When a Roommate Is Not a Roommate

Case in point. We represented a board where a shareholder had claimed he had a roommate who was also his fiancee. Then he moved out West, got engaged to someone else and wanted the board to get his ex out of the apartment. But even though she had been there a long time, she was an unauthorized roommate who had never been vetted, and the board had never signed a contract with her. We told the shareholder that we were going to charge him an unauthorized sublet fee, which certainly got his attention. He got her out and then sold the apartment. 

Defining terms. Distinguishing between roommates and sublets is simple. You have to live in the apartment with the shareholder to qualify as a roommate; if the shareholder isn’t living there, it’s a sublet. Boards should establish clear rules and make sure shareholders are informed. For example, if you have a roommate and you move out, you must apply for a sublet within 10 days, which can only be approved with written consent from the board. You can have a residents handbook explaining your policy and present it to shareholders at the closing table, or put the information on your co-op’s website. Or you can change the house rules or proprietary lease. 

On the lookout. Boards need to be vigilant about who is living in their building. You can request a photo ID of any new occupant and then ask your managing agent to write the shareholder a letter saying: “We noticed there’s a new occupant in your apartment. Please let us know who they are and their relationship to you.” Boards have a fiduciary duty to identify roommates who become sublets and make sure they’re collecting the appropriate fees.