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Architect to Pay $450K to Settle Lawsuit Over Inaccessible Senior Housing

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An architectural firm in Riverton, New Jersey, will pay $450,000 to settle a federal lawsuit over the design of eight senior living communities that allegedly did not meet accessibility requirements. According to a Sept. 28 consent order released by the Department of Justice, J. Randolph Parry Architects was accused of engaging in discrimination by failing to comply with Fair Housing Act (FHA) and Americans with Disabilities Act (ADA) design standards.

Of the settlement, $350,000 will pay for retrofitting the properties to be more accessible, $75,000 will be used to create a settlement fund to compensate individuals harmed by the inaccessibility, and $25,000 will be paid as a civil penalty, McKnight’s Senior Living recently reported. The architecture firm denies any intentional discrimination.

“If a company does not know the laws regarding ADA and FHA accessibility, they need to hire an expert. If not, they run the risk of something like this happening,” said Tameka Livatino, Underwriting Director, Professional Liability, Burns & Wilcox, Chicago, Illinois. “When designing or building something specifically for our aging community or those with disabilities, they really have to seek that outside expertise.”

The recent settlement should remind U.S. architects and developers that “they cannot ignore federally mandated accessibility requirements,” a DOJ official said in a statement, McKnight’s reported. These design professionals should always carry Architects & Engineers Professional Liability Insurance, also known as Errors & Omission (E&O) Insurance, which can cover the financial damage resulting from a professional’s mistake. They should also consider hiring ADA compliance consultants when needed.

“There is no harm in receiving professional guidance on understanding ADA regulations and requirements,” said Rahmad Bauldrick, Associate Vice President, Regional Practice Group Leader, Professional, Burns & Wilcox, Chicago, Illinois. “In fact, this makes the company a better risk for E&O Insurance and shows their level of awareness for this niche area of business.”

Resolving inaccessibility comes with high cost

Another senior housing developer recently faced similar allegations from the DOJ over 11 of its complexes, CBS News reported on Sept. 27. Stavrou Associates Inc. in Maryland agreed to pay $185,000 to settle claims that it violated the FHA and ADA; $175,000 will be put into a settlement fund, $10,000 will be paid in civil penalties, and the company will also pay for the cost of “extensive retrofits” to make the buildings accessible. The retrofits will include replacing walkways, removing obstacles in pedestrian pathways, widening doorways, and making kitchens and bathrooms accessible for wheelchairs, the news outlet reported.

These renovations can be extremely expensive, Livatino said. “The upfront due diligence costs to avoid these issues will be a fraction of what the damages will be if something is found to be not in compliance,” she said. “Contractors and designers should take that into consideration.”

Hiring an ADA compliance consultant can save real estate developers and architectural firms “millions of dollars by simply surveying properties for code violations/barriers and providing solutions to prevent them from potential lawsuits,” Bauldrick added. “Firms should want to have a comprehensive review for collaboration purposes between the consultant and design team.”

Retrofitting expenses can be covered by Architects & Engineers Professional Liability Insurance, along with legal defense. Supplementary payments such as civil penalties, settlements and more. Rectification coverage, which can pay for correcting design flaws that are discovered during the project, may also be included. “That is a huge coverage feature that some policies have, which will cover design flaws found while it is being built and cover the expense of fixing that problem before it is completed,” Livatino said.

Lawsuits over violations of Title III of the ADA, which prohibits discrimination on the basis of disability in public accommodations and requires newly built public places to comply with certain standards, have been rising each year for the past several years, the Society for Human Resource Management reported in March. A law firm tracking the lawsuits found that over 11,400 individuals filed this type of ADA lawsuit in 2021, which was up 4% from 2020 and 320% from 2013, when the tracking began. Record numbers of lawsuits citing ADA violations are costing U.S. small businesses “tens of thousands of dollars in settlements,” the Washington Post reported in April.

