This agreement is a tripartite contract concluded by the bank (usually an “Aztec” recognition agreement is required) with the board of directors, the lending bank and the buyer, formalizing the relationship between the lending bank and the cooperative. The co-op acknowledges the relationship through this document and agrees to notify the lender if the shareholder does not pay maintenance or other expenses to the co-op on time. Aztech recognition agreements are usually one of the last outstanding points for your co-op application, as they are sent towards the end of the credit underwriting. When we say “sent”, we mean it – your lender will physically send you three copies. Unlike virtually every other document in 2019, Aztecs still have to be original copies (so don`t lose them!). Hi Ruquaiyah – thank you for your comment, and we are sorry to hear about the delays associated with your purchase. Honestly, it looks like you were rejected by the board. The listing agent (and/or your buyer`s agent) is usually the first to receive a message even before the formal notice of approval or rejection is issued by the co-op and sent to your real estate lawyer. Your lender will send the Aztech recognition agreement, so it`s for informational purposes only, but you can find an example here.
Please note that this does not necessarily look like yours. Each co-op has a different ownership lease, so the rules for using shares as collateral for a mortgage vary. Today`s Aztech recognition agreement smoothed out these differences, allowing buyers to easily finance a cooperative purchase. This greatly expands the buyer pool, so that all the apartments in the building have much more value, which benefits all shareholders. The Aztecs will arrive signed by the bank. You sign and submit them with your co-op application and, eventually, a member of the Board of Directors will fully sign and execute the agreement. The co-operative has a primary privilege over shares and leases. The building is paid first (in front of a bank). Banks can try to get cooperatives to accept their version of the agreement. In this case, the cooperative`s lawyer may accept minor deviations.
However, the bank is likely to reject anything that eliminates the language that protects the co-op from liability if the co-op accidentally forgets to notify the lender of a default. By far the biggest advantage of Aztech recognition agreements is that they allow buyers to finance in a cooperative. .