VALUABLE ASSET
A residential lease in New York City or any desirable locale can provide many benefits. Some people wait years to get into a rent stabilized apartment. There is even a Seinfeld episode where Elaine quips that some people scan the obituaries to see if someone in a rent stabilized apartment has passed away. It is a common occurrence for many people to live decades and raise generations of families in their rent controlled rental unit. Many cities have their own laws dealing with how to inherit these leases. New York Real Property Actions and Proceedings §236 law deals permits an estate to inherit the lease of a deceased person and New York Estate Powers and Trusts Laws §13-1.1(a)(1) also holds that a lease is an asset of an estate. In addition, many local laws housing and regulations also mandate how and when a lease may be inherited. New York City ended its Rent Control laws in 1971, yet still has approximately 38,000 rental units listed under the old Rent Control laws, as once the lease is under the Rent Control law it remains until it is no longer. Going forward New York leases are generally covered by Rent Stabilization laws, also covered by the same laws dealing with succession of a residential lease. Rental units under the rent stabilization laws are the most common type of residential lease. These leases will remain for so time due to the right to succeed these leases by other family members or even friends. Most particularly, New York Code, Rules and Regulations §2532.5(b) allows for family members to succeed the lease. Landlords have been known to fight like the devil to regain possession of these rentals, sometimes offering cold hard cash, from $40,000 on the low end to $17,000,000 on the high end.
HOW TO INHERIT OR SUCCEED – COHABITATION
To succeed the lease the new renter must show that he/she lived with or cohabitated with the deceased tenant for at least two years, or, in the case of a senior citizen or if they are disabled, they only need to show that they cohabitated with the deceased tenant for a year. The term cohabit is critical, as the new tenant must show that he/she actually lived with the deceased tenant. If the deceased tenant lived elsewhere, there is no cohabitation. Personal possessions, cancelled rent checks from the deceased tenant’s checking account, failure to change address for the deceased tenant’s driver’s license and maintaining a bedroom are all evidence in the event that the landlord decides to challenge the new tenant for possession of the rental unit.
FAMILY RELATIONSHIP OR INTERDEPENDENCE
In addition to the cohabitation requirement, New York Code, Rules and Regulations §2520.6(o) requires for the succeeding party of a rent controlled or rent stabilized rental unit have a family relationship or anyone that can show an emotional and financial commitment and interdependence with the deceased tenant. The regulation itself indicates that no one factor is determinative and lists eight different factors that a Court can take into account to determine if indeed there was an emotional and financial commitment.