Stock Cooperative and Proprietary Lease - Posted by John Behle
Posted by John Behle on June 13, 2000 at 22:51:34:
As Sean mentioned, you do not own any real estate with a co-op. You have stock in the corp. that owns the property. You then have lease rights to one specific unit.
When you sell, you transfer the stock and assign the lease. When you loan against a coop, you hypothecate the stock and do a c conditional assignment on the lease.
It may vary state to state, but in essence, that is what it is.
The problem with the paper is you are a minor stockholder in a corporation. I had some coop paper cut right out from under me when the majority of stockholders got together and converted it back to an apartment complex. Without having received any notice, I was cut out. Yes, I could sue…etc.
But, it is risky as a paper buyer.