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2017 IREM Issue Briefing Papers

ADA Education and reform act of 2017 (H.R. 620)

Download 2017 IREM Issue Briefing Papers

ISSUE BACKGROUND
Under the Americans with Disabilities Act (ADA), attorneys may collect fees related to pursuing claims of non-compliance of the law, but plaintiffs are not permitted to collect damages. Unscrupulous lawyers abuse this by sending “drive-by” demand letters or pursuing actual lawsuits simply to collect these fees, without regard for creating accessibility for the disabled. These suits often target easily-correctible infractions such as signage, soap dispenser heights, and transition lifts on ramps. Owners of these properties often have a reasonable belief that they are in compliance with the law based on state and local inspections. As a result of “drive-by” ADA suits, they are subject to paying high fees – money that would be better spent on making improvements to their accessibility. 

IREM’S POSITION
We support legislation and public policy that would provide a “notice and cure” provision in ADA regulations. We believe those facing possible sanctions under the law should be entitled to written notice of the alleged violation in combination with a reasonable time to rebut and/or cure the alleged violation before facing economic sanctions and/or litigation, except in the most grievous of circumstances involving a repeat pattern and practice of actual violations.

OPPOSING VIEWS
Some argue that the industry has had sufficient opportunity to learn the requirements of the ADA and that instances where design and construction are noncompliant reflect situations in which providing accessibility has not been enough of a priority for the commercial building industry.  

CONGRESSIONAL ACTIONS TO DATE

  • Representatives Ted Poe (R-TX), Scott Peters (D-CA), Ken Calvert (R-CA), Jackie Speier (D-CA), Michael Conaway (R-TX), and Ami Bera (D-CA) introduced the ADA Education and Reform Act of 2017, H.R. 620, on Jan. 24, 2017
  • There is not yet companion legislation in the Senate.

CONGRESSIONAL ACTION NEEDED
Eliminate drive-by lawsuits, and restore integrity and access to the Americans with Disabilities Act (ADA) – Cosponsor and Vote YES on The ADA Education and Reform Act of 2017 (H.R. 620).

WHAT TO TELL YOUR REPRESENTATIVES AND SENATORS

  • Notice and Cure will Increase Accessibility
    • H.R.620 is a "notice and cure" bill that requires a plaintiff to give specific notice to the property owner about the alleged violation(s) so they know what they are looking for in terms of a barrier. The legislation also allows property owners up to 120 days (in addition to a 60 day period to respond to a notice) to fix the alleged ADA violation before the clock starts running on attorney fees.
  • Landlords Cannot Just Defer Compliance
    • H.R. 620 provides property owners 60 days to outline their path to compliance, and another 120 days to complete work to remedy the deficiency. If work is not completed in that time, the lawsuit may proceed.
  • Drive-by Lawsuits are On the Rise
    • According to an International Council of Shopping Centers (ICSC) study, 2016 saw a 37% increase of ADA violation lawsuits from 2015. These lawsuits often result in property owners paying out lawyers' fees in settlement, without any money left over to repair the ADA violation. This bill will put the focus on making appropriate and necessary changes – rather than lining lawyers' pockets.

The Institute of Real Estate Management heartily endorses an end to discrimination against individuals with disabilities. We encourage the regulatory agencies charged with the responsibility of enforcing the Act to adopt fair and workable regulations to ensure and facilitate timely compliance by public accommodations. Requiring property owners be given notice and time to cure would much more effectively achieve the result of increased accessibility.

ADDITIONAL INFORMATION:

Support Economic development: Retain the 1031 LIke-Kind Exchange

ISSUE BACKGROUND
The Section 1031 like-kind exchange provision is fundamental to the real estate investment sector. It provides small and large investors alike with a great deal of flexibility in managing their real estate portfolio. Real estate is essentially an illiquid asset that requires substantial commitments of cash. Flexibility is needed in order to ensure the free movement of property and capital. This, in turn, results in economic growth and job creation.

IREM POLICY
IREM believes that it is in our nation’s best interest for congress to encourage real estate investment in the united states by creating a tax system that recognizes inflation and a tax differential in the calculation of capital gains from real estate; while stimulating economic investment; and consequently leveling the playing field for those who choose to invest in commercial real estate.

OPPOSING VIEWS
Opponents believe that the tax code is far too complex and needs to be simplified. They further believe that real estate investments receive unwarranted and unfair tax benefits, and that the like-kind exchange is such an example and should be limited or removed. 

CONGRESSIONAL ACTIONS TO DATE

  • Both the House and Senate are considering tax reform. 

CONGRESSIONAL ACTION NEEDED
When considering tax reform, Congress should recognize that the like-kind exchange for real property is vital to economic growth and should be preserved.

WHAT TO TELL YOUR REPRESENTATIVES AND SENATORS
Many in Congress are unaware of the 1031 like-kind exchange provision. You should take this opportunity to educate and inform your federal legislators and their staff on what the provision is, and how it is beneficial to the economy.

  • A Like-Kind Exchange Does Not Avoid Taxation
    Like-kind exchanges stimulate real estate transactions, but also encourage U.S. businesses to reinvest in their domestic operations, as domestic and foreign property are NOT like-kind. It is not a “loophole” – taxes are still paid in the great majority of cases, whether upon the sale of the replacement property, incrementally through increased taxes from forgone depreciation, or by inclusion in a decedent’s taxable estate. The elimination of Section 1031 would move in the opposite direction of creating a tax system that promotes growth and jobs.

  • A Like-Kind Exchange Encourages Development and Spurs Economic Activity
    Allowing capital to flow more freely among investments encourages commerce, and supports economic growth and job creation. Real estate owners use like-kind exchange rules to efficiently retain and allocate capital to its most productive uses. Section 1031 enables owners to reposition portfolios, exchange peripheral assets for core assets, realign property by geography or real estate sector to improve operating efficiencies, and manage risk. By avoiding a tax-induced “lock up” of properties, like-kind exchange rules increase the frequency of property transactions and ensure a more dynamic real estate sector that supports more reinvestment in real estate and a higher level of construction activity.

  • Repealing the 1031 Like-Kind Exchanges will REDUCE Government Revenue
    A recent study by Ernst & Young found that elimination of the 1031 like-kind exchange would reduce federal revenue and result in an annual year after year decline in GDP of $27.5 billion. The report said, “The analysis finds that repeal of the like-kind exchange rules increases the cost of capital in the economy, even when combined with lower tax rates. The higher cost of capital is found to discourage business investment which adversely affects the overall economy.”

ADDITIONAL INFORMATION: