Having an HDFC (Housing and Development and Finance Cooperation) co-op within an estate can lead to uncertainty beyond what a standard property would have. An HDFC is handled differently. Certain steps must be taken to determine how the property is passed to an heir.
What is an HDFC is and Why it Was Initiated
Between the late 1970s and throughout the 1980s, the New York City Housing Preservation Department rehabilitated several housing developments that had been transferred to the city following owner abandonment, which resulted from unpaid taxes and utilities. These homes, prior to rehabilitation, sat abandoned and were a major influence on increasing crime rates.
Following rehabilitation, each development was turned into a modern home that was desired by many. However, the one stipulation that was required was that these developments were to be made available to people within the community who otherwise would be unable to afford decent housing. To ensure that these housing units went to those who needed them the most, select requirements were initiated.
Transferring of an HDFC in an Estate
Like other properties within a person’s estate, transferring an HDFC comes down to simple ownership transfer. However, the primary difference is what is to be done with the HDFC following a transfer. Since these developments have affordability guidelines, certain criteria must be understood and met. Depending upon the financial value of the person who has inherited the HDFC, the property will either be moved into or sold. An HDFC housing property may have sale restrictions, which need approval of HDFC to be lifted.
Requirements set by HDFC for new Homeownership
When an HDFC has transferred ownership, the owner has a share within the development. However, in order to move in, the new owner must fall within the co-op’s income requirements. Additionally, they must be approved by the co-op board.
A board will often deny new shareholders based on overall credit history, past criminal charges and often for the simple reason that they haven’t been placed on a waiting list. The latter can be prevented by having the heir placed on the co-ops waiting list at the time of creating the will. In the event that the new heir is unable to move into the residence, it must be placed on the market so that someone who has been accepted to the co-op can purchase the newly available share.
Selling an HDFC Property
If an HDFC needs to be sold, all profits from the sale will go to the intended heir. There are two available choices when deciding to sell. Some heirs will sell the shares or property to the co-op, which will allow them to offer the newly attained property to those who have been waiting for a unit to open up. The other option is to contact a real estate agent who has previous experience handling HDFC marketing and sales. Each available choice has its own advantage. Selling directly co-op will provide a quick sale, while placing it on the market may bring in a slightly higher purchase price. If the property has restrictions, HDFC needs to be involved in the sale.
If you have an estate with an HDFC property, contact the Law Offices of Albert Goodwin at 718-509-9774.