Inheriting a Co-op or Condo: What’s Involved? There Are Issues When It Comes to Transferring Property

Inheriting a Co-op or Condo: What’s Involved?

Picture this: at some point, your parents would like to move out of the co-op or condo apartment in the city that they’ve owned for decades and now want to live out their remaining years at their Columbia County single-family home in upstate New York. They want to give the apartment to you as their heir. The question is can you inherit that unit from your folks in the same way you could for the upstate home?  The answer is yes, but it’s complicated. Then again, anything involving real estate in New York City usually is.

Is It Real Estate?

Like all privately-owned, fee-simple real estate, the house in Columbia County is in fact real estate.  It can be easily passed from parent to child, or to anyone else for that matter. What’s required is a will that clearly states who inherits the ownership of the property.  A condominium unit is not far from that, since they are real estate, too.  

If owned jointly with a spouse, real estate can pass directly upon the death of one joint owner to another.  In the case of a condominium passing from parent(s) to a child(ren), the transfer of ownership, particularly in the case where there is a will, is also a relatively easy and painless process.

The one unique question in a condominium is whether the condominium association’s usual “right of first refusal” is enforceable in cases of inheritance rights.  The “right of first refusal” is the condominium association’s legal recourse in cases where the board--as the elected representative of the association membership--is unhappy about a potential unit sale.  In the event a board exercises its “right of first refusal,” they can offer to purchase the unit at a comparable price, rather than accept the unit owner’s purchaser.

“Inheritance of a condominium unit is like a private home, and not subject to the right of first refusal,” says Phyllis Weisberg, a co-op and condo attorney with Montgomery McCracken Walker Rhoads, which has offices in New York, New Jersey, Pennsylvania, and Delaware.

And Then There Are Co-ops...

As with just about everything, co-op apartments are different.  First of all, they’re not real estate.  The cooperator owns shares in a corporation that owns the property. “Co-op shares are personal property,” says Weisberg.  The shareholder does not own the apartment but rather has a proprietary lease for their individual apartment.  And as is the case with most issues in a co-op, the inheritability of the shares depends on the specific co-op’s governing documents.

“If the shares are jointly held by a spouse,” explains Weisberg, “the transfer is easy.”  That’s not necessarily the case for inheriting children or others.  “In most co-ops, the board has the right to approve purchases," she adds, "Many proprietary leases accept surviving spouses.  Some permit other family members, provided the person is financially able to meet the monthly obligations.  Case law is split.  Does the lease trump the will or does the will trump the lease?  Most co-ops will ask the inheriting individual for an application and interview.  If the co-op board turns someone down, that person will need to sell and will get the money from the sale.  The co-op doesn’t deprive you of your inheritance.”

Mark Hakim, an attorney for the firm of Chaves & Perlowitz in Ronkonkoma, concurs that “inheriting co-op shares doesn’t automatically give you the right to live there.  You have to know the terms in your proprietary lease.”  It depends on the documents.

What If There’s No Will?

In the event a cooperator dies, and there’s no surviving spouse and will, Weisberg explains that an administrator is appointed.  One result of not leaving a will, or dying intestate, is that the co-op shares--or the condominium unit for that matter--could result in a kinship proceeding.  According to the website of New York attorney Jules Martin Haas, a kinship proceeding results when no one steps forth "to probate or administer an estate or the closest living relative is a cousin or more distant kin," to determine inheritance rights.  So having a will makes things a lot easier.

Another unpleasant situation can arise when there are battling heirs. In a co-op or condo, someone has to continue making monthly maintenance or common charge payments until the will is settled or the unit is sold.  In the event of non-payment, “a co-op will sue,” says Weisberg, which can ultimately result in an eviction proceeding and lose of the proprietary lease.

What the Board Requires

Most of the time, co-op boards will request the inheritor of the shares to submit the same financial package as any potential new owner or purchaser.  After that, requirements differ substantially from building to building.  A board might require the inheritor to live in the apartment, prohibiting subletting.  They are interested in owner occupants, not investors.

In one case described in a New York Times article, a co-op board required that the inheritor of a unit to sell another co-op he owned and to live in the unit, to approve the transfer.  In some cases, if the board determines the inheritor is not financially capable of carrying the unit, they may approve the transfer of the shares but not approve residency, which would force the individual to sell.  A board can refuse you as a resident but they can’t deprive you of value of your inheritance.

Another potential pitfall, explains Hakim, “is when you buy an apartment from an estate, you must be certain the seller has the right to sell.  What too many people fail to get is the New York State release of lien (form ET117).  The New York State release of lien confirms that the shares from the estate are free from New York State taxes.”  So, Hakim adds, “get your nuts and bolts in order.”

To get your nuts and bolts in order when it comes to inheritance matters, speak to an estate planner or accountant and read your documents.

AJ Sidransky is a staff writer at The Cooperator and a published novelist.

