The Real.Est List
Ask an Expert: How can my co-op board find out how much rent I'm charging?
Q. After reading the recent post about whether a co-op board has the right to approve a roommate who’s paying rent, I would like to know how a co-op board can find out if I am charging rent to a roommate? Can they audit my bank deposit statements? How would they know if I am making a profit if I don’t tell them?
A. According to BrickUnderground's experts, your board would first have to be suspicious enough to start a legal action.
“The board could initiate legal action based up on an alleged illegal sublet,” says real estate lawyer Eric Goidel, and obtain information that goes toward showing the “true nature” of the living arrangement.
If your board is taking the position that “the arrangement is not simply a roommate sharing expenses, but a profit-driven sublet, portions of both the shareholder and the roommate’s banking records would be discoverable,” says real estate lawyer Robert Braverman. “The board does not, however, have an independent right to audit a shareholder’s bank statements.”
The most common way a landlord or a board finds out what a roommate is being charged is “directly from the roommate if there is ever a falling out between the tenant or shareholder and the roommate,” says real estate lawyer Jeffrey Reich.
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