We have previously discussed the parameters of shareholders subletting their co-ops. In regards to subletting a unit, it is ultimately the co-op board’s decision. They can impose time constraints, fees and surcharges, or deny the option outright. However, whatever policies they do intend to impose on shareholders will have to be clearly stated in the proprietary lease (specifically in relation to surcharges, see DeSoignies v. Cornasesk House Tenants’ Corp.) and be reasonable (see Bailey v. 800 Grand Concourse).
There are additional questions raised in the context of allowing your grown children to live in your apartment without you. How do shareholder’s young adult children fit into co-op board by-laws and the proprietary lease? Typically, a spouse or immediate family member has the right to live in the co-op with the shareholder. The shareholder may also have the ability to transfer their shares to these family members. However, the language of the proprietary lease has been construed by the courts very literally in that only the “Lessee and Lessee’s spouse, their children, stepchildren, grandchildren, parents, stepparents, grandparents, brothers and sisters” can live in the unit as opposed to the lessee or shareholder’s relatives on their own. Interpretation of the proprietary lease could depend on which New York borough you live in. In Brooklyn, Queens and Staten Island, there have been instances where the courts construe the word “and” to mean “or”, which then permits children to live in the unit without the shareholder.
Generally the shareholder should seek board approval before allowing their adult child to live in the apartment, otherwise you run the risk of the board construing the arrangement as a sublet and imposing a sublet surcharge. Would the same issue arise in a rental? Most likely not, since landlords are more concerned about receiving monthly rent rather than who lives in the unit. Co-ops on the other hand have stricter regulations and a tedious interview process. Boards normally are careful as to who they select and look for potential shareholders who will have a long-term interest in the building and are able to pay bills and maintenance fees. During the vetting process, the board will examine the individual’s financial history, business and personal references and tax returns. Young adults who just graduated university do not necessarily have an extensive financial and tax return history, making them an unlikely candidate.
One solution would be to add your children to the proprietary lease, so in the event you have to leave your apartment for an extended period, your children will have the right to occupy the unit. However, boards should be careful with this process and ensure they protect themselves while accommodating shareholders. If the child of a shareholder is on the proprietary lease it means that the shares of the co-op and the lease will be transferred to the child automatically upon the parents’ death. Young adults also tend to have financial debts, such as student loans, so it is important to assess the family unit’s financial stability as a whole to guarantee the maintenance payment and any other fees. Shareholders should discuss these options with their board and managing agent in order to come to the most suitable conclusion for the co-op and the shareholders’ family.