When an Apartment Is Not a Home

In an HDFC co-op, there was a shareholder who wasn’t using his apartment as his primary residence but was allowing a relative of his to live there. The board had approved a sublease agreement between the two parties 23 years ago, but then out of the blue it commenced a holdover proceeding to evict the shareholder. After the 30-day cure period elapsed, the board went straight to litigation. Nothing in housing court moves quickly, and the legal arguments dragged on and on. But finally, the board approved transferring the stock from the shareholder to the occupant, and everyone was satisfied with the resolution. 

As to why the co-op moved to evict when it did, my guess is the current board and managing agent weren’t aware of the agreement and didn’t realize the relative had been living there for a quarter century. In this particular case, it would have made sense to send out a demand letter first. It sounds threatening, but it gives shareholders an opportunity to present their side to make sure there are no misunderstandings. And it doesn’t waive the board’s right to enforce the proprietary lease by pursuing an eviction. 

If a board is not fully informed and makes a rash decision, it can often be buying itself a lot of headache. The more adversarial you are, the more you can waste time and money. Boards should be thinking about what they want in the long term. Is the goal simply to have the occupant removed, get rid of the shareholder or find an amicable solution? It’s important to have that conversation with counsel early on so that you can strategize and act accordingly.