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If you’re like most people, you’ve probably never heard of an Aztec recognition agreement. But these agreements are becoming more and more common.
In this blog post, we’ll explain everything you need to know about these agreements, including what they are, how they work, and how to get them. So read on to learn more!
The “Aztech Recognition Agreement” or “Aztech Forms” specifies what will happen if the buyer fails to pay the required mortgage and/or co-op maintenance fees.
In particular, the agreement specifies what share of the property the lender will take back if this happens and how much money (if any) the co-op will receive from the sale.
Aztech Recognition 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 agreement also outlines what happens if the buyer fails to make mortgage and maintenance payments.
The bank requires an Aztech Recognition Agreement in order to make a loan, and originals are required for the purchase application. Furthermore, without the lender’s approval, the co-op corporation is prohibited from consenting to any further encumbrances of the collateral.
Aztech agreements are issued by banks. Before a loan can be closed, all three parties must agree on these terms. The agreement’s entire purpose is to protect the co-op in the event of a default.
In exchange, the lender’s security interest is protected. Some cooperatives, however, require the use of their own recognition agreement and will not accept the lender’s version.
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.
For the building to get financed, the Aztec letter must be signed by the building’s owners. However, the whole agreement must be mutually agreed upon by all the parties involved.
The Aztech Recognition Agreement’s entire purpose is to protect the co-op in the event of a default. In exchange, the lender’s security interest is protected.
As a coop 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 co-op recognition 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.