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Sprinkler System Leases the New Letter of the Law

By Adam Leitman Bailey


By: Adam Leitman Bailey & Dov Treiman

October 9th, 2014

A new sprinkler system law coming into effect December 3 could leave landlords guessing about their obligations.

Effective December 3, 2014, all residential leases in New York State require a notice to the tenant about the presence or absence of sprinkler systems in the “leased premises.”

The new law, while defining a sprinkler system, does not define a “lease” or “premises”.

The law is effective throughout New York and makes no exceptions for premises that are governmentally regulated or run.

However, while stating what must exist, the law has no enforcement mechanism and no penalty for noncompliance. The law covers main leases and subleases, new leases and renewal leases. While most leases call themselves “leases,” some don’t.

Even where the name is modified in some manner, common perception fails to recognize a lease. Thus, many co-operators under “proprietary leases” lose track of the fact that they are also conventional tenants in a landlord-tenant relationship.

The bylaws of the majority cooperatives require that all proprietary leases be identical.

Since this new law requires that all residential leases issued on or after December 3, 2014 contain the required language, to issue one proprietary lease to the new owner of an apartment in a cooperative, all the proprietary leases for that complex will have had to have been amended by December 2, 2014.

No one knows the results if a shareholder refuses to sign the new lease. In some co-operative developments, this could mean issuing hundreds of leases.

Others go by the name “occupancy agreement,” but are leases. There is no legal requirement for what the parties call the agreement.

Some leases deny that they are leases, such as some calling themselves licenses. While, some really are licenses, licenses are difficult to draft correctly and the courts hold those to actually be leases.Thus, those parties could be surprised to find out that this statute applies.

Required language in unregulated residential leases is exceedingly rare. Generally speaking, in New York, a landlord and a tenant could write on the back of a napkin, “The apartment at 123 Mockingbird Lane will be rented to the tenant to live in for X months at $Y rent per month” and, once they sign it, they have a “residential lease.”

Now the law requires that cocktail napkin to state facts about whether or not there is a sprinkler system and what its recent maintenance history is and to do so “in bold face type.”

While the rest of the cocktail napkin can be handwritten, the sprinkler language has to be machine generated.

Inside NYC, subletters may be surprised by this statute. As sublessors, they have no control over any sprinkler system and neither any access to the maintenance records, nor the ability to demand such.

If they are rent regulated tenants, their last renewal lease could have been two years earlier and even if it’s more, by the time they are subletting, that information could be nearly two years out of date.

With regard to rent regulated leases, the statute requires that the lease set forth “the last date of maintenance and inspection.”

However, since the renewal could be offered as early as 150 days before the expiration, the landlord will be filling out “the last date of maintenance and inspection” on a date some half year prior to effective date.

The effective date of the lease may be after a maintenance and inspection that took place between the time of the lease offer and the time of its acceptance.

This problem could possibly be solved by the landlord mailing an update on the date the renewal lease is to take effect. Where this law can have a substantial anti-consumer effect is on the question of subletting.

New York law presents a statutory right to sublet, provided the tenant follows to the letter, a statutory procedure.

The first step in the procedure includes sending to the landlord a copy of the proposed sublease.

Under this new statute, the landlord can drag the sublet-wanting tenant through the rest of the sublet procedure and then, at the very end of the procedure deny the request because the sublease did not comply with this new statute.

And two things are going to make it very likely that the sublease won’t comply with the new statute: The subletting tenant will have no warning in the sublet law that leases need to have any particular language; the sublet-wanting tenant probably has no access to the maintenance history of the sprinkler system and no way to demand it.

This law will affect at least tens of thousands of dwelling arrangements where people will have no idea they are in violation of the law.

In NYC, this includes sublets and apartments of all kinds in buildings with fewer than six residential units. The larger buildings will also be affected, but they are more likely to expect obscure laws to be ruling them.

And all of these places, in large buildings and small, inside New York City and outside it will all have the same question we can’t answer: How is this thing going to be enforced?

Possible enforcement mechanisms include courts finding leases that lack the required language aren’t valid leases at all.

Perhaps, the New York State Attorney General’s Office will take the attitude that folks who rent to several or more different tenants with leases that lack this mandatory language are guilty of fraudulent business activities and are subject to fines and penalties.

 

Original content here.

Adam Leitman Bailey, P.C.

NEW YORK REAL ESTATE ATTORNEYS