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KEYS PLEASE!!

New York State has a law, Section 51-c of the Multiple Dwelling Law,  which requires tenants to deliver copies of their keys to the landlord.  The reason for this is to allow landlord’s entry into apartments to make repairs and to deal with emergency situations.  This particular section of the law applies to three or more family buildings built after April 18, 1929.  Cases have held that the law applies to Co-Ops.

But what is a Co-Op to do when the shareholder simply refuses to turn over the keys?  The first place to look is the proprietary lease which most likely has a paragraph requiring all shareholders to deliver copies of keys to the Co-Op.  The lease probably also has a clause which allows the Co-Op to terminate the lease if there is a breach.

If the proprietary lease has those provisions then the Co-Op can write to the shareholder and demand the keys.  If the shareholder refuses and raises the stakes, then the Co-Op may go to Court to terminate the lease and evict the shareholder.  The result would be that the shareholder would still own the apartment but not be permitted to live there.

This happened in the case of 111 Tenants Corp. vs. Stromberg .  The Co-Op won and the Court found that the shareholder’s refusal to give the Co-Op a copy of the keys was a violation of a substantial obligation of her tenancy.  However this turned out to be a pyrrhic victory because the Court awarded possession to the Co-Op BUT (this is a big but), pursuant to law, allowed the shareholder to avoid the eviction by simply giving a set of keys to the Co-Op within ten days.  So, after what one imagines to be a lot of legal fees and wasted time, the shareholder eventually was ordered to do what the proprietary lease required.

Parties thinking about this issue should be aware that if the shareholder bought the apartment with financing it is almost certain that the Co-Op signed an agreement with the lender, commonly known as a Recognition Agreement.  The standard Recognition Agreement obligates the Co-Op to notify the lender of any notice of intention to terminate the lease and give the lender an opportunity to cure the default.  So, if the shareholder has such a loan, the Co-Op should also notify the lender, which hopefully will motivate the shareholder to turn over the keys.

Another thought to consider is that the proprietary lease may also provide for the tenant to pay the Co-Op’s legal fees if there is a breach.

On a practical note, if your Co-op asks for copies of your keys, give them up.

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