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Our too generous sublet policyOct 21, 2008


My building (also small) has a very generous sublet policy -- allowing a shareholder a total of 4 years of subletting. How it got to be so long is beyond me. Up until about 15 years ago, we had a no-sublet policy. Then the retrenchment in coop pricing and mortgage lending induced us to allow it to relieve the hardship on shareholders who needed to sell but could not get a buyer. The term started at 2 years, I think, and has expanded to 4 -- far longer than ought to be necessary to accommodate a temporary job reassignment or even to tide a departing shareholder over a depressed resale market.

There are some abuses. E.g., 2 apartments were rented out for the maximum 4 years, and when the maximum was up, lo and behold it became "convenient" for the owners or members of their families to move back in -- and both of them had been living in the City (I think) during the sublet. One shareholder sublet because he had been admitted to business school down South; 2 years later, after he had obtained his degree, he wanted to continue subletting, even though he was then living in NYC. The only reason why he changed his mind is that he couldn't get his tenant to pay a higher rent.

Then there was the woman who wanted to sublet because she was now engaged, the apartment was not big enough for her and her fiance and they were now living in larger, rented quarters elsewhere, but she wanted to hold on to (and sublet) her apartment in our building "in case things didn't work out."

Or the couple who bought the apartment for their college student daughter, who lived here the minimum 2 years and then decamped for Los Angeles, where she had gotton a job. The parents sought to sublet, saying that they had intended to use the apartment as their pied a terre when their daughter moved out, but they now found themselves not as close to retirement as they had thought they would be. They've been subletting for 2 years -- so far.

The maintenance rate is far below the rental value of apartments in our building, and I can't help but think that shareholders wouldn't be subletting at all, much less for so long, if they weren't making a profit off it. This is a small building (110 apartments), and we have trouble getting people to run for the small board (of 5), as well as to do the things around the building that have always been done by volunteers, such as gardening our tree pits. The presence of subletters exacerbates both problems.

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Re: Our too generous sublet policy - Response to newbie Oct 22, 2008


If you have 110 apartments and are having trouble getting 5 people to serve on the board, you building has issues that go way beyond a handful of apartments being sublet.

The supposed horror stories you cite -- it's hard to comprehend any problem. You mention someone subletted for the 4-year max, and then the owners/family-members moved back in. And the problem is ... what?

You mention a parent-owned apartment, with a daughter who moved to L.A. 2 years ago, and the parents are ... only halfway through the allowed 4 years. What is the problem???

I read this thread about subletting, and most of what I see is knee-jerk hysteria and the throwing of labels. It's like a Sarah Palin rally.


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Re: Our too generous sublet policy - newbie Oct 22, 2008


Before you start accusing others of hysteria and "label throwing" like participants in a Palin rally, you should look at your own behavior. These gratuitous insults sound like a McCain tactic -- character assasination -- made all the worse by the fact that they were delivered anonymously. It's just this sort of abusive rhetoric that poisons discourse in this forum.

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Re: Our too generous sublet policy - Anonymous Oct 23, 2008


Putting too many and putting too few (or no) restrictions on subletting can both cause problems. With too many, SHs can get tied in a strangle hold. With too few (or none), SHs always find ways to "abuse the privilege". Either way, the board has to sort out issues case-by-case and deal with complications or complaints that arise. This can be avoided to a great extent if rules and guidelines are in place and enforced properly.

If subletting is allowed, the best way (IMO)to handle it is to establish the clearest, most complete set of sublet rules possible - rules that are fair and consider the needs and best interests of SHs, their neighbors, and the coop as a whole. Send all SHs a memo or a "Coop Rules For Subletting" document that spells everything out, and advise them to keep it for future reference.

Make sure (as best you can) that everyone is on the same page and understands what is and isn't permitted. A memo or document with a short intro (or short cover letter) and the rules outlined in bullet points is a good way to make this easy for SHs to grasp.

Be clear and be specific. For example, the rules should state:
-- If a sublet application package and board approval are required for new sublets
-- If an application form and board approval are required for every renewal period (this can be short with just basic info - renewal lease dates, where the tenant works and his work/cell number, etc.)
-- What sublet lease periods are allowed (e.g., 6 months or 1 year only at a time)
-- How long subletting is permitted (e.g., for a 5 year max, then no more - or - with no limit but with board approval required for every new and renewal sublet)
-- If there's a residency requirement (i.e., if a SH must be a resident for, say, 3 years before any sublet of that apt is permitted
-- The sublet fee for new and for renewing tenants (it's a good idea to have fees)
-- Any fine for "invalid occupancy" - if an unauthorized person is living in an apt or a tenant remains after his sublet period has expired without a board approved renewal

Above are examples of what rules should include. The board of each bldg has to get together, carefully consider what rules to establish, and impose fines or take some type of action if there's non-compliance.

You want to be fair to everyone and rules are necessary, but rules with no follow-up or no ramifications if they're ignored are no rules at all.

Have a subletting game plan, set rules for it, be proactive if rules aren't followed, and a lot of problems can be eliminated.

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Posting by "anonymous" - BP Oct 23, 2008


Sorry, I accidentally forgot to fill in the sender line on my post here that begins with putting too few or too many restrictions on subletting, and I clicked "response" before I realized that I did this. My apologies.

BP

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Re: Anonymous: Now THAT'S leadership! - Upper West Side Oct 24, 2008


My compliments to Anonymous -- he or she shows exactly the kind of thoughtful, nuanced leadership that any organization needs.

Anyone can blindly follow draconian, authoritative rules that try to fit all human behavior and needs into a "one size fits all" form that doesn't account for a range of human and economic realities.

True leadership is hard work. If showing judgment and wisdom is too tough, than let someone else lead. As with Mayor Bloomberg and the City Council's term-extension power-grab yesterday -- slapping 89% of referendum-desiring New Yorkers in the face -- it's the height of hubris to think that "I and only I can run this co-op. No one else is capable."

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To sublet or not to sublet - BP Oct 22, 2008


I do understand the cons of subletting, but it's hard on SHs who relocate, can't sell quickly, etc. if they can't sublet. It can also be hard on tenants if a sublet has a cap of, say, 2 years. Why make them have to find a new place when they've just started to build a life where they are?

If a coop has a policy stating that sublets can only be for 6 months or 1 year at a time and every renewal requires board approval, tenants who cause problems or don't obey the rules can be denied renewal. A cap on sublet renewals could be set at, say, 5 years. Many tenants (even many SHs) wouldn't stay that long. They'd marry and need a bigger apt, relocate or whatever but it would provide some sense of "permanence" while they are in a bldg. Flipping tenants in and out in the short term also adds to a hotel or revolving door mentality which is what coops typically don't want in any case.

Having SHs as residents is usually deemed preferable. We have a policy stating that no more than 20% of apts can be sublet at any one time so we're not overrun with tenants and that's never been a problem for us.

Sublets can also be a good source of income for a bldg, especially one that doesn't have many/any other ways to generate it. We have a sublet fee for all new AND renewal sublets equal to 2 months maintenance, and we only allow sublets for 6 months or 1 year at a time, so this does bring in income. It can also be thought of as a way of discouraging over-subletting because some SHs won't want to pay that fee for every new or renewing tenant. If the average fee was, say, $1200 and a bldg had 10 sublets, that could bring in $20K a year.

Just wanted to express a few thoughts on the pros of subletting. Thanks.

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