How to Avoid Estate Issues

A father and his daughter owned a cooperative apartment. The father died. The daughter remained in occupancy, but maintenance payments fell into arrears. The board of directors wanted to initiate legal proceedings. It turns out that the deceased and his daughter owned the shares as tenants-in-common. That means, among other things, that ownership of the shares and lease did not pass directly to the daughter. So, legal proceedings had to be started against the daughter and the executor of the father’s estate.

The corporation obtained from the court a judgment of possession and a warrant of eviction against the daughter and the executor. The daughter asked that enforcement proceedings be delayed to sell the unit. The board gave her an extended period of time for this to happen, but it did not. A contract of sale was prepared but was not joined in by the executor, so ownership could not pass. The board is proceeding with its eviction and foreclosure of the cooperative apartment.

Takeaway

The lesson of this tale is that, when dealing with an apartment sale, boards and their transfer agents should be more astute about the manner in which the title is held. If they aren’t diligent, they can get into complicated estate issues such as this. The way ownership of a cooperative or condominium is held is important. This is particularly so when the co-owners are of different age brackets or life expectancies, or have different relationships. In any event, ownership as a tenant-in-common, as in this case, caused the father’s shares to pass through his estate and not directly to the daughter. Whether this was really the father’s intent will never be known. If the shares had been listed as joint tenants with right of survivorship, the daughter would have been the sole owner at the time her father died. Boards should advise owners of jointly owned residential community associations to review their estate plans in general, and their form of unit ownership in particular.