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KJL LAW
KJL LAW, Arbitrator
Category: Real Estate Law
Satisfied Customers: 1536
Experience:  Attorney at Law Office of KJLLAW
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Must a cooperative have UCC (e.g. UCC-1, 3, or otherwise) filings

Customer Question

Must a cooperative have UCC (e.g. UCC-1, 3, or otherwise) filings of secured interests in the apartments of its cooperative? Must it be kept current, as a matter of public record? Where would I find such records?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Maverick replied 1 year ago.
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Customer: replied 1 year ago.

ok

Expert:  Maverick replied 1 year ago.
Look at this link. Security interest in personal property that is not "real estate" such as shares of a cooperative showing ownership/mortgages, and fixture filings should show up at the link above. If it is not there, then check the county deed records.
Customer: replied 1 year ago.

Yes, I know about ACRIS as stated in my initial question. I do not see the cooperative I am talking about there. In fact I see UCC-1 and 3 filings by the bank(s) for the shares appurtenant to the cooperative but I do not see the cooperative filing of a UCC 1, nor do I see a UCC cooperative addendum in the aforementioned bank filings or otherwise.

In one instance of another cooperative I have units in I see that the secured party bank has a UCC financing statement cooperative addendum which identifies the cooperative as a party with rights superior to the first secured party (the bank) who is filing the UCC.

Must the cooperative file a UCC, or minimally have the bank file a UCC cooperative addendum?

Furthermore must these records be kept up to date. I see in the "Detailed Document Information" on ACRIS that there is a expiration date?

The banks which have a secured interest in my cooperative have an expiration date which has past.

Expert:  Maverick replied 1 year ago.
I will have to opt out and let another, more knowledgeable expert try to assist you on this. Your deposit is still in tact.
Expert:  KJL LAW replied 1 year ago.
To follow up with aminlaw. A coop can fike UCC on their interest in coop shares, but they are not required to under NY law. The banks filing is not under the traditional 5 year rule with filings and extensions, bank/lender UCC Filings against coop shares are good for 50 years. I hope this helps with your question.
Customer: replied 1 year ago.

You wrote

" A coop can fike UCC on their interest in coop shares, but they are not required to under NY law"

What does "fike mean"?

If they do not file then what proof does a cooperative have that it has a secured interest in the underlying shares?

Example...Coop cannot produce a bona fide signed proprietary lease between the parties, or the share of stock.

It has a form lease but it has been decades since this was the current lease with all amendments.

Coop cannot produce secondary evidence "person with personal knowledge of the last known whereabouts, or someone who saw lease, or lease being signed, etc"

Expert:  KJL LAW replied 1 year ago.
Under the NYS UCC code the coop is not required to "file" a UCC, the proprietary lease. If they can't produce any lease or other documentation regarding the purchase then they may have a hard time collecting any past due maintenance payments.
Expert:  KJL LAW replied 1 year ago.
I keep getting cut off. The lease or any other documents signed at purchase can establish their rights in the underlying shares. They may not produce any documentation to prove their interest until a court hearing.
Customer: replied 1 year ago.

Must a cooperative in NYC provide a 90 day notice to shareholder of its plans to initiate a non judicial foreclosure pursuant to UCC section 611(f)?

Expert:  KJL LAW replied 1 year ago.
UCC §9-611, which requires that notification be sent to the mortgagor, any secondary obligor, and any other lienors of whom the mortgagee has notice a reasonably authenticated notice of the impending sale of the shares of stock. There are two notices required, the first 90 days prior to the disposition, and the second at least 10 days before the actual sale.
Customer: replied 1 year ago.

I received two 30 day notice (two different apartments) effectively stating that the sale(s) would occur at a place certain on June 10th. It was mailed May 6th. I am the owner of the apartment(s). Does UCC §9-611 apply to me as the shareholder of these apartments. I do not live on the premises, and they did mail it to my proper address.

Expert:  KJL LAW replied 1 year ago.
Yes. They must mail it to the residence under 9-611 and it is proper service if mailed to the address of the coop by first class and registered or certified mail.
Customer: replied 1 year ago.

What I am specifically talking about is the 90 day notice required in the UCC. It reads as if only a banking institution must do this but it also seems as if the legislative intent was to afford coop owners the same notice time protections afforded under the statute for foreclosures on real estate. So the question goes first to is the 90 day notice required of the coop as the secured party.

Expert:  KJL LAW replied 1 year ago.
Yes, it would apply because as you pointed out the legislative intent is to give the coop owners the same protection for other real estate. Yes the notice is required.
Customer: replied 1 year ago.

I have been doing some westlaw research on this and have not been able to find any decisional law that supports that position, and because the letter of the law speaks to loan as opposed to secured interest it is clear that it was written thinking about lenders foreclosing and seemingly not realizing that a coop itself could take this action as the primary secured interest. I found also an article on the subject which would contradict what you said but if you could cite a decision it would help.

Please read this:

http://www.firstam.com/assets/ucc/articles/outsidecounsel-legislative-recognition.pdf

Expert:  KJL LAW replied 1 year ago.
I will let another expert assist you further
Customer: replied 1 year ago.

how can I rate this when you areletting another expert continue?