are betting that we live in a digital world and a simple flick of the interest rate switch will quickly revert things back to normal. Well, I’ll tell you that I do think things are different this time. In the ‘70s and ‘80s, debt levels were lower and asset valuations were cheap. Today, our economy relies heavily on debt for consumption and to rollover maturing debt to avoid bankruptcy. High interest rates will be exponentially more damaging now than they were 40 years ago.
In a recent American Express survey, 75% of small businesses surveyed reported being impacted by inflation. Interestingly, those surveyed reported nearly double their last year’s revenues while profits were down slightly (-4%). Small business leaders reported that 37% planned to raise prices, 22% were going to negotiate better deals with supplies and 22% were going to cut lower margin products and services. Thirty-three percent planned to strengthen customer relations to increase revenues. Lastly, 47% said inflation is impacting their labor market due to higher healthcare, employee benefits or increased raises.
Americans with Disabilities Act (ADA) litigation continues to rise. Many owners and tenants wonder, “Will I be next?” Lack of knowledge is not a valid defense with respect to access compliance. ADA lawsuits are costly and time consuming experiences. A common misconception is that accessibility modifications are necessary only when the property is upgraded. However, the ADA requires “readily achievable” barrier removal regardless of whether or not alterations to the property are made. Because there is no enforcement agency for ADA, individual lawsuits are now the most common way to become aware of violations at a property.
The first step...
