An apartment cooperative will typically involved a corporation renting apartments to people who are also owners of stock in the corporation. The apartment complex is owned by the corporation.
Two basic documents are ordinarily involved in the transfer of a member's or stockholder's interest in a cooperative apartment corporation: (1) an agreement for the purchase and sale of the proprietary lease and the appurtenant membership or stock; and (2) the instrument of assignment. Also, it is common to have an assumption by the Assignee of the liabilities under the Lease.
The agreement of purchase and sale is similar in format to an agreement for the sale of real property. The seller agrees to assign all rights under the proprietary lease covering the unit, and to sell the membership or stock in the corporation. The seller also agrees to procure the consent of the corporation to the transfer if this is required in the proprietary lease. The purchaser agrees to pay the purchase price and to submit references to the corporation and otherwise cooperate in procuring its consent to the transfer, and also promises to execute an agreement in a form approved by the corporation by which the purchaser assumes and agrees to be bound by all covenants and conditions of the proprietary lease.
Keywords: New Jersey, Assumption of Proprietary Lease, types Description: The New Jersey Assumption of Proprietary Lease refers to a legal process wherein a tenant, also known as a lessee, takes over the responsibilities and obligations of a proprietary lease from another tenant. This process allows the original leaseholder to transfer their lease rights and duties to another individual or entity. The assumption of a proprietary lease is an essential aspect of property management within various types of real estate developments, such as cooperatives or co-ops. In New Jersey, the Assumption of Proprietary Lease involves the transfer of ownership for a specific type of residential property known as a cooperative unit. Cooperative housing is a unique form of homeownership in which individuals own shares of stock in a cooperative corporation, granting them the right to live in a specific unit within the cooperative building. These units are subject to a proprietary lease, which outlines the terms and conditions under which the lessee can occupy the unit. When assuming a proprietary lease in New Jersey, there are different types or scenarios that may arise: 1. Individual-to-Individual Assumption: This occurs when one individual tenant assumes the proprietary lease from another individual tenant within the same cooperative building. It involves the assignment of lease rights and obligations, including the payment of monthly maintenance fees, adherence to rules and regulations, and responsibilities for repairs and maintenance. 2. Corporate Assumption: In certain cases, a corporate entity may assume a proprietary lease from an individual tenant. This typically happens when the lessee is a business entity rather than an individual. 3. Assignment and Sublet Assumption: Under certain circumstances, a tenant may be allowed to assign or sublet their proprietary lease to another individual or entity. In such cases, the new tenant assumes the lease while the original tenant retains ownership of their shares in the cooperative corporation. Regardless of the type of assumption, the process typically involves obtaining the approval of the cooperative board of directors or management, who evaluate the financial stability, creditworthiness, and adherence to the cooperative's bylaws and regulations of the proposed new leaseholder. In conclusion, the New Jersey Assumption of Proprietary Lease involves the transfer of lease rights and obligations from one tenant to another within a cooperative housing setting. Different types of assumptions, such as individual-to-individual, corporate, and assignment/sublet assumption, exist depending on the circumstances and parties involved. The process requires the review and approval of the cooperative board of directors or management to ensure compliance with established guidelines and regulations.
