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Q. Our co-op has a new house rule barring shareholders who have home-based businesses from having clients or customers come to their apartments. This is in direct conflict with the lease, which states that we may have any home occupation permissible under local zoning laws. How can we persuade the co-op board to rescind this rule? And if we can’t, what can the board do if we violate it?
A. If a new rule materially alters a shareholder’s rights and obligations, it may not be enforceable, because, it can be argued, it is an impermissible change to the terms of the contract between the co-op and the resident, according to Matthew J. Zangwill, a Manhattan real estate lawyer.
A co-op’s proprietary lease is the principal document that sets forth the dos and don’ts of daily living in a co-op, and the house rules are usually part of the proprietary lease. The lease, which is a contract between the co-op and the tenant/shareholder, usually gives the board of directors the power to adopt new house rules without the consent of the shareholders, Mr. Zangwill said. But a new rule would not be enforceable if it changed the terms of the contract.
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KLee, all the NYTimes Q&A is saying is that the board cannot pass and enforce a new house rule if it conflicts with the lease. That's been a settled point for ages and is not news. Changes to the lease require approval by a super-majority of shareholders.
The interesting part is the question-asker's claim that their lease explicitly allows home occupations. That would be quite an unusual provision, if actually present. I see above that you believe your own lease also has such a provision - could you please post the language from your lease that states this?
Our own lease is based on the same template as many co-op conversions from the early 1980s. There is no mention of home occupations or zoning, and the language in Paragraph 14 ("Use of Premises") explicitly rules out any use except as a private dwelling: "The Lessee shall not, without the prior written consent of the Lessor on such conditions as Lessor may prescribe, occupy or use the apartment or permit the same or any part thereof to be occupied or used for any purpose other than as a private dwelling ..."
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