'); document.write('
'); } else { document.write(''); document.write(''); document.write('
'); }
box-top

Will The Board Let Me Buy An Apartment For My Kids?

It’s a question I hear all the time, even more now that the spring selling season is getting underway. But it’s not the right question – at least not in the first instance.  Because whether or not the board is agreeable, the co-op’s documents may put a wrench in the transaction.

Most proprietary leases have what’s a called restrictive use clause that says who can and who can’t live in an apartment.  Boiled down to its essentials, it might say that the lessee (that’s the owner) can’t occupy or use the apartment for any purpose other than as a private dwelling for the lessee and the lessee’s spouse  and their children.

There’s the rub.  The word “and” has been interpreted by lots of courts to mean that parents have to move in and live with their kids, when usually the whole point of parents buying is so that their kids can cut the umbilical cord and move out on their own.

The result could be that even if the board allowed the parents to buy, they’d have to sublet the apartment to their children, subject to payment of potentially hefty fees and any time limitations imposed on renting out their place.

One way round this mess, is for parents and children to buy the apartment together as co-purchasers. That way everyone would be a shareholder independently entitled to live in the apartment that they jointly own – with or without each other.

Still, that doesn’t mean you’re home free.  Before parents and kids can each live in the apartment – even legally — they first have to be approved for admission, and boards can impose financial conditions on all parties to the transaction, as one seller in a Greenwich Village co-op recently found out the hard way. (See cite below.)

He claimed that after having been told that a co-purchase was OK, his sale to a mom and dad and their two daughters was rejected, forcing him to sell to someone else for a lot less.  But the seller got no sympathy from the court, only a lecture that the board has the right to withhold approval for any reason or no reason, so it was within its right to reject because the children didn’t meet the building’s requirement of being able independently to carry their home and living expenses – a requirement increasingly demanded by boards in this environment.

Even if you’re lucky and the lease contains the magic word “or” instead of “and,” which allows children to live in the apartment bought by mom and dad, without their parents being present, that doesn’t exempt them from the building’s financial conditions.

So let this be a lesson, Even if the answer to your question comes back that you can buy the apartment for your kids, you need to remember two things: 1) All of you still may have to jump over the financial hurdles set by the board, and 2) Even if you do, there may be unacceptable strings attached to the purchase, like having to pay for the privilege of subletting to your kids the very apartment you just bought for them. You’d do well to find out the whole story before you buy, or you could be left with a headache you didn’t bargain for.

See, Fishman v. Charles H. Greenthal Management Corp., 2010 NY Slip Op. 30115(U), Jan. 13, 2010, Sup. Ct. N.Y. Co.  Click here, then enter case year and number under Search By Citation.

  • Facebook
  • Twitter
  • Tumblr
  • Digg
  • Blogplay
  • del.icio.us
  • LinkedIn
  • StumbleUpon
  • Add to favorites
  • email

Tags: , , ,

Leave a Reply

box-bottom