The death of a loved one not only brings grief and sorrow, but an agonizing pile of paperwork to tend to and affairs to get in order. For residents of New York City, it also means figuring out the fate of the deceased's co-op or condo apartment, if it hadn't been figured out beforehand.
When an owner dies, a co-op or condo has specific rules and regulations outlining how it can be passed down to a beneficiary. For example, since a condominium is considered real estate, it can be passed down to any beneficiary, provided that the condo board doesn't choose to exercise its right of first refusal and buy the apartment outright from the owner's estate. According to Thomas E. Kass, an attorney specializing in real estate and corporate transactions with Kantor Davidoff in New York City, "It depends; the involved parties would need to reference the condo's documents to see if the condominium does indeed have that right - but that's not usually an issue that arises." And after the beneficiary receives the property, it can then be determined whether to keep it, be financially responsible for it, or sell it.
By contrast, as a co-op is an allotment of shares in a corporation that is run by a co-op board, transferring shares to a beneficiary becomes more complicated. "A typical proprietary lease has restrictions with respect to transfer or sale and is often subject to a co-op board approval," says Kass.
To protect your property and to make sure that it is given to the person that you have chosen, the best place to start is before you seal the deal. "If you're in a situation where you want someone to inherit the apartment after you die, than make sure the paperwork is done at the time you get the apartment," said Alan Fried, an attorney with Manhattan-based Ganfer & Shore, LLP.
Most married couples purchase co-op apartments as Tenants in the Entirety, a form of home ownership available only to married couples, so long as they remain married and occupy the home as their principal residence. "If one spouse dies, the other spouse will inherit the property, regardless of any legal will that was created," says Fried.