NG THE BEN
VI
VOLUME 232—NO. 87
COOPERATIVES
Co-Op Ownership: Permitted Occupants of an Apartment
A
n increasingly important
issue pertaining to co-op
ownership is occupancy of
apartments by non-share-
holders.1 Boards may seek to restrict occu-
pancy to meet the compatibility expecta-
tions of a co-op community, while share-
holders often assert their ownership rights
by permitting extended family, adult chil-
dren, significant others or domestic
employees to reside in an apartment.
The issue of who may reside in an apart-
ment can thus become complex and con-
tentious. Therefore, precise and clear lease
drafting is critical, so that shareholders are
not burdened with occupancy restrictions
they did not contemplate when entering
into a lease and the door is not left open
for court-imposed interpretations contrary
to the expectations or interests of the
co-op community.
This column reviews relevant case law
and suggests language for use in co-op
leases that limits occupancy to clearly
identified categories of persons. This
column also addresses condominium
Richard Siegler is a partner in the firm of
Stroock & Stroock & Lavan and is an adjunct
professor at New York Law School. Eva Talel
is also a partner in Stroock & Stroock & Lavan,
specializing in litigation involving co-ops and
condominiums. Zev J. Holtzman, a stu-
dent at New York Law School, assisted in the
preparation of this article. The Stroock firm is
counsel to the residential management council of
the Real Estate Board of New York.
SER
CH
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R SINCE 1
WEDNESDAY, NOVEMBER 3, 2004
AND CONDOMINIUMS
BY RICHARD SIEGLER AND EVA TALEL
Richard Siegler Eva Talel
bylaws and their much-broader universe of
permitted occupants.
Who Is a Permitted Occupant?
A court’s analysis in resolving this issue
is twofold. First, the court will determine
whether an individual is included within
the proprietary lease’s definition of permit-
ted occupant. If the lease definitions are
clear, the court will enforce them and the
analysis ends there. If the party in issue is
not within the lease definition of a permit-
ted occupant, the court will likely construe
the occupancy as impermissible.
Ambiguities arise, however, where a
lease sets forth less than a clear definition
of what constitutes a permitted occupant.
For instance, a lease may state that
permitted occupants are, “the shareholder
and his immediate family.” The court
must then determine what constitutes
“immediate family” by looking to the
terms of the lease.
In Mitchell Gardens v. Cataldo,2 The
appellate term ruled that the shareholder’s
stepdaughter was not within his immediate
family. The court looked to the co-op’s
rules, which defined immediate family
Web address: http://www.nylj.com
members to be: “those members of the
stockholder’s family who lived with the
stockholder on the date he first took
occupancy of his apartment and lived with
the stockholder continuously from that
date.”3 The stepdaughter was not living
with the shareholder when he first took
occupancy, so she was not a permitted
occupant under the lease.
• Concurrent Occupancy Required? If the
court determines that the party at issue is
within the proprietary lease’s definition of
permitted occupants, the second prong of
the court’s analysis is triggered: must the
shareholder reside in the apartment con-
currently with that party?
In 1983, in Rubloff v. 5 East 71st Street,4
the shareholder’s sister occupied the
apartment while the shareholder resided
elsewhere with her husband. The propri-
etary lease permitted occupancy of the
apartment by the lessee and the family of
the lessee and the shareholder contended
that her sister could therefore occupy the
apartment in her absence. The co-op
argued that because the shareholder
and her sister had never occupied the
apartment simultaneously as a family unit,
the sister could not occupy it in the share-
holder’s absence. The court — relying on
case law holding that where family mem-
bers lived in an apartment together prior
to the lessee moving out, the family mem-
ber was permitted to continue to occupy
the apartment — held that because lessee
and her sister had never simultaneously
occupied the apartment, the sister was not
NEW YORK LAW JOURNAL
permitted to occupy the apartment absent
the lessee. The principle of concurrent
occupancy was thus established.
When Does ‘And’ Mean ‘Or’?
In January 1994, a Queens County Civil
Court in Barbizon Owners Corp. v.
