Q: I live with my partner in a co-op apartment in New York City that I purchased outright three years ago. Since it was a sponsored apartment, I didn't need approval from the board to purchase it. Now I'm writing my will and would like to leave the apartment to my partner to live in or sell. But would he have to be approved by the co-op board to become an owner? We are not married. If it were us, would he inherit it without board approval? Should I hold the apartment in irrevocable trust to avoid board sabotage?
A: If you want your partner to be able to live in your home after your death, marriage may be the safest solution. As a rule, no approval from the board of directors is required if shares in the cooperative are to be given to a spouse who wants to live there.
However, first look at your cooperative's rental agreement. Details on passing on shares can be found here. Many leases provide for phased board approval for heirs who want to live in the building. For some family members, the lease could specify that board approval “will not be unreasonably withheld.” This means that the board could only deny the lease for valid reasons, such as if the family member was financially unable to cover transportation costs for the unit.
But for all others, approval from the full board could be required. Placing your shares in an irrevocable trust will not help you avoid the succession requirements of the proprietary lease, as board approval is required to create the trust.
In any case, passing on shares with the intention of selling them after your death does not require such authorization.
If you confirm that the lease allows transfers to spouses without board approval, the marriage will achieve your goal.
“Otherwise, the applicant may specify in their will that if the co-op does not allow the transfer to their partner, the executor should sell the home and pass the net sale proceeds to the partner,” said Mindy H. Stern, a partner who represents clients in real estate, trust and estate matters at Schwartz Sladkus Reich Greenberg Atlas LLP.
If your lease doesn't give your partner these rights and you don't want to get married, it's still possible that your board will view your partner more favorably than another suitor because they know them, said Andrew B. Freedland, a partner who practices real estate law at Herrick.