Coop Rules and Regulation in NYC

Coop rules and regulations in NYC can be quite onerous and much stricter than many first time home buyers will expect. Unlike condos, houses or other real property, a co-op building is wholly owned by the co-op corporation which is in turn run by the co-op’s board of directors.

Every co-op apartment owner is therefore both a shareholder of the co-op corporation but also a tenant with a proprietary lease that allows them to reside in a specific apartment in the building.

As a result, co-op apartment owners are much more beholden to their co-op boards, which have an enormous amount of power over the resident shareholders.

Restrictions on Subletting a Coop

Restrictions on Selling a Coop

Pet Policies and Restrictions

Co-op boards will often limit a shareholder’s ability to sublet his or her apartment, and many co-op buildings won’t allow subletting at all. Furthermore, subletting policies are subject to change at any time, so even if you buy an apartment in a building with supposedly liberal sublet policies, that could easily change at the whim of the co-op board.

Co-op buildings that do allow subletting will have restrictions in place for how long you can sublet for. It’s very common to see co-ops only allow subletting for two years out of every five years. Some co-op boards will only allow a total of one or two years of subletting every, meaning that if you choose to sublet your apartment it had better be for an emergency.

Co-op buildings will often have a plethora of fees charged to both the sub-tenant as well as the tenant. Besides various application fees, the shareholder will typically also have to pay a fee just to sublet their apartment. This can range from 10% of annual maintenance to a percentage of the rent collected.

A key difference between condos vs co-ops is that you can’t simply sell your co-op apartment to whomever you wish whenever you wish. All purchasers of co-op apartments must submit a length coop board package and then pass a co-op board interview.

Furthermore, co-op boards can reject a prospective purchaser without ever having to give a reason for the rejection. This effectively means that a co-op board can reject a purchaser for whatever reason, even if it’s simply because they think the price is too low and the resulting sale comp won’t be flattering for the building. More ominously, the lack of accountability can also result in bigotry in some co-ops, particularly in more close minded neighborhoods in NYC.

Most co-ops will have specific pet policies detailing whether cats or dogs are allowed, and if so, what specific breeds are allowed or what the maximum weight of pets can be. Co-op pet policies might even specify that pets must be present at the co-op board interview and must therefore be approved by the board.

As you can imagine, these pet policies were designed to ensure that current residents and shareholders are comfortable and won’t be disturbed by loud animals, especially dogs that bark a lot. However, these policies can be quite distressing to prospective purchasers who are also owners of dogs.

If you don’t want to deal with any co op rules and regulation then we suggest that you stick to buying a condo in NYC!