A New York estate may have many different types of assets. These may include bank accounts, brokerage accounts, real estate, and retirement funds. Each of these items can present various issues for an executor or administrator. The estate fiduciary has an obligation to collect and protect estate assets. The failure to do so can be a breach of fiduciary duty. The New York Probate Lawyer Blog has published many articles discussing estate settlement and the responsibilities of administrators and executors.
One asset which may have unique complexities is a cooperative apartment. A cooperative apartment, particularly in the New York City area, is a very common type of residence owned by a decedent. A cooperative apartment is not real estate. The ownership interest is personal property in the form of stock in the cooperative corporation. This interest allows the owner to become a lessee under a proprietary lease where the cooperative corporation is the lessor or, in other words, the landlord. As a result, the estate fiduciary, just like the decedent, must comply with the rules and regulations of the co-op with regard to all aspects of the apartment.
One of the main issues that a fiduciary may face is in connection with the sale of an apartment. Most co-ops require approval of any transfer or sale by the cooperative Board of Directors. The prospective purchaser must apply to the Board for approval. In New York, the Courts allow a tremendous amount of discretion to a co-op in approving or rejecting a sale. The Board is not even required to provide any specific reasons if it decides to reject an application from a prospective purchaser. In the absence of some type of discrimination, an estate fiduciary is at the mercy of a co-op board in trying to sell an apartment. This can be very frustrating, particularly when the estate is being charged monthly for maintenance fees and mortgage payments. The sale of residential real estate or a condominium apartment does not require approval from a third party.
Also, the sales process can be very time-consuming since a cooperative may require the submission of many original estate documents such as the decedent’s Last Will, Letters of Administration or Letters Testamentary. Also, most cooperatives want to have an original Release of Lien document which must be obtained from the New York State Department of Taxation and Finance. This Release shows that there is no estate tax lien. Various estate tax forms must be filed and the process can take a couple of months. Sometimes a similar release form is required from the Internal Revenue Service.
Another issue may arise if the co-op is subject to a mortgage. In these cases, the decedent’s original proprietary lease and stock certificate is typically in the possession of the mortgage bank. Arrangements must be made to have the mortgage bank issue a payoff letter and have the bank attorneys attend the closing and deliver the original co-op documents. This process can be very time-consuming. Problems arise when the mortgage has been transferred to a new company or the original documents cannot be located.
As can be seen, dealing with estate assets, particularly a cooperative apartment, can present challenges. I have represented estate fiduciaries regarding the settlement of estates for over 40 years and have participated in hundreds of cooperative apartment transactions. Consultation with an experienced estate lawyer can be essential for the benefit of an estate and estate beneficiaries. Call Me Now for a free confidential review of your estate issue. We offer reasonable and flexible fee arrangements and personal representation.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 40 years resolve issues relating to guardianship and probate and estate settlement throughout New York City including the Bronx, Queens, Brooklyn, Manhattan, Nassau and Suffolk County. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial free consultation.