Watchcase in Sag Harbor From the Long Island Market Report: Older homeowners downsizing and younger couples moving from the city have fueled a recent surge in the number of Long Island condominium projects and their trend toward city-style designs and amenities, according to developers and brokers. An analysis of attorney general filings for condo projects…
An issue came up on a recent transaction and I thought it was appropriate to repost this quick tip originally published 6/24/2007.
Soon after entering into a contract for the sale of a cooperative apartment, order a payoff letter for the underlying loan being secured by the stock certificate and proprietary lease. By ordering a payoff letter, the lender holding your stock certificate and proprietary lease as collateral for the loan will start to the search; assign an attorney to receive the documents who will deliver them to the closing. Upon locating the stock certificate and proprietary lease the lender will send it to this law firm who will hold it until closing. Although the payoff letter can be ordered and updated on relatively short notice, locating the stock and lease may take some time. Ordering the payoff letter early assures the Seller that the stock certificate and proprietary lease will have them when needed. Ordering a payoff letter late in the transaction, may cause delays in closing while the bank locates these documents which will be needed in order to close. Be aware, sometimes lenders may lose your stock certificate and proprietary lease. The lender will issue an affidavit attesting to the misplacement of the stock and lease and indemnify the Seller and the managing agent from any liability resulting from the loss.
I deal with a number of coop apartment owners, boards, managing agents and one of the major causes of conflict is a lack of cooperation, communication and a feeling of being powerless by the owners of cooperative apartments.
I have encountered coop boards who give the impression they are reside in an “ivory tower”, are untouchable, whose actions are not to be questioned. This paired with the failure of the board to listen to their constituents, understandably results in frustration, tension, conflict and ultimately lawsuits.
Alternatively, some apartment owners maintain an underlying agenda to instigate conflict with board members and other apartment owners. Commonly the apartment owner who likes to go to “war” is a long time apartment owner or board member who wishes it was like the old days. This is especially prevalent where there is a drastic change in board membership or the composite of apartment ownership in the building. Old timers got used to a sense of power when serving on the board or where the former board members were weak. A new sheriff is in town where recently elected board members are in control of their responsibilities and surroundings.
In both of the above situations, it is the perceived lack of control and power that are fostered by a lack of communication between the parties. Can’t we all just get along???
I came across the attached article which mentioned a free (yes free) mediation service between apartment owners or apartment owners and coop board members. I think the concept is great. I have counciled and mediated parties who are in conflict and the fact I am the attorney representing one of the parties has sometimes been a hinderance to the process (regardless of the existence of impartiality). The use of an unattached experienced mediator will greatly assist in communication and dispute resolution. The increase in communication would lead to less conflict, avoided lawsuits and reduced legal fees. Did I mention they are free?
I would encourage angry owners and board members alike to take advantage of this service.
I would interested in hearing from anyone who has used the Safe Horizon Mediation Service in the past and how it has helped (or hurt) their particular conflict.
See the below link I found for more information located on the Brick Underground website.
Visit: www.lavenderlawblog.com for more information.
The article linked below was emailed to me by a client of mine (Thanks Amanda). I thought it was interesting. It highlights one of the hurdles a purchaser of a cooperative apartment has to overcome in order to obtain financing. The composition of the building (percentage of owner/coop/investor owned apartments) is something we look at when performing our due diligence prior to entering into a contract of sale to purchase a coop apartment. This is information typically requested by a prospective lender as part of the underwriting process. They would get it from the Board or the managing agent. We want to make sure we are not wasting time and money.
Any questions or comments are greatly appreciated.
Visit: www.lavenderlawblog.com for more information