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Can anyone give me advice here? I'd like to add my brother to the stock and lease on my coop shares as this is the only way that I am permitted to have him occupy the premises. I wanted to transfer 1% of the shares under a tenancy in common structure but the coop is telling me that it must be 50/50 which (according to my tax accountant) would result in a gift tax liability. In other words, I would need to pay gift tax on 50% of the value of the apartment (above my original cost.) This is not insubstantial so I'm not interested in doing this. Is there any way around this? Can we put together a separate rider which would indicate that ownership is 1% / 99%?
Gift-estate tax has such a high exemption that unless you are living in a palace on Park or Fifth Aves it should not amount to anything at all and only at the time of your death.
Can you SELL him half the apartment and hold his mortgage and have him pay you fairly, at a very low interest rate, over the next 15 or 30 years?
But you don't want to give up control of the apartment willy-nilly, you might regret it later.
I doubt that your co-op actually has the right to forbid your brother or any OTHER person from living with you:
Quote:
Q. I live in a self-managed co-op, and we are getting conflicting information about whether co-ops can prohibit roommates. What is the law?
A.
Adam Leitman Bailey, a Manhattan real estate lawyer, says the state’s roommate law allows any tenant who has a lease to have a roommate — including the roommate’s dependent children — without interference from the landlord. Mr. Bailey says that while co-op boards have broad powers to establish building regulations under the “business judgment rule,” the rule does not supersede the law.
I am pretty sure you can just move your brother in and there is NOTHING your board can do about it. They cannot charge extra nor can they even interview or screen him.
Last edited by Kefir King; 07-13-2012 at 02:58 PM..
the roomate law will superceede any rules the co-op has . anyone can live with you.
but that doesnt mean he can be added to the proprietary lease or even an owner without approval by the board unless the co-op bylaws allow it. whats required when transfering or selling shares to family members varies from co-op to co-op
Can anyone give me advice here? I'd like to add my brother to the stock and lease on my coop shares as this is the only way that I am permitted to have him occupy the premises. I wanted to transfer 1% of the shares under a tenancy in common structure but the coop is telling me that it must be 50/50 which (according to my tax accountant) would result in a gift tax liability. In other words, I would need to pay gift tax on 50% of the value of the apartment (above my original cost.) This is not insubstantial so I'm not interested in doing this. Is there any way around this? Can we put together a separate rider which would indicate that ownership is 1% / 99%?
Any advice would be greatly appreciated.
Eileen
The plain answer is no.
Though, it w/b nice if you were to be more straightforward.
What you are really wanting to do is to circumvent your coop's rules regarding occupancy. The coop restricts occupancy to 'proprietary leaseholders'. Sublets and long term occupancy by family and/or friends is disallowed.
The coop allows for marriage and the occupancy of spouses by way of addition to the proprietary lease. Which is why the 50/50 restriction.
I take it you won't be in occupancy? Which I imagine is the real issue.
The above is a summation w/o the facts.
I say no, because any 'transfer' will require the coop's approval AND the issuance of a new stock certificate, as well as a new or amended proprietary lease, etc.
Obviously, your wishes are against the coop's purpose and intent, and they won't comply.
I suggest you consult with a real estate litigation attorney. He will review the bylaws and proprietary lease and determine if your brother is allowed to occupy; and will negotiate the circumstance with the coop's atty. Sometimes these things can be worked out with just a few phone calls.
It is often best to put things to professionals, as things can often become 'personal' and serves no one, particularly when you have live with your fellow shareholders and will need their cooperation in the future.
Jfyi, the coop's purpose is to maintain the integrity and value of the cooperative. Too many or any non-owner occupancies and the value of the cooperative can fall, and the capability to obtain mortgages for individuals and the cooperative.
Basically, this why the requirement for occupants to be shareholders.
Though, it w/b nice if you were to be more straightforward.
