Rent Coach: Can the co-op board kick us out after 2 years of subletting?

Q. My family and I are in a predicament. We are currently subletting an apartment in an Upper West Side co-op. Before moving in, we signed a one-year lease with the shareholder and the application was approved by the board.  At the end of the first year we were approved for a second year.

The end of the second year is approaching quickly, and we are AFRAID of losing our home as the co-op seems reluctant to renew our lease again. 

They sent us the following language in response to our application for renewal:

“If the Board does grant its approval for subletting, the sublet period must be for no more than two (2) years. Under extraordinary circumstances, The Board may, at its sole discretion, agree to extend the sublet for a third and final year. Each year is subject to Board approval and the payment of the sublet fee.

Under no circumstances will the Board agree to extend the sublet for more than the aforementioned period. At no time can a sublet agreement be extended without Board approval. The Board, at its sole discretion, has the right to refuse the extension of an existing sublease. There is no minimum period, but no more than one sublet per consecutive 12-month period.”

What does the future hold for us?!

A. Co-ops are restrictive about sublets in order to preserve a carefully curated environment that evolves out of restrictive purchase policies and an extensive application and interview process.

Rightly or wrongly, co-ops tend to view renters as having less of a commitment to protecting the co-op and maintaining its culture. Many have adopted sublet policies that either place on absolute prohibition on a shareholder’s right to rent out their apartment or greatly restrict it.

The limited subletting that co-ops do permit can be viewed as an attempt to lower the risk of default by shareholders who are going through atypical and potentially difficult circumstances in their lives (e.g. a sudden loss in income or need to move to another location).

It is very important to understand a co-op’s subletting policy before renting an apartment from a shareholder.  A good broker should be able to advise on the nature of a building’s sublet policy and how it will affect their client's ability to renew the lease in the future.

For example, it is not uncommon for the bylaws to limit sublet periods to “no more than two years out of any five year period,” or “no more than twenty-four consecutive months,” or “no more than twelve consecutive months and only in the event of extraordinary occurrence such as a job loss or transfer.” 

In all cases, if the bylaws allow for interpretation of their meaning (e.g. what are “extraordinary circumstances?”), the right to do so rests solely with the co-op board. 

It appears that the co-op you have rented in has a sublet policy restricting rentals to no more than twenty-four consecutive months. 

Though the policy appears to leave open the possibility that your lease could be extended for a third year in the event of “extraordinary circumstances,” it is most likely that such circumstances would need to be those of the shareholder and not the subtenant (i.e. you). 

At the very least, it is the shareholder that will need to advocate for such an extension to the board and their management company. 

This is a process that should begin as soon as possible so that you will have the information you need in order to decide with fair warning whether or not you will need to begin your search to secure another apartment. 

Mike Akerly is a New York City real estate attorney, landlord, and real estate broker. He is also the publisher of the Greenwich Village blog VillageConfidential.     

Note: The information provided here is for informational purposes only. It should not be construed as legal advice and cannot substitute for the advice of a licensed professional applying their specialized knowledge to the particular circumstances of your case.

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