Coop apartment ownership- Joint Tenancy or By-The-Entirety. What’s the difference?
I recently represented a couple at a closing of the purchase of a cooperative apartment. My clients are legally married but have different last names. The attorney, representing the Cooperative Corporation who was issuing the new proprietary lease and stock certificate (evidencing ownership of the apartment) presented the stock certificate for review and the proprietary lease for signature. Upon review, the documents indicated that title was being taken by my clients as “Joint Tenants with the Rights of Survivorship”. I requested that ownership to the apartment be taken as “Tenants-By-The-Entirety”. Both forms of title, upon the death of an owner, provide the surviving owner the absolute right to receive title to the entire apartment. The coop attorney was annoyed that I was requesting that he make this change. After unsuccessfully bluffing that there was a “recent change in the law” he questioned the significance of a married couple taking title to a coop apartment as Tenants-By-The-Entirety rather than Joint Tenants with the Rights of Survivorship.
Under a Tenancy-By-The-Entirety, married spouses (and who remain married) are viewed as a single person each owning an undivided 100% ownership (and a right of survivorship) that cannot be diminished by the other tenant or a creditor. What this means is while a creditor of one Tenant-By-The Entirety can obtain a lien on that spouse’s interest in the apartment, the lien will only survive if that particular spouse is the surviving spouse. If the debtor/tenant dies prior to his or her spouse, the creditor’s interest in the apartment is extinguished and the surviving spouse takes the apartment free of all liens. Married couples who take title as “Tenants-By-the-Entirety” prevent creditors from reaching, attaching and possibly selling the joint marital property. Similarly, New York cases have held that a receiver in bankruptcy cannot reach or sever ownership when it is by the entirety.
A Joint Tenancy with the Right of Survivorship is subject to actions of the Bankruptcy Court, the possible attachment and sale of a joint tenant’s interest. A joint tenant can transfer their ownership interest without the other tenant’s consent, which may interfere with any estate planning in place.
Tenants-By-the-Entirety who divorce automatically change their ownership to Joint Tenants with the Rights of Survivorship.
Joint Tenants with the Rights of Survivorship who wish to change title in an apartment to a Tenancy-By-the-Entirety may have to get permission of the Coop and any lender using the apartment as collateral.
Offering Planet (www.offeringplanet.com) article in Real Deal Magazine
Please see another article about Offering Planet (www.offeringplanet.com) published in Real Deal Magazine.
Article about www.offeringplanet.com in Habitat Magazine
Please read the article recently posted in Habitat Magazine about Offeringplanet.
or if you prefer
We’ve posted it on our Facebook page, I’m tweeting it now, please feel free to retweet.
If anyone has digital copies of offering plans please email them to info@offeringplanet.com so that we can make them available to others. Thanks.
Court voids Tribeca Summit condo purchase with too many exits | Crain’s New York Business
Court voids Tribeca Summit condo purchase with too many exits | Crain’s New York Business.
Interesting case voiding a contract because the court deemed a contract containing a unilateral, unrestricted right to cancel (by a Purchaser of a commercial condominium) unenforceable and illusory, as it lacks “mutuality of obligations”.
I don’t know if this ruling will survive on appeal.
Thousands of NYC developers facing federal penalties | Crain’s New York Business
Thousands of NYC developers facing federal penalties | Crain’s New York Business.
Interesting article in Crain’s New York Business regarding the settlement of a case between the federal government and the developer illustrating the need to be aware of federal handicap accessibility guidelines in addition to NYC Code. The Fair Housing Act requires new multi-family housing complexes with at least four units to be built with certain features that make them more accessible. The law requires properties to be built with facilities or services that will aid disabled people in their use of the property. Failure to do so can result in civil penalties even if it meets NYC code.
Seller returns deposit to co-op buyer who allegedly failed interview on purpose | The Real Deal | New York Real Estate News
Thought this was a very interesting article in the Real Deal.
Tom Le of Corcoran top broker in Williamsburg
Read the attached article published in the New York Daily News and get to know Tom.
Selling a Cooperative Apartment- Quick Tip
An issue came up on a recent transaction and I thought it was appropriate to repost this quick tip originally published 6/24/2007.
