Coop apartments being in an unresolved estate

The estate pays the maintenance until it sells the shares. If the estate doesn't pay the maintenance, legal and late fees are added until the whole shebang is collected upon sale. I.e., it's just as with any other shareholder.

Yes, estates file income-tax returns.

Also important to make sure the shares are transferred to the beneficiary before trying to sell. Otherwise there is a long delay before a contract can be issued to the new buyer.
Happy Hanukkah and a Merry Christmas!
Keith Burkhardt
The Burkhardt Group

I went through something like this when a close relative died. I had to hire a lawyer to deal with the Board because they became so unreasonable they even posted a notice in the building that the apartment was going on the market. The bottom line is that the Board has to wait until the disposition of the apartment is resolved in court. As long as the maintenance is paid and no one tries to move into the apartment, the Board has to wait. In my case, it took 14 months to settle the estate. I also had to apply to the IRS for an estate account number so that I could file income tax returns.

Thanks for the info. I am on the board and we have been patient with a relative who is the Public Administrator for the estate that has moved into the apartment 5 years ago. This happened before I was a shareholder and the previous board allowed the relative to occupy the apartment out of ignorance/apathy, there is no written agreement between the coop and the relative. FYI, the Administrator can not transfer anything over $30k so we are now concerned who exactly owns the shares and that the estate hasn't paid taxes and the unit may end up with the state.

This gets more complicated. In order to reside in a coop, you must have a lease and a stock certificate in your name. Only the Board can issue those documents. I would ask the resident to show both documents in order to prove he has the right to stay.

In my case, I was allowed access to the apartment for 14 months, but I was not allowed to move in. By the proprietary lease, a close relative was allowed to inherit the property. However, in order to move in, the relative had to go through a complete Board review and get a new stock certificate and lease. Inheriting the property did not give you the right to live there.

Last year, this coop demanded all residents show these documents to prove they had the right to live there. People who could not show their documents were legally evicted.

Check with your building's lawyers. You may be able to evict him. I've never heard of an estate taking 5 years to be settled unless there's a lot of money involved and litigious relatives.

It's taken 5 years because the Administrator doesn't have the power and hasn't tried to get the power to resolve the estate and the board has been remiss. It is frustrating that the previous board left this mess for the current board to deal with.

I'd get the "administrator" out of the apartment ASAP. His role in this estate resolution seems dubious since this has gone on for 5 years.

If the relative has been appointed by the Surrogates Court as the Administrator, then he does have the power to resolve the estate. He may be having troubles doing so because of multiple claims on the estate, particularly if the original owner died without a will (which is implied in there being an Administrator. Otherwise they would be the Executor).

NY state law limits who can be a distributee of the estate of somebody who died without a will, and if this relative doesn't have sufficient blood relation, then they may not be allowed to inherit the co-op shares. If this is the case, then they may be illegally converting the estate's assets for their own benefit, or 'wasting the estate' (assuming that the estate is paying the maintenance). If so, the co-op could be included in a suit brought against the Administrator for not properly handling the proprietary lease (i.e., the Board permitted somebody to live in the apartment that was not permitted by the proprietary lease). Your board needs to get their lawyer to square things away sooner than later -- if nothing else, fully understand any issues with resolving the estate.

That said, I know of a unit in a Brooklyn co-op that remained empty for 10+ years while the estate sorted things out with the heirs.

mike,
clearly the co-op board is going to have to hire an attorney to move this process along, and since I'm not an attorney, I can't say anything that can be construed as legal advice.

But as a broker, I have sold a number of properties that have passed through estates, and I would remind you that it's customary for co-op boards in this situation to ask that the Letters Testamentary (which in this case might be Letters of Administration -- your attorney will know) be updated so that they are not more than 180 days old at time of closing.

ali r
{downtown broker}

Thanks for the advice.

I am dealing with an interesting estate sale at the moment. The situation involves a coop where (1) the shareholder died a few years ago; where (2) the coop was shareholder's pied-a-terre such that "estate" attorney is not a New York attorney; where (3) a relative lived in said pied-a-terre for a few years prior to shareholder's death and continues to reside there today, which is a few years after shareholder's death; and where (4) said relative is now trying to sell the coop. Out-of-state estate attorney has presented a contract but does not appear knowledgeable about NYC real estate and has been opaque about existence of Letters of Administration or other verifiable legal authority that his client has requisite authority to sell the apartment. I do not have full confidence that "Seller" can actually perform the presented contract. Buyer's remedy for breach is specific performance, but Seller cannot specifically perform contract that he cannot legally perform. Interesting situation that I know how to deal with from a contract perspective (i.e., I am not seeking legal advice), but I am curious as to whether anyone has dealt with anything like this before and how it worked out.