November 3, 2017

On November 1, 2017, Michelle Maratto Itkowitz taught a Continuing Legal Education class for Lorman entitled, “Current Issues in Apartment Overcrowding and Illegal Occupancies”. One of the sections of the program was completely new material that Michelle had never taught before – it was on co-living. Michelle has many co-living companies as clients these days. Here are two small excerpts from the November 1 program:

Introduction

People today, especially younger people (millennials), occupy apartments differently than people did twenty years ago. I have extensive anecdotal experience from my landlord and tenant litigation practice in New York City to support that last statement. I represent BOTH landlords and tenants, by the way. 

Today, tenants bring more people into apartments with them – including family members, roommates, and subtenants. In some cases, we see married couples living together with other married couples – as roommates. People are “location independent” in their work lives these days and operate businesses from their apartments. Then of course, we have people turning their apartments into beds-and-breakfasts and/or hotel rooms, via Airbnb and other short-term leasing platforms. Then we have “Co-Living”, an exploding phenomena where people are living in apartment buildings as if they are dorms. 

Some of these occupancies are illegal, and some are perfectly legal. To some landlords, all of this activity might seem like “Overcrowding”. The more people in a building, the more stress on the infrastructure, the more garbage, the more noise, the greater the need for maintenance, etc. To tenants (and this program is good for tenant’s counsel too) these new modalities of occupancy represent more choice in housing in an increasingly expensive marketplace. To the developers and lenders who build the apartment buildings, this changing environment represents more risk and more opportunity.

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Co-Living

This is the definition of co-living that I have developed for use in my practice:


An arrangement by which a landlord rents an apartment to a group of tenants, where the tenants occupy and share the apartment as roommates, an arrangement which the landlord consents to and facilitates as an active participant; the tenants have flexible terms, which are often short, and are allowed to vacate the apartment early without liability for the full term of the lease; if a roommate is lost, the landlord assists the remaining tenants with getting a qualified new roommate to take lost roommate’s place and gives the remaining tenants rent relief while doing so; the landlord frequently provides the tenants with other advantages and amenities, including but not limited to furnishings and personal property, services, and thematic programming, such as dinners or lectures on topics of common interest to the roommates; co-living places a big emphasis on the creation of a community within the apartment; the price per square foot for the apartment is often higher than it would be if the same apartment was not rented for co-living. The advantages of co-living for the tenant are flexibility, convenience, limited liability for bad roommates, and community. The advantage of co-living to a landlord are a higher price per square foot and greater control of the occupants of an apartment.