Estate Settlement involves dealing with many different types of assets. New York City estate lawyers routinely find that a decedent was the owner of a cooperative apartment. The ownership nature of these apartments is comprised of shares of stock that the decedent owned in a cooperative corporation. As a shareholder of the corporation the decedent would also have been the lessee in a proprietary lease that provided for the decedent to reside in his apartment. A cooperative proprietary lease sets forth the rights and obligations that exist between the shareholder-lessee and the cooperative corporation-lessor. While the decedent was an owner of the shares of stock allocated to his apartment, the lease is really in the nature of creating a landlord-tenant type of relationship.When a person dies, the shares in the cooperative end up being controlled by the decedent’s estate. Thus, either an estate executor or administrator will have the legal authority to transfer the decedent’s interest in the apartment. Of course, if the apartment was owned by another person jointly with the decedent, then the decedent’s interest would pass automatically to the joint owner upon death. However, when there is no joint ownership, the decedent’s fiduciary must abide by the lease provisions and cooperative rules in order to effectuate a transfer of the cooperative apartment. Even if the decedent had a Last Will that bequeathed the apartment to a named beneficiary, such beneficiary would usually need to obtain the approval of the cooperative to have the shares transferred to the beneficiary. Such approval would also be necessary for the executor or administrator to sell the apartment to a third party.
In view of the control that cooperative corporations have regarding the transfer of apartments and the rules that must be followed in connection with any transfer, it is not uncommon for disputes to arise between a decedent’s estate and the cooperative. Sometimes, an estate does not have the financial resources to pay monthly maintenance while it attempts to find a suitable purchaser for the apartment. This situation can result in the cooperative corporation commencing legal proceedings for non-payment of these fees that can jeopardize the estate’s ownership interest in the apartment. Other disputes may arise where the cooperative management alleges that the estate has violated cooperative rules. In 601 West 135th Street HDFC v. Tsiropoulos, decided on October 27, 2015 by Manhattan Civil Court Judge Sabrina Kraus, a cooperative corporation commenced a holdover eviction proceeding against the voluntary administrator of an estate. In Tsiropoulos, the cooperative corporation asserted that the administrator breached obligations under the proprietary lease by not transferring the decedent’s cooperative apartment within 60 days after the decedent’s death as required by the lease. After a trial, the Court found that there was a pending application for a transfer of the apartment that was still being reviewed by the cooperative which, in effect, amounted to an extension of time until a final determination was made.
I have represented many Executors and Administrators in connection with the sale of cooperative apartments as well as with regard to legal disputes with cooperative management. If you have any questions regarding these matters, please call me now for a free review of your issue.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate, estate settlement and landlord-tenant cases throughout New York City including Manhattan and Brooklyn. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.
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