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My coop charges 15% of maitenance for any portion of the first year in which an apartment is sublet.
However, for shareholders who are renovating they have allowed sublets (of vacant shareholder apts) where this fee does not have to be paid. This seems unfair and inconsistent.
Is this allowable/ equitable/legal?
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My Co-op charges a monthly fee for sublets. It is on a per-share basis, but since maintenance is based on the number of shares, it is roughly equivalent.
There are a number of reasons why co-ops charge a sublet fee. Probably the most significant is to discourage sublets. A sublet puts extra work on the board and managing agent to make sure that the strangers being granted access to the building do not present a security and safety risk, and will fit in well with the rest of the shareholder community.
Too many sublets make it difficult for shareholders to sell or refinance their apartments because banks use the number of concurrent sublets as one of the factors in deciding to approve or reject a mortgage.
Sublets cost money in terms of extra paperwork and bookkeeping for the MA, credit and background checks, interviews, etc. The fee helps to recoup some of these expenses.
These are the reasons why most co-op charge a sublet fee, impose a time limit (usually 2 years) on the length of a sublet, and have a limit on the number of concurrent sublets.
If the board allows an existing shareholder to use a vacant apartment during a renovation, almost all of the reasons for discouraging a sublet vanish. The shareholder's character is already known to the board, the duration of the sublet is usually very short, and almost no additional expenses are incurred by the co-op or MA.
Is is allowable/equitable/legal? In my opinion, absolutely. First, in my opinion it is both allowable and legal. Subletting to an existing shareholder without a fee does not create a new class of co-op shares, which is prohibited under co-op regulations. I'm assuming that either the co-op owns the shares of the vacant apartments or that the shareholder-owners have given permission. I don't believe a board can force the owner of a vacant apartment to sublet to another shareholder or anyone else.
Is it equitable? I believe the Business Judgement Rule gives a co-op board the power to waive fees like the sublet fee if they feel it is appropriate to do so. It might be a different story if the board waived the sublet fee for some sublets to external tenants and imposed the fees on other sublets to external tenants. That would be a question for an attorney, or maybe someone else on here knows the answer. There may be finer points to the definition of a "sublet" I'm not aware of.
I hope this helps.
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