Soon after entering into a contract for the sale of a cooperative apartment, order a payoff letter for the underlying loan being secured by the stock certificate and proprietary lease. By ordering a payoff letter, the lender holding your stock certificate and proprietary lease as collateral for the loan will start to the search; assign an attorney to receive the documents who will deliver them to the closing. Upon locating the stock certificate and proprietary lease the lender will send it to this law firm who will hold it until closing. Although the payoff letter can be ordered and updated on relatively short notice, locating the stock and lease may take some time. Ordering the payoff letter early assures the Seller that the stock certificate and proprietary lease will have them when needed. Ordering a payoff letter late in the transaction, may cause delays in closing while the bank locates these documents which will be needed in order to close. Be aware, sometimes lenders may lose your stock certificate and proprietary lease. The lender will issue an affidavit attesting to the misplacement of the stock and lease and indemnify the Seller and the managing agent from any liability resulting from the loss.
Lavenderlawblog Post: Amendment to Real Property Law – Mortgagor Right to Recover Legal Fees
I received an email from Stewart Title Insurance Company concerning a bill that was recently signed into a law to allow borrowers in a foreclosure proceeding access to legal representation by providing that mortgage agreements which allow a prevailing lender to recover attorneys fees in a foreclosure proceeding shall be read to allow prevailing borrowers to recover attorneys fees as well, thereby enabling borrowers with meritorious defenses to foreclosure to obtain the legal representation necessary to assert those defenses, similar to the reciprocal attorneys fees rights given tenants by Real Property Law Section 234.
It takes effect 60 days after it becomes a law (December 20, 2010) and apply to all real property mortgages that are in existence on or after such date to all actions and proceedings
commenced on or after such date.
Bill for Amendment to Real Property Law
The effect of this law could be to cause banks who are foreclosing to think twice before advancing an action where the loan was improperly underwritten. This in turn may prompt banks to settle foreclosure suits where they not only risk being unable to collect on their loan but be responsible for a borrower’s legal fees as well.
HEY YOU SITTING IN THAT CHAIR . . . .
Yes I am talking to you. I know you are tired of seeing posts about the Do Gooder award (remember the movie Groundhog Day?) but this is the last day to vote for Jed Marcus. It’s important you (and anyone you can get) go and vote. After the voting ends tonight at midnight, judges will award a $5000 grant to one of the top 5 vote getters. We are hoping to get a very impressive number of votes to demonstrate to the judges that our environmental efforts enjoy strong, committed support in the neighborhood and among our friends.
The easiest way to proceed is instead of going to the Do Gooder home page go directly to Jed Marcus’ nomination page:
http://www.dogoodrighthere.org/campaigns/73
Then Click “Vote for this Do Gooder” to the right of the picture. You will then be prompted to either log in or create an account. Once that is done, your vote will be acknowledged on a white screen. Close the screen and you can vote 4 more times.
Email this to ALL OF your friends and family. For each vote that he receives, Jed will send you a pony.
Just kidding, Jed doesn’t have that many ponies.
Seriously, a big thanks goes out to each and every one of you that voted. The response received shows that people really do care about the environment and the community. It gives a person hope.
Sincerely,
Phil Lavender
About
My name is Philip J. Lavender. I am an attorney with the law firm of Marcus Attorneys located in Fort Greene Brooklyn, N.Y. I represent individuals, corporations and lending institutions in the acquisition, financing, development and sale of residential and commercial properties, cooperative and condominium units.
A significant part of my practice, whether representing a first time homebuyer, experienced investor or developer, is explaining various aspects of a transaction. I have started this blog as a forum to exchange information as the world of real estate and the laws that affect it are constantly changing.
It is my hope that this blog will serve as a source of information whether you are a home buyer or seller, real estate investor, professional or attorney.
As a buyer or seller of a home, the more information you acquire about the process, the less daunting, stressful and more positive your experience will be.
As an investor (whether a novice or seasoned pro), knowledge obtained about the process, the product and market place will increase their likelihood of success.
Real estate professionals have an obligation to educate themselves in an effort to better serve, represent and protect their interests or the interests of others.
It is also my hope that I learn from others. Your feedback and knowledge are greatly appreciated.
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