Can my parent's transfer partial ownership of their NYC Apt. to me and my wife?

Question

Would it be possible for my wife and I to buy into my parent's apartment or put our name on the title, mortgage, etc.? This apartment is our parent's retirement so they don't want to cash out completely. Any advice would help. Thanks!

Answer 1

Sure, it's possible, but it will cost some money. A partnership agreement needs to be drawn up, and each couple should have their own attorney review it before agreeing to it. The partnership document should specify who owns what % of the apartment, what happens if/when one or more of the owners die, what happens if one or both of the couples divorce, what happens if one of the owners wants to sell, but the others don't, etc.

You also need to be aware that since this is an asset held by multiple people, if one of the owners is found liable for a lawsuit, for instance, it could force sale of the apartment, if this is the only asset that would satisfy the judgement.

There are also lots of estate planning and tax implications, so it would be best if you consulted both an estate planner and a tax planner. Otherwise, you could end up with a very large and unexpected tax bill.

If they are just looking to take some money out of the equity, and the apartment is a condo, not a co-op, it may be cheaper for them to get either a HELOC or a reverse mortgages. If the apartment is a co-op, it would be more difficult to exercise one of these options, and your buy-in may be necessary to help them access their equity.

If the apartment is a co-op, keep in mind that the co-op board will likely have to approve the ownership arrangement, too.

Answer 2

You mention apartment in your question, Apartments are normally leased and not owned and you pay rent every month.

If they own the unit it may be possible for them to do this. You will have to have someone look at the property deed to be sure there are no covenants against it. Another thought is to take out a home equity loan.