Assessment fee in subletting a co-op

[margaret]

Hello everybody! is it common, when subletting a co-op , that the sublet assessment fee, must be paid each year, even if the same subtenant remains in the apt?

[Abou]

Sitting here with my managing broker now and he says yes it is very common for co ops to charge a sublet fee each year. Even if it's the same tenant renewing a sublease. That's why condos are better for investors.

[aslan]

Yes Margaret, this is why co ops aren't a great fit for investors. Co ops generally prefer primary occupancy vs subleasing. They want to control who lives in the building. So this is just another way for them to make it more difficult to sublease apartments, while making some money along the way.

Short answer is yes, it's common for co op boards to charge a sublet fee each year, even if it's the same sub tenant renewing a sublease. Investors should factor these sublet fees for coops into their cap rates when making an investment decision.

[lower_nyc]

Yes Margaret, this is why co ops aren't a great fit for investors. Co ops generally prefer primary occupancy vs subleasing. They want to control who lives in the building. So this is just another way for them to make it more difficult to sublease apartments, while making some money along the way.

Short answer is yes, it's common for co op boards to charge a sublet fee each year, even if it's the same sub tenant renewing a sublease. Investors should factor these sublet fees for coops into their cap rates when making an investment decision.

100% correct. Co-ops will almost always charge an annual sublet renewal fee. Some co-ops may also charge a running monthly sublet fee as a percentage of the shareholder's monthly maintenance. If you sign a 2 year lease, the application fee is sometimes double what it would be if the lease term was just one year.

Since the sublet fees and policies vary by building, the only way to be sure is to speak with the managing agent and review the building sublet application and policy.