By Howard Morrel & Leslie Hirsch
Inheriting real estate in New York can feel like a windfall — but it often comes with hidden legal, tax, and financial complications. Whether it’s a Brooklyn brownstone, a Manhattan co-op, or a vacation home upstate, inheritors frequently make costly missteps that can reduce the property’s value or create unnecessary stress. Estate attorneys know the biggest mistake of all is failing to get advice from experienced legal and real estate professionals.
Here are the ten most common mistakes people make when inheriting real estate in New York, and how to avoid them. Professionals might consider passing this article on to clients.
1. Failing to Determine Legal Ownership Early
One of the first things you should do is clarify who actually owns the property. Did the deceased leave a will, or is the estate going through intestacy (New York’s default inheritance rules)? Was the property owned individually, jointly, or through a trust? Without settling ownership, you can’t sell, transfer, or even properly maintain the asset. Many families delay this step and find themselves stuck in probate court or fighting over unclear titles. It’s always best to consult a qualified estate attorney to review all the paperwork and help settle any title issues.
2. Ignoring Probate and Court Requirements
In New York, most real estate not held in a trust, even if inherited through a will, must pass through Surrogate’s Court. Sometimes property owned by a trust must also go to court. Probate in New York can be complex, especially if there are multiple heirs or disputes. Skipping steps, missing deadlines, or not filing required documents can cause long delays and legal costs. If you are headed to probate, we believe that an experienced probate attorney is essential for streamlining the process and avoiding costly mistakes–both in court and with other stakeholders. If you decide to sell, you will also want a real estate agent deeply versed in probate property issues in New York. Here at the Christie’s International Real Estate Trusts & Estates Division, we have decades of experience in these issues.
3. Forgetting About Co-op Board Approval
Inheriting a co-op apartment in New York City comes with a unique twist: co-op boards have a say in who can own, occupy, or sell the unit. Heirs often assume they can move in or sell right away, only to find that the board requires a formal application or imposes restrictions. Understanding the board’s policies early will save time and headaches. An experienced New York agent like those here in the Christie’s International Real Estate Trusts & Estates Division will help assure a smooth landing. Thinking of selling? Here are some key FAQs about selling a Co-op apartment in New York City.
4. Overlooking Property Taxes and Liens
Property taxes in New York can be high, and unpaid taxes can quickly lead to penalties or even foreclosure. Some heirs don’t realize the deceased had outstanding tax bills, utility liens, or assessments. Before you make any plans, check the tax status of the property to ensure you’re not inheriting a financial burden along with the bricks and mortar. Consult an in-state CPA right away.
5. Underestimating Capital Gains and Estate Taxes
Even though inherited property generally receives a “step-up” in cost basis (which can minimize capital gains when you sell), heirs sometimes miscalculate their tax exposure. Remember that both Federal and State taxes come into play. Beyond IRS demands, New York State has its own estate tax, with thresholds lower than federal limits–and it can get complicated. Selling or transferring the property without tax planning can result in unexpected and significant tax bills. Consult an in-state CPA right away.
6. Neglecting Maintenance and Upkeep
Inherited properties often sit empty while the heirs sort out paperwork and decisions. But vacant properties in New York deteriorate quickly — pipes burst, pests move in, and vandals notice. Insurance may also lapse or become void if a property is unoccupied. Regular maintenance and securing the property should be a top priority to preserve its value. Here at Christie’s we can provide complete maintenance services to our real estate clients. Click here to learn more about our range of services to sellers.
7. Not Anticipating Disagreements Among Heirs
Family conflict is one of the biggest challenges in inherited real estate. Some heirs want to sell, others want to keep the property, and still others may want to rent it out. Without clear communication or legal guidance, disputes can stall the process for years. In many cases, a court may need to order a “partition action” — a legal process that forces the sale or physical division of jointly owned real estate when co-owners cannot agree on its use or sale. The court can order a property to be sold, with the proceeds divided among the co-owners, or the property can be physically divided into separate portions (a “partition in kind”). This legal procedure provides an “out” for co-owners who no longer wish to remain co-owners, even if the other owners disagree. But this outcome often reduces the property’s value. The biggest mistake? Making moves before consulting all the stakeholders, then dealing with the fallout in the middle of a sale. A good estate attorney will help manage these issues.
8. Selling Too Quickly (or Too Slowly)
Some heirs rush to sell the property without understanding its market value, while others hold on too long hoping for a better price. Both approaches can cost money. A professional appraisal and consultation with a specialized brokerage like ours can help you set realistic expectations and make an informed decision about timing.
9. Failing to Consider All the Options and Issues Around Renting
While selling may be the obvious choice, renting out the property can sometimes provide steady income and buy time for heirs to make long-term decisions. However, heirs often underestimate the responsibilities of becoming landlords in New York, including tenant laws, rent regulations, and maintenance obligations. They also often fail to create appropriate legal structures like jointly-owned family LLCs to hold the real estate. Not weighing this option carefully, not consulting with knowledgeable brokers, and failing to work closely with experienced estate attorneys can lead to missed opportunities or legal trouble.
10. Not Seeking Professional Guidance
Perhaps the most common mistake is trying to handle everything alone. Inheriting real estate in New York involves estate law, tax law, real estate regulations, and sometimes co-op or condo rules. Without guidance from professionals — including an estate attorney, accountant, and specialized real estate broker like those here at Christie’s — heirs risk making avoidable errors that reduce the property’s value or create legal liability.
Need Help Selling a House or Co-Op in NYC?
Contact us for a consultation. We specialize in handling co-op sales and helping buyers get board-approved with confidence. Let’s talk!
All the best,
Howard Morrel & Leslie Hirsch
Co-Founders, Trusts and Estates Division
Christie’s International Real Estate Group
(212) 956-4823
mha@christiesrealestategroup.com
About the Authors
Howard Morrel and Leslie Hirsch are co-founders of the Trusts and Estates Division at Christie’s International Real Estate Group. With over 20 years of experience in high-value real estate transactions, they specialize in guiding executors, trustees, and families through the unique complexities of estate-related property sales in New York City.