Dear Michael: My husband and I previewed a Co-op that we really liked on Sepulveda Boulevard, but we are wary of the term Co-op. We don’t want to get ourselves in a situation that we will regret. Can you please explain what are the differences between Cooperatives and Condominiums?
Answer: In a “condo” arrangement, you legally own a particular unit in a multiple unit structure of building. Plus, under a typical arrangement, you have a share and a right to use common property (i.e., hallways, elevators, gardens, swimming pools, club house, and so forth) within that structure. Monthly payments to an “association” for expenses incurred in maintaining the common property are normally required. The association gains its legal authority from the legal documents which create it – declarations, by-laws, and articles – and these associations typically run like a corporation and may be managed by professional property management companies. There are usually complaints and appeal processes built into the association documents to protect individual rights and to provide a mechanism for resolving controversies within the community – as well for selecting the members of the Board of Directors who oversee management of the association. A “co-op”, on the other hand, is very different. You do not own your own specific unit in the building but own stock in the corporation that actually owns the building and all the apartments. You lease your apartment or unit from the corporation. The unit’s size determines the number of shares of stock you must purchase. Monthly fees based on the number of your shares of stock are assessed for the mortgage payment, taxes, and general operating expenses. As a shareholder, you have a say in electing the Board of Directors who manage and decide on how the cooperative is to be run, who is qualified to buy shares, and so on.
Dear Michael: Our escrow company is telling us that they need to record title before we can claim ownership. What is recording Title all about?
Answer: Whenever you purchase real property (real estate), you will receive a written document (called “the deed”) which transfers the ownership (title) of the property to you as the purchaser. The deed gives you formal title in exchange usually for a specified amount of money. The conveyance of real property is not complete until the deed is delivered to you or your authorized agent. When you get the deed, you should record it with the county recorder in the county where the property is located. The purpose of recording the deed is to give “notice to the world” that you now have an ownership interest in that particular piece of real property. Recording also tracks the chronological chain of title. Anyone who wants to know who owns a piece of real property can check the records of the county recorder for the county where the property is located. Before you purchase real property, you can follow the chain of sales and transfers of the property – from the original grant of the land all the way to the current owner. When title insurance is purchased, the title insurer checks the change of title to determine whether any defects occurred in prior conveyances and transfers – defects may then be pointed out and excluded from coverage. As a purchaser of property, you want to check that every time in the past, when the property was transferred, the grantor had clear title to the property and the previous purchasers obtained clear title.
Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com
