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Can Shareholders Have Roommates?

SECTION 235 of the Real Property Law was enacted in 1983, and it’s known as the Roommate Law. It protects not only tenants in rental buildings but also co-op shareholders. Essentially, the law allows a tenant to have an additional person live in the apartment other than immediate family. This was designed to protect tenants from being evicted by landlords, but it’s been upheld by many cases to apply to cooperative shareholders as well. The rights under the Roommate Law cannot be waived.

The tenant or the tenant’s spouse must occupy the apartment as primary residence, and this is something that is not always followed. If, for example, they’re living someplace else most of the time and allowing people to live in the apartment, they would not be protected under the Roommate Law. Many co-op proprietary leases do not have provisions that protect people under the Roommate Law, and that’s not good because the courts would hold that the Roommate Law supersedes the provisions of the proprietary lease.

Many of my co-op clients are surprised by the application of the Roommate Law because in the proprietary lease there’s a use clause that spells out who can live in the apartment. Generally it’s the lessee and members of the immediate family, but not others, such as a significant other or people who are protected by the Roommate Law. Many of my co-op boards feel that they have the right to tell shareholders they’re not allowed to have a roommate because the proprietary lease does not permit it. And they’re wrong.

There’s also debate about whether or not a roommate can pay the rent and still be deemed a roommate protected under the Roommate Law. Are they actually a subtenant, in violation of the proprietary lease? The Roommate Law does appear to allow someone to collect rent from a roommate.

What further confuses the issue is the explosion of transient tenants – users of Airbnb, for instance – which is against the law and also violates virtually every proprietary lease. In order to protect the building, boards should first review the proprietary lease and see what the use clause says. Does it parallel the Roommate Law and state that a shareholder can have an additional tenant? Even if it doesn’t, the Roommate Law will prevail. So to be pragmatic. I would amend the proprietary lease to include the provision. It could protect the co-op.

Also, boards can establish protections by staying on top of what’s going on in the building. If someone comes in and says, “I’m going to be living here for a while,” and a key is left for them, I would make sure that you have identification and that you get written approval or consent from the lessee. If you find that this is a rollover every week or month, clearly it’s not a roommate in the traditional sense who would be protected under the Roommate Law. We advise having the lawyer and the managing agent act promptly in situations where they feel that this is an attempt to circumvent the restrictions in the lease and turn the apartment into a short-term rental.

I see this issue over and over again. Unless the boards act uniformly and consistently by having the lawyer send letters and, if necessary, take action, buildings can easily be overcome by the abuses of people who buy apartments just to use them for rental income. 

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Dennis Greenstein is a partner at Seyfarth Shaw.

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