Part II of the “Avoiding Major Pitfalls at the Closing Table” series takes a look at cooperative closings. Since the form of ownership is very unique, the mistakes that can take place are vastly different than those of a condominium. You are purchasing shares in a corporation and the information provided must be completely accurate in order to make sure ownership is passed on correctly. Take a look:
PART II: Co-ops
- Stock and lease: Make sure all names on the stock and lease are spelled correctly.
- Surrender of old stock and lease: You must have this or a lost stock and lease affidavit at the closing to be able to close. If you have financed, the bank should prepare this. If not, you should have one on hand from your original purchase.
- New Assessment: Before you get to the closing table, inquire if there are any new assessments. After the contract is signed, a newly imposed assessment may be the responsibility of the purchaser.
- Maintenance Increase: Inquire about any maintenance increases between contract signing and closing. They happen frequently and will effect the amount of the checks drawn for closing.
- Flip Tax: In your initial offer you should clarify and agree on who will pay the flip tax.
- UCC-1 Financing Statement: Make sure the name of the cooperative is spelled correctly on the statement.
- Maturity Date of Proprietary Lease: If you are financing, the proprietary lease must remain in affect beyond the loan term. If it is not, the managing agent will need to provide a letter to the lender’s counsel stating so.
- Broom Cleaning: As a seller, make sure the apartment is cleaned before someone does a final walk through. It helps move the process along.
- Walk Through: Try to do the walk through the day before so any issues that may arise can be addressed prior to arriving at closing.
- Closing Time: Schedule closings in the morning. This will help if there are any issues with documents or checks that need to be attained that same day.
- Photo ID: PLEASE bring it. This is so easily overlooked.
- Keys: The seller should always bring all the keys (especially the mailbox key) to the closing.
These are just a few issues you can run into at a closing, but are very important to make sure that you avoid any closing delays.
Jarrod Guy Randolph