Chudick,5 addressed a different version of
this issue. In Barbizon, the apartment was
occupied by the lessee’s brother; the lessee
was present from time to time, but did
not occupy the apartment as his primary
residence. The lease prohibited the apart-
ment from being “occupied or used for any
purpose other than as a private dwelling
for the lessee and the lessee’s spouse, their
children, grandchildren, grandparents,
brothers and sisters and domestic employ-
ees ….”6 Although lessee’s brother was
clearly within the category of persons
permitted to occupy the apartment, the
co-op contended that contemporaneous
occupancy by the lessee was required. The
co-op’s position was based solely on
grammar: “[T]he clause … says, ‘The
Lessee and …’ not, ‘The Lessee or …’ …
imply[ing] that the lessee must reside in
the apartment together with the permitted
occupants.”7 The court rejected the co-op’s
argument, holding: “In terms of grammar,
‘and’ is merely a coordinating conjunction
(as is the word ‘or’),”8 which did not clear-
ly signify a requirement that a lessee must
occupy the apartment contemporaneously
with a permitted occupant. Absent a clear
restriction, none would be implied by the
court and the lessee’s brother was therefore
permitted to stay in the apartment.
A few months later, in Thwaites House
Owners Corp. v. Vega,9 a Bronx County
Civil Court ruled that the word “and” does
require contemporaneous occupancy by
the lessee. There, the co-op claimed that
the lessee violated her lease by allowing
her grandson to occupy the apartment
while she resided in Puerto Rico. The lease
provision was virtually identical to that in
Barbizon and the lessee claimed that the
grandson was permitted to reside in the
WEDNESDAY, NOVEMBER 3, 2004
apartment alone because “grandchildren” [lessee] also living in there at the same
are a category of permitted occupants. In time would be to permit [lessee’s] domestic
interpreting the word “and,” the court employee to live in the apartment without
rejected the lessee’s argument that the [lessee] also living there at the same
lease clause identifying permitted occu- time — a patently unintended if not
pants “must be read in the disjunctive absurd result.”15
as if in the place … of ‘and,’ a comma or
the conjunction ‘or’ separated the words Roommate Law Exception
Lessee and Lessee’s spouse, etc., rendering
Despite some confusion, courts are like-
each person separate and independent of
ly to construe the word “and” to require
the other.”10 Instead, the court relied on
concurrent occupancy by the lessee.16
the “generally accepted meaning” of the
Nevertheless, there may be exceptions. For
word “and,” as defined in Webster’s New
example, occupants who are not among
International Dictionary: “Expressing the
those permitted under the lease may be
general relation of connection or addition,
protected by §235-f of the Real Property
…combination, …simultaneity … thus
Law,17 dubbed the “Roommate Law,”
along or together with; added to or linked
which deals with unlawful restrictions on
to; as well as, at the same time ….”11
occupancy. The applicability of the
Hence, the grandson was not permitted to
Roommate Law has been upheld in the co-
occupy the apartment absent the lessee.
op setting and provides that a tenant may
In 1995, in Wiesz v. 233 East 69th
share the apartment with at least one addi-
Owners Corp.,12 the New York County
tional occupant without first gaining the
Supreme Court interpreted a lease clause
landlord’s permission.18 Section 235(f)(7)
virtually identical to that in Barbizon and
prohibits waiver of the rights conferred by
Thwaites and held that the word “and”
the law and provides that any lease that
does require concurrent occupancy by the
attempts to waive such right is void as
shareholder. The shareholder contended
contrary to public policy.19 Because of this
that her lease permitted her apartment to
nonwaiver provision, the Roommate Law
be occupied by her children’s caregiver
overrides the restrictions set forth in a
without the shareholder’s co-occupancy.
proprietary lease and allows one additional
The court discussed the opposing holdings
occupant — the roommate. Section 235-
in Barbizon and Thwaites and concurred
f(3) however, states that such protection is
with the Thwaites holding: “[A] reasonable
available only where the tenant or the ten-
and fair construction of the words ‘lessee
ant’s spouse occupies the apartment as a
and’ requires [that] the lessee must reside
primary residence.20 Therefore, the
in the apartment.”13 Thus, the Weisz ruling
statutorily required concurrent occupancy
clarified some of the ambiguity apparent in
of the roommate and the lessee puts some
the previous line of cases.
limits on this expanded occupancy.
