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Q&A: Co-op Tenant Evicted

A hand presents an eviction notice isolated in flat design style (cut out)

Q. In 1999 I inherited a low-income HDFC co-op, which at that time the president told me I could rent out. When my relative passed away in 1998, I had just bought myself a condominium, so I took the president at his word and rented the co-op unit. My current tenant has lived in the co-op ever since. 

As of April, the board said she had to leave, because the unit is not for profit. Her maintenance is paid, which I paid every month as the owner. She lives alone with no kids. What can be done about this?

                              —In Need of Answers

A. “The first issue to clarify here is who is the shareholder of record for the apartment,” said attorney Dean Roberts Chair the New York Real Estate & Finance Law Practice Group for Norris McLaughlin, which has offices in New York, New Jersey, and Pennsylvania. “[The writer] says that he inherited the apartment, but it’s unclear if he is the actual shareholder of record or if it’s in the name of their deceased relative. 

“Assuming he is the shareholder of record, their duties and obligations are then dictated by the regulatory agreement that the HDFC has with the City of New York. In most circumstances there is a primary residence requirement and/or an income qualification at the time you become a shareholder. It is highly likely that the subletting of this apartment for so many years is a violation of the regulatory agreement with the City. However, even this is not clear, because given the suspected age of this HDFC co-op, its regulatory agreement may have expired - and with it the limitations on subletting.     

“As for the co-op’s rights to pursue this litigation, they have a serious waiver issue in that they have knowingly and with consent allowed the occupancy of this individual for now over 20 years. The co-op may have lost the ability to object to the subtenancy, given its duration.”

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3 Comments

  • I agree with advice given. At no time did the person continuing to sublet the unit say that he or she was appointed the Administrator of the deceased’s estate and the coop board accepted him or her as a member by transferring the proprietary lease of the deceased in that person’s name. Additionally, rules concerning subletting is different based on the year that the building was converted or sign a regulatory agreement with HPD. The board’s President is probably wrong in describing HDFC cooperative corporations as non-profit; most HDFCs aren't nonprofit; they are special purpose for-profit corporations that are incorporated under the State’s Business Corporation Law. When the president saying the corporation is non-profit, he referring to its special purpose of providing low-income housing in exchange for tax exemptions. Instead of attempting to evict the dibleasee or force the shareholder to sell, the board should take a percentage of the surplus that the shareholder is receiving from subletting the unit. I hadn't heard of the waiver of subtenancy, so that's a great piece of information to add to my HDFC tool kit.
  • Since co-op unit owners pay mortgages and maint fees/taxes and live in the same type of buildings as condo owners, we should have the same rights both in foreclosure proceedings AND in the decisions that affect our quality of lives such as the ability to vote on and approve vendors, contracts, priorities ( like security cameras) and % of renters allowed. We are not less than.... U all need to grow some and demand appropriate legistlation from your reps...WRITE letters and petitions, keep records.
  • Not all HDFC co-ops have regulatory agreements with the City. However, all HDFC co-ops have primary residency and subletting restrictions in their proprietary lease. The proprietary lease last for 99 years from the initial date.