Residential building owners may soon have to devise and disclose their smoking policies to renters or buyers if a new proposal by Mayor Michael Bloomberg is passed.  The Real Estate Board of New York (REBNY) is generally supportive of the legislation given it is in line with recommendations previously issued by one of our subcommittees.  However, REBNY is proposing some important changes to the City’s bill.

Last week, Mayor Bloomberg introduced a bill that would require owners of Class A multiple unit residential buildings to disclose where smoking is permitted or prohibited inside the units, outside areas within 15 feet of entrances and doorways as well as the common areas, balconies, courtyards and rooftops.

Current trends to regulate smoking in public spaces, such as in parks and restaurants, have sparked interest in pursuing non-smoking policies for residential buildings. Additionally, New York City’s Smoke Free Air Act already requires that individuals cannot smoke in public places, including the common areas of a multiple dwelling such as hallways, elevators and stairs.

The proposed legislation put forward by the Mayor’s office would require buildings to create a smoking policy if they do not already have one.  There are several concerns with the legislation.

• In the current draft of the bill, buildings would have to comply within 90 days.   This is an unrealistic turnaround time for condo and coop boards. They would need at least 6 months to confer with their attorneys and have any smoking policy approved by the board members.
• Under the legislation, the proposed notification requirement is the responsibility of many parties including owners, managers and leasing agents.  In actuality, given the various ownership and management structures in New York City real estate, each lease and sale transactions can be structured differently and can make it difficult to clearly delineate responsibility.  It may be straightforward to designate responsibility in an owner managed and leased rental building, but it may be less clear if a condo owner is subletting his/her own apartment.
• Additionally, the City is seeking to impose hefty violations if this notification is not in place. We question the need for a complicated fine schedule.

REBNY will be working with the Mayor’s office and City Council to ensure that any bill that is passed is practicable for building owners and managers.

Related to the smoking issue, the Best Practices Subcommittee of REBNY’s Residential Management Council created a guide that serves as a starting point to help managing agents best inform their buildings and boards if they are considering implementing a no-smoking policy. This Subcommittee, which finalized the guide at the beginning of April, laid the groundwork to open communication and provided insight into addressing this issue.

Under existing city, state, and federal law, owners of rental apartment buildings are free to adopt a non-smoking policy with regard to the individual residential units that are free market. Currently, there are no laws in New York prohibiting smoking within an apartment in residential buildings, but implementing a smoking ban could lower maintenance costs and insurance rates.

Here are some highlights from REBNY’s guide for implementing a smoking ban in residential buildings:

Rentals

A landlord or owner can ban smoking in the building for each new non-rent-regulated tenant.  However, the landlord would have to add a rider to that effect to the lease.

In the event that an existing tenant has smoke emanating from his or her apartment and other tenants have registered complaints, the landlord may be able to use that as a basis to attempt to terminate the smoker’s lease.

Coops

An outright ban on smoking would most likely require an amendment to the proprietary lease, which would require the affirmative vote of the owners of a supermajority (typically two-thirds or 75 percent) of the shares.

The Board of Directors may consider whether the smoker’s conduct rises to the level of objectionable conduct sufficient to terminate the shareholder’s proprietary lease.  The Board of Directors could also use the prohibition against “objectionable odors” emanating from an apartment found in most proprietary leases to attempt to terminate the smoker’s proprietary lease.

Condos

Condominium’s By-Laws can generally be amended by the affirmative vote of the owners.  The Board of Managers has the ability to reject any purchaser who permits smoking in the unit.  The Board of Managers can also indicate a specific date in the future at which point no resident may smoke in the building including within the unit.

If the Board of Managers has the authority under the By-Laws to fine a unit owner who smokes in a unit and the smoke enters another unit, it may impose such a fine.  Absent such a provision, the Board or offended unit owner could sue the owner who smokes for monetary damages and an order enjoining the owner from smoking.

The Guide titled, Issues to Consider-Smoking and Second Hand Smoking in Multi-Unit Residential Buildings, is easily accessed on the member’s only side of REBNY.com.  Go to ‘Just for Managers’ and click on ‘RMC Subcommittees” for the full document.

From REBNY memo April 25, 2012.