Further reinforcing the holdings in
Thwaites and Wiesz, in 2002, the
Proposed Use Clause
Appellate Division, First Department,
ruled in 445/86 Owners Corp. v. Haydon14 A clearly drafted occupancy provision
that virtually identical language in a lease in the proprietary lease gives a measure
provision must be interpreted to require of certainty to shareholders and boards
the lessee’s concurrent occupancy. The and reduces the need for judicial interpre-
court held that the mother-in-law of the tation. The following is an example of
lessee was not permitted to reside in the such a provision:
apartment absent the lessee: “to hold that The Lessee shall not, without the
paragraph 14 permits [lessee’s] mother- written consent of the Lessor on such
in-law to live in the apartment without conditions as Lessor may prescribe,
NEW YORK LAW JOURNAL
occupy or use the Apartment or permit
the same or any part thereof to be
occupied or used for any purpose other
than as a private dwelling for the
Lessee and Lessee’s spouse or Spousal
equivalent (as defined herein) and,
simultaneously with the actual
occupancy of the Lessee, the Lessee’s
spouse or the Lessee’s Spousal
Equivalent, their children, grandchil-
dren, parents, grandparents, brothers
and sisters and domestic employees,
and in no even[t] shall more than one
married couple occupy the apartment
without the written consent of the
Lessor. For the purpose of this Lease,
the term “Spousal Equivalent” shall
mean any person residing with the
Lessee as a primary or principal
residence, who can prove emotional
and financial commitment and
interdependence between such person
and the Lessee.
Condominiums
Condominium associations have bylaw
provisions that identify permitted occu-
pants and reflect a concern for congenial
occupancy of the property and protection
of values.21 However, their scope is in sharp
contrast to typical proprietary lease use
provisions. In the proprietary lease,
as illustrated above, the categories of
occupants are fairly narrowly defined and
basically limited to the family of share-
holders. In contrast, modern condomini-
um bylaws typically reflect a broad range of
permitted owners and occupants, includ-
ing corporations, partnerships, limited
liability companies and foreign govern-
ments. Occupancy is typically permitted
for officers, directors, shareholders or
employees of the corporation owning the
unit, partners or employees of a partner-
ship owning the unit, and the like.
Further, such bylaws generally allow
permitted occupants to live in the unit
alone, without requiring contemporaneous
occupancy by the unit owner. While such
bylaw provisions provide far less control
over who lives in the unit, they reflect
the goals of the condominium form of
ownership, where unit owners, as com-
pared with owners of co-op apartments,
have far less financial, legal and social
interdependence with one another.
Conclusion
A clear proprietary lease or condomini-
um bylaw provision is the most effective
way for a co-op or condominium to set
forth restrictions on who may occupy
an apartment as well as whether such
occupancy must be concurrent with that of
the lessee or unit owner. Furthermore,
clear language puts purchasers on notice of
restrictions regarding their use of an apart-
ment or unit. The language should clearly
state who may reside in the apartment,
with whom and at what point in time.
If the lease or bylaws are unclear,
boards should consider the need to seek
shareholder or unit-owner approval
of a clarifying amendment. Clarity will
prevent ambiguity in interpreting the
rights of occupancy and will best protect
the security, values and quality of life
associated with the co-op or condominium
community.
•••••••••••••• •••••••••••••••••
1. Another category of residential occupancy issues
pertains to the death of a shareholder. The executor or
administrator can use the decedent’s apartment for a
period of time in order to wind-up the affairs of the
estate. See Richard Siegler and Eva Talel, “Death of a
Shareholder,” The New York Law Journal, Jan. 7,
2004 p. 3, col. 1. See also, Joint Queensview Housing
Enterprise, Inc. v. Balogh, 174 AD2d 605 (2nd Dept.
