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Rental limitsNov 11, 2017

Does anyone live in a Condo that has rental apartment limitations? Our board wants to put a limit on how many unit owners can rent, my question is how do you do it? Who gets the right to rent over someone else? and for how long does each unit owner get to rent?
Thanks for any suggestions!!

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Rental Limits - Steven424 Nov 12, 2017

I live in a *co-op* that has rental limits. They are spelled out in the House Rules, and I'm not sure offhand if there is any wording about sublets in the proprietary lease.

The rules are that there can be no more than seven concurrent sublets. This is 10% of the total number of units in our building. Any greater number begins to pose problems for people who want to purchase or shareholders who want to refinance because banks don't like to see more than 10% rentals. It also starts to change the complexion of the rest of the community. Once the limit is reached, additional sublet requests go on a FIFO waiting list until one of the seven slots opens up. The board will consider severe hardship cases.

Each shareholder has a guaranteed lifetime sublet limit of two years. This does not have to be contiguous and can be broken up on a month by month basis. If there is no waiting list, the shareholder can request a third year, but it must be on a month by month basis. This means that if another shareholder wants to start their guaranteed sublet, the board can terminate a sublet in its third year after 30 days notice. Sounds complicated, but works in practice.

There is a sublet fee and it is used to pay for paperwork processing by our MA and also for a background check of the proposed tenants. The board interviews the tenants as if they were new purchasers. The apartment shareholder-owner assumes all responsibility for maintenance payments and tenant behavior. We have a sublet form which must be completed which has standard questions like, "do you have any diplomatic status or immunity?" (complicates eviction if it becomes necessary), "do you play any loud instruments?", "have you ever been a party in a lawsuit in the past X years?", things like that.

The reasons for the lifetime limits are to discourage speculators from purchasing units and then immediately trying to turn them into long-term sublets. There is a question on our new purchase application that asks if the purchaser intends to sublet their unit during the first year of occupancy. We understand situations can change, but if they answered "no" and then ask to rent after a few months, we'll ask questions before approving the sublet.

Condos have different considerations because each unit is considered separate property and not a lessee/lessor arrangement as in a co-op. You didn't say if your condos are free-standing, townhouses, or multi-dwelling (apartment) building. All that we go through in our apartment building to allow sublets is designed to insure that the new individuals who will be living in the building do not pose a safety or security risk to the rest of the community.

AirBnB adds an additional level of complexity to sublets. We do not allow any rentals for less than 30 days, and I believe NYC law prohibits it as well.

Long-winded, but I hope it helps,
--- Steve

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