—Concerned About Co-op Transfer
A “Just because people ask to have relatives or friends added to the stock certificates does not mean the board has to agree,” says New York-based real estate attorney C. Jaye Berger. “There should be a requirement that they meet whatever financial requirements the building may have. Even in the event of death, the building does not necessarily have to agree to allow the family member or friend mentioned in the will to live in the building. For example, a shareholder can state in his/her will that a friend will inherit the shares but that person must still meet the financial requirements for the building. If they do not have sufficient income to pay the monthly maintenance, the estate would have to sell the apartment and give the proceeds to the friend or relative.
“There is also an issue concerning jurisdiction. If you add another person to the stock and proprietary lease, they need to be served in the event of a default. It can get complicated if that new party lives outside of the State of New York or even the United States. In other words, if the building were to allow the party to be added in addition to the current shareholders, the building might want to impose some requirements about what constitutes good service in the event of a lawsuit. These are the same kinds of issues boards face when shareholders want to set up trusts. This would only involve a small group of shareholders who own their shares and do not have mortgages where bank approval is needed.”