Where owners of real property cannot agree on the continued ownership or operation of a property, they may commence an action for partition in Court seeking the public sale of the property. The proceeds from the sale are then distributed amongst the owners in accordance with their respective interests.
An person holding an ownership interest in a cooperative apartment however does not technically own real property. Rather, shares in the cooperative are owned which entitle the shareholder to occupy a unit pursuant to a proprietary lease. The cooperative shares owned by the unit owner are considered personal property. Where there is a breakdown in the relationship of owners of a cooperative apartment and, and one wishes to sell the cooperative unit, many people question whether they may maintain an action for partition of the unit.
Generally, the law allows for the partition of a cooperative unit and such a litigation to be commenced. New York RPAPL §901(1) is available to permit the partition of cooperative apartments, which defines partition as “the act or proceeding by which co-owners of property cause it to be divided into as many shares as there are owners, according to their interest therein, or if that cannot be equitably done, to be sold for the best obtainable price and the proceeds distributed according to the respective interests. Chiang v. Chang, 137 A.D.2d 371, 529 N.Y.S.2d 294 (1st Dept. 1988). A partition action of a cooperative unit may not be allowed in the event the cooperative’s by-laws or proprietary lease do not permit partition. Even if those documents do, the cooperative may still need to approve the sale of the cooperative unit to a potential buyer at any public sale.
Therefore, the partition of a cooperative apartment is permissible however with some caveats, specifically the governing cooperative documents.
For any questions related to a partition action, you may call Peter Moulinos at 212.832.5981.