Published: Summer 1995
The following information appeared in the Summer
1995 issue of CNYC's quarterly Newsletter. You must
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EXAMINE DOCUMENTS BEFORE ENACTING NEW SUBLET RULES
Boards must examine existing documents carefully before enacting
new rules to assure that there is proper authority to do so.
Your own corporate attorney is best qualified to determine
which modifications will be necessary in a particular instance.
In the case of assuring the authority to levy a sublet fee, CNYC advises
boards to ensure that their documents include wording along these lines,
paying particular attention to include the bold portions:
1. Article V, Section 5 of the bylaws should say: The Board of Directors
shall have the authority before an assignment or sublet of proprietary
lease or reallocation of shares takes effect as against the Corporation
as lessor, to fix a reasonable fee to cover actual expenses and attorney's
fees of the Corporation, a service fee of the Corporation, such other
fees and charges and conditions as it may determine, in connection with
each such proposed assignment or sublet including, without limitation,
a credit or title search of the apartment or parties."
2. The section of the proprietary lease dealing with the need for consent
to any subletting, typically Section 15 of the lease, should state that,
"... consent to any subletting shall be subject to any conditions
the Directors or lessees may impose."
To review previously published Court Cases articles, refer to CNYC's