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What are your sublet rules for your coop? Our building is considering revising policy and would like to know what you think works and does not work.
No sublets during the first 2 years of ownership. Then maximum of 4 years subletting, in 1-year increments. Fee is one month's rent for each of the first 2 years, 50% more for third year, double for the fourth. Schedule will reset if the shareholder moves back in for 2 years or more. The monthly rent used is the open market rent for comparable apartments in the neighborhood.
Ours is not the strictest around. In fact, it's fairly liberal.
Our aim is to promote owner-occupancy and reduce the resident turnover that comes with rented apartments. The time limit seems to work. In the last couple of years, we've had 3 apartments be sold to buyer-occupants after 4 years of subletting; in only 1 case did the owner move back in after 4 years of subletting. We impose fees as a deterrent to absentee owners' treating their apartments as income-producing properties. This doesn't always work, but in other cases it may.
Ours is 3 yrs over 10 in 1 yr increments but must live there for 3 yrs first.
No sublet for first two years; then allowed three years out of any five year period with one-year terms approved by board. 15% fee for first, 20% for second and 25% for third year.
While co-ops can have their own governing rules. I personally would not buy into one that imposes sublet fees. Also, I feel such a rule may devalue the property (the co-op) in the real estate market.
In a weak market such as the current one, I believe that sublets are necessary. There should be a minimum period of prior ownership, maximum limits on permitted terms and a fee to bolster the coffers of the community. It would probably be a good idea to limit the number of sublets allowed based on a percentage of units in the building. This would prevent a huge number of non owner occupied units. Problems will arise if a strong policy is not put in place that has an understanding by the residents of "no exceptions". Finally, put the policy in place for a limited time, say 3 to 5 years so that it can be re examined in light of the market in the future. Good luck
Dianne Stromfeld
min 3 year ownership before allowed to sublet, +15% surcharge on maintenance, BUT the financial criteria is as strict as a purchase, they just 'check off' a different box. Our flexibility is that the Lessee's financial obligation is to the Lessor, who is obligated to the corporation. They don't have a direct financial obligation/link to the corporation. Sign off on all rules, pets etc. 1-2 year leases, no storage bins in basement, restricted to owner's only. IF they bail or screw up in any way the Shareholder pays. We are not their partners in the risk or reward.
3 years of ownership before you can sublet. One month's maintenance each year that you do sublet (or renew w/ current renter).
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I heard some buildings require 1 year live-in before permission to sublet.
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