Your right a housing investment is major decision of time, money and effort. When one chooses to purchase shares in the cooperative, they agree and accept the proprietary lease, house laws, and by-laws that govern shareholders and the corporation. At the time of purchase, a shareholder accepts the theoretical and applicable differences between owning property in a house, condominium property and shares of a cooperative.
Under NY State Business Rules, Board of directors is granted wide ranging powers to govern the corporation – focusing on equitable treatment of shareholders. Policy and governing document updates are controversial.
This year we updated our sublet policy as well - to include a time limit and fee; it was a change that had not been made since the 90’s. We didn’t grandfather anyone; rather we allowed a phase out over two years until the new rules were implemented for those with current sublets, meaning they received 2 years + the time limit. I want to avoid hypotheticals, to stay focused.
We made the policy change consistent with our governing documents. Our bylaws Article I states – the primary purposes of the corporation is to provide residences for shareholders who shall be entitled solely by reason of their ownership of shares to proprietary leases … We wanted to meet this standard, while allowing some flexibility by allowing more time, but not grandfathering. We wanted to set a new policy that would be consistently followed, allow all shareholders the same opportunity and terms for subletting, and to minimize legal and financial issues for the corporation as a whole.
On Grandfathering – it’s a difficult proposition. Board’s change, managing agents change, requirements change. As a board member, a goal we strive for that treats shareholders equitably is consistency in polices. Think of all the policy’s in effect in a co-op, from the move in/move out, - Parking – laundry room – sublet and pets, etc… If these policies are updated and grandfathering occurs for each policy – managing the corporation (which the board was elected to do) becomes considerably more difficult and time consuming.
Those not happy about the decision, should reach out to the board/managing agent and see if they will meet with you to discuss your concerns (no guarantee), sometimes there are factors behind a policy change which are not communicated clearly if at all. (If you want specifics let me know)