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Hi all,
I closed my coop on Feb 15, coop sent me an email today and said they will impose a fine of $1000 cause the tenant from the previous owner haven't move out yet, and the coop deny my permission to move in until the tenant move out. I already told the tenant to move out, and she is looking for a new place and will move out soon.
What can I do? $1K seems a lot. And I do not see anywhere in the house rule state how this $1K fine come from. I've enclose the house rule where it states fine structure, please help! There is also sublet rule, the tenant asked me to let them stay there until they find a new place, and they would pay me for the stay. Does the sublet rule apply here?
12.1 Failure to follow the House Rules constitutes a violation of the Proprietary Lease and is liable to penalties.
NOTE: THE PROVISION OF THIS COPY OF THE HOUSE RULES CONSTITUTES A WRITTEN WARNING OF ANY/ALL VIOLATION.
12.2 The general administrative fee structure is follows:
First Offense: written warning (see above)
Second Offense: $100
Third Offense: $250
and as previously said, any fines have to be in the proprietary lease. we have a similar situation right now in that the current owner is going to rent from the new owner for about 2 months. the board was notified of that prior to interviewing the buyer and had to approve. if you were informed of this after all paperwork was submitted it seems the seller pulled a fast one on you.
I am not an attorney, but it is my understanding that it isn't "any fines have to be in the proprietary lease", but rather that the proprietary lease allow for fines. To my understanding the specifics do not need to be in the proprietary lease.
I know in my building we also have a $1K fine for having an "illegal sublet". I also know that we as a board are reasonable and will waive it if circumstances warrant. I also know that as part of out application, the sublet policy is included so that there is no question about it.
In your case, you don't indicate whether the existing tenant from the prior owner had a lease that extended past Feb 15th. I would think that if the lease had not expired, that you could say to the board, you approved the lease and (I assume) there was no clause in the lease indicating that the lease terminated if the coop was sold to a new owner. If the lease already expired, I would send a letter to the board indicating that as a new shareholder in a coop, you were unaware that allowing the current tenant sufficient time to find another place to live would be a violation of the rules. I would explain that you would have abided by the rules if you had been aware that this was an issue, and that you have asked the tenant to move out as expeditiously as possible (and I would ask the tenant to move as soon as they can). I would then ask that any penalty be waived as you were new to the building, unaware of the rules and as soon as you found out you took steps to comply with the rule by insisting the tenant move out. I would also remind then that this was a pre-existing tenant and that no one advised you that this was an issue.
This is one of the stranger things I've heard about lately.
First, why in the world did you close on your purchase with a tenant in possession of the unit you were buying? Vacant possession should be a prerequisite to any sale except in extraordinary circumstances - e.g., buying an apartment with a rent-controlled tenant as an investment.
Second, you can give someone a general warning in writing that rules will be enforced, but that's not a "written warning" in the usual sense of the term. The warning has to *follow* the specific offense. This is confirmed by the language in the House Rules you cite: "First Offense: written warning (see above)." Note that the penalty on each line follows as a *consequence* of the offense. However, as sleazy as this may be, it's not terribly important because House Rules are generally subject to change by a vote of the board. They can change the language in the House Rule to match what they want it to say.
The third point is that the authority to impose financial penalties must come from the Proprietary Lease, not the House Rules. Financial penalties are a material term of the lease and may not be imposed unilaterally by the board. The board can add financial penalties to the House Rules, but they will not be enforceable unless the lease clearly provides for such penalties.
All that said, I would make two recommendations. First, CONSULT YOUR ATTORNEY as it sounds like this is quite a bad situation for everyone. (I must stress that I am not an attorney myself.) Second, look for an amicable solution to this mess. Both you and the board are very unhappy about the situation, and you should be actively working to remove the tenant while reassuring the board that you are doing so.
Additional questions: Why didn't the board know about the sublease at the time of the closing? Or did they? Has the sublease expired at this point? Is there even a formal sublease, or is the presence of the subletter a surprise to the board?
Be *extremely* careful about letting someone stay in an apartment after a sublease has expired, as there are all sorts of surprising laws that kick in. Also, although the board may not have the authority to fine you, they certainly have the right to sue to cancel your lease and shares if you fail to remove the subletter. Assuming that the sublease has expired, your focus must be on getting the subletter out of the unit. Be open and forthright with your board about the details of the situation and what you're doing about it.
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Also, when I question about I the written warning, they quote me 12.1, and said the house rule is the written warning, can they give me the warning prior of violation?
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