In an earlier article, “Can a Child Occupy a Co-op Apartment if the Parent Shareholder is Not in Residence?,” we discussed TWW’s win in Queens County Housing Court in Northridge Cooperative Section III, Inc. v. Bonilla.
The question presented there was whether it is a violation of the ‘use clause’ of the lease, which restricts occupancy to the shareholder and his or her immediate family, for a child of a co-op shareholder to reside in the apartment without the shareholder. TWW, representing the shareholder and her daughter, successfully argued that under controlling Second Department precedent, ‘concurrent occupancy’ – that is occupancy with the shareholder of record – is not required, even in co-ops with additional residency requirements due to federal loans under the Fair Housing Act.
This win was recently affirmed on appeal to the Appellate Term, Second Department (the decision can be found here). The appellate Court agreed that the controlling precedent did not require concurrent occupancy, notwithstanding the co-op’s argument to the contrary. The co-op also argued that a separate provision of the lease, which required a shareholder to surrender the apartment if he ceased occupying it, dictated a different result. The Court rejected this argument too, reasoning that that provision was subject to several interpretations, one of which is that the shareholder had not ceased occupying the apartment so long as a family member was living there. The long-standing rule of construing ambiguities in a contract against the draftsman, here the co-op, applied, preventing the co-op from enforcing the lease as it interpreted it. This holding would prevent co-ops, including most if not all co-ops formed under the Fair Housing Act, from using this provision as a workaround to the Second Department rule. (But be mindful of the department split discussed in our previous post.)
Occupancy and subletting claims can be very nuanced, as demonstrated by the Bonilla decisions. When faced with such issues under a proprietary lease or occupancy agreement, cooperative boards and shareholders should consult with experienced counsel in this field to determine their rights and responsibilities.