To Ban or Not to Ban?

It’s an issue confronting boards throughout New York City: What to do about electric bikes amid the alarming epidemic of fires caused by exploding e-bike batteries? There were nearly 200 fires linked to the devices in 2022 — up from 44 just two years ago — including a devastating blaze last November that tore through Rivercourt, a luxury high-rise apartment building on East 52nd Street, injuring dozens of people. “I’ve been getting a lot of questions from boards that are struggling to figure out whether they should ban the bikes outright, and if so, how they would do it,” says Leni Morrison Cummins, who chairs the cooperative and condominium practice at the law firm Cozen O’Connor. “They’re asking what their fiduciary duty is since it’s clear they pose a serious fire risk.” Before you make a decision on e-bikes for your building, here’s everything you need to know.

The Flammability Factor

Nearly all micromobility devices, from e-bikes and e-scooters to hoverboards and wheelchairs, are powered by rechargeable lithium-ion battery packs. The batteries are extremely sensitive to high temperatures and inherently flammable; according to the New York City Fire Department (FDNY), fires are generally triggered by overused, improperly maintained batteries that overheat and explode while charging. The explosions, which can also occur when the battery packs are kept close to a heat source or charged with a non-compatible device, can be so powerful that they blast out walls between rooms and neighboring apartments.

“The problem is that there are no safety standards for these e-bike batteries,” says Chris Nolte, the founder of Propel Electric Bikes, a Brooklyn-based retailer. While it is not required, most electric components, equipment and appliances sold or manufactured in the U.S. are certified by a nationally recognized testing lab, such as Underwriters Laboratories (UL), to ensure that they meet standard minimum requirements for safe operation. That’s not the case with e-bike batteries, most of which are manufactured in Asia. “Most batteries made in Europe, where e-bikes have been popular for a long time, typically do meet UL standards, but many batteries imported from China do not,” Nolte explains. “And they were never intended to be stored or charged indoors.”

To Ban or Not to Ban?

In the wake of the Rivercourt fire, which the FDNY blamed on e-bike batteries charging inside a 20th-floor apartment, there’s been heated debate among boards on whether to ban lithium-ion batteries from indoor residential spaces or from their buildings altogether. Buildings can enact a ban by amending the proprietary lease in a co-op or the bylaws in a condominium, “but that typically requires a supermajority vote by shareholders or unit-owners, which can be hard to obtain,” says Steven Sladkus, a partner at the law firm Schwartz Sladkus Reich Greenberg Atlas. “So if you want to act immediately, you could simply amend the co-op’s house rules or the condo’s rules and regulations with a majority vote of the board.”

Either way, imposing a blanket ban on all devices powered by lithium-ion batteries can get complicated, Sladkus points out. “If there are residents using wheelchairs with lithium batteries, boards will want to think twice,” he says. At those buildings, Sladkus adds, boards could either exempt such wheelchairs from the ban or grant exemptions to residents as a reasonable accommodation on a case-by-case basis.

Proceed with Caution

There are other legal matters to keep in mind. “If you’re going to change the house rules, you have to make sure that there have been no previous regulations about e-bikes in the bylaws,” Morrison Cummins cautions. “If a resident challenges the board’s action, there’s heavy case law that house rules cannot be amended as an end run around the bylaws, because that’s taking away the voice of shareholders and unit-owners.”

Even if a co-op or condo decides not to prohibit e-bikes, boards need to tread carefully. “All of the board’s discussions and deliberations need to be recorded in the meeting minutes, because that shows a business decision was made about the risk,” Morrison Cummins says. “That way, if there is a lawsuit against the board for breaching their fiduciary duty by not keeping the building safe from fire hazard, it will be protected by the business judgment rule.”

Some boards are finding other ways to defend themselves, she adds. “I have one co-op that has asked me to prepare a document that is basically like an affidavit and indemnity where shareholders with e-bikes will swear they have UL-approved batteries that were purchased firsthand and meet all the manufacturer’s requirements,” Morrison says. “Nevertheless, if there’s a fire and there’s personal injury or property damage, the shareholder is responsible and will indemnify the co-op.”

As for property insurance, there’s good news and bad news. “Buildings are currently covered because there’s no specific exclusion related to fires caused by e-bike lithium-ion batteries,” says Sarah Schnepf, the vice president of underwriting at the insurance firm Mackoul Risk Solutions. That could soon change. “The industry is still formulating its opinion, but at least one carrier is already considering prohibiting e-bikes by adding an exclusion to their policy, and others may follow,” she says. Even if exclusions don’t become the norm, boards should be prepared to take a financial hit, Schnepf adds. “It depends on how many fires continue to happen. But there is property damage, and people are getting hurt, and that’s almost certainly going to impact insurance rates.” 

Decision Time

For now, insurance carriers are advising boards to follow the revised FDNY guidelines (see box). In the meantime, the City Council is considering several bills to address the spike in fires, including prohibiting the sale of lithium-ion batteries for mobility devices that are not certified by a nationally recognized testing laboratory. Legislation could be approved as early as this spring.

“E-bikes are here to stay,” says William McCracken, a partner at the law firm Ganfer Shore Lee & Zauderer. “I think the batteries will get safer over time, but for now we do have all these uncertified, unregulated devices out there, which boards need to address.” There’s no one-size-fits-all answer, which is why McCracken recommends that boards take inventory of their buildings to see how many people have e-bikes and how big of a problem they’re potentially facing. “It’s not just a question of banning e-bikes, but how you are going to enforce a ban and whether it is going to be something that residents will abide by and be comfortable with,” he says. “Along with assessing the facts and weighing the risks, that’s something boards need to consider when making their decision.”

SIDEBAR: Reducing the Risk

The NYFD has updated its 2022-2023 Fire and Emergency Preparedness Bulletin for apartment buildings, including co-ops and condos, in response to the dangers posed by lithium-ion batteries. The bulletin, which landlords are required to post in their buildings by April 30, is available at http://bit.ly/2023FEP and includes the following safety practices:

• Only buy devices that are certified by a nationally recognized testing laboratory, such as UL (Underwriters Laboratories), ETL (Environmental Testing Laboratories), and CSA (Canadian Standards Association).
• Use the original batteries, power adapters and power cord supplied by the manufacturer or replacements that are either recommended by the manufacturer or certified by a testing laboratory. Unapproved batteries may cost less, but they carry a higher risk of fire.
• Plug devices directly into an electrical wall outlet to charge. Do not use extension cords or power strips.
• Charge e-bikes and other mobility devices in a safe facility, if possible, rather than in an apartment. Building owners and managers can consider providing a safe charging and storage area.
• Position devices away from entrances or exits when charging so that a fire does not prevent escape. Never charge an e-bike or e-bike battery on or near your bed or couch, or close to drapes, papers or other combustible materials.
• Monitor devices and batteries when charging. Never charge overnight or when away from the apartment.
• Follow the manufacturer’s charging and storage instructions.