Co-Op takes Apt after Subletting

You and the co-op have a landlord-tenant relationship.

If you breach the terms of the proprietary lease (e.g., by subletting without approval) then the co-op will serve you with a notice to cure.

If you don't cure, then the co-op can follow these steps:

1. Cancel your proprietary lease
2. Take back your shares
3. Evict your subtenant
4. Sell your shares to a new lessee
5. From the proceeds, deduct anything owed to the co-op, including legal fees, and pay you the remainder.

I don't find any cases where that happened specifically because of unauthorized subletting, but there're quite a few cases due to "objectionable behavior," the most famous being Pullman on W 67 St.

Most likely, any tenants who try it cure very quickly, as soon as a lawyer tells them they have no leg to stand upon. The co-op's legal fees are especially deterrent.

Oops, in step 5, add in any involvement by a lender from whom you have a share loan. Your loss of the lease triggers a default with all kinds of penalties and fees.

Here's an unauthorized-sublet case: http://caselaw.findlaw.com/ny-supreme-court-appellate-division/1428930.html#

There, the tenant tried to claim that because she bought from the sponsor she became a holder of unsold shares and therefore could sublet without approval. She wasn't and couldn't, and not only lost but ended up paying the co-op's legal fees of $95,000.