Published: Summer 1995

The following information appeared in the Summer 1995 issue of CNYC's quarterly Newsletter. You must be a member of CNYC to receive the complete Newsletter, which features timely articles on issues of importance to cooperative shareholders and condominium unit owners. Click here to reach the CNYC Membership Registration Form.

Sublet Fees:
EXAMINE DOCUMENTS BEFORE ENACTING NEW SUBLET RULES

Boards must examine existing documents carefully before enacting new rules to assure that there is proper authority to do so. Your own corporate attorney is best qualified to determine which modifications will be necessary in a particular instance.

In the case of assuring the authority to levy a sublet fee, CNYC advises boards to ensure that their documents include wording along these lines, paying particular attention to include the bold portions:

1. Article V, Section 5 of the bylaws should say: The Board of Directors shall have the authority before an assignment or sublet of proprietary lease or reallocation of shares takes effect as against the Corporation as lessor, to fix a reasonable fee to cover actual expenses and attorney's fees of the Corporation, a service fee of the Corporation, such other fees and charges and conditions as it may determine, in connection with each such proposed assignment or sublet including, without limitation, a credit or title search of the apartment or parties."

2. The section of the proprietary lease dealing with the need for consent to any subletting, typically Section 15 of the lease, should state that, "... consent to any subletting shall be subject to any conditions the Directors or lessees may impose."

 

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