Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
Co-op Sublet policies & rules are tricky. New York City is a place where rentals always seem to pop up. If you’ve ever rented a sublet, you already know this is a hot move for people who want to maximize their income. This is especially true if you are part of a co-op community. Once you’ve bought a co-op, it’s yours. However, the board still has a lot of say on what it can do. Did you ever wonder if you’re allowed to sublet (or Airbnb) your place? Can the co-op evict a sublet tenant in the case of an illegal co-op sublet? It’s not as simple as you think.
It’s important to remember that every single co-op has different rules, bylaws, and fees. We’re generalizing when discussing the typical experience of co-op owners who want to sublet in NYC. If you own a co-op, the content in our article may or may not represent what you deal with. The best thing you can do for yourself is to read your co-op’s rulebook or ask board members about their policies.
When working with real estate, details are always a must. Otherwise, you might wage a legal battle during the co-op’s board meetings.
Owners can find subletting policies in the rulebook of co-ops, which means you can check your copy or ask the co-op board. If you are working with a broker, you might ask them. Many brokers and real estate agents are aware of more prominent co-ops’ policies on subletting.
In most cases, you can’, but it’s hard to tell. Co-ops have a wide variety of policies, and most NYC co-ops are owner-occupied.
rather than rented out. As a result, a decent percentage of co-ops won’t allow you to sublet it at all. In some cases, they will allow you to sublet it for a maximum of two to four weeks at a time. In other cases, still, they will let you do whatever you want with it as long as they get a cut.
Wondering what the most likely scenario is? The most common co-op sublet policy among New York City co-ops is that they will allow you to do it for up to two years, provided that you’ve lived in the apartment for one to three years at a minimum.
This is where asking the co-op board directly (or reading the rulebook) remains the most brilliant move. You’ll find out what you can and cannot do with your potential co-op sublet.
Generally speaking, co-op owners who are allowed to sublet are discouraged from renting their co-ops for short-term stays. This means Airbnb probably isn’t going to work out. Typically, you must have a long-term lease with your subletter. So, expect to have lease terms of six months to a year.
Co-ops can have both minimum and maximum lease lengths. Oddly enough, both minimum and maximum terms tend to be a year long. So, try to plan for a single-year lease.
Things get a little dicey regarding how long you’re allowed to turn your co-op into a sublet. Co-ops that enable you to sublet their units will often let you do it for 1 to 3 years at a time. Some co-ops allow owners to sublet it for a maximum of five years for the duration of ownership.
If the co-op does not implement these policies, co-ops quickly attract “vulture investors” who do nothing but snap up units to rent them out at a higher price. These rules ensure that the community stays among New Yorkers who want to live and work there.
Are you ready to sublet your co-op properly? If so, you will have to go through your co-op board’s process for subletting if it’s allowed. Here’s what you should prepare to do:
When you’re subletting a co-op unit, you’re doing two things that aren’t cool with the co-op. First, you’re bringing in people who weren’t approved by the board and posed a risk to the co-op. Second, you’re renting out your property which means you’re making money off a property YOU are supposed to live in. That’s a lot for a co-op to deal with, so they will want a cut.
Co-ops charge subletting fees because it’s a significant risk for them to take. Those fees help cover anything the subletter breaks and any trouble the co-op could cause. It is a way for the co-op to get more money toward new amenities.
These fees vary significantly from community to community. There are several different ways that co-ops can calculate their fees.
The most common include:
It’s true. Illegal sublets are on the rise and happen quite often including short-term leases. If someone accidentally rents from an illegal subletter, they’re usually asked
to leave. Or, they leave of their own accord because they don’t want to have an eviction on their record and choose to sue the subletter. However, a lawsuit from an angry ex-tenant is the least of your concerns.
If you sublet when you’re not supposed to, the following can all occur depending on what your co-op board’s rules are:
If you are looking to sublet policy to a co-op, think long and hard before you do it. It’s not always a good move. However, if you have the board approval and can afford the fees, it is a great way to make money and improve your apartment’s return.
Talking to a good broker can help you navigate it, so give NestApple a call today.