Rights of Inheritance Co-op Boards Change With the Times

Several months ago, I wrote an article for this column detailing the circumstances under which a cooperative

board could legally discriminate against those wishing permission to either occupy or purchase the stock and lease of a cooperative apartment (Boards Beware: Steer Clear of Discrimination, September 1994). That article explained that so long as a board did not engage in prohibited discrimination, its acts would be protected under the Court of Appeals' ruling in Matter of Levandusky v. One Fifth Avenue Apartment Corp., a case which insulated board members from liability for the consequences of good faith decisions made in the context of carrying out their elected responsibilities.

In recent years, however, there have been significant developments in one area of discrimination which has become increasingly troublesome for boards, namely, discrimination based upon real or perceived sexual orientation and/or marital status. In this rapidly evolving area of the law, co-ops frequently struggle with how to decide the occupancy or inheritance rights of individuals, often characterized as live-in lovers, who want to be treated as the equivalent of married spouses or blood-related family members.

In 1989 the Court of Appeals, in what has come to be known as the Braschi case, awarded rent controlled succession rights to a gay roommate who claimed and demonstrated domestic partner status. Later, amendments to the Rent Stabilization Law and Code echoed this change. Typical proprietary leases and House Rules, however, have been woefully inadequate to deal with these issues and often have not kept pace with the flurry of court and legislative activity in this area.

Traditionally, most co-op proprietary leases written prior to the court decisions and legislative and administrative changes mentioned above, restricted occupancy of a co-op unit to the shareholder and his or her immediate family members, usually including a spouse, children and other blood relatives. A typical use provision in such a proprietary lease would have read:

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7 Comments

  • If a shareholder's husband of 25 years is not listed by name on the coop shareholder certificate, does the board have the right to refuse answering and dealing with the husband's complaints about unsafe conditions, etc. because the board says he is not a shareholder?
  • @unkown: As a managing agent, I don't talk to subtenants (they have to talk to me through their landlord, the Shareholder.) While practically speaking this is the case, I would never turn down information that is an unsafe condition. In fact, the Manager/Board may be opening the building up to liability should this unnoticed and unmonitored unsafe condition turn to damage, injury or death. I would certainly step to the side of the normal rule in this case.
  • My brother grew up in the co-op he now lives in. The shares were willed to him by my father. He never moved out. The new board of approximately three years sent him a letter from the co-op attorney telling him that since his name is not on the stock certificate, he either has to pay the flip tax or sell to a third party. My lawyer has sent their lawyer all of the the sufficient documentation and it's now a waiting game. Can the board do this to my brother?
  • I am in a similar situation to the person whose Brother grew up in the Co-Op. My Mother and I purchased a Co- Op about 15 years ago. She passed away two years ago. my name was never put on the Stock. We thought it had been done. Anyway , it is obvious I can pay the Maintenance since I do so. Do I have the right to stay or can the board make me pay the flip Tax and or Move?
  • I am a shareholder in a Florida Cooperative; it is a mobile home park & I own my unit. The share is in my name only. I want to make my sister 2nd occupant (I am a widow). My coop insists that her name go on the share as joint shareholder. I do not want to do this. Any thoughts?
  • I am in a mobile home park where we own 1 58th. share of the corp. Ownership requirements state that owners must be over 55 yrs. old, a married man and woman. I would like to sell my unit to a gay couple that meets all the requirements except "man and woman". Is it legal for the board to deny their purchase.
  • @Barbara: Use a sublease and make your sister your undertenant and attach it to your proprietary lease. This way you won't have to put her name on the certificate thus keeping the occupancy separate provided you stay and reside in your unit. Also, I've never heard of joint shareholder. However I'm familiar with joint tenancy which means all parties jointly own the property. Hope this helps.