Inheriting a co-op apartment as part of an estate

[showtime]

Yes you can leave a coop to a heir, but remember that doesn’t mean they get to live there. They still would have to get coop board approval. If the coop building doesn’t allow pied a terres or subletting, then the heir may have to sell.

And of course, if the heir decides to play games and doesn't pay the maintenance, then the coop can much more easily foreclose on the apartment vs a condo. The co-op could simply start a non payment action against the estate, cancel out the lease and do a coop foreclosure.

Lastly, as an interesting side note that I recently learned, the $500 credit to buyers that sellers pay in return for not doing a property disclosure form doesn’t apply to estates!

[ryan_gz]

Another issue that comes up quite frequently in co-op estate sales is that the original stock and lease are missing, because it's been so long! Especially common if the mortgage has long since been paid off, in which case the bank sure as heck isn't holding onto it.

If that's the case then the seller or estate has to pay for a leasehold insurance policy, which functions kind of like title insurance for real property. Essentially it's to prevent someone from popping up years later with the original stock and lease and claiming to be the rightful owner.

Fortunately, this leasehold insurance policy seems to be quite a bit cheaper than your typical condo's title insurance. It should run you between $1k to $2.5k in NYC at least.