Definition of Cooperative Terms

A building of individual units.  Ownership of the units is represented by Stock Certificates and the right to occupy the unit is given by a Proprietary Lease.  Ownership of a cooperative apartment is not considered real estate or real property but personal property.  A cooperative Corporation owns the building.  The building is run by a Cooperative Board which is made up of individual owners of cooperative units.

Assignment of Proprietary Lease  
This is used for a cooperative mortgage loan whereby the Owner/Borrower assigns his rights in the apartment to his Lender.  This is used by the Lender in the event that the Owner/Borrower defaults on his loan and the Lender has to foreclose.
Proprietary Lease  
This gives the owner of the apartment the right to occupy the apartment for a term of years.  The lease is thereafter renewed by the cooperative for an additional term.
Cooperative Board  
Is an elected group of apartment owners who represent the Cooperative Corporation.  They approve new Purchasers of apartments and handle important matters dealing with the running of a cooperative apartment building.  A Managing Agent, who handles the day to day management of the Cooperative, reports to the Board
Recognition Agreement  
Used in connection with a mortgage loan the Lender will require the execution of this agreement whereby the Cooperative Corporation recognizes the Lender’s lien on the apartment.
Flip Tax  
Is the charge that some cooperative corporations charge an apartment owner who sells his/her interest in an apartment.  The Flip Tax is expressed in a dollar amount per share.  Each apartment is represented by a number of shares.  To calculate the Flip Tax you multiply the number of shares for a particular apartment times the amount of the Flip Tax.
Stock Power  
Every owner of a cooperative apartment has shares of stock in the cooperative corporation.  A Stock Power is used to transfer the rights of an owner of the stock to another person.  A Lender will require the owner/borrower to sign a Stock Power and will use the Stock Power in the event that there is a default on the loan.
Lien Search  
A search for liens on a Cooperative Apartment and the individual Seller of a Cooperative Apartment.  The search is done by a title company for the Purchaser.  A Lender will require a Lien Search as a condition of the mortgage.
Transfer Agent  
Is designated by the Cooperative to handle the purchase and sale of the ownership of the apartments.  The Transfer Agent will issue new stock certificate, cancel old Certificate, draft proprietary leases, execute recognition agreements etc.
Maintenance Charges  
This is the monthly charge that the cooperative apartment owner has to pay to the Cooperative Corporation.  It pays the maintenance of the building including the taxes.
UCC-1  
Is a financing statement which is filed in the County Clerk’s Office and in Albany.  It is a lien on the cooperative apartment and gives notice that a loan is secured by an interest in the apartment.  It performs the same function that a mortgage does on real property.
Managing Agent  
Is hired by the Cooperative to handle the business of the Cooperative on a day to day basis.
UCC-3  
Is an amendment, assignment or a release on a UCC-1 which was previously filed.  It is similar to a satisfaction of a mortgage.


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