When purchasing a property or refinancing a mortgage, a lending bank will do a Title Search on the property in question. Often, if there are outstanding violations on file for the subject property, the bank will ask the Agent for an Indemnification and Hold Harmless letter stating that the Condominium Association, Cooperative Corporation and/or Managing Agent will indemnify them for all claims and damages as a result of these violations.

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In a Cooperative, the Board of Directors has a lot of leeway when approving or rejecting a proposed sale of shares (of course, they can only deny for legal reasons), but in a Condominium, since there is no Proprietary Lease and the apartments are all fee-simple in ownership, the Right of First Refusal plays an important part in how the Board of Managers can impact a pending sale or lease agreement. A Right of First Refusal is the mechanism that gives the Board the option of stepping into the proposed deal on behalf of all unit owners, instead of allowing the deal to go through with the purchaser that has submitted an application to purchase.

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