What Is a Cooperative Apartment Lien Search in NYC?
A coop lien search, otherwise known as an cooperative apartment lien search, is ordered by the buyer’s attorney after a purchase contract has been signed. Any outstanding liens against the seller or the coop apartment must typically be cleared by the seller before a closing can happen.
Co-op apartment buyers in NYC are spared from having to pay for expensive title insurance that increases in cost per the value of the insured property.
Remember that coops are different than condos in that the co-op apartment owner does not have title over his or her apartment, but rather owns shares in a cooperative corporation that owns the entire building.
However, just because coop buyers in NYC don’t have to worry about fraudulent title to real property doesn’t mean they don’t have to do some sort of lien search. Fortunately, coop lien searches are quite affordable and will run you between $300 to $400 dollars from any number of popular title search companies.
This search will be critical to ensure that there aren’t any outstanding tax liens, mechanics’ liens, bankruptcies or other violations and judgments you should know about.
What If There Is a Lien on Co-op Shares?
A coop lien search will indeed result in some unexpected results for the seller from time to time. Perhaps the seller had a dispute a long time ago with a general contractor who renovated the apartment. Perhaps the general contractor felt that he was owed $10,000 more than the seller actually paid.
It is conceivable that the seller was never served or otherwise made aware of the mechanic’s lien that the general contractor placed on the seller’s apartment (i.e. technically a lien on the seller’s co-op shares).
When this happens, a good buyer’s attorney will have put standard protections in the purchase contract which will require the seller to clear up any judgments, violations or liens against the co-op shares before a closing can occur. In the vast majority of cases the seller will take some time but will do so in order to close.
In the rare instance that the seller refuses to clear up any liens against the property that were found through a coop lien search, the buyer will have the right to cancel the contract and receive his contract deposit back in full.
Read the Full Article: https://www.hauseit.com/coop-lien-search-nyc/
Disclosure: Hauseit (https://www.hauseit.com) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).