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  • When it comes to inheriting a coop from parent..if financially fit a coop board should not have the right to refuse you. If parent left will and it clearly states an adult child should have coop .Also coops should allow a guarantor for apartment as many adult children took time off from their careers to be a caregiver for the parent. One sibling was a caregiver and the other one has the financial means to easily be a gurantor and willing to do it.
  • My senior mother lives in NYC and inherited a coop apt. The apartment is paid and my aunt was paying for the maintenance only. The management office told my mom to get a lawyer so their attorneys will get in contact. I would like to know why my mother needs a lawyer. Should she need to pass the coop board approval also? Please advise. Thank you
  • My Wife was married prior to me and her husband died. He had shares. In 2 co ops he left the shares for one of the two to his sons from a previous marriage and the other to his spouse. The Will was a mess and the Attorney’s for both my wife and the sins from first marriage would not disburse the multimillion dollar estate because of contradictions in the will. The heirs agreed to a global settlement where my wife gave up Other real estate for the second co op unit shsres. Because she was not a citizen of us at the time of death she set up a QDOT trust and her inheritance passed to the trust. The co op’s prop lease expressly says that a spouse can inherit shsres without consideration. Therefor no board approval. The co op maintained that the trust was not a spouse and therefore she had to go before the board. The co op went onto sue her to compel her to go before the board. The court ruled for my wife but has not yet awarded legal fees. That matter is under appeal. My question is my wife entitled to damages in excess of legal fees as the court ruled that she did not need board approval to inherit the shares.
  • My spouse moved in a coop with his dad and step mom and lived for over 20 years. My spouse name is on the lease his dad passed away. My spouse has a sister who never lived there feels she is an heir. Even tho she never paid rent or lived there is that true?
  • we 3 siblings inherited a co-op apartment in FL. I am making a revokable trust and want my fee simple home, my personal effects and my 1/3 interest in the coop to go to my estate / trust. Can a 1/3 interest in a coop be sold by itself. If not, would the wording in my trust force the sale of the coop?
  • Roman Aminov Estate Law Firm of Queens on Friday, April 1, 2022 6:13 AM
    This blog is really helpful
  • I'm about to go through a similar situation and need advice; my mother has been recovering in a rehabilitation facility and is now being considered for Long Term patient care due to her age (85), early onset dementia, and slight failing health due to surviving Covid-19. Once I sign all the documents and provide her finances to the agency, what happens with her apartment? My late father purchased it in the late 1990's, and held onto it until his expiration in 2009. My late sister showed me the metal file box with all the documents proving his purchase of this apartment. What responsibilities do I owe, what do I receive in return?
  • What about the case where a parent created a trust and left a condominium to the daughter. Does the daughter have to go through the process as if she were buying the unit and submit an application or can a deed just be prepared from the trust to the daughter?
  • My Mother moved to Florida when my Father passed, and after a couple of years missed us , her children, which whom 2 are married and I am divorced with 2 children. She moved back up to N.Y.and purchased a nice 1 bedroom co-op. Soon after her Parkinson’s kicked into high gear after nasty fall, and I immediately moved in with her, cause I would never let her stay at a nursing home . I turned the apartment into conditions that would best suit her care due to now she was in a wheelchair and shortly following bedridden , which she now had a Hospitalbed setup in the main area. They said she wouldn’t last in a facility cause most elderly do not and the social worker concurred with her Dr. and estimated 3 months, to a year. I gave her the best care that only a family member can give . And most of all , the company and close friendship which we always had. She passed in February of this year, 8 years after I became power of attorney and removed her from the nursing home that already had her burried 8 years ago. I got her an elderly care attorney, where she updated her will and to protect her pension and medical insurance. I worked as a freelance Artist , and during this time suffered a massive heart attack which followed bi-pass surgery, so now our savings which we combined to live off of lasted to almost the passing of her life. It’s a shame how many agencies try to swindle the elderly of their savings. Unfortunately, I am unable to work, and fell in arrears with the maintenance, the management company already started the legal paperwork to do what they do, which is to take ownership of the shares, which never had a mortgage cause it was bought outright . I am the executor of the estate and handled everything , and the shares were given to me by her in the will. We tried to have my name transferred and have ownership, but like mentioned on your site, co-ops have their own laws and regulations. And they state I have to go through basically an entire closing of sale through their attorney which charges $5,000. I wanted to sell the day after she passed , but realtors are unable to represent any sale ,except for the owners of the shares, which I am not on the deed.I am at an exhausting part of this unfortunate situation, and in no way will surrender this property that has no mortgage and was purchased for $159,000. Cause I owe $5,000. Any suggestions or knowledge on how to make this work out. I’m at the end of my nerves, cause I’ve been doing more paperwork the past 6 years, than a staff of paralegal secretaries. THANKYOU for all that had the time to read a lengthly description. My learnings on dealing with this is TO NEVER HAVE ANYTHING TO DO WITH A CO-opertive again. It’s nothing but a legal way for these management companies to creep in on the eldely, have them foreclose if they have even a year left on their mortage,take control of their shares a sub-lease it out for a profit. I’ve seen it happen to 5 people who became destitute and were forced out by city Marshall’s. It’s a disgrace.