A coop lien search, otherwise known as an cooperative apartment lien search, is ordered by the buyer’s attorney after a purchase contract has been signed. Any outstanding liens against the seller or the coop apartment must typically be cleared by the seller before a closing can happen.
Co-op apartment buyers in NYC are spared from having to pay for expensive title insurance that increases in cost per the value of the insured property.
Remember that coops are different than condos in that the co-op apartment owner does not have title over his or her apartment, but rather owns shares in a cooperative corporation that owns the entire building.
However, just because coop buyers in NYC don’t have to worry about fraudulent title to real property doesn’t mean they don’t have to do some sort of lien search. Fortunately, coop lien searches are quite affordable and will run you between $300 to $400 dollars from any number of popular title search companies.
This search will be critical to ensure that there aren’t any outstanding tax liens, mechanics’ liens, bankruptcies or other violations and judgments you should know about.
What If There Is a Lien on Co-op Shares?
A coop lien search will indeed result in some unexpected results for the seller from time to time. Perhaps the seller had a dispute a long time ago with a general contractor who renovated the apartment. Perhaps the general contractor felt that he was owed $10,000 more than the seller actually paid.
It is conceivable that the seller was never served or otherwise made aware of the mechanic’s lien that the general contractor placed on the seller’s apartment (i.e. technically a lien on the seller’s co-op shares).
When this happens, a good buyer’s attorney will have put standard protections in the purchase contract which will require the seller to clear up any judgments, violations or liens against the co-op shares before a closing can occur.
In the vast majority of cases the seller will take some time but will do so in order to close. In the rare instance that the seller refuses to clear up any liens against the property that were found through a coop lien search, the buyer will have the right to cancel the contract and receive his contract deposit back in full.
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Sample NYC Coop Lien Search
Cooperative Apartment Lien Search, Certification and Report
Certification Page
Effective date: [Date Issued]
Certified to: [Purchaser Name]
Copy sent to: [Purchaser’s and Seller’s Lawyers]
Borrower / Purchaser : [Purchaser Name]
Owner / Seller : [Seller Name]
Cooperative apartment building premises (“Premises”):
– Address :
– County :
– City :
– Block :
– Lot :
– Apartment / Unit :
Fee title to Premises: [Cooperative Corporation Name]
– By deed from :
– Dated :
– Recorded :
[Title Search Company] certifies that the above listed searches have been made of public records in the county specified above with respect to the following name(s): [Purchaser Name]; [Cooperative Corporation Name]; [Seller Name]
Searches Made
Searches Returns
UCC Financing Statements
– County* 0
– State 0
Federal Tax Liens
– County 0
– State 0
Judgments / NY Tax Liens 0
Bankruptcies 0
Mechanics’ Liens 0
Lis Pendens 0
Patriot Act (OFAC) 0
Mortgages on Premises Enclosed
Mortgages on Units 0
*Returns include only those UCC’s that affect both the names searched and the referenced Premises.
Cooperative Apartment Lien Search – Mortgages on Premises
Subordinate Mortgage held of record by: [Sample Lender Name]
Mortgagor: [Cooperative Corporation Name]
Amount of lien: $4,000,000
Pursuant to: Mortgage recorded 2/15/1995 in Reel 1231 Page 2219
Consolidated mortgages held of record by: New York Sample Bank
Mortgagor: [Cooperative Corporation Name]
Amount of consolidated lien: $ 3,900,000
Pursuant to: Consolidation, Modification and Extension Agreement recorded 9/21/1995 in Reel 1231 Page 3516
Mortgages consolidated: Reel 245 Page 1924; Reel 1066 Page 1776; Reel 1588 Page 1945;
Assignment of Leases & Rents held by: New York Sample Bank
Assignor: [Cooperative Corporation Name]
Pursuant to: Assignment of Leases and Rents recorded 8/15/1995 in Reel 1929 Page 1111.
Mortgage held of record by: [Sample Private or Public Lender Name]
Mortgagor: [Cooperative Corporation Name]
Amount of lien: $ 590,000
Pursuant to: Mortgage recorded 1/14/1998 in Reel 1666 Page 1492, as assigned in Reel 2549 Page 1066, recorded 9/11/2001.
Assignment of Leases & Rents held by: [Sample Private or Public Lender Name]
Assignor: [Cooperative Corporation Name]
Pursuant to: Assignment of Leases and Rents recorded 1/14/1998 in Reel 2541 Page 1666, as assigned in Reel 3540 Page 1241.
Cooperative Apartment Lien Search – Terms and Conditions
In light of the payment accepted for the deliverance of this cooperative apartment lien search, [Title Search Company] certifies this report and the results enclosed to the Certified Party, as of the date mentioned within, with the complete understanding that [Title Search Company] is strictly limited to a total of fifty thousand ($50,000) dollars for any losses or damages incurred by the Certified Party for reason of failure of [Title Search Company] to include any recorded and/or filed lien, encumbrance or defect in this coop lien search, whether as the result of negligence, or for any reason whatsoever.
A claim cannot arise until firstly all payments for this coop lien search has been completed and secondly that the Certified Party nor any related party to the Certified Party has any knowledge of the lien, encumbrance, judgment or defect not shown in this report for which a claim is being filed.
Unless [Title Search Company] expressly provides prior written consent, [Title Search Company] will be not responsible for any liability, damages or payment in settling any claim or lawsuit involving matters concerning this cooperative apartment lien search.
The invoices that are charged this coop lien search are due and payable regardless of whether a sale or refinancing of the co-op apartment specified herein occurs or not.
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Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided.
Just got a copy of the coop lien search report. It seems that the title company also did a search on the buyer, which is very strange as I thought it was supposed to focus exclusively on the property and maybe the seller? It searched the buyer’s UCC, judgements and bankruptcies. And it also searched for names similar to the buyer’s. Is this normal practice? I’m just very surprised.
I heard that there is a lien against my co op from Alba Oil for $495,000.00 trying to find out if this is true.
Hi Paulette, are you looking to sell your property? If so, it’s best to consult your real estate attorney and possibly get this cleared up before putting it on the market. If you’d like some recommendations to great attorneys who specialize in real estate in your area, please shoot us a note!
How can a lien be placed on a Co-op by a person who never NEVER owned the co-op This is happening right now to my son and lawyers seemed baffled as how to proceed. Lender who put lien on shares apparently went out of business.
Hi Kevin, a lien can certainly be placed on a co-op or condo apartment by someone who has never owned or resided in the apartment. For example, if you don’t pay your home renovation general contractor or a HVAC contractor, they can put a mechanic’s lien on your apartment. If what you are saying on the other hand is how can a bank who has never lent money to you put a lien on your co-op, may we ask whether it’s because you defaulted on other debt from them?
Can someone who loaned me money to buy my coop place a lien on my coop shares even if they live overseas?
Purchased co op apartment 4 month ago. Now I would like to add my son’s name on Certificate.
Co op attorney wants me to order a Lien search again.
Is this right or wrong?