Q&A: Transfer of Shares
A “The ability to transfer ownership of shares in a cooperative in a stock and lease varies from co-op to co-op,” says attorney and partner Geoffrey Mazel of the New York-based firm Hankin & Mazel, PLLC. “The transfer does not serve any corporate interest and is an accommodation to the shareholders of the cooperative. Many co-op boards argue that the proprietary lease requires the owner/lessee to occupy the unit and in the case of trust ownership of the shares this provision of the lease is in technical violation.
“In addition, there are issues such as service of process; maintenance collection; proxy voting and uncontrolled occupation of the unit which may make trust ownership problematic for the co-op board.
“Many co-ops have found ways to overcome these problems. The easiest way to do this is to have the current shareholder and the trustee of the trust sign an agreement at the time of transfer which in effect requires the current shareholder to be the only occupant of the unit and the guarantor of the maintenance. Of course, this document should be drawn by the cooperative's attorney and approved by the board of directors.”