Q Our building is 75 percent shareholders, 25 percent sponsor units (renters). The  sponsor units fall under the Emergency Tenant Protection Act (ETPA) of 1974. My  question is, doesn’t everyone in the building, shareholders and sponsor units alike have to adhere  to the house rules and any fair and reasonable decision of the Board of  Directors? Do you have any case law that addresses this issue, as well as  statutory law?  

 —Board President in Yonkers

A “The tenant/shareholders in a housing cooperative are bound by the proprietary  lease, bylaws, rules and regulations,” says Albert Pennisi of the law firm of Pennisi Daniels Norelli in Rego Park,  Queens. “A tenant /shareholder (sponsor) must comply with the proprietary lease, bylaws  and house rules. However, a tenant/shareholder (sponsor) tenant under the  Emergency Tenant Protection Act (ETPA) or rent-stabilized tenants are not  tenants of the cooperative and therefore are not bound by the proprietary  lease, bylaws and house rules. If a tenant/shareholder (sponsor) tenants under  ETPA or rent stabilization violates their house rules, the cooperative must  proceed against a tenant/shareholder (sponsor), who then in turn must proceed  against its tenant.  

 “The issue becomes complicated when house rules are promulgated by the  cooperative, which the ETPA or rent stabilized tenant does not have to comply  with pursuant to his or her lease, (e.g. laws concerning placing rugs on 80  percent of the floors or any other rules of the cooperative, which are not  enforceable against the ETPA tenant pursuant to the Department of Housing and  Community Renewal regulations)—notwithstanding that the rules may be fair and reasonable decisions of the Board  of Directors.  

 The cooperative should consult with its legal counsel who is familiar with the  cooperative’s offering plan, proprietary lease, bylaws, rules and regulations, as well as  Department of Housing and Community Renewal regulations with regard to specific  rules and regulations and the case and statutory law with regard to the  aforesaid rules.