Rules
Leasing hospitality property: restaurant and hotel space checks before you sign
What a tenant should verify before signing a restaurant, bar or hotel lease: ADA responsibility, food permit and plan review, build-out triggers and the lease clauses that carry the risk.
What to take away
- A restaurant, bar or hotel is a place of public accommodation under the ADA, and both the landlord and the tenant are subject to the rules. The lease decides who pays.
- A remodel or conversion can trigger an accessible path of travel to the altered area, up to a cost limit set in the ADA rules.
- Food establishments face a separate gateplan review before construction or remodeling, a preoperational inspection and a permit to operate, under the model Food Code that state and local regulators adopt.
- Apply for the food permit well before opening. The Food Code model asks for the application at least 30 calendar days before the planned opening.
- Put the approvals in the lease as conditions, with rent starting only after they are obtained.
Why hospitality space needs its own checklist
Office and retail leases mostly ask whether the space fits the business. A restaurant, bar or hotel lease asks whether the space can be legally operated for that use. The answer depends on accessibility law, food safety review and local approvals that sit outside the lease and can take months. A lease signed before those questions are answered puts the schedule risk on the tenant while rent may already be running.
This article covers the two federal frameworks that apply across the United States, the ADA and the FDA's model Food Code, and the lease terms that connect them. Zoning, liquor licensing, fire and building approvals are set by state and local bodies, so confirm each with the authority for the address. Our general guides to zoning and permits and ADA compliance and building codes in leased space cover that wider picture.
ADA responsibility: landlord and tenant are both covered
The Department of Justice's Title III regulation lists the places of public accommodation. The list includes a place of lodging, meaning an inn, hotel or motel, and "a restaurant, bar, or other establishment serving food or drink." A facility counts as a place of lodging where it provides guest rooms for primarily short-term stays, generally 30 days or less, with hotel-like management and services. The regulation excepts a facility with not more than five rooms for rent that is occupied by the proprietor as a residence.
On who is responsible, section 36.201(b) says both the landlord who owns the building that houses a place of public accommodation and the tenant who owns or operates it are public accommodations subject to the requirements. As between them, "allocation of responsibility for complying with the obligations of this part may be determined by lease or other contract." In plain terms, the regulation lets the lease move the cost, but it does not remove a party's exposure to a claim.
Read the ADA clause line by line. Check whether it covers the exterior route, parking, the entrance, restrooms and any dining or lobby areas, and whether it distinguishes between existing conditions and work the tenant does.
Existing barriers and remodel triggers
Two rules matter for a build-out.
Existing facilities. Under section 36.304, a public accommodation must remove architectural barriers in existing facilities where removal is readily achievable, that is, easily accomplishable and able to be carried out without much difficulty or expense. The ADA primer says obligations scale with the size and resources of the business and lists priorities: access from sidewalks, parking and transit, access to goods and services, restrooms and other amenities. If a barrier cannot be removed, the business should offer an alternative such as curbside service.
Alterations. A remodel must be made accessible to the maximum extent feasible. Section 36.403 requires that where an alteration affects an area containing a primary function, the path of travel to the altered area, and the restrooms, telephones and drinking fountains serving it, be made accessible, unless the cost and scope are disproportionate to the overall alteration. The Department of Justice explains that costs beyond 20 percent of the overall alteration cost are deemed disproportionate. Normal maintenance such as painting or reroofing does not count as an alteration.
For a tenant, that means an ambitious kitchen and dining-room renovation can pull the entrance, route and restrooms into the scope. Ask for the landlord's disclosure of known barriers, price the path of travel before you commit and compare it against the landlord's improvement allowance. The tenant improvements checklist shows how to line up those costs.
Hotels have an additional operational duty. The primer states that hotels must make reservation systems fully accessible, with a compliance date of March 15, 2012, so a hotel operator should confirm its booking systems and policies as well as the building.
Food permits: plan review comes before construction
The FDA Food Code is a model code. The FDA says local, state, tribal and federal regulators use it as a model to develop or update their own food safety rules, and adoption is up to each jurisdiction. The FDA's page names the 2026 Food Code as its most recent full edition. The text reviewed for the points below is the 2022 edition, and the edition your jurisdiction has adopted may differ, so ask the local regulatory authority.
Under that model text, section 8-201.11 requires a permit applicant to submit plans and specifications for review and approval before the construction of a food establishment, the conversion of an existing structure for use as one, or, where the regulatory authority decides plans are necessary, the remodeling of one or a change in its type or operation.
The plans can include the intended menu, anticipated food volume, layout, mechanical schematics, finish schedules and equipment specifications, as the authority requires (section 8-201.12).
After construction, the authority conducts one or more preoperational inspections to verify that the establishment is built and equipped according to the approved plans (section 8-203.10). A person may not operate a food establishment without a valid permit to operate (section 8-301.11). For a new, converted or remodeled establishment, the permit is issued after a complete application and fee, approval of the plans, and a preoperational inspection showing the work matches them (section 8-303.10). The model asks for the application at least 30 calendar days before the planned opening (section 8-302.11).
The lease consequence is clear. You cannot finalize the equipment layout, order hoods and refrigeration, or fix the opening date until the plan review is complete. A lease that starts rent on a fixed date, regardless of permits, shifts that risk entirely to the tenant.
Lease terms that carry the risk
Turn the checks above into clauses.
- Permitted use and compliance.The use clause should name the use precisely, such as full-service restaurant with alcohol, and the landlord should confirm it does not conflict with existing restrictions on the property.
- Contingencies.Make the lease conditional on obtaining zoning confirmation, building permits, plan approval, the food permit and any liquor license for the use. Add a right to terminate and recover deposits if approvals are denied.
- Rent start.Tie rent commencement to the later of delivery of the space in the agreed condition and the date the permits needed to open are issued, or negotiate a fixed abatement period.
- ADA allocation.State who pays for the exterior route, parking, entrance and restrooms, and whether a path-of-travel obligation triggered by the tenant's alteration is the tenant's cost. Rely on the lease, since section 36.201(b) leaves allocation to it.
- Landlord work and allowance.Describe what the landlord delivers, such as utilities, grease interceptors or venting capacity, and the improvement allowance. See lease clauses, CAM charges and TI allowances for examples of how these are written.
- Operating costs.Check how common-area charges and utilities are passed through, using the net vs gross lease guide.
- Exit.Ask for a termination or assignment right if the concept fails or the business is sold, as discussed in the guide to early termination and break clauses.