What you are really wanting to do is to circumvent your coop's rules regarding occupancy. The coop restricts occupancy to 'proprietary leaseholders'. Sublets and long term occupancy by family and/or friends is disallowed.
The coop allows for marriage and the occupancy of spouses by way of addition to the proprietary lease. Which is why the 50/50 restriction.
I take it you won't be in occupancy? Which I imagine is the real issue.
The above is a summation w/o the facts.
I say no, because any 'transfer' will require the coop's approval AND the issuance of a new stock certificate, as well as a new or amended proprietary lease, etc.
Obviously, your wishes are against the coop's purpose and intent, and they won't comply.
I suggest you consult with a real estate litigation attorney. He will review the bylaws and proprietary lease and determine if your brother is allowed to occupy; and will negotiate the circumstance with the coop's atty. Sometimes these things can be worked out with just a few phone calls.
It is often best to put things to professionals, as things can often become 'personal' and serves no one, particularly when you have live with your fellow shareholders and will need their cooperation in the future.
Jfyi, the coop's purpose is to maintain the integrity and value of the cooperative. Too many or any non-owner occupancies and the value of the cooperative can fall, and the capability to obtain mortgages for individuals and the cooperative.
Basically, this why the requirement for occupants to be shareholders.
Great answer. I would only add that if the OP has any kind of a mortgage/loan on the apartment,the bank will not allow or recognize any transfer of shares even if the co op board is inclined,which is highly unlikely.
the roomate law will superceede any rules the co-op has .anyone can live with you.
This is not true, specifically, nor entirely.
It the case of proprietary leases, the law is unclear. It can and s/b fought.
In a few weeks I'll see my old boss and will discuss the issue.
In reading the law *I* see HUGE holes!!
The Law Journal reference is old, some issues must have been addressed by now.
In any event, in the OP's case, his personal occupancy is a linchpin. Which is why I inquired and suspected that his intent was 'circumvention'.
In order for the 'roommate law' to be applicable, the proprietary lease holder MUST be in occupancy!
Frankly, as a strategy for cooperatives, I would advise to continue to act in accordance with the proprietary lease and bylaws. Specifically in the circumstance of coops with 'deep pockets', the odds of a tenant-shareholder needing roommates having the wherewithal to sustain a court fight are in favor of the cooperative with 'deep pockets'.
Stupid application of the law!
Probably w/h been litigated and/or legislated to clarity, but the motivated and interested parties are weak. Tenant Groups on one side, Coops on the other, and the third interested party, 'Mortgage Holders'.
Most coops don't have the financial capability/motivation to litigate the issue thru the courts; and, with Lenders dumping off mortgages into Bond derivatives, and consequently 'risk' diversified, there isn't any ONE interest holding thousands of coop mortgages and thereby an interest to litigate and lobby for legislative clarity.
Yes, but the coop can restrict it if they see it as a long-term sublet (if the OP is not still living in the apartment and her brother takes it over).
That is the weird and stupidity of the Roommate Law, which obviously was not intended to apply to coops; AND in all likelihood was 'written' by a Tenants Group!
Under real property law Coops EXPRESSLY have the right to forbid subletting, and this right is continued. The roommate law cannot and does not effect this right.
YET, the roommate law appears to restrict Coops' right to disallow roommates (when legally applied in an idiot's viewpoint!).
This conflict is also the basis of the legal requirement that the proprietary leaseholder be resident.
The conflict is illogical and unreasonable, yet par for the course in the Socialist Republic of NY.
****
Just an aside,
This circumstance highlights a WEAKNESS in our society: populism; and also highlights WHY *money* is the ultimate facilitator of FREEDOM! With it, one can buy freedom and relief from stupid laws enacted by populist!
subletting means the tenant on the lease isnt there with the roomate. thats a no no for sure. someone not on the lease is in total possesion of the apartment.
roomate as jc says means the tenant on the lease must be present. and live there full time.
Last edited by mathjak107; 07-13-2012 at 07:09 PM..
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