It is a trend Livatino has noticed, particularly regarding commercial and public spaces. “A lot of those structures were built before the laws, but they are still expected to renovate and become compliant within a certain amount of time,” she said.

Lack of accessible features could lead to injuries 

In January, the DOJ announced that Amtrak paid more than $2 million to over 1,500 individuals with disabilities who were harmed by the railroad company’s inaccessible rail stations. The payments to victims were part of a settlement agreement with the DOJ after its civil rights division determined that Amtrak had “failed for over a decade” to make its intercity rail system accessible. Amtrak is also required to complete design changes and construction to make the stations accessible.

Earlier this year, a U.S. federal court filed a lawsuit against Wrigley Field in Chicago, Illinois, alleging that renovations to the venue did not meet accessibility requirements, the Architect’s Newspaper reported in July. The lawsuit seeks further renovations to the stadium in addition to compensation for those who have been injured due to the noncompliance.

Payments for injuries that are linked to inaccessibility can be covered by Architects & Engineers Professional Liability Insurance, Livatino said.

“These policies typically have a contingent bodily injury and property damage element to them, which can cover an injury or property damage that arose out of a faulty design,” she said. “That can become extremely expensive, especially if someone is injured or, God forbid, a loss of life occurs because someone was not able to get out of a building in time or get in. If they could not maneuver a space that was supposed to be designed for them, it could be very costly, and the Professional Liability Insurance could pick that up.”

In these situations, any professionals involved in the design, construction or renovation of an inaccessible building could be pulled into a lawsuit, Livatino said — from the general contractor and architectural firm to the individual contractors working on site. All of these professionals should carry Professional Liability Insurance.

“All parties involved should have insurance coverage of some sort. The design firm is at the greatest risk, however the owner and contractors of the facility may need to take some responsibility for that, too, and needs to make sure they let the designers know the intent of the space,” Livatino said. “If it is for aging adults or individuals with disabilities, that should trigger both the designer and the owner to review the relevant requirements. The designer also needs to realize when something needs an extra set of eyes or a peer review before moving forward, because the end result could be costly to all parties.”

Accessibility concerns have also triggered litigation in Canada, which has its own requirements for disability access. The Accessible Canada Act (ACA) was enacted in 2019 and aims to make the country barrier-free by 2040. In September of 2021, a disabled inmate sued the attorney general of Canada for $10 million after allegedly being forced to sleep on the floor of her cell because she could not be moved from her wheelchair to her bed, CBC News reported. In 2019, a Canadian couple settled their lawsuit against CN Rail and other entities after their 29-year-old son who was in a wheelchair was struck and killed by a freight train at a crossing in Moncton, New Brunswick, the Canadian Press reported.

Defining design “errors”

Design and construction professionals should know that when it comes to ADA violations, Architects & Engineers Professional Liability Insurance may include a supplementary payment section for these penalties outside of the standard policy limits, Livatino said. “This can pick up ADA violations, but it is usually capped pretty low. It may only cover a fraction of the fines and penalties,” she said.

True “errors,” however, would be generally covered to full limits. The distinction depends on the individual circumstances of the alleged violation, she said.

“Professional Liability Insurance is designed to cover design errors and omissions. What could come into question is whether there was a true error in the design, or whether the unit was built exactly to the owner’s specifications,” Livatino said.

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The cost of hiring an ADA consultant is a nominal fee in comparison to triggering an E&O Insurance policy, costing the company millions of dollars and potentially harming the reputation of the firm.

Many of these concerns can be avoided by hiring an expert, Bauldrick emphasized. “The cost of hiring an ADA consultant is a nominal fee in comparison to triggering an E&O Insurance policy, costing the company millions of dollars and potentially harming the reputation of the firm,” he said.

Those front-end costs “cannot compare to what it could cost in the end if there is a problem,” Livatino agreed. “If you are getting involved in something that is outside of your expertise, always hire an outside expert to consult,” she said. “A contractor does not have to know every law, but they need to hire somebody who does.”

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