We personally review and negotiate the contract and rider provisions to ensure clients’ needs are met. Once the bank is ready to close and title objections, if any, have been resolved, an inspection is scheduled. The final step, the closing, involves the exchange of funds and the signing of all bank documents. The contract contains the entire agreement between the parties. If the parties are contented that all terms and conditions have been met, a buyer cannot hold the seller responsible for the problems that occur after the closing. Our team interfaces with the client and all parties involved during the entire process.
Sellers also need representation during the initial step, before the signing of any broker agreements. Our team represents sellers and we confirm that the deal is structured properly.The early determination of problem areas such as illegal tenancies, judgments, illegal construction, and New York City Code violations should be disclosed to the attorney before the drafting of the Contract of Sale to avoid delays and cancellations. This is essentially what the term “full disclosure” means.
The buyer here is not actually purchasing the apartment itself, but rather shares of stock of a corporation that owns the building. As a shareholder, the buyer will be leasing the apartment from the coop corporation through a document called “proprietary lease.” Maintenance and repairs of the building will be for the account of the corporation of and its shareholders. Financing is available for most coops and a complex board approval process follows a receipt of the coop financing. Purchasers buying directly from a sponsor do not require board approval. A coop’s board may accept or deny buyers without revealing the reasons for doing so. The general rule is the better the building, the tougher the standards of approval are. Prospective buyers are usually required to provide financial information, including one or two years of tax returns and bank statements, as well as personal and business reference letters, to the Board of Directors. An interview usually follows upon submission of the documentary requirements.
“Flip taxes” and other management fees are common in coops. The tax is used to establish a reserve fund to pay for improvements to the building. The tax usually depends on the purchase price. It is typically payable by the seller but can sometimes be imposed on the purchaser as well. It is a rare instance but sometimes a flip tax imposed is equal to a certain percentage of gain received by the seller from the transaction. Though usually imposed on the seller, some buyers of sponsor-owned units may be required to pay transfer taxes.