By: Tom Soter
Nov. 20, 2014
Dec. 3 is very close — and if you’re a board member or manager, you may be concerned. Then again, you may not. The one thing that’s indisputable is that Dec. 3 is a deadline of which you, your manager, and/or your attorney should be aware. Here’s the deal: effective in less than two weeks, all residential leases (which include proprietary leases) in New York State must include a notice to the tenant about the presence or absence of sprinkler systems in the “leased premises.”
The new law, while defining what a sprinkler system is, does not define what a “lease” is or what “premises” are.
“The law is effective through the entire state of New York and makes no exceptions for premises that are governmentally regulated or even governmentally run,” explains Adam Leitman Bailey, partner in his eponymous firm. “There is no question whether the document in question really is some kind of lease; it appears clear that the law covers both main leases and subleases, both new leases and renewal leases.”
Bailey adds: “Since the statute specifies that the new language has to be in bold print (without specifying just what the language is), this means that it will not be good enough for the board of directors to pass a resolution that all of the leases in the complex are ‘deemed’ amended by adding this language. It will actually have to be done in real time on real paper. We have no way of predicting the results if a shareholder simply refuses to sign the new lease. We note that in some cooperative developments, this could mean the forced reissuance of hundreds of leases.”
One key point: the law has no enforcement mechanism and no penalty for noncompliance.
Arthur Weinstein, an attorney in private practice, advises his clients to deal with this issue by having every resident sign a letter, prepared by the board, attorney, or managing agent, simply acknowledging that they do or do not have sprinklers, and also reporting on the last day of maintenance and inspection of the system.
“It’s like the window guard notices,” Weinstein says. “You send them out once a year. The managing agents are sending them out; lawyers are not getting involved because it’s pretty routine. As near as I can tell, it’s as much a management issue as anything else.”
Not a Lease, a License
Some leases for residential space go by the name “occupancy agreement,” attorney Adam Leitman Bailey explains, but are nonetheless actually leases. In fact, there is no legal requirement for what the parties call the agreement. Even more confusing, some leases deny that they are leases. This is typical of leases that call themselves licenses. While some licenses really are licenses, licenses are difficult to draft correctly and, therefore, courts hold many documents that want or claim to be licenses to actually be leases. As a result, the parties holding this kind of lease could be very surprised to find out that this statute applies to them.