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Laundry Licensing

What’s the difference between a license and a lease? If your board doesn’t know the answer – or hasn’t even heard the question – it could be the difference between having the laundry room company you want or being stuck with one you can’t stand.

It all starts with the agreement. When laundry companies are hired, they usually send over a standard lease. Accepting a lease is a board’s first big mistake, says Arthur Weinstein, an attorney in private practice. “You do not want to give them a tenant’s right to occupy the space and the protections offered to tenants under New York’s complex landlord and tenant laws, which generally favor the tenants,” he notes. 

Weinstein recommends that the rights granted to the laundry room company be contained in a “license to use,” which allows them to run their operation on the premises but does not give them the rights of tenants. “It’s very difficult to evict a non-performing laundry room company that has a lease rather than a license,” Weinstein says. 

In addition, boards should read – or have their attorney read – the fine print. Many of the agreements presented by the laundry companies contain automatic renewal provisions. These will extend the term of the lease for another seven-year period if the co-op does not cancel 30 to 60 days before the end of the term. Another common practice is to include a provision that gives the laundry company the right to match the deal that a new company is offering. “The problem with that is, if you’re looking for a new laundry room company, you’re presumably not happy with the old company,” Weinstein notes.

The board should insist that the co-op retain the right to cancel if it is unhappy with the service being provided. This should be very specific, says Weinstein. “In my contracts, I say that if the equipment is down for more than two days and if it happens more than twice in a year, we have a right to cancel. This is about taking control of your situation. You have the right to demand decent service.” 

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