Subletting and renting rules must be in your bylaws if you wish to enforce any prohibition.

Our co-op has a rule that there are absolutely no sublets.

You might be able to enforce something retroactively if your proprietary lease document stipulates that only those on a “proprietary lease / stock certificate” may live in the unit.

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We are now in the throes of converting our 500 unit coop to condo. (As I have previously noted in other postings, we do not have any underlying mortgage so our path is significantly less onerous than the path faced by others coops. Likewise, we have not shirked our responsibility to fund capital improvements.)

We have learned in NJ as a condo association, we must allow rentals, but we can impose restrictions. By the way, this requirement to allow rentals is not a legal requirement in Florida. States differ.

Our planned restrictions will include:
1. One must be an owner for two years before one can rent. This avoids buying for investment purposes to rent only.
2. There will be a minimum of two years on a rental. This avoids transient populations.
3. The condo owner must pay a fee to the condo association up front. This avoids, “oops”, they skipped and we want to rent again.
4. There will be a limit of 20% as to the number of units that can be on rental at any one time. This avoids becoming a predominantly rental property. Conversely, this still maintains an 80% owner / resident population. Of note is that until five years ago, the sponsor owned about 20% of the units and thus we did have a rental population with no adverse affects, as the sponsor screened all rentals. The sponsor slowly divested its units over the past five years.

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Separately, I have researched the question of rentals, and I have found that there are additional impositions that can be enforced:
1. There can be a limit as to the dollar amount for which a unit can be rented.
2. A surcharge can be imposed, if an owner wishes to exceed the 20% limit.

At this time, we are reviewing changes to our coop bylaws that will be carried into the condo association bylaws. So, all the above is under consideration.


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Are there any other thoughts for the originator of the question or to our conversion plans narrated above?

Who are the firms that can convert a co-op property?

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In turn we are employing the services of a firm that has a long history of coop and condo sponsorship.

Note we are unique as our coop does not have any underlying mortgage and we have not shirked our responsibilities in funding capital improvements.

The firm we are employing is:
Arilex Realty Corp
1000 Portside Dr
Edgewater, NJ 07020
(201) 943-6030

If you elect to call Arilex, ask for Jimmy D. and indicate to the staff that Ted made the referral. I spoke to Jimmy this evening and indicated that I would be posting his firm’s name.

We are very interested in talking to you regarding your conversion to condo. Could you give me a call?
212-505-2030 ext. 3007.

XXXXXX CORP.
XXXXXXXXX AVE, NEW YORK XXXX

POLICY FOR SUBLEASING

1. Definitions. The following terms shall have the meanings respectively ascribed to them:
(a) Applicant refers to a person who proposes to sublease an apartment in the building owned by the Corporation from a Shareholder.
(b) Board means the board of directors of the Corporation.
(c) Corporation means XXXXXX Avenue Corp.
(d) Effective Date means June 26, 2003.
(e) Proprietary Lease refers to the proprietary lease between the Corporation and the Shareholders.
(f) Shareholder refers to a Shareholder of the Corporation.
2. Coverage of this Policy and Requirement for Board Approval. No sublease shall take effect or be valid without compliance with the sublet policy set forth herein, nor shall any sublease be valid until approved in writing by the Board as provided in the Proprietary Lease. This sublet policy shall become effective on the Effective Date with respect to subleases entered into on or after the Effective Date. This sublet policy shall not apply to any sublease duly approved by the Board which commenced prior to the Effective Date, but it shall be effective with respect to: (i) any extended or renewal term thereof commencing on or after the Effective Date; and (ii) any sublease which commenced prior to the Effective Date and which was not been duly approved by the Board prior to the Effective Date. The term “Subletting” shall include the occupancy of an apartment by any person not authorized to occupy the apartment by the provisions of the Proprietary Lease, whether or not any rent is paid by such occupant.
3. General Criteria For Subletting. The following provisions shall apply to all apartments other than those owned by holders of unsold shares:
(a) No more than thirteen percent (13%) of apartments owned by Shareholders, excluding apartment(s) owned by a holder of unsold shares, may be sublet at any given time (“sublet quota”).
(b) No Shareholder shall be permitted to sublet the whole or any part of his/her apartment until he/she shall have owned his/her shares in the Corporation for a period of not less than two (2) years prior to the commencement date of the sublease term. This requirement may be waived by the Board, provided such waiver is in writing.
(c) Except for apartment(s) owned by a holder of unsold shares, no apartment may be sublet for a period or periods exceeding two (2) years out of any five (5) year period. This limitation may be waived by the Board, provided such waiver is in writing.
(d) No Shareholder may sublet more than one apartment during any given one year period.
(e) Upon receipt of a completed sublease application, the Shareholder's request will be placed on a list and reviewed by the Board. Generally, Board consideration of sublet applications will be on a first-come-first-serve basis, subject to the sublet quota. If more than one Shareholder seeks approval to sublet his or her apartment, the Board may, in its discretion, give preference to a Shareholder who has historically sublet his/her apartment less frequently than others, but nothing in this Sublet Policy is intended to diminish or restrict the Board’s discretion with regard to the granting or withholding of consent, for any reason or no reason, or to impose such conditions as the Board deems appropriate in connection with the granting of any consent.
(f) No sublease application shall be considered by the Board in the event that the Shareholder is then in default of his/her Proprietary Lease, including without limitation breach of the house rules, failure to pay any maintenance fees, assessments, garage parking fees, repair fees, or any other outstanding fee or charge due.
(g) The term of each sublease shall not exceed one (1) year, unless extended with written approval by the Board. In addition, each sublease agreement must begin on the first day of a calendar month.
(h) Any proposed sublease must specifically state that it is subject to all of the terms and conditions of the Proprietary Lease and that it is subordinate to the Proprietary Lease. A breach of the house rules by a subtenant shall also be deemed a breach of the Shareholder’s Proprietary Lease.
(i) Each Shareholder subletting an apartment shall maintain a comprehensive homeowners type policy with an A rated insurance company, including (i) coverage of at least 80% of replacement value of the interior portions of the premises for which the Shareholder is responsible to maintain and repair under his/her Proprietary Lease, including the Shareholder’s improvements, fixtures, wall coverings, floor coverings, the finished surfaces of all floors, and all other of Shareholder’s improvements and installations, (ii) personal property contents insurance to cover contents contained within the apartment, (iii) other provisions that the Board may require, and (iv) liability insurance in an initial amount of not less than $100,000 (the "minimum amount"), provided that in their sole discretion, the Directors may, by resolution, increase the minimum amount of such liability insurance from time to time.

