Cooperative Loan Recognition Agreement
Description
Definition and meaning
A Cooperative Loan Recognition Agreement is a legal document that formalizes the relationship between tenant-stockholders of a cooperative housing unit and a lending institution.
This agreement outlines the terms under which the lender recognizes the tenant-stockholders’ interest in the cooperative shares and leasehold as collateral for a loan. Essentially, it ensures that the lender has a claim to the shares and leasehold if the borrower defaults on the loan.
How to complete a form
To properly complete a Cooperative Loan Recognition Agreement, follow these steps:
- Fill out the names of tenant-stockholders, the unit number, and the name of the building.
- Provide details about the cooperative corporation, including its name and principal business address.
- State the amount of the loan and describe how it will be secured, including the shares and leasehold rights.
- Ensure all parties involved sign and date the agreement in the designated areas.
- Have the document notarized if required by state laws or cooperative bylaws.
Who should use this form
This agreement is vital for tenant-stockholders applying for a loan backed by their equity in the cooperative. It is suitable for individuals:
- Who are seeking financing to improve, renovate, or purchase property.
- Who wish to secure a loan using their cooperative shares and lease as collateral.
- Who need to clarify the terms of their loan with their cooperative corporation.
Key components of the form
The Cooperative Loan Recognition Agreement includes several essential components:
- Borrowers' Information: Names and details of all tenant-stockholders involved.
- Lender's Information: Details about the financial institution or lender providing the loan.
- Loan Amount: The total sum being borrowed.
- Security Description: Clear identification of the shares in the cooperative and the premises being pledged for the loan.
- Covenants: Mutual promises outlining the rights and responsibilities of both parties.
Legal use and context
The Cooperative Loan Recognition Agreement serves as a critical instrument in transactions involving cooperative housing. It establishes legal clarity for lenders regarding their rights over the pledged collateral—namely, the shares in the cooperative and leasehold. This form is often used when:
- A cooperative intends to provide a loan or guarantee.
- Borrowers seek to confirm their ownership and protect their investment.
- Legal disputes arise regarding tenant-shareholder rights.
Common mistakes to avoid when using this form
When completing a Cooperative Loan Recognition Agreement, it is important to avoid the following errors:
- Failing to accurately complete all required fields, such as names, addresses, and loan amounts.
- Neglecting to sign and date the agreement properly.
- Not reviewing the terms and conditions to ensure they are understood by all parties involved.
- Overlooking the need for notarization in certain jurisdictions.
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FAQ
An Aztec form is an agreement between three parties: the bank, the co-op and the shareholder. It confirms consent by the co-op corporation to the lender extending a loan to the shareholder in exchange for a lien on the shareholder's lease and shares as security.
Recognition Agreement means, an agreement among a Co-op Corporation, a lender and a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.
Recognition Agreement means, an agreement among a Co-op Corporation, a lender and a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.
An Aztech remains a contract between those three parties. It states the bank will have a first lien on the buyer's shares as collateral for the mortgage. The name comes from the Aztech Document Systems company, which dates from 1973.
An Aztec form is an agreement between three parties: the bank, the co-op and the shareholder. It confirms consent by the co-op corporation to the lender extending a loan to the shareholder in exchange for a lien on the shareholder's lease and shares as security.
Closing is usually scheduled within two weeks of the time you receive co-op board approval or the condo issues its waiver of right of first refusal, assuming you've received a commitment letter and your bank is ready to close.
Closing on a house takes 30 to 45 days from when your loan begins processing. And an hour or so on the day you sign the final paperwork.
An Aztech remains a contract between those three parties. It states the bank will have a first lien on the buyer's shares as collateral for the mortgage. The name comes from the Aztech Document Systems company, which dates from 1973.