Q: I bought a co-op apartment in Queens about 35 years ago and rented it. About 15 years ago, the cooperative imposed a surcharge of 10 percent for the maintenance fees for rented apartments. That rose to 20 percent about five years ago. Should my apartment be excluded from the contract? Does a cooperative even have the right to raise this additional fee? The board claims that the co -op has the authority, but not discriminatory to apply the maintenance surcharge only to non -resident owners?
A: A co-op board has a large scope in order to operate in the best interest of the building and the shareholders as part of the rain judgment. However, you should check your government documents to see what you say about subletting.
Even if the board is on its rights, this does not necessarily mean that you should pay 20 percent.
The proprietary lease should state whether subletting is allowed and under what conditions. However, the fee may not be listed. In some cases, leases provide the boards for comprehensive authority to determine conditions for the approval of a sub -tenant, which includes the right to impose a maintenance surcharge like the surcharge you have described.
“The decision of the board of directors to do this and increase or reduce the fee is subject to the business judgment rule, which enables it to make decisions in the name of the shareholders and in his authority in accordance with the management documents of the cooperative,” said Andrew I. Bart, Senior Counsel with Kagan, Lubic, Finkelstein and Gold, LLP.
For shareholders who undermine their apartments, an additional fee levied is not uncommon. The board of directors must treat shareholders equally, but it would not be discriminatory or illegal if he imposed this surcharge and occasionally changed its conditions when he is approved by the proprietary rental agreement, said Steven S. Anderson, a lawyer who works in condominium and co-op practice at Becker. And there seems to be no reasons for you to avoid the contract because you have subjugated your unit before it has been imposed.
However, 20 percent seem to be somewhat high and could be considered inappropriate in court, said Anderson. Typical surcharges are 5 or 10 percent. Perhaps the board of directors will take how much you calculate your sub -rental company for renting the apartment, that you can easily pay you. Depending on how much rent you calculate, you can advise a lawyer to assess whether a lower fee is worthwhile.
For weekly E -Mail updates for real estate messages in residential buildings, register here.