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Is Subletting a Co-Op Legal in Manhattan?

Subletting adds value to your co-op, and it might have been one of your considerations when buying in. At the same time, co-op boards have an interest in creating a stable living environment for all co-op residents.

Like most legal questions, whether you can sublet your co-op in Manhattan depends on several factors. The co-op’s subletting policy and the steps you took to follow it will play a primary role in determining whether you have legally sublet your co-op.

Below, learn about co-ops and how to legally sublet in Manhattan.

What is a co-op?

To understand what you can and cannot do with your co-op, you must first understand what you bought. A co-op has two components:

  1. Property ownership in the building
  2. A proprietary lease on your unit

This combination of rights gives you:

  • A voice in how the building gets managed
  • A permanent right to live in your unit
  • A right to use common areas
  • An ownership share that you can resell

A co-op is much more complicated than a condominium. When you buy a condo, you own your unit rather than lease it. Your role in managing the building is to vote for your HOA board instead of having a direct voice in the management.

Subletting a Co-op Under New York Law

Subletting happens when you lease your co-op unit to someone else. Your subtenant does not replace you on your lease. You remain the primary tenant, and the co-op remains your landlord. But you also become a landlord to your sub-tenant.

You might want to sublet your co-op if you need to relocate to a different city or if you outgrow your unit. Subletting can also help you maximize your co-op unit’s value.

Your proprietary lease will usually outline your right to sublet your co-op unit. But the co-op board can amend the proprietary lease with the approval of the co-op residents.

A proprietary lease can ban subletting altogether. But most do not. Instead, they impose restrictions on how and when you can sublet, along with whose approval you will need.

Common Conditions for Subletting

In effect, the co-op board retains total control over whether you can sublet. Some ways the board exercises control over your right to sublet include:

Board Approval to Sublet

Almost all proprietary leases require you to get board approval to sublet your co-op unit. The proprietary lease will usually tell you how to request approval and how the board decides whether to approve.

In many cases, the proprietary lease will give the board complete control over whether you can sublet. Some examples of language that give the board control include:

  • The board has sole discretion to grant or deny the request
  • The board can reject for any reason, or no reason

Some leases include procedures for overruling the board’s decision. For example, a lease may allow you to sublet if you get approval from a majority or supermajority of residents.

Limitations on When You Can Sublet

Proprietary leases can limit how long you must reside in the co-op before getting the right to sublet. For example, a co-op may prohibit subletting until you live in your unit for two years.

Co-ops can also restrict how often you sublet or the length of the sublease. For example, you may be allowed to sublet for only two out of every five years of the lease. For the remaining three years, you must either reside in the unit or leave it vacant.

Sublet Fees

Another obstacle to subletting is the sublet fee. A co-op board may charge a fee to sublet your unit. This can effectively price your unit out of the market due to the fees you must pay to lease it.

Subletting Legally in Manhattan

You must follow your proprietary lease to form a legal sublease. If you fail to do so, you will breach the proprietary lease and your sublease. This puts you in legal jeopardy with both your co-op and your subtenant.

To discuss how you can sublet your co-op legally in Manhattan, contact the business law firm of Woods Lonergan in New York City.