Corresponding Paperwork Notations

Disclaimer

REGARDING REAL ESTATE’s applications, agreements, and legal document samples are to be read for familiarity, and to be used as a reference only.  Actual binding documents presented for signature can, will, and do vary.

Therefore, no example should be printed out,  distributed as a legal instrument for a signature, so please, again, always keep in mind that they are a sample.

Furthermore, New York State, Department of State requires that every document or instrument for a real-estate transaction (excluding a rental lease) must be read and approved by an attorney admitted to the New York State bar, and then it should be explained in detail by that attorney.

In addition, a licensed real-estate broker is empowered to only prepare two document types: an Exclusive Right to Sell Agreement and the Deal Memo distributed to the seller’s and buyer’s attorney. Moreover, a sales associate or broker cannot perform the functions of a licensed mortgage broker.

 

Co-ownership Application to Purchase Examples

1. A propriety lease has been previously issued by a corporation (with a renewable expiration date) to the shareholder, with certain shares, in order to occupy a specific unit under the conditions specified.

Riders, which list additions or enumerations, can vary enormously. Therefore, each (added) item must be read before the lease is signed.

2. The house rules’ overriding consideration is that each co-owner is entitled to the same quiet enjoyment as another co-owner, regardless of the number of shares or interest owned.

The items covered are services and amenities, and subjects particular to multiple-family dwellings, such as use of the co-owned areas and facilities. House rules and regulations outline a wide range of specific policies for owners and renters on such subjects as subletting a unit, pets in a household, washers and dryers in the units, installing new windows, use of the service elevators to move in or out large objects, monthly charge payments and the penalty for tardiness.

Application to purchase

The application package, according to the contract for sale, is required to be submitted to the governing board of directors within ten business days of the agreement being signed.

The entire package should be typewritten, and include the documents as requested. Each point must be consistent.

A financial statement, and its supporting documentation should match, verify, and authenticate the net worth stated.

As a whole, personal reference letters must leave no doubt as to the worthiness of an applicant. Letters best serve that intent when they are from New York City residents, and written by one board member from a present residence, whenever possible.

A letter from the lawyer representing the sale or a controversial or questionable figure is not particularly advisable. The financial reference letters can be from an accountant, banker or investment advisor, stating the length of time of the association, and average account balance with their institution.

A landlord’s or management company’s reference letter should express—in plain terms—that the applicant is an owner (or tenant, as the case may be) in good standing.

The interview pointers: More than likely an interview will be scheduled in the early evening.

It should be approached in a relaxed, confident manner; somewhat like a job interview, perhaps.

It may be after a favorable decision has been made, or not—so assume the latter.

It is best to dress conservatively, to be early, and be prepared to answer personal questions—but only if requested.

It is not appropriate to ask questions—it is presumed that all information regarding the apartment had been investigated before the contract was signed.

It is unwise for partners to correct or contradict, amend or add on to one another’s comment or answer.

It is not recommended to suggest changes to incorporate into the building—no matter how sweetly coated—or to criticize how the building is managed—no matter how flagrant or innocent.

It is not the appropriate time to address any aspect (whatsoever) regarding intended renovations—no matter how insignificant or trivial they may be.

Don’t expect—although it is entirely possible—an on-the-spot decision to be announced.

The entire board may be queried, and occasionally, approval may be contingent upon something like a portion of the maintenance held in an escrow account (for example).

Consistent with the process is the managing agent notifying the seller’s representative within 48 hours (hopefully!) regarding the board’s acceptance of the application.

In conclusion, any post-interview questions should be addressed to the managing agency (for review by the board) by the seller’s lawyer.

Broker Agency Agreements

Agency Relationship Disclosure
Dual Agency Informed Consent
Broker Exclusive Agreement
Buyer Agency Agreement Letter
Deal Memo

An agency relationship, in real-estate terms, is between a seller or buyer and their broker. A licensed real-estate broker must abide by the New York State, Department of State, Division of Licensing rules. This includes not acting as a mortgage broker or preparing the paperwork (besides a Deal Memo).

There are no such existing regulations for a buyer or seller, however.

The New York State, Department of State provides the pertinent regulations and rules governing a brokers actions (as a condensed form) in their Disclosure Regarding Real Estate Agency Relationships brochure. The information allows both owners and purchasers to make informed decisions.

Likewise, the New York State Disclosure Form for a buyer and seller delineates Seller’s from Buyer’s Agents and Dual Agents from designated Sales agents.

A standard designated agent agreement includes:

1. The exclusive right to sell agreement—whether for a co-operative, condominium or a town house—is essentially the same. The property is identified, the owner’s name (as it appears on the title), and a co-operative agreement includes the number of shares associated with the unit’s proprietary lease; a condominium agreement includes common charges and real-estate taxes stated individually; and the town house agreement includes the lot and block numbers, and the related taxes.

At a glance, the crucial points are:

A. Acknowledgement of ownership of the referenced property.

B. The asking price.

C. Term (date to date) of the effective agreement.

D. The brokerage commission due at the closing, as a percentage.

E. Agreement to solicit other broker’s cooperation.

F. Agreement to refer all inquiries and offers to the broker.

G. If, for any reason, within 90 days after the standard 180-day-agreement term has lapsed, a potential buyer who inspected the property and is listed among six prospective purchasers, does sign a contract to purchase, then the original exclusive broker (now terminated) is entitled to their commission upon closing.

2. Exclusive right to rent agreements contain similar boilerplate clauses, which define a broker’s rights and obligations, and with the broker’s commission described as a percentage of the yearly lease amount to be paid by the prospective tenant, or landlord, when the lease is signed.

3. Dual Agency, one broker representing both seller and buyer, and the related informed consent disclosure contains disclosure information and an informed consent form provided by the New York State, Department of State.

4. A Buyer’s Broker agreement is the basis for a working relationship between a buyer and one specified broker, who then represents the buyer. It should be noted that an exclusive right to sell is assigned to a brokerage firm; therefore, a buyer’s broker at that firm holds a fiduciary obligation to the seller, just as the exclusive broker holds.

Legal Documents

Deal Memo
Contract to Sell, Cooperative
Contract to Sell, Condominium
Contract to Sell, Town House
Standard and Condominium Apartment Leases

 

1. The deal memo, or deal sheet, states the particulars in order for each participant to proceed.

A. The property and its particulars.

B. The parties to the agreement to purchase.

C. Their lawyers.

D. Their representatives.

E. The contract price.

F. The terms.

2. Contract to purchase  in New York State cannot be prepared by a real-estate broker. All documents for real-estate to be conveyed are a legal document that must be written by an attorney representing the seller and reviewed by the attorney for the buyer.

3. The “boiler-plate” or standard rental lease varieties can be obtained from many online sources. Both a  co-operative or condominium rental lease (although essentially similar) contain several clauses not included in a standard landlord/tenant agreement to conform to the corporate by-laws.

The important elements are a term limit, adherence to specific house rules (see the REGARDING REAL ESTATE co-ownership examples, and obtaining the applicant’s board approval (see the Regarding Real Estate Paperwork section 26) as a lease-holder is mandatory.

Most tenancy leases contain additional clauses or “riders,” and each should be read (and understood) before signing the lease.