Though many—in fact, most—co-op buildings flatly forbid shareholders from subletting their apartments to rental tenants, many co-op (and many more condo) buildings have populations of subtenants residing in them. Sometimes an apartment owner or shareholder takes on a roommate, or has a friend or family member move in for an extended period of time. The reasons for these arrangements can vary widely, from the purely economical (a roommate can help defray costs) to the emotional (a parent or sibling needing support during an illness), and are for the most part peaceful and drama-free.
That said, friction does occasionally arise between rental tenants and fully-vested shareholder/owners, or between tenants and the board. And in in the case of Airbnb, when apartments are rented out to complete strangers for a few days, that friction can ignite into serious acrimony, and even lead to litigation.
Let’s take a look at the gray areas between legal and illegal tenancy in co-op and condo buildings, and how boards can protect the stability and security of their communities while also respecting owner's rights.
Co-op vs. Condo
The difference between the two forms of residential housing is particularly stark when it comes to rental tenants.
“The traditional sublet dispute, on the basic level, is when there’s a landlord and then a subtenant. Technically as a co-op owner, you’re a tenant of the cooperative corporation,” explains Austin Brown of the Austin Brown Law Firm in Manhattan. “So you have a lease that delineates your rights as far as subletting goes. For legal sublets, most co-ops want to have a board interview [of the prospective sublettor]; they want to make sure that the tenant is going to be able to pay the maintenance, that they’re going to be good neighbors, the same way that they would want from a shareholder.”