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Subletting a Rent Stabilized Apartment

November 16, 2014:  This post originally appeared on the LandlordsNY blog, where Michelle Maratto Itkowitz is the "Legal Expert".

Hi, Michelle here. I am the LandlordsNY “Legal Expert”. My goal is to post in the LandlordsNY blog most of the questions I get from LandlordsNY members (keeping the member anonymous) and my answers thereto, when I think that such questions and answers would be of interest to other people. Let me know if this is helpful.


Question:  "My tenant sent me an email stating she is moving to Ohio to pursue a degree program for 3 years and she will sublet her apartment while she is gone.  According to her, the stabilized rules allow for this scenario. I cannot find any information that supports this.  The sublet is not a relative.  Can she legally do this?  What are my options?"

Answer:  

The short answer is – No, your Rent Stabilized tenant may not sublet her apartment for three years.  Moreover, the process of subletting might not be as simple as she thinks because there are many rules with which she must comply.  Let me explain the law here, and then I will suggest that your best option is sending the tenant a letter containing this information, and making it clear that you expect her to abide by the rules.

How Long Can a Sublet Last?

The first place to start is with the length of time this woman wants to sublet.  A tenant may not sublet an apartment for more than two years out of the four-year period before the termination date of the sublease.  Rent Stabilization Code § 2525.6(c).  

Procedure for Subletting

The devil is sometimes in the details.  A landlord may not unreasonably deny a sublet if the tenant follows the procedures required by New York Real Property Law 226-b.  Here are the details:

An owner may not unreasonably deny a sublet if the tenant follows these procedures:

1. Inform the owner of an intent to sublease by mailing a notice of such intent by certified mail, return receipt requested, no less than 30 days prior to the proposed subletting with: 

(a) the term of the proposed sublease
(b) the name of the proposed subtenant
(c) the business and home address of the proposed subtenant
(d) tenant's reason for subletting
(e) tenant's address for term of the proposed sublease 
(f) written consent of any co-tenant or guarantor of the lease
(g) a copy of the tenant's lease, where available, attached to a copy of the proposed sublease, acknowledged by the tenant and subtenant as being a true copy of the sublease.

THEN…

2. Within ten (10) days after the mailing of the request, the owner may ask the tenant for additional information.  Within 30 days after the mailing of the tenant's request to sublet, or of the additional information reasonably asked for by the owner (whichever is later), the owner must send a reply to the tenant consenting to the sublet or indicating the reasons for denial.  Failure of the owner to reply to the tenant's request within the required 30 days will be considered consent.

If the owner consents, or does not reply to the request within the appropriate 30 day period, the apartment may be sublet. However, the prime tenant remains liable for all obligations under the lease.

If the owner unreasonably withholds consent, the tenant may sublet the apartment and may also recover court costs and attorney's fees spent on finding that the owner acted in bad faith by withholding consent. If the owner reasonably withholds consent, the tenant may not sublet the apartment.

Finally, whether a landlord’s withholding of consent is “reasonable” is naturally a fact-sensitive question but a court will objectively evaluate the proposed sublet based on the character and financial status of the subtenant as relevant factors.  See Vance v. Century Apartments Associates, 93 A.D.2d 701, 703-04 (1st Dep’t 1983) (“Where a lease affords to a tenant a right to assign or sublet subject to the consent of the landlord, the reasonable ground to support a withholding of consent has always been tested by an objective standard, relating to the acceptability of the proposed subtenant or assignee.  Thus, among the relevant criteria from the point of view of the landlord is the character and financial responsibility of the proposed tenant and the nature of the occupancy or purposes for which the property is to be used.”)

In other words, this tenant should spend less time lecturing you on her right to sublet for three years (which she does not really have), and more time reading up on the proper procedure for subletting her apartment (which is available to her on the DHCR website).

The Costs of Subletting 

Subletting can never, for a Rent Stabilized tenant, be about making a profit on the Landlord’s real estate.  

The owner may charge the prime tenant the sublet allowance in effect at the start of the lease, if the lease is a renewal lease.  The allowance is established by the New York City Rent Guidelines Board Order.  The prime tenant may pass this sublet allowance along to the subtenant.

If the prime tenant sublets the apartment fully furnished, the prime tenant may charge an additional rent increase for the use of the furniture.  This increase may not exceed ten percent of the lawful rent.  

The prime tenant may not demand "key money" or overcharge the subtenant.  If the prime tenant overcharges the subtenant, the subtenant may file a "Tenant's Complaint of Rent Overcharge and/or Excess Security Deposit" with DHCR.  If the DHCR finds that the prime tenant has overcharged the subtenant, the prime tenant will be required to refund to the subtenant three times the overcharge.

Your Options

From what little you have told me, you have two options.  READ MORE...



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