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Dianne - not all sublet fees or 100% of a sublet fee are used to generate income. In my Co-op we charge a sublet fee as a fixed dollar amount per share. Part of that fee goes towards time and cost of doing a background check on the proposed tenant, interviewing the proposed tenant, additional bookkeeping, etc. Sublets are not without costs.
I think the ability to even charge a sublet fee varies between Co-ops and Condos. Share ownership in a Co-op must still abide by the proprietary lease and house rules since the Co-op corporation owns the physical building. Condo ownership is by individual title, and I don't know how much authority the Association can exercise over who occupies the physical dwelling. Interesting question.
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First, a correction, co op ownership is not conveyed by title, but by share ownership and occupancy as a result of the proprietary lease.
No doubt there are some minor expenses in vetting a tenant, but in the end, the purpose is to raise additional income for the community. Generally sub tenants have to abide by the same rules as tenants (shareholders). The authority should be spelled out in the sublease agreement just as it is in the propietary lease. Of course, there could be additional resrictions on the sub tenant, but that is for the Co op board to determine. Most boards charge a dollar amount per share which is a fair way of determining the fee.
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