New Sprinkler-Notification Law Could Require Reissuing Proprietary Leases
By: Frank Lovece
December 26th, 2014
A New York State law that went into effect Dec. 3, requiring all residential leases to contain a notice about the building’s sprinkler system, appears to mandate that even co-op proprietary leases must be amended to reflect the language change. The new law also impacts leases offered by condominium homeowners renting their apartments as well as subleases offered by rental tenants and by co-op shareholders.
The addition to the Section 231 of the State’s Real Property Law — dubbed 231-a and not yet appearing in most public, non-subscription online law databases — is designed to require all residential leases to contain boldface notice as to whether there is a sprinkler system in the leased premises. Introduced as Senate Bill S5212A-2013 and Assembly Bill A07641, the eventual joint legislation was signed Governor Andrew Cuomo signed the joint legislation on Aug. 5.
The new law specifies that, “(1) Every residential lease shall provide conspicuous notice in bold face type as to the existence or non-existence of a maintained and operative sprinkler system in the leased premises. (2) For purposes of this section, “sprinkler system” shall have the same meaning as defined in section one hundred fifty-five-a of the executive law. (3) If there is a maintained and operative sprinkler system in the leased premises, the residential lease agreement shall provide further notice as to the last date of maintenance and inspection.”
No Skirting the (Re-)Issue?
In some cooperatives, this could mean the mandatory reissuing of hundreds of proprietary leases, write attorneys Adam Leitman Bailey and Dov Treiman, of Bailey’s namesake firm, in the New York Law Journal. “The bylaws of the overwhelming majority of cooperative corporations require that the development’s proprietary leases be identical to each other.” One shareholder’s lease must be the same as every other shareholder’s lease. “Since this new law requires that all residential leases issued on or after Dec. 3, 2014, contain the required language, this means that in order to issue one proprietary lease to the new owner of an apartment in a cooperative complex, all of the proprietary leases for that complex will have had to have been amended….”
The attorneys note that, “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’ or considered 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.”
While co-op shareholders have no statutory right to sublease, many co-ops allow subleasing subject to restrictions and approval. While it might seem simple for a shareholder to include the new language in whatever sublease he or she might give a subleasee, the shareholder might not have information enough to do so, which could render the sublease invalid. “Sublessors have essentially no control over any sprinkler system on the premises nor do they have any access to the maintenance records or the ability to demand such access,” Bailey and Treiman write.
What will it mean if the lease is invalid? The attorneys believe “the courts will probably find that there is a valid month-to-month tenancy and will give both sides the minimal protections that kind of tenancy accords….”
The new law provides no enforcement mechanism, however, so for many co-op and condo residents, the issue may only reach a head if the tenant or the shareholder has reason to go to court over some other issue.
One convenience in all this is that the boilerplate BlumbergExcelsior New York residential leases available online, in stationery stores and elsewhere have been updated to include the new language.