Everything You Should Know About Aztech Recognition Agreements

By: ROS Team

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When financing a co-op apartment in New York City, a buyer must complete an Aztech recognition agreement, which is also known as an Aztech form. This is a three-way agreement between the buyer, the lender, and the co-op business, and a copy of the agreement must be submitted with the loan application.

The agreement documents an understanding between all parties that the lender will first have a lien on the buyer’s property and a proprietary lease as collateral for the loan. The Aztech agreement also outlines what happens if the buyer fails to make mortgage and maintenance payments.

What is an Aztec Agreement?

The Aztec recognition agreement explains what will happen if the buyer fails to pay the required mortgage and/or maintenance fees associated with the co-op. A signature on the Aztech form is simply an acknowledgment of the expectations and the repercussions of not meeting them.

The Aztec letter is written primarily to benefit the co-op if the buyer fails to meet their financial obligations.

Aztec Agreement
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Some Common Provisions that are Included in These Letters Include:

  • The buyer is not allowed to have debt-free ownership of the shares acquired;
  • Buyers are instructed to notify the lender if a payment is missed;
  • The buyer should let the lender make the payments if they’re unable to do so; and
  • In the event of a sale, the buyer must acknowledge the lender’s lien on the shares.

Co-ops frequently welcome Aztech recognition agreements for a variety of reasons. For the building to get financed, the Aztec must be signed by the building’s owners. Moreover, if the buyer is unable to pay monthly maintenance fees, the agreement gives lenders the power to make the payments on the buyer’s behalf. Thus, the co-op has guaranteed coverage on the upkeep of the property. Another reason most co-ops like Aztech agreements are that, in the event of foreclosure, the lender will pay the co-op first. Only after the co-op has been repaid in full will the lender receive any profit from the sale.

Sign An Aztech Recognition Agreement
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When Should You Sign an Aztech Recognition Agreement, and How Should you do so?

Because they’re provided after the loan underwriting process, Aztech recognition agreements are usually one of the final documents left to complete when filling out the co-op application. Your lender will send you three copies of the document for filing with various entities.

The Aztec forms will come with a bank-issued signature. Your signature and submission with your co-op application will be followed by a signature from a board member, thereby completing the execution of the agreement.

Advantages of Aztech Recognition Agreements

Aztech recognition agreements enable buyers to complete the finance of co-ops, which is the biggest advantage. As a co-op buyer, you are essentially purchasing the building and a single unit’s private lease. Co-op mortgages are collateralized by the property’s shares and proprietary leases.

Advantages of Aztech Recognition Agreements
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Using shares as security for a mortgage is a different process depending on the proprietary lease. Today’s co-op recognition agreements have simplified the financing process for buyers. This makes the buyer pool considerably larger and, thus, increases the value of all of the apartments in the building.

Another advantage of Aztech agreements is that they require prompt payment of mortgage and maintenance fee payments. Most shareholders are more worried about defaulting on their loans than being late with their maintenance payments. Therefore, this arrangement works well.


As a co-op owner, you should know that co-op corporations and lenders will be paid first in the event a shareholder fails to meet their financial obligations. There are occasions when lenders attempt to persuade co-op firms to agree to a different version of the Aztech agreement. A co-op lawyer may agree to minor changes if this occurs, but they will almost certainly reject anything that removes language that shields the co-op from responsibility if the co-op mistakenly forgets to inform the lender of a default.