Victory in a Lien Priority Controversy Involving a Co-Op Apartment

Under New York law, co-op apartments are considered personal property for judgment enforcement purposes.¹ See, e.g., In re Estate of Pollack, 18 A.D.3d 555, 557 (2d Dep’t 2005) (“Cooperative apartments are personal property, not real property”).

Because they are personal property, money judgments are not automatically docketed as liens on such apartments, as they are on condominiums and other real estate interests. See CPLR 5014. To obtain a judgment lien on a personal property interest of a judgment debtor, a judgment creditor must deliver an Execution to a Sheriff or New York City Marshal, as explained in Kassover v. Prism Ventures Partners, LLC, 2017 N.Y. Misc. LEXIS 3438, *16-17 (Sup. Ct. N.Y. County 2017), affirmed, 169 A.D.3d 525 (1^st Dep’t 2019):

In New York, for personal property, the mere docketing of a judgment does not create a lien, rather a lien upon personal property arises when an execution is issued to the proper officer. Meyerhardt v. Heinzelman, 71 N.Y.S.2d 692, 692-693 (N.Y. Sup. Ct. 1947), aff’d 272 A.D. 800, 71 N.Y.S.2d 925 (1st Dept. 1947). Before a creditor may obtain priority in personal property, under CPLR § 5202 and § 5234, delivery of execution to the Sheriff is required. State Tax Commission v. Shor, 43 N.Y.2d 151, 157, 371 N.E.2d 523, 400 N.Y.S.2d 805 (1977).

We had the opportunity to apply these principles successfully in a recent case, Matter of Malvin v. Cibella, Supreme Court, New York County, Index No. 156363/2024. There, our client won a large judgment in a sexual abuse case but learned later that the defendant immediately after trial gave his lawyer a confession of judgment for his unpaid fees. That judgment was entered before our client’s judgment. Normally, priority is determined by date of entry of the judgments in the county where the defendant has real property. But, as we said, co-ops are personal property.

The attorney judgment creditor here never took the steps necessary to obtain a judgment lien on the debtor’s co-op unit and therefore never acquired a lien. The “order of priority among judgments [for personal property] is to be determined strictly in accordance with the chronological service of execution levies and the filing of orders for turnover or receiverships.” New York v. Panzirer, 23 A.D.2d 158, 160 (1st Dep’t 1965).

By failing to execute on his judgment, the attorney judgment creditor never acquired a lien on his client’s co-op apartment. Our client duly executed and established priority on his later filed judgment, leading to a sale of the apartment and recovery by our client of the proceeds.

1 An owner’s interest in a co-op is documented by a share certificate and by the shareholder register of the co-op corporation, which holds title to the building and the real property on which it sits. The shares are linked to a proprietary lease that gives the owner of the shares the right to possess and live in a designated apartment unit. See 4 Warren’s Weed, New York Real Property, Cooperatives, at § 33.34 (“When a prospective purchaser buys stock allocated to a particular apartment owned by a cooperative corporation, he or she becomes entitled to a lease for the occupancy of that apartment. This ‘proprietary lease’ may be either a long-term lease or a renewable short-term lease and is considered to be appurtenant to the shares of stock”).