Co-op Sublet Fees Can Give Renters a Shock

In a recent Habitat cover story entitled “Sublet Sticker Shock,” we told you about a renter’s surprise when he was hit with a bushel of non-refundable fees – including a fee to the management company – when he applied for a sublet in a Manhattan co-op. Now a Brick Underground reader has expressed shock that his sublet application in a co-op included one month’s rent as a “management fee.” The reader asks: “Is it at all standard for a building to request this?”

"No, it's not standard," says Gordon Roberts, a broker with Sotheby's International. "I'd ask what it's for, and why you weren't informed of it earlier."

Usually when you're renting in a co-op, says Roberts, the cost of property management is baked into the monthly maintenance fee, which should already be covered by your rent. Charging a fee from shareholders who sublet their apartments is a way for the co-op board to control the number of sublets and also add to the co-op’s revenue stream. But when subletters are hit with surprise fees, Roberts advises them to review what, exactly, they’ll be signing on to. "The pressure is often on for you to make snap decisions, and pony up, last-minute, additional charges," he says.

The fact that this sublet is in a co-op – and therefore probably subject to board approval – actually works in the renter’s favor, since it can decelerate the rental process that might otherwise be moving at a breakneck pace. "I would advise renters in Manhattan to slow down and demand, up front and in writing, what your fees are going to be, as well as the mandatory New York State Agency Disclosure form," says Roberts.

And before paying anything beyond the application and/or credit check fee, he recommends reviewing the lease with an attorney or your own real estate agent to make sure you're getting a fair deal. While it can be easy to give in to pressure and agree to anything a co-op board or its management company demands, it's best to take a deep breath, step back, and make sure you have confirmation – in writing – of exactly how much you will be paying, what the money is going toward, and what will be given back to you at the end of your lease.