‘In a typical transaction, the purchaser’s attorney asks the search company to perform a Cooperative Apartment Lien Search, which searches for UCC filings, judgments and liens against the cooperative corporation or sponsor in an initial sale or the seller in the case of a subsequent sale. Where the purchaser intends to use lender financing to acquire the unit, the lender generally requires searches to be run against the purchaser as well. The search reveals whether there are any security interests perfected and attached to the shares of stock and whether there are any judgments or other liens filed against the seller and, if applicable, the purchaser. The search will also furnish information as to any open mortgages of record on the building.
A diligent practitioner will also review the minutes of the last year’s board of directors meetings of the cooperative corporation to check for any pending costly capital improvement projects or potential litigation. Usually, this is the extent of due diligence in a cooperative unit acquisition. No title insurance is purchased.
Note that, in the case of a condominium unit or other real estate sale, a title insurance policy will likely be part of the transaction. Counsel can explain to its client just what protection the client has, when it arises and what to do if the policy protection must be relied upon.
None of this is the case with respect to a Cooperative Apartment Lien Search. The issuer’s liability is presumably based only on a cause of action in negligence of the company in conducting its search, which is often difficult to establish.’ (Source)
When purchasing or refinancing a cooperative unit, Charter Land Services can also:
- Provide limited errors and omission liability for lender lender, if so required.
- Pre-File UCC-1 in County & State and return proof of filing
- File Terminations, Assignments, etc. of UCC-1 (UCC-3) after closing
- Search the County Clerk’s or Register’s Ofiice to certify the owner of the cooperative underlying fee title.
- Search for open moetgages and liens against the block and lot
- Search in the County for liens against the purchaser, seller and cooperative corporation.
- Search for UCC filings on the purchaser, seller and cooperative corporation at the State level.
For more information on how we can help with a Co-Op, call us today at 631-923-1835!