4. Application Procedures.
(a) Four (4) sets of a duly completed application to sublease must be delivered to the Board in care of the Corporation’s managing agent at least thirty (30) days prior to the first day of the month that the sublease term (or renewal or extended term, as the case may be) is to take effect.
(b) An application to sublease an apartment, or to extend or renew an existing sublease must contain the following:
i. A properly completed and signed application form;
ii. Permission to check the Applicant’s credit history;
iii. Copies of the Applicant’s State and Federal Income Tax Returns, and W2 forms for the two most recent years;
iv. Verification of the Applicant’s current employment stating position, length of employment, and salary;
v. Verification of Applicant’s current residence, including a copy of two months’ insurance bills, utility bills or credit card bills;
vi. Copy of three months’ most recent banking and brokerage accounts, together with a letter from each institution indicating types of accounts and the date(s) the accounts were opened;
vii. One business reference letters;
viii. Two personal reference letters;
ix. One letter of reference from Applicant’s current or most recent landlord (or its managing agent) stating length of residence and payment history together with rent receipts, cancelled checks/money orders on account of rent for the most recent twelve (12) month period;
x. The written consent of the Shareholder’s lending institution (if any) to the proposed sublease; and
xi. The fully executed counterpart original standard sublease agreement.
(c) Falsification or omission of information may result in the denial of the sublease application by the Board, and may also result in termination of the current sublease.
(d) All persons who will reside in the apartment with the Applicant must attend a Board interview. No person, other than those named in the Applicant’s application and the sublease, may occupy the sublet premises without prior written approval from the Board. Any such requests must be submitted to the Board in writing, along with a completed application form.
5. Fees.
(a) Each Shareholder to whom consent to sublease is granted must pay a sublet fee to the Corporation on the first day of each and every month of the sublease term, as follows:
i. 10% of the monthly maintenance for the first year or partial year of the sublease term, except as provided in (b) below; and
ii. 15% of the monthly maintenance for each additional year or partial year of any extended sublease term. For these purposes an “extended sublease term” shall include a sublease to a new sublessee if less than one year shall have elapsed since the expiration or termination of any prior sublease.
(b) The following fees must be paid to the Corporation at the time a sublease application is submitted:
i. A non-refundable $75 credit check fee;
ii. A refundable $500 moving deposit to cover possible damage to the building caused by the moving in or out of the subject apartment;
iii. A non-refundable $100 processing fee; and
iv. A non-refundable $250 interview fee.
(c) The following fees must be paid to the Corporation at the time an application to renew or extend an existing sublease application is submitted:
i. A non-refundable $100 processing fee; and
ii. A non-refundable $150 interview fee.

We for the most part do not allow sub-let.

It is nothing but trouble. In fact if you have to many your insurance rate will go up.

Best bet for the bldg. unless absolutly necessary don't allow it.

Thanks for your informative response,,, One more question... Is there a restriction on how many times an apartment can be sublet?

A number of years ago the Board relaxed the rules, and some of the absentee owners run B&B in our building. We now have board members who are intrested in changing the house rules.

Habitatmag.com article archives has a treasure trove of info. Search the phrase Sublet Policies and sort by "Relevance". Good luck.