In New York City it is very common that a person may own a cooperative apartment. Essentially, the ownership of a co-op apartment has two aspects. A person is a stockholder of and owns shares in the cooperative corporation. The vested interest in the corporation provides a person with the right to be the lessee in a proprietary lease for his apartment.
As most cooperative apartment dwellers know, the co-op owner is subject to many corporate rules and regulations that are contained in various forms such as the proprietary lease, the corporation’s by-laws and the house rules. Perhaps the most well known rule or restriction regarding these apartments is that the ownership rights cannot be sold or transferred without the express approval of the corporation. The general law in New York provides that cooperative corporations have broad and usually unreviewable discretion to approve or disapprove of a prospective purchaser or transferee. While the corporation cannot engage in discriminatory conduct, it can disapprove a transaction for any reason and generally does not need to disclose the reason for such rejection. Continue reading