Legal Line Question of the Week: Tenancy by the Entirety, Co-op Stock Certificates and January 1, 1996

May 20, 2019

Legal Line Question of
the Week: Tenancy by
the Entirety, Co-op
Stock Certificates
and January 1, 1996

Q: What is a Tenancy by the Entirety and what is the relevance of
January 1, 1996 as it relates to co-op stock certificates?

A: A Tenancy by the Entirety ("TBTE") is a form of
ownership of real property that is only available for
married spouses. In a TBTE, married couples are
viewed as a single person to whom title to real
property is vested, and each spouse owns an
undivided 100% interest in the property. Each spouse
in a TBTE has a right of survivorship, which means
that upon the death of one spouse, the surviving
spouse becomes the sole owner of the property
by operation of law.
Technically speaking, a co-op purchase is a securities transaction
rather than a real estate purchase, and therefore, a TBTE was not
always available to married couples purchasing co-ops. However,
on January 1, 1996 (the "Effective Date"), the New York Estate
Power and Trust Law (the "Law") was amended to permit married
couples to hold title to co-op apartments as a TBTE. Under the Law,
married couples who purchase co-ops after the Effective Date, and
do not specify the form of ownership on the stock certificate, are
presumed to own the co-op as a TBTE.

Important Tip: If a married couple owns a co-op that they purchased
prior to January 1, 1996, the stock certificate should be examined to
determine how the couple holds title to the shares. If the stock
certificate does not indicate a TBTE and one spouse dies, the property
will not pass to the surviving spouse by operation of law. Accordingly,
the couple should speak to their legal counsel and evaluate the various
forms of ownership, from an estate planning perspective, to determine
whether they should amend the stock certificate to create a TBTE.

Neil B. Garfinkel,
REBNY Broker Counsel
Partner-in-charge of real estate and banking practices
at Abrams Garfinkel Margolis Bergson, LLP