In New York what is a coop lien search and why do you need one?

By | January 8, 2014

If you have ever been in the market to buy or refinance a commercial/residential property or condominium, you know that purchasing title insurance is part of the process!

But what about a property that is part of a coop?

Do the same rules regarding title insurance apply in the event you are not actually buying or refinancing the mortgage for a  property, but rather  a beneficial interest in shares of the property?

As the description below explains conventional title insurance is not required for coop transactions but a coop lien search is.

And, unlike title insurance premiums that will rise as the price of the property being insured increases, a coop lien search should only cost about $375.

Coop Lien Search Explained!

In a typical transaction, the purchaser’s attorney asks the search company to perform a Cooperative Apartment Lien Search, which searches for UCC filings, judgments and liens against the cooperative corporation or sponsor in an initial sale or the seller in the case of a subsequent sale. Where the purchaser intends to use lender financing to acquire the unit, the lender generally requires searches to be run against the purchaser as well. The search reveals whether there are any security interests perfected and attached to the shares of stock and whether there are any judgments or other liens filed against the seller and, if applicable, the purchaser. The search will also furnish information as to any open mortgages of record on the building.

A diligent practitioner will also review the minutes of the last year’s board of directors meetings of the cooperative corporation to check for any pending costly capital improvement projects or potential litigation. Usually, this is the extent of due diligence in a cooperative unit acquisition. No title insurance is purchased.
Note that, in the case of a condominium unit or other real estate sale, a title insurance policy will likely be part of the transaction. Counsel can explain to its client just what protection the client has, when it arises and what to do if the policy protection must be relied upon.

None of this is the case with respect to a Cooperative Apartment Lien Search. The issuer’s liability is presumably based only on a cause of action in negligence of the company in conducting its search, which is often difficult to establish.

Most companies impose a limitation on liability in their Cooperative Apartment Lien Search. Furthermore, the protections of a title insurance policy that the real estate practitioner is accustomed to are not available in the Cooperative Apartment Lien Search. There is no duty to defend the title nor to bear the cost of any defense…‘ (Source)

If you have any questions about this or any other aspect of title insurance or you would like to have Hallmark Abstract Service provide you with a sample title bill for an upcoming transaction (we charge our cost for the non-title insurance premium fees) please give us a call at 516.741.4723 or send us an email at

If you would like to place an order for a coop lien search the order form is here.

Do you know everything that you need to know about your title insurance?
  • Who is your underwriter?
  • What is the claims experience of your title insurance provider?
  • Do you know whether the non-title insurance premium fees you are paying are fair and reasonable?
If the answer to any of these questions was NO, please read…

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