Hi - You may be OK in tha coop has waived it rights in your case by not acting sooner. On the other hand, , a "niece" may also not be a close enough family member. There was just a case/lawsuit about this where the owner of the apt. basically won due to "ambiguity" in the lease bout who could / can reside in the apt. . You should get a lawyer and have them write the coop a fierce letter bout how they have waived their rights and the situation is ambiguous. Also, a Hour Rule is different than the lease. Did they actually change the lease? That requires a shareholder vote.
The case: 221 Middle Neck Owners Corp. v. Paris

Generally speaking, the terms of the Proprietary Lease supersede any House Rules. If the two are in conflict, the PL is the governing document.

I read through the case cited by another poster (221 Middle Neck Owners Corp. v. Paris). Any time a decision uses the word "ambiguity", the results are not going to have a happy ending.

Your best bet in this situation is to contact an attorney for an opinion and advice on what your options are and how to proceed. Do not try to be your own attorney, write any fierce letters, or do anything to antagonize the board. They hold most of the power, courtesy of the Business Judgment Rule, and really, all you want is to have your niece to continue living in your apartment as before.

Rules made to counter the encroachment and illicit subletting of AirBnB tend to carry a lot of weight. If your niece's occupancy termination is collateral damage, it's a shame, but it may be reality. I checked my Proprietary Lease and nieces and nephews are not listed as permitted family members.

Perhaps you could post the verbatim text of the new House Rule. That might help us come up with some creative ideas.

Good luck!

As per Steve sad but true, the sad part is you have to get a lawyer. As time goes on I find some boards get carried away with power an as boards do not change because share holders have something more important to do. As the old saying goes if one share holder tries to pull something off all the share holders get punished. Do you know if other share holders got a letter and if so maybe you can get together and all higher one lawyer to fight for all. Best of Luck

This is very good advice. I'd like to see the wording of the House Rule to try to figure out if the board is being arbitrary or if they're making an honest attempt to control what they feel is an epidemic of very short term and questionable rentals. In my Proprietary Lease, the list of recognized family members is in paragraph 14.

The original applicable part of the lease says:
The lessee shall not, without the written consent of the lessor, occupy or use the apartment, or permit the same or any part thereof to be occupied or used, for any purpose other than as a private dwelling apartment for the lessee, the family, employees and servants of the lessee........

1. The occupancy policy statement from the board says:
Family members enumerated in the lease may occupy an apartment when the shareholder is also in residence without the prior consent of the board.
2. If the shareholder is not in residence of the apartment, family members other than the Shareholder's spouse will require prior Board consent to occupy the apartment.

There are several more restrictions that followed.

I read through my proprietary lease. It looks like yours is different than mine, in that mine enumerated who is considered a family member (paragraph 14):

"14- The Lessee shall not, without the written consent of the Lessor on such conditions as Lessor may prescribe, occupy or use the apartment or permit the same or any part thereof to be occupied or used for any purpose other than as a private dwelling for the Lessee and Lessee's spouse, their children, grandchildren, parents, grandparents, brothers and sisters and domestic employees, and in no event shall more than one married couple occupy the apartment without the written consent of the Lessor."

It's possible that your board used this list as a guide for who is considered a family member for the purpose of the new House Rule. Check your PL to see if there is any list of included family members.