Changing a Name Is the Starting Point

Not so fast. Aside from apartment sales, there are several reasons a shareholder might want to transfer his or her stock. Maybe the shareholder is taking care of estate planning and wants to add or remove a family member from the certificate, or the shares were bought by a couple who are breaking up. Whatever the scenario, you can’t simply change the names on the stock certificate; any change has to be approved by the board, and there’s a procedure that should be followed.

By the book. All the boards we represent have stock-transfer applications that shareholders have to fill out. The transfer process is actually a legal transaction, so a judgment and lien search has to be conducted. If the shareholder has a mortgage, the bank holds the proprietary lease as collateral, so the bank has to approve the change as well. We also have to record the transfer with the city.

Equal treatment. We advise boards to make sure that an applicant would be a suitable shareholder. If one person is leaving and one is staying, we want to make sure that the latter has the finances to pay the maintenance, even if that person has been a shareholder for many years. Some boards interview new applicants. Some do not. Either way, you want to make sure that person is vetted in the same way that every other shareholder is vetted.