The Name Game

Types of ownership. When you purchase into a housing cooperative, you obtain shares in the corporation, and the stock certificate is evidence of that ownership. There are multiple ways to hold shares. If there are two people, they can hold them by something called “tenants in common,” which means each person owns a 50% interest separate from the other. There can be joint tenants, meaning that they both co-own the shares, and if one of them dies, the survivor inherits the deceased person’s shares automatically. Or, if you’re a married couple, you can own as “tenants by the entirety,” which has a similar right of survivorship.

Then and now. In 1996, there was a change in the New York state law. A married couple who took title after 1996 no longer needed a special notation on the stock certificate in order for their stocks to have a right of survivorship. However, many certificates from before 1996 list the two spouses’ names, but there is no indication that they are married and thus tenants by the entirety. So lo and behold, they’re tenants in common. If one of them dies, there would have to be an estate proceeding in order to get that person’s shares over to the surviving spouse. 

An ounce of prevention. To avoid this, married couples need to go to the co-op board and say: “We have stock and a proprietary lease. We don’t want to change who’s on the stock certificate. We would just like to change how the ownership is written to ‘tenants by the entirety.’” There’s no reason the co-op shouldn’t do it. Some fees may be involved, but if a spouse dies, that person’s shares will go to the surviving partner without a hitch.