An “Aztech Recognition Agreement” or “Aztec” is an agreement between you, your lender and koop, and determines what happens when you stop paying for maintenance and/or mortgages. It is necessary to finance the acquisition of a co-op. While you`re signing the Aztecs, this is really just confirmation. It doesn`t require you to do anything wrong. Aztech recognition agreements are usually one of the last outstanding points for your co-op application, as they are sent towards the end of the credit subscription. If we say “sent,” we think so – your lender will physically send you three copies. Unlike virtually any other document in 2019, the Aztecs still have to be original copies (so don`t lose them!). The main advantage of Aztech`s recognition contracts is that they allow buyers to finance in co-ops. If you buy a co-op, you technically buy shares of the building and the owner lease to live in a particular unit. This is against a condo where you buy the apartment proper. From a legal point of view, koops is a personal property (shares and leasing), while condominiums are real estate (the real good).
For this reason, a mortgage in a co-op is effectively guaranteed by shares and property rental. Now that we know what the buyer is actually buying, we can take the next step to your bank and what`s rightfully theirs. At closing, the bank receives the initial investment certificate and lease to which it can cling until the unit is sold or the loan is repaid (depending on what happens first). In addition to these documents, the Bank will also seek recognition agreement. Co-ops are generally happy to sign an Aztech recognition agreement for certain reasons. First of all, it is needed by the lender, so that if the building wants financing, they must sign the Aztecs. It also allows the lender to pay for your maintenance if you don`t. The lender wants its guarantees to be as clean as possible, so it is a good investment to pay a few thousand dollars to avoid darkening their assets to six or seven figures.