1991) and Joint Properties Owners, Inc. v. Deri, 113
AD2d 691 (1st Dept. 1986). Yet another category of
residential occupancy issues relates to the rights of a
judgment creditor or purchaser of the judgment
debtor’s co-op apartment at a sheriff’s sale. The pur-
chaser at auction may not occupy the apartment with-
out board approval, although “transfer” of the shares
and lease may occur by operation of law. See House v.
Lalor, 119 Misc2d 193 (Sup. Ct. N.Y. County 1983);
Trepel v. Diop, 2003 WL 22283816 (SDNY Oct. 2,
2003). Yet another category of residential occupancy
issues relates to occupancy of a co-op apartment by a
sublessee of the shareholder, a nonshareholder. This
issue, which is the subject of a separate body of case
law, is not addressed in this article.
For a discussion of nonresidential occupancy and
steps that boards and managers can take to halt such
WEDNESDAY, NOVEMBER 3, 2004
occupancy, see Richard Siegler and Eva Talel, “Non-
Residential Occupancy,” NYLJ, Sept. 3, 2003, p. 3,
col. 1.
2. 175 Misc2d 493 (App. Term 2nd Dept. 1997).
3. Id. 175 Misc2d at 494. The court rejected as
improper the civil court’s use of the definition of “fam-
ily member” that appears in the Rent Stabilization
Code §2520.6 (N.Y. Comp. Codes R. & Regs. title 9,
§2520.6 (2000)) to determine the meaning of those
words when used in the proprietary lease.
4. Index No. 6489/83, (Sup.Ct. N.Y. County) (Nov.
14, 1983).
5. 159 Misc2d 1023, (Civ. Ct., Queens County
1994).
6. Id. 159 Misc2d at 1024.
7. Id. 159 Misc2d at 1025.
8. Id.
9. NYLJ June 29, 1994, p. 30, col.2 (Civ.Ct., Bronx
County).
10. Id.
11. Id.
12. NYLJ April 19, 1995, p. 25, Col. 2 (Sup. Ct.,
N.Y. County 1995).
13. Id.
14. 300 AD2d 87 (1st Dept. 2002).
15. Id. 300 AD2d at 88. The court also reversed the
Individual Assignment System (IAS) court’s holding
that the nonpermitted occupancy constituted an ille-
gal sublet, characterizing the mother-in-law’s status as
that of a licensee, which status did not entitle the co-
op to recover a sublet fee.
In 2004, a New York City Civil Court, distinguish-
ing Haydon, held that a co-op waived and could not
summarily revoke the occupancy of an apartment by
the shareholder’s son without her being present,
notwithstanding the identical proprietary lease provi-
sion as that construed in Haydon and a no-waiver
clause in the proprietary lease. The court found that
the co-op’s former managing agent had apparent
authority and did grant permission for the sharehold-
er’s son to occupy the apartment alone and the board
accepted rent for 11 years knowing of the noncoter-
mimus occupancy. 201 East 37 Owners Corp. v. Cass,
3 Misc3d 1102(A), 2004 WL 1094804 (N.Y. City Civ.
Ct. April 23, 2004).
16. Indeed, the pendulum may have swung too far.
In a recent decision, a court interpreted the words in
a lease clause — “lessee or lessee’s spouse, their chil-
dren …” — as requiring concurrent occupancy by the
lessee when lessee’s adult child occupied the apart-
ment. Bikoff v. 198 East Tenants Co., Index No.
101483/04 (Sup. Ct. N.Y. County) (March 8, 2004).
17. N.Y. Real Prop. Law §235-f (McKinney 1989).
18. See Richard Siegler, “The Roommate Law
Revisited,” N.Y.L.J., Jan. 2, 2002 at p. 3, col. 1. The
Roommate Law does not apply to condominiums. See
Smith v. Board of Managers of Leland Gardens
Condominium, NYLJ, Nov. 16, 1993, p. 28, col. 6
(Sup. Ct. Bronx County).
19. N.Y. Real Prop. Law §235-f(7) (McKinney
1989).
20. N.Y. Real Prop. Law §235-f(3) (McKinney
1989).
21. See, e.g., Board of Managers of Village House (a
Condominium) v. Frazier, 81 AD2d 760 (1st Dept.
1981), aff’d, 55 NY2d 991 (1982).
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