How to turn a Tenants in Common 3 family brownstone into Co-op or Condo?

THanks so much. This gives exactly the initial overview of options we needed to start thinking. No tenants but each of us has one of our two adult kids living in the building and contributing toward expenses (and we want an estate arrangement that is fair to the other kids not in the building) Really interesting comments about condo vs. coop for a small building. And the trust option. Thanks again.

There is not enough specifics here to give a rounded objective opinion other than to say a three family condo does not work in the long run. Because there is nothing in the legal structure of a condo to force each owner to co-operate in looking after the whole. ( I know people will chime in and say you can write all kinds of Home Owner Association rules in the plan etc., but most of that just defeats the purpose of it being a condo, future buyers lawyers and banks underwitters will just throw their hands in the air and tell their buyers to find something else.) And with only three units it does not make for an easy democracy! But even if there are two against one on an issue it still often means that you have to end up suing each other. Whereas a Co-Op by definition means they have to look after the whole and two against one can force an issue to get things done that are needed to protect the whole. Are you currently three separate family units that own together as partners or do you currently have tenants? Tenants in occupancy do have rights during the conversion process and sales need to occur to make it a legitimate Co-Op or Condo. Whatever you do, remember once you have created this new entity (animal) what happens 20-30 years from now?. (Or even sooner as markets, cultures and neighborhoods change so fast and new owners come into the mix.) I have seen and if you only new, there are many “white elephant” small condo buildings around that are unsalable and slowly deteriorating due to lack of control to maintain the whole, and co-ops that become de-co-op’d due to lack of owner occupants or infighting etc. It is much easier to protect yourself in a floundering co-op than a condo. It may be better to put it in a family trust, members that want to reside, pay a market rent and can take the owner occupant tax deductions etc. and those members that do not want to reside get proportionate share rental income and the proportionate share of tax deductions etc. However you write the trust to run and behave. This is one of those areas that it takes a good family therapist, a good estate planner, financial planner as well as a good co-op/condo attorney to all work together to advise you; but such an animal does not exist and the three/four professions do not even speak the same language most of the time. But try not to impose your wishes on your children, too many estate issues get bogged down in litigation because parents have left something that the offspring did not want or could not work at together.