The law firm of Richard Stelnik, Esq. provides experienced representation to purchasers and sellers of co-operative and condominum apartments.

1. What Type of Work Is Typically Done By An Attorney With Respect to a Purchase or Sale of a Residence?

The two fundamental steps involved in the purchase or sale of residential real estate are the drafting and/or negotiation of a contract of sale and attendance at a closing where title to the property being sold is transferred to the buyer. There are many items that must be taken care of in order for this process to go smoothly. Often, there are real estate broker's contracts that must be reviewed, mortgage commitments that must be reviewed, issues involving any items that will be left in the premises when the seller moves out, property inspection reports that must be reviewed, and discussions regarding any repairs that must be made before the closing occurs. In co-op transactions, minutes of board of directors meetings are often reviewed and co-operative offering plans and amendments to the plans are often reviewed. Also, board of the directors approval of the transaction usually must be obtained in a co-op transaction. A title search is done to make sure the seller has clear title to the property that is being sold. Any title issues must be resolved prior to or at the closing. With a purchase, financing documents must be reviewed. At or prior the closing, the deed and/or other closing documents are prepared.

2. What are some of the differences between a
co-op apartment and a condominium apartment?

When one purchases a co-op apartment, title is transferred to the purchaser by the transfer of ownership of stock in the co-op corporation and a proprietary lease for the particular apartment. When one purchases a condominium, title is transferred to the purchaser by delivery of a deed. With a co-op apartment, usually the board of directors of the co-op must approve the sale, which can be time consuming and can result in a transaction not being approved.

3. With a co-op, who own the apartment building?

With a co-op apartment building, the entire building is usually owned by a corporation which is referred to as a "co-op corporation". The usual procedure is for the co-op corporation to issue a certain number of shares of stock in the co-op corporation for each apartment in the building and to issue a proprietary lease for each apartment. Typically, the amount of shares of stock allocated to an apartment depend on the size of the apartment and other factors, such as for example, whether the apartment has a terrace. The apartment "owner" is referred to as a "proprietary lessee" or "tenant-shareholder." Frequently, the co-op corporation puts a mortgage on the entire building. The monthly mortgage payment on the mortgage on the entire building is then included in the monthly "maintenance" charge paid by the apartment owners. Therefore, an owner of a co-op apartment may actually be paying off two mortgages, the first being the mortgage on their particular apartment, i.e. the stock and the proprietary lease, and the second mortgage being the mortgage on the entire building. The co-op apartment owner usually pays only their proportionate share of the mortgage on the entire building as part of their monthly "maintenance" payment.

4. Who manages a co-op apartment building?

Usually the board of directors of the co-op makes the major decisions with regard to the operation of the co-op. However, day to day tasks such as collecting monthly "maintenance" payments, cleaning the building and doing routine repairs may be contracted out to others.


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