Who’s Responsible for Screening Tenants?

You and your boards might not like it, but some associations’ bylaws clearly permit owners to rent their units. So what does that mean for managers and boards? Do they have some responsibility for vetting prospective tenants? Not according to a New York state court (Kling v. The 129 Lafayette Street Condominium).

The owner of a unit in a luxury building in lower Manhattan decided to lease the unit, as permitted by the condo bylaws. He hired a broker, and the broker submitted a lease application for a tenant to the manager. The manager submitted it to the board for final approval.

The lease was set to renew for three years through the end of 2017, with the tenant paying a lump sum each year. In September 2015, though, the owner learned his unit apparently was illegally listed on Airbnb. He didn’t act because he wanted to first collect the second-year rent.

In October 2015, the tenant alerted the owner that he couldn’t make the lump sum payment and instead would make monthly payments. The owner rejected this, and they agreed to terminate the lease, with the tenant vacating by the end of November. Throughout November, though, the tenant refused to allow the broker to show the unit, and, by Dec. 1, he hadn’t fully vacated.

The owner ultimately brought an eviction action. The parties settled, and the tenant agreed to pay him a $100,000 judgment. When the tenant failed to do so, the owner went after the manager, the association, and the board for, among other things, breach of duty.

To find out what the court thought about this, and learn some valuable lessons for other managers and their clients, read our new article Owner Sues Manager and Board Over His Own Tenant’s Behavior.

Best regards,
Matt Humphrey
President