In New York it is very common that a person will own a cooperative or condominium apartment. The rights to the apartment may be part of a decedent’s administration estate where the decedent was the sole owner of the unit. In cases where the unit is held jointly, the ownership interest would pass automatically to the joint owner.
When a cooperative or condominium unit becomes a part of the estate, the Executor or Administrator is responsible for maintaining and disposing of the unit. Thus, monthly common charges and maintenance must be paid. Additionally, the unit may be subject to other issues. For example, the actor Philip Seymour Hoffman recently died in February 2014. At the time of his death the actor owned a condominium unit in the West Village. As reported at NYdailynews.com in an article by Barbara Ross on June 5, 2014, another unit owner sued the late actor’s estate alleging that a flood from the actor’s apartment caused extensive damage to their unit.
As New York Estate Lawyers know, such lawsuits need to be defended by the estate fiduciary and any recovery by a plaintiff would have an adverse financial impact on the estate and the beneficiaries’ interests.
Another area of concern for estate executors and administrators relates to the disposition of the unit. Very often a cooperative or condominium apartment is sold by the estate. In the case of a co-op, the approval of the Board of Directors to any transfer of the apartment is typically required.
Board approval of a transfer may be difficult to obtain at times, particularly when a person’s Last Will provides that a cooperative apartment is to be given to a specifically named beneficiary. Notwithstanding the terms of the Will, the transfer must be approved and allowed by the Board. While a cooperative proprietary lease may allow transfers to close relatives such as a spouse and children without the typical Board restrictions, giving such apartment to a third party such as a friend may not be approved by the Board. A cooperative Board has great discretion in determining whether the proposed new owner is acceptable, particularly where the proposed new owner is not financially responsible.
When preparing an estate plan or administering an estate it is important to consider the ultimate disposition of assets such as cooperative and condominium units. Thought should be given to whether the unit is to be sold or specifically transferred to a particular person. If a specific bequest is to be made, an analysis should be made regarding the likelihood that the intended beneficiary will be successful in obtaining all the required approvals to become the owner of the unit.
As a Real Estate and Estate lawyer, I have handled the estate settlement of co-op and condos for many clients. Since the issues regarding these transactions can get complicated, the advice and direction of experienced legal counsel is essential.
New York City estate lawyer, Jules Martin Haas has helped many clients over the past 30 years throughout Brooklyn and New York Counties resolve issues relating to estate planning, administration and settlement in New York Probate and Administration proceedings. 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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