Apr
21

Legal Question of the week: Lost Co-op Stock and Lease

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Q:  I am selling my co-op.  I have turned my apartment upside down and inside out, inspecting every scrap of paper and I cannot find my Stock and Proprietary Lease for the apartment.  I’ve contacted the managing agent who is requiring me to not only execute a Lost Stock and Lease Affidavit, which I understand is common, but they also are requiring me to post a bond.  Is this common practice?

A:  No, it is not common practice for a co-op to require a shareholder to post a bond if the shareholder loses their stock and lease.  While the co-op has a right to request a bond, generally, the co-op simply requires the shareholder (or the party who lost the stock and lease) to execute a Lost Stock and Lease Affidavit.   Lost Stock and Lease Affidavit generally states that the shareholder (i) is unable to locate the stock and lease, and (ii) is required to indemnify the managing agent and co-op for any loss that the co-op incurs as a result of the loss of the stock and lease.  The shareholder (or the party who lost the stock and lease) will likely incur a fee in connection with the Lost Stock and Lease Affidavit.

 Important tip:  One of the first questions your real estate broker should ask a seller of a co-op apartment who has the original stock and lease.  If the shareholder has a loan, then it is likely that the original stock and lease will be in the possession of the lender.  If the stock and lease is lost,, the managing agent for the co-op should be contacted immediately so as to determine the co-op’s procedures concerning lost stock and leases.

 

Based on REBNY article by Neil B. Garfinkel, REBY Residential Counsel Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP   

This post is provided as informational proposes only and should not be construed as legal, accounting or tax advice by the RealEstateGeezer. You should seek advice from a qualified professional.

Categories : Build Your Team, Co-op

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