For a young couple looking for a place to live as well as a community to join, looking into a co-op may be a good bet. A co-op sub-lease differs from other rental situations in a number of ways. From the number of documents to passing through the board of directors, it can be a long process that is ultimately worthwhile for your personal living and even financial goals. A co-op sublease is far different than a normal lease, so be sure to read the fine print before signing anything.
In the United States, a co-op or cooperative is considered a non-capital corporation. These cooperatives can be anything from a house to an apartment complex. Condominiums are considered to be co-op housing. Members within the co-op are considered owners of the corporation. These owners can sublet their share to prospective renters if they are leaving town for an unspecified amount of time or are looking to make a little extra money. The board of the cooperative, which consists of its current members, must approve any potential sublet. Before signing a sublet, understand that some co-ops are dedicated to specific lifestyles and may have strict guidelines on what is to be excepted from its residents.
The Involved Parties
A co-op sublease agreement has three parties involved. These parties include the owner of the co-op shares, the corporation that is in the building and the renter. The owner is considered the overtenant, the renter is the undertenant and the co-op is the landowner. There will be an overlease between the co-op and the owner of the building, while there will be a sub-lease between you and the owner. Once a sub-lease has been drawn up, read the fine print before making any decisions.
While the agreement will be similar to most tenant/landlord leases, there will be some differences. The undertenant will be responsible solely to the co-op, meaning that all rules will be based on what the corporation says or does. Often, these rules will be different from what one would find when renting a private home or apartment and may include extra fees to go to the co-op as well as mandatory work provisions to help the cooperative run its day-to-day activities.
Final approval of the lease is subject to the co-op board. This will be after an interview with the owner you are renting from and one with members of the co-op board and any kind of required background or credit check. Once the board approves your application, you are officially a tenant of the co-op for the predetermined length of your sublease.
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