What Is A Co-Op Recognition Agreement

Aztech recognition agreements are usually one of the last outstanding points for your co-op application, as they are sent towards the end of the credit underwriting. When we say “sent”, we mean it – your lender will physically send you three copies. Unlike virtually every other document in 2019, Aztecs still have to be original copies (so don`t lose them!). Hi Ruquaiyah – thank you for your comment, and we are sorry to hear about the delays associated with your purchase. Honestly, it looks like you were rejected by the board. The listing agent (and/or your buyer`s agent) is usually the first to receive a message even before the formal notice of approval or rejection is issued by the co-op and sent to your real estate lawyer. The objective of the agreement remains to protect the cooperative in the event of non-payment. Once completed, the bank receives the original share certificate and the property lease, which it can keep until the apartment is sold or the loan is repaid (whichever comes first). In addition to these documents, the bank will also require the recognition agreement. This agreement is a tripartite contract concluded by the bank (usually an “Aztec” recognition agreement is required) with the board of directors, the lending bank and the buyer, formalizing the relationship between the lending bank and the cooperative. The co-op acknowledges the relationship through this document and agrees to notify the lender if the shareholder does not pay maintenance or other expenses to the co-op on time. It requires the co-op to accept payments on behalf of a defaulting shareholder. Interestingly, the Aztech recognition agreement also stipulates that the bank releases the cooperative from any liability arising from claims claimed by the shareholder as a result of the cooperative`s actions in the form of Aztec.

By far the biggest advantage of Aztech recognition agreements is that they allow buyers to finance in a cooperative. When you buy a co-op, you technically buy shares in the building and the owner lease to live in a particular unit. This is in contradiction with an apartment where you buy the actual apartment. In legal terms, cooperatives are personal property (shares and lease), while condominiums are real estate (real estate). For this reason, a mortgage in a cooperative is actually secured by the shares and the property lease. Cooperatives are usually happy to sign an Aztech recognition agreement for several reasons. .