Co-op Board's Refusal to Transfer Shares to Unmarried Partner Is Upheld

Among the many powers enjoyed by co-op boards, one of the biggest is the power to decide what happens after a shareholder dies. Most co-op proprietary leases state that, in the event of a shareholder's death, the stock and lease will be transferred without question to the deceased person's spouse, and the board will not "unreasonably" withhold transfer to a member of the family. But there is, as we're about to see, significant wiggle room.

As in: what happens if the deceased shareholder had a "long-time romantic partner" who he never legally married?

That question was at the heart of a highly contentious lawsuit known as Maryann McCabe v. 511 W. 232nd Owners Corp. The lawsuit emerged when David Burrows died, and the board in the Bronx co-op ordered his partner, Maryann McCabe, to vacate the apartment because only Burrows's name was on the stock and the proprietary lease, and he and McCabe never married.

When McCabe sought to have the shares transferred to her, the board refused on two grounds: that McCabe was not Burrows's "spouse," and she was not, in the board's opinion, "financially responsible." McCabe challenged the board's decision under the city's Human Rights Law, which prohibits discrimination based on marital status. 

Her petition was denied, and the denial was recently upheld by a sharply divided New York Court of Appeals.

Nicole Malen, an associate at the law firm Moritt Hock & Hamroff, sought to put the court's controversial decision into perspective. In the firm's newsletter, Malen wrote: "The majority concluded that while the Human Rights Law was intended to prohibit discrimination against persons on account of their being married or single, it was not intended to expand what it meant to be a 'spouse' of someone else. In other words, as the court put it, Ms. McCabe 'was not denied an automatic transfer of Burrows's unit merely because she was unmarried, but because of her relationship to a particular person — specifically because she was not married to Burrows.'"

Malen noted that judges in separate dissenting opinions warned that the majority's opinion unfairly excluded committed but unmarried couples, effectively discriminating against McCabe for not having gotten married to Burrows. The dissenters decried the majority's narrow construction of "marital status."

In closing, Malen offered a prediction: "It would not come as a surprise to see a legislative response to this ruling, by which New York City would amend the Administrative Code to more clearly protect those in Ms. McCabe's position."