In Spiegel v. 1065 Park Ave. Corp., 305 AD2d 204, 759 N.Y.S.2d 461 [1st Dept 2003], the plaintiff argued that she did not need the consent of the board of directors to sublet her apartment because the housing corporation's proprietary lease and by-laws gave original purchasers of the cooperative's shares more favorable subletting rights than non-original purchasers.

In that case, the First Department held that the plaintiff was not entitled to special subletting privileges, because "there is no question that the lease . . . and the related bylaw provision violate Business Corporation Law § 501 (c) by giving original purchasers more favorable subletting rights that nonoriginal purchasers (see Wapnick v. Seven Park Ave. Corp., 240 AD2d 245, 246-247, 658 N.Y.S.2d 604 [1st Dept 1997])."

In that case, the court found that the preferential treatment was illegal and void as against public policy. The court went on to state:

It does not avail plaintiff that she relied on the sponsor's offer of special subletting privileges in buying the apartment, that the cooperative learned of her intent to sublet the apartment when she purchased a second larger apartment in the building with her husband, that the cooperative is continuing to permit subletting by other original shareholders and that the cooperative is itself subletting an apartment (Spiegel v. 1065 Park Ave. Corp., 305 AD2d at 204).