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Q. & A.
Documents Needed in Co-op Sale
Q. Could you tell me in plain words which documents I will need when I get ready to sell my co-op apartment? . . . Ron Blostin, Sunnyside, Queens.
A. Errol A. Brett, a Manhattan co-op lawyer, said that the most important documents a co-op owner should locate in anticipation of a sale are the proprietary lease and the stock certificate for the apartment.
''The selling of a co-op is really an assignment of the proprietary
lease and the transfer of shares in an apartment corporation,''
Mr. Brett said. A lawyer representing the seller of a co-op apartment,
he said, will need the lease and certificate to accurately set
forth in the sale contract information such as the exact number
of shares being sold and the legal name of the apartment
corporation. He said it will also be necessary for the stock certificate
and proprietary lease to be given to the co-op's transfer agent
on closing day so the agent can issue a new lease and certificate
to the new shareholder.
Mr. Brett said that if there is financing on the apartment
-- usually called a share loan -- it is likely that the lender
is holding the original stock certificate and proprietary lease
as collateral. In that case, he said, the seller should provide
the lawyer with copies of the original documents, as well as with
information on the share loan so the lawyer can get a letter from
the lender indicating the amount needed to pay the loan in full.
In most cases, Mr. Brett said, the lender will send a representative
to the closing to return the documents to the shareholder in return
for payment of the outstanding balance of the loan. In addition,
Mr. Brett said, the lender will also provide what is known as
a UCC-3, a document drafted under the Uniform Commercial Code
and filed on the public records as evidence that the loan has
been paid in full.
Finally, Mr. Brett said, sellers should bring photo identification
to the closing in case anyone challenges the seller's identity,
and should be prepared to surrender the keys to the apartment
when the closing is over.
Co-op Board Objects To a Dishwasher
Q. In January 1999 I was told by my co-op's property manager
that it had come to their attention that there was a dishwasher
in my apartment. I wrote back that the dishwasher had been
installed by the prior owner. I then received a notice from the
co-op's lawyer advising me that if I do not remove the dishwasher,
I will be evicted from my apartment and my shares will
be sold at auction.
I have provided the lawyer with an affidavit from the prior owner
stating that the dishwasher was installed eight years ago with
the approval of the board, and have pointed out that the dishwasher
was listed in my contract of sale. I have repeatedly asked to
be shown what rule they claim I am violating, as there is nothing
in our house rules or proprietary lease prohibiting dishwashers,
but I have been shown nothing. Please help. . . . Margaret Rubin,
Brooklyn.
A. Andrew P. Brucker, a Manhattan co-op lawyer, said that the
fact that a dishwasher was installed by a prior owner, or was
included in the contract of sale, does not give the current owner
the right to keep it if it is otherwise prohibited. On the other
hand, he said, if a prior board gave permission for the dishwasher,
or knew of its presence and did nothing about it, then a court
would likely rule that the board has waived its right to require
the shareholder to remove it.
In any case, Mr. Brucker said, if there is no prohibition against
dishwashers in the proprietary lease or the house rules, it is
unlikely that a court would enforce a policy that has not been
communicated in writing to the shareholders.
He added, however, that since the letter writer indicates that
the dishwasher was installed with the board's approval, there
is a possibility that some prohibition against such appliances
is in force. As a result, he said, the letter writer should contact
the prior owner and ask if there is anything in writing indicating
the board's approval. If not, he said, the letter writer or her
lawyer can ask to examine minutes of board meetings for the appropriate
time period to determine whether approval was granted.