HABITAT

LEGAL/FINANCIAL

Only Boards Can Prevent Co-ops From Becoming Hotels

Stuart Saft in Legal/Financial on November 10, 2017

New York City

Stuart Saft
Nov. 10, 2017

This article appears in Habitat’s special November issue, “Governing Powers Through a Legal Lens.” 

The use provision in proprietary leases is a particularly important subject right now as a result of everything we’re reading about Airbnb, HomeAway, and all of these other services. The question is: who can stay in your cooperative apartment? Most proprietary leases have a provision allowing the following people to live in the unit: the person whose name is on the lease (the lessor); the lessor’s family; or the lessor and the lessor’s children.

The legal interpretations we’re discussing, however, have a lot to do with where you are living. In Manhattan and the Bronx, which is the First Judicial Department, the word “and” means that the lessor has to reside in the apartment simultaneously with someone else. In Brooklyn and Queens, which is the Second Department, the word “and” has been interpreted to mean “or.”

If you move into the apartment and you’re there with your son and your daughter, or you move in with your son and your daughter and then your son and daughter go to college, and then they come back, can you then leave one of them in the apartment by themselves as a permanent resident? When I say “you leave,” I don’t mean you’re just going out to get a container of milk, but that you’re retiring elsewhere. Because they were originally residents of the apartment when you moved in, either can remain as a permanent resident. 

But in many situations, you will move out and your nephew from Syracuse is going to be in New York to go to college for the next two years and you say, “Sure. Why don’t you stay in my apartment?” But that is not permitted because although that person may be a family member, that person wasn’t an original resident when you purchased. Are they banned? Not necessarily. You just need the approval of the board in order for them to stay. 

The reason for these rules has to do with several factors, one of which is the board is trying to protect the residents from people without an economic interest in the building moving into an apartment and ignoring the rules and therefore upsetting the quiet enjoyment of the other residents. 

What we’re seeing now with Airbnb is another example of why this section of the proprietary lease has been so important. The other parts of the use provision frequently say that no one can be the sole resident without the approval of the board. But what if the owners – a husband and wife – go away for two weeks and want to leave their 15-year-old son there? That is usually not permitted unless there’s an adult staying with the teenage son. Many boards are amending their proprietary leases to make this very specific, because 15-year-olds have a tendency to invite their friends over and create a ruckus. 

There’s one caveat: New York has a roommate law stating that any tenant in an apartment in the city has the right to have another adult and the minor children of that adult live with them. That law negates anything to the contrary contained in the proprietary lease. For purposes of building security, the co-op can ask for information about an adult and children moving in. But it’s not a full board review. That’s the law. 

Attorney Stuart Saft is a partner in the firm of Holland & Knight.

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