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Sublease rulesDec 19, 2011

I am wondering what would sustain or increase the values of a cooperative better.

If the by-laws allowed:
a) After owning for 1 year you can sublease for 5 years out of a 6 year period.
b) After owning for 1year you can sublease indefinitely.

The variables that I feel come in to play are as follows:
a) Currently there are more apartments then usual on the market, this can help decrease the supply, helping to sustain perhaps increase values.
b) There is a flip tax that is received on the sale of an apartment. However if the shareholder starts to sublease instead the potential revenue will not be the same.
c) Subtenants may not care for the property and community the same as an owner will.

Thank you for your thoughts.

Join the Conversation Comments (1)
sublease rules - ellen Dec 20, 2011

I think if you allow subleasing indefinitely the bldg will attract a whole different kind of buyer; investment buyers. Your bldg will turn into a rental type bldg but you will be able to sell more apts. So it depends on the goal of the coop. Do you want predominantly owners or a more transient constituency.

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