There are a number of cooperative housing complexes in New York City and the surrounding metropolitan area. In one form of co-op, the purchaser buys shares of stock in the corporation which owns the building or complex. The ownership of the shares comes with appurtenant rights to a proprietary lease to a particular apartment in the building.
Where Cooperative being transferred pursuant to
Company has been advised that the title to the shares and proprietary lease [has devolved into the present tenant-shareholder via][is passing through] the non-judicial foreclosure of a lien filed under the Uniform Commercial Code. The following proofs are required:
(a) that notice of default was properly given to the former tenant-shareholder;
(b) that a notice of sale, in compliance with the New York Lien Law, was served on the former tenant-shareholder, on any person who had given the foreclosing lender notice of an interest in, or lien upon, the property, and upon any person who has filed a UCC financing statement affecting the property; [if a Federal Tax Lien is shown on the search, add “and the Internal Revenue Service has received all notices required under federal law, and redemption rights of the United States will be excepted.”]
(c) that all notices have been given, procedures followed and conditions met, in connection with any required board approval for the sale, or alternatively, that no such board approval is required;
(d) that the sale was well advertised in accordance with the applicable provisions of the lien law;
(e) that the former tenant-shareholder is no longer in possession of the apartment, and that the premises is presently vacant and untenanted;
(f) Proof is required as to whether the managing agent or the co-op corporation has been served with any execution relating to the shares and proprietary lease.
NOTE: Title will not be insured unless all of the above items have been cleared to the satisfaction of the Company. Additional exceptions may be raised.
Judgment against tenant-shareholder
The following judgments have been found:
Judgment in: ________ Court, ________ County;
Attorney for Judgment Creditor ___________________.]
Proof is required that the coop corporation, its managing agent, and the holder of any security interest in the shares of stock and proprietary lease, have not been served with any restraining notice or execution in connection with the above as of the date of closing.
Unless the proprietary lease, any assignment of same, or mortgage or security agreement thereon, is recorded, policy will not insure against any loss, cost or damage by reason of a failure to record any such instrument.
If an existing lease is to be assigned at closing, or a co-op loan is to be insured, executed copies of any unrecorded proprietary lease, and any interim assignments NOTE thereof, must be furnished to the Company for review, and so that proper searches may be run against names which appear therein.
Policy will not insure against any Bankruptcy proceedings, Uniform Commercial Code filings or Federal Tax liens which are not filed in the Recording office in the County where the premises are situate.
Title is subject to any state of facts which an accurate survey or inspection would show.
Policy will except the terms, covenants, provisions and conditions of the proprietary lease and any assignments thereof.
Policy excepts the terms, covenants, provisions and conditions of the cooperative corporation’s charter, bylaws and rules and regulations, and any instruments amending same.
Certification of Title for Cooperative Apartmen
Title to the fee is vested in ____(name of co-op corporation or, if not yet converted, the sponsor)___, which acquired title by deed dated __/__/__, made by __(grantor)__, recorded on __/__/__ in (Liber, Record Liber, Reel) ______ (C)p _____.
Option 1 for the leasehold portion of the certification (where you have seen the proprietary lease):
As to the Leasehold interest to be insured hereunder, Company certifies that Proprietary Lease dated __/__/__ made by __(name)__ to __(name)__, [*as evidenced by instrument recorded __/__/__ in (Liber, Record Liber, Reel) ______ (C)p _____,*] is a valid and subsisting lease upon the premises herein described for the unexpired term thereof and can be assigned, transferred or pledged as security, together with the shares of stock appurtenant thereto, by __(name)__, the owner and [*record*] holder thereof.
[*bracketed language is deleted in the usual case, where neither the proprietary lease nor any assignment thereof is recorded*]
Option 2 for the leasehold certification, when relying on the application information:
As to the Leasehold interest to be insured hereunder, Company certifies that such leasehold interest, together with the shares of stock appurtenant thereto, can be assigned, transferred or pledged as security, by ___(name)___, subject to production of the original stock certificate and proprietary lease as verification.