Can I inherit a cooperative apartment? How is the transfer done?

Quick overview

Co-operative flats can be “inherited” is an inaccurate way of putting it. The subject of inheritance is the cooperative share. If there was a joint tenancy of the co-operative flat by the spouses and joint membership of the co-operative, then on the death of one of the spouses, the membership and the tenancy pass to the surviving spouse and this share is not usually discussed in the inheritance proceedings. However, if only the deceased was a member of the cooperative, the cooperative share is inherited and passes to the heir to whom it accrued. In the case of multiple heirs, it is most practical to agree who will be the transferee of the share and how to pay out the others.

Is it the apartment or the cooperative share that is inherited?

Legally, you need to be precise. In the case of cooperative housing, the member of the cooperative does not own the apartment, but owns the cooperative share and the associated membership in the housing cooperative and the right to rent a particular apartment. Therefore, on death, the transfer of ownership of the flat is not dealt with, as in the case of a freehold flat, but the transfer of the cooperative share. This is a crucial difference for inheritance proceedings.

In practice, this means that for a cooperative flat you will not register the new owner in the Land Registry after the inheritance proceedings are completed. The change of a member of the housing cooperative or the related question of the lease of the flat is dealt with.

When the cooperative share is not inherited at all after the death of the spouse

The most important distinction is whether there was a joint membership of a housing cooperative and a joint tenancy of a cooperative flat. If so, then upon the death of one spouse, the membership and the lease pass to the surviving spouse. In other words: this cooperative share is not normally dealt with as a separate item of the estate in the ordinary succession proceedings after the first deceased spouse.

This also corresponds to the normal logic of life. The spouses live together in the cooperative flat, have a joint right to it, and after the death of one of them, the other remains in the flat as a member of the cooperative and a tenant.

A practical example: a married couple live for thirty years in a cooperative flat which they acquired during the marriage and have joint membership. On the death of the husband, neither the daughter nor the son automatically becomes a member of the cooperative in his place. The cooperative share remains with the surviving wife. Inheritance proceedings will then cover other assets such as savings, a car or a cottage.

When does the cooperative share enter the succession

A different situation arises if only the deceased was a member of the cooperative and it was not a joint membership of the spouses. This is typically the case if one of the spouses acquired the cooperative share before the marriage or if the joint membership did not arise for another reason. In such a case, the cooperative share is discussed in the succession proceedings and passes to the heir to whom it has accrued. At the same time, the lease of the cooperative flat passes to him.

This is precisely the situation in which the cooperative share can be bequeathed by will to a particular child, respecting, of course, the rights of the non-minor heirs.

What if there are more than one heir

This is where the practice tends to be most complicated. From the point of view of inheritance law, it is not excluded that more than one heir may be entitled to the cooperative share. However, the very operation of the housing association and the subsequent management of the share usually require that it is clear who will be a member of the association and who will exercise the rights attached to the lease. Therefore, it is usually most sensible for the heirs to agree who will take over the share and how to settle the others.

A typical practical example: a mother is left with a cooperative flat and two children. The son is not interested in the flat, the daughter wants to continue living there. In such a situation, it makes sense to agree that the co-operative share will go to the daughter and she will pay her brother an amount corresponding to his share. If the family agrees, this is usually the quickest and cheapest way.

How the value of the cooperative share is determined

When inheriting, the value of the cooperative share needs to be determined, especially if one heir has to pay out the others. In practice, this is often based on the heirs’ declaration of consent. If they disagree, an appraisal or expert valuation can help. In simpler cases, an indicative estimate by an estate agent may be useful, but in a more serious dispute, an expert’s report is usually safer.

This is also important because poorly determined values are often the source of family conflicts. One of the siblings feels that the apartment is “almost worthless”, the other claims that it is a very valuable home in an attractive location. Without a reasonable valuation, an agreement is often not reached.

What if the heirs don’t get along

If an agreement is not possible, the situation becomes more complicated. While the succession proceedings will determine who receives the estate, the practical operation of the cooperative share may continue to run into disputes between the heirs. A situation may arise where it is necessary to resolve the matter in court outside the estate proceedings themselves. Without an agreement, the road to a final arrangement may be significantly prolonged.

Therefore, in the case of condominiums, it is usually worthwhile not to overburden family relations and to think about the question of inheritance during the lifetime of the deceased.

Does it make sense to make a will?

Yes, especially in the case of condominiums, it often makes sense. A will can greatly reduce uncertainty and avoid a situation where several heirs are fighting over one share of the flat after the death of the testator. The testator can designate who is to receive the condominium share, and the remainder of the estate can be divided differently. However, here too, it is necessary to think about the non-minor heirs and their obligatory share. For adult children, it is at least one quarter of their legal share of inheritance, for minors three quarters.

Practical example: parents have two children, the son has been using the cottage for a long time and the daughter lives near her parents and is interested in a cooperative flat. If they want the cottage to go to the son and the condominium to the daughter, a will is often the cleanest solution. Without it, everything would be divided according to the legal sequence and the result could be much less clear for the family.

What about the notary and the costs

Even in the case of the inheritance of a cooperative share, the notary conducts the probate proceedings as a court commissioner and his fee is based on the value of the property under consideration. Costs are therefore not to be assessed on the basis of whether the property is a ‘freehold flat’ or a ‘cooperative flat only’, but on the actual value of the share inherited and the other circumstances of the proceedings.

Summary

A co-operative flat can be inherited is simplistic. In fact, a cooperative share is inherited, with which is associated the membership of the housing cooperative and the right to rent the flat. Where there was a joint membership and joint tenancy of a cooperative flat, on the death of one spouse, the surviving spouse usually remains a member and tenant of the cooperative and the share is not normally passed on to the first deceased. However, if only the deceased was a member of the cooperative, the cooperative share is inherited and may go to one or more heirs. In practice, the most important thing is to work out in time who will take the share, how it will be valued and how the other heirs will settle. For families where there is a risk of litigation, it is usually worth thinking things through beforehand and making a will.