Real estate questions I get asked at inopportune times

Rarely does the condo or coop sublease application process move quickly. There are a small number of occasions where it’s either an extremely relaxed board or you’re subleasing directly from the sponsor (the original purchaser who is exempt from board approval and other house rules), but usually you will be following a similar approval to someone purchasing the property.  First, the owner will preview your basic paperwork and give you the thumbs up or thumbs down if they want you to rent their home. With co-ops, owners will be a bit more selective because they have to keep in mind the likelihood of you passing the board based upon you as a person (condos typically don’t reject people, while co-ops can reject you any reason and not disclose). If it’s a green light from the seller, then you can move onto board packages. Most condos and co-ops will require full board packages, which are like the rental application on steroids. For example: you’ll have to complete a REBNY financial statement and back up all declared assets with proof; you’ll need both professional and personal letters of recommendation; you’ll need full tax returns.  If you want to use a guarantor, they’ll need exactly the same and absolutely cannot cut any corners or you’ll be rejected.  The package must be neat, organized, and often multiple copies made. The application itself is ~$500; at the same time, along with this you will submit the other fees required. It ranges building to building but usually there’s between $1,000-2,500 of additional move-in/move-out fees required, some being refundable, some not. Once the board package is submitted, it will take between 10-30 days to review – any issues/pieces missing will only delay the process. If it’s a co-op, you will most likely have to interview as well, which will come after the approval and at the co-op’s discretion as to when they are holding interviews.  If you receive the waiver from the board to move in, you can then plan your move with the super. Since sales take precedence over rentals for the managing agent’s attention, often approval is delayed and this is not a process I would attention to do less than 30 days away from your absolutely necessary move-in date. Renting directly from an owner is much more intimate than a landlord and typically they are more fair with rent and renewals since it isn’t the easiest to land a tenant in their building. Your neighbors are more often than not fellow owners who have vested interest in the building and will most likely treat it better than transient renters. But you have to arm yourself that it is paperwork heavy with zero room for flexibility and in addition to the normal first months rent, one month security, and brokers fee, you have about $1,200-2,500 of additional fees between the application and all the deposits. With condos, the owner of the condo will be allowed to grant you renewal but be wary on policies of coops – many have limited subletting, e.g., only 2 years out of every 4 years; only 2 years in their entirety of an owner. If you’re going through the hassle of subleasing a co-op, make sure it isn’t a property you’ll be booted from at the end of your lease.

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If a purchaser is looking for a property he or she will be able to use as an investment and sublease, that should definitely be made a priority during the initial stages of the home search. Condos are markedly easier to sublease than co-ops (since they are real property, which you have title to); with condos, directly after closing, you can freely sublease. There is no board interview, the board package may be a watered down version of the package you submitted, and the board can really only reject the applicant if there is something egregiously wrong or they financially do not qualify – both things you’ll vet prior to their ever submitting a board package.  The lease will be held between you and the tenant and there is no limit to renewals or how often you can sublease. Renewals do not need to be cleared by the board; you simply draft another lease, which again is held between you and your tenant.  With co-ops, things can vary greatly. Since you don’t “technically” own the property (with co-ops you have a proprietary lease to your apartment based upon the shares you have in the cooperation on the whole), you have restrictions upon what you do with your unit, which are clearly spelled out in house rules. Some of the super small, four story, intimate co-ops in parts of Brooklyn can be relaxed enough to allow subleasing with a simple application, easy paperwork and laid back interview. Some co-ops allow unlimited subletting after 5 years of ownership; some allowing subletting 2 out of every 4 years, with the other 2 years either being vacant or owner occupied. Some co-ops only allow for a certain percentage of the building to be subleased out at a time, so you get on a waiting list for your turn to pop up. Some other buildings allow only two years during your entire time as an owner to sublease, with no exceptions.  Most will require your subleassee to interview, however there are a few that will not. They most likely will all require that they submit full board packages. Some may require your tenant to reapply every year in order for you to grant a renewal.  These are all things that will be clearly spelled out in house rules so there will be no smoke and mirrors around the topic when you’re considering the value of a purchase. The one upside to a strict subletting policy; if this a home you plan to make your primary residence and you have no intention of leasing it out, then rest assured the majority of the other folk in the building will be owners as well and you’ll avoid a transient, potentially less responsible crowd in the building.