Q&A: Are corporations allowed to own a certificate in a co-op?

Q In our co-op association, we have new owners who have not registered their new certificates.

Some have owned for a period as long as four years. Others have purchased as corporations and all it seems have children or parents living in the apartments while the registered owners live elsewhere. Are the people occupying said apartments renters or roommates? Some are listed as members of the corporation. My question is as follows: are corporations allowed to own a certificate in a co-op? The problem, as I interpret this, is that any member listed as being a part of the corporation could possibly move into the apartment without the approval of the board.

My next question is this: the co-op where I live has three separate buildings—one is older and has required an inordinate amount of repairs ($130,000) more than the other two newer buildings. The board is now claiming that they do not have enough money to repair washers and dryers in the two newer buildings. What is the board’s responsibility towards the shareholders in the newer buildings?

—Taking Ownership

A “The individual(s) who purchase(s) the shares and lease is(are) the tenant-shareholder(s) of the apartment,” says attorney David L. Berkey, a partner with the law firm of Gallet Dreyer & Berkey, LLP in Manhattan. “The proprietary lease will state in its “use clause” the categories of persons who are permitted to occupy the apartment, which usually include the tenant-shareholder(s) and members of the tenant-shareholder(s) immediate family.

“It is important to read the lease carefully to determine (i) who may occupy the apartment, (ii) whether all such occupants are required to use the apartment together with the tenant-shareholder, and (iii) whether the permitted occupants must be in the apartment contemporaneously with the tenant-shareholder at all times. Family members and other permitted occupants who do not pay rent to the tenant-shareholders for the privilege of occupying the apartment are not renters or subtenants. They usually are a part of the tenant-shareholder(s) family.

“Roommates are those other than members of the tenant-shareholder’s immediate family who live in an apartment together with the named tenant-shareholder in accordance with the “roommate law,” Real Property Law Section 235-f. That law permits the occupancy of a rental apartment (such as a cooperative) by an occupant and the minor children of such occupant, in addition to the tenant-shareholder. Per your question regarding tenants being listed as members of the corporation:

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Comments

  • Regarding the Coop subject I have a question which I will appreciate if you email me your answer.Can the board decide to force shareholders to sell there shares ( apartments) although the bylaws and the propertie lease says that after leaving for two years in your apt,you have a right to sublease. You see by this unfortunately a lot of this shareholders ,who are not occupying their apt ,because they had to move out for what ever reason they had, ('family increase, job in different state, retireing in cheaper state etc...) they become a victims, because they have to loose 50-100k of their money,due to the fact they bought their units high, and besides the market, this board with this I think criminal decision are putting this people in hostage situation not letting them to rent,but at the same time causing even higher price drop, because suddenly you have 30 apt on the market.Any potential buyer will wonder, what s happening in this coop ,thus they can't even sell. So the very first important question is CAN THE BOARD WITHOUT VOTE FROM THE MAJORITY OF THE SHAREHOLDERS MAKE ('change the coop laws) and try to convert the property in ,non sublease when all of this shareholders who are suddenly forced to sell ,when they bought they knew they can sublease. Second question is " WHAT CAN YOU DO IF YOUR PURCHASE of A COOP UNIT IS REJECTED AND AFTER YOU PAYING THE APPLICATION FEES ( WHICH BY THE WAY ARE $550 ) YOU ARE NOT EVEN HONORED WITH AN INTERVIEW ,JUST TOLD YOU ARE NOT APPROVED. I HAVE TO SAY WE ARE TALKING FOR A BUYER WITH 800 credit score and zero debts who is buying for cash,savings. Third and last question Can I ask for a list of all the shareholders names and addresses of the non occupaing ( according the BCL section 607 I believe I read, and what are my rights if they refused to give it to me.My intention would be to vote this board out,because they have been acting as we are their tenants and they own the buildings and by the way probably for ten years they have been saying to us that always we couldn't rich a quorum, missing few ,to vote them out,,After so many lies, no transparency and dictatorship I believe I have to do this. Although I had a plan to sell and move out from NY ,Westchester . Thank you in advance for your answers