Co Op Purchase for Daughter (New York, York: sale, real estate, sublease)

[RBCPAPC]

My wife & I want to purchase ( close to signing contract) a coop for my daughter who will be living there. We want the shares in our name jointly excluding my daughter. WIll the board accept this ? Or does she need to be on the contract and shares? My Loan broker says, we have to obtain an Investor loan, if she is listed on the contract rather than a primary residence loan? Appreciate any light in this matter
Thank You

Randy

[Pruzhany]

Purchase it under your name and sub-lease it (with board approval) to your daughter. It stays an investment as long as you never live there.

[mathjak107]

an investor mortgage is alot more usually. ..i would say you can buy it as a 2nd home since family members arent considered subletting. you dont want to start with it as a rental because then you will fall under an investment loan, have to take depreciation on your taxes because whether you do or not it will be recaptured from you when you sell. keep in mind in any case since its not your primary residence you will have to pay taxes on any gains when sold.

this is the recommendations of a nyc real estate attorney when asked:
"you should list the actual occupants in the contract of sale. if parent is buying the apartment for a daughters use, the parents and the daughter should be listed on the contract of sale as occupants. This avoids confusion. Technically, most proprietary leases allow immediate family members to be in possession without the board's consent. That includes mother, father, brother, sister, son, daughter, etc. In fact, Real Property Law section 226-b allows such persons to be occupants without them being illegal subtenants. Hence, as long as the Co-op board knows who the family members are, there should not be a problem. The term family member has been construed by the New York Court of Appeals (Barachi decision) to mean significant or gay lover as well. If you allow anyone else to be in possession without the written consent of the Co-op, in all likelihood, an illegal sublet case will be brought against them. Notably, a board may not unreasonably withhold consent to a sublet request".

[loratliff]

Some coops have no problems with parents buying for their kids—other have big, big issues with it, so you need to check with the board first.

Also, sub-leasing it like NeilVA suggested will likely not work, as most buildings only allow subleases for a year or two at a time.

Mathjak's suggestion is correct and would be the most hassle-free way to go about things.