River Place Co-Op Settlements with Segan, Mason & Mason, P. C.

      The transfer of a co-op unit is different from the sale of land or a condominium unit. In a co-op, instead of getting a Deed, the buyers receive shares of stock in a corporation that owns the co-operative building. Along with the shares, the buyers receive an Assignment of a “Proprietary Lease” allowing them to occupy the apartment (and any parking space) involved in the purchase.

       Our goal is to make this transfer as smooth as possible while advising all parties what is expected of each side to make this happen. To do this, let’s go through the process, step by step:

   Step 1: Order a Resale Package

        The seller should order a resale package as soon as possible. This package is obtained from the management company. Here is the contact information for River Place transfers:

            River Place North

            1121 Arlington Boulevard, Suite L-1

            Arlington, VA 22209

            (703) 276-3363

            River Place South

            1011 Arlington Boulevard, Suite 350

            Arlington, VA 22209

            (703) 528-3555

            River Place East

            1021 Arlington Boulevard, Suite A

            Arlington, VA 22209

            (703) 276-0025

            River Place West

            1111 Arlington Boulevard, Suite 106

            Arlington, VA 22209

            (703) 276-1212

            River Place Parking

            1011 Arlington Boulevard, Suite 340

            Arlington, VA 22209

            (703) 276-9810

       The management company will charge a fee for the resale package. Contact them directly for the amount that will be charged.

   Step 2: Obtain Board of Directors Approval of Transfer

       The resale package will include the applications for the seller and the buyer to apply for the Board of Directors to approve for the transfer. You should submit these applications as soon as possible. The co-op rules require that the Board approve the transfer of any co-op unit or parking space. Until we receive the signed resolution approving the transfer, we cannot schedule the closing. Please make sure that the buyer makes application in the name that is to appear on the stock certificate. We must transfer the stock only to the approved buyer, so if the buyer wants the stock to appear in an “LLC,” for example, the application would have to list the “LLC” as the buyer. Similarly if two people will be co-owning (such as husband and wife), make sure both are on the application as buyers.

   Step 3: Signing the Assignment of Lease and Parking Space

       Before the scheduled closing, we will be contacting the buyer and seller to arrange for the signing of the Assignment of Lease or Parking Space (if applicable). These are the documents that are recorded in the Arlington County land records to show to anyone searching the title that the buyer is the holder of the stock and is entitled to occupy the apartment and the parking space. The Assignment is executed before the scheduled closing so that we can expedite getting it signed by the Board of Directors. Since we cannot record or disburse funds to the seller until the Assignment is signed by the buyer, the seller and the Board of Directors, it is important to you that you work with us to get these signed early.

   Step 4: Scheduling Closing Date

       Once the Board of Directors has approved the transfer of the co-op and any parking space, the settlement can be scheduled. However, if the buyer is obtaining a loan, the loan must first be approved by the lender, and the settlement date must be coordinated with the lender. When these approvals are in, please contact our office to set up the date and time of closing.

   Step 5: Seller’s Preparations for Closing Date

       The seller must notify us of the names, addresses and account numbers of any lender with a loan recorded against the co-op unit. We will contact each lender to obtain written payoff amounts. We then pay off these loans from the sales proceeds.

       If the seller owns the co-op free and clear of any loans or other liens, the seller should have the original stock certificate. This stock certificate must be brought to closing.

      If there is a loan against the unit, the lender will most likely have the original stock certificate. However, many times the lender cannot locate the original stock certificate or the seller may have lost the stock certificate. If the stock certificate is lost, the transfer agent, Edmund J. Flynn & Co. charges a $250 fee and requires that the seller sign an Indemnity Agreement. Because we will not know if the payoff lender has lost the stock certificate until many weeks after the closing, we usually escrow the $250 fee from the seller’s proceeds and have the Indemnity Agreement signed at closing so it is available if needed.

   Step 6: Buyer’s Preparation for Closing Date

       We will make every effort to provide the buyer with the amount of funds needed in advance of the closing date. However, if the buyer is obtaining a loan, we cannot finalize the numbers until we receive the loan documents. Many times these are not received until the date of closing.

       The buyer should bring the amount needed for closing in a cashier’s check payable to Segan, Mason & Mason, P.C. The buyer should also bring a checkbook in case additional amounts are required. If the cashier’s check is over the amount needed, a refund can be issued at the closing. In the cases where we cannot get you the exact figure for closing, the buyer should use the good faith estimate given by the or realtor for the cashier’s check amount.

   Step 7: The Closing Date

        An attorney will be conducting the closing for the seller and buyer. At the closing, the documents and costs will be reviewed and explained. If the seller has the original stock certificate, that will be turned in to the attorney at the settlement.

   Step 8: After the Closing Date

       We will record the Assignments and any loan documents within two working days of the closing date. Once the documents are recorded, we will disburse all of the monies including the seller’s proceeds. A new stock certificate will be issued a few weeks after closing showing the buyer as the holder of the stock. If the buyer obtained a loan to buy the co-op, the lender will hold this new stock certificate as collateral for the loan. Otherwise, we will send the stock certificate to the buyer once issued. The buyer will also receive the original recorded Assignment of Lease/Parking Space a couple months after the closing. If the buyer purchased an Owner’s Title Insurance Policy, this will also be mailed around the same time.

   Our Fees

        Our fees to the buyer and seller are $350 to each for the closing fee. In addition, the buyer is charged for the title search which cost $110. If title insurance is being issued, there is a $75 binder fee along with the premium. Any courier fees and notary fees that are incurred will be charged to the respective party. In the event there is a lien that must be paid and/or released (i.e. a loan against the stock), a release fee of $60 will be charged to the seller.

   Title Insurance

       With respect to the title insurance, you should be aware that the title insurance agency through which we normally order our title insurance binders, policies, and endorsements is owned by the officers and directors of this law firm.

   Our Role as Settlement Attorney

       Lastly, please note that since our firm is acting as settlement agent for the buyer and seller, we cannot represent either party in the event of a contract dispute. However, we will do our best to work with both parties in any dispute to attempt to reach an amicable resolution of any problems that develop.

       For further information, you can contact Donna Mason or Shari Rastegar at (703) 354-9170.