Form 24-19

This supplemental checklist (SC) is designed to work in concert with the checklist at form 4-1 in this manual and sets out additional items required to draft and complete forms 24-20 through 24-32 in this chapter, for use when terminating a condominium regime and selling the property. SC item numbers 3a and 6a supplement form 4-1’s items 3 and 6, respectively, and SC item numbers 22 through 44 con­tinue from where the item numbers in form 4-1 leave off.Following this checklist is commentary addressing the use of this chapter’s forms for such a termination and sale.

Supplemental Checklist and Commentary

3a.   Buyer’s type of entity and jurisdiction of formation: [state of formation and type of entity, e.g., Delaware limited liability company]

6a.      Additional Earnest Money: $[amount]

22.      Project: [name of project]

23.      County of condominium’s location: [county]

24.      Initial Payment to Seller: $[amount]

25.      Subsequent Payment to Seller: $[amount]

26.      Amount of minimum limit general liability insurance, single occurrence: $[amount]

27.      Amount of minimum limit general liability insurance, aggregate: $[amount]

28.      Amount of collective limit excess or umbrella insurance: $[amount]

29.      Amount of minimum limit pollution liability insurance: $[amount]

30.      Postclosing Lease to Unit Owner, Outside Closing Date: [date]

31.      Postclosing Lease to Unit Owner, date that is thirty days after Outside Closing Date: [date]

32.      Postclosing Lease to Unit Owner, amount of daily holdover rent: $[amount]

33.      Recording information for Declaration: Volume [volume], Page[s] [page(s)]

34.      Clerk file number for recorded Declaration amendments: [number]

35.      Association’s president: [name]

36.      Effective Date of Contract: [date]

37.      Seller’s secretary: [name]

38.      Type of public records: [type]

39.      Number of Condominium Units: [number]

40.      Date of Condominium Declaration: [date]

41.      Seller’s mailing address: [address, city, state, zip]

42.      Buyer’s mailing address: [address, city, state, zip]

43.      Trade name: [name]

44.      Corporate name of Condominium Association: [name]

Supplemental Checklist Commentary

The following supplemental checklist commentary outlines considerations to explore and steps to take in the process to terminate an existing condominium regime and to close the sale of the former condominium property to a third party. This process is divided into the fol­lowing sections.

A.Engaging Consultants

B.Gathering Necessary Information

C.Amendments to Declaration and Bylaws

D.Sales Contract

E.Preclosing Process

F.Closing Process

G.Postclosing

References to forms in this commentary are to the following forms in this manual:

A.Engaging Consultants

A.1.Selection of Counsel.      The association likely has existing counsel that has assisted in various matters, including preparing the condominium documents and holding periodic meetings of the association and the board of directors. In addition to obtaining the assistance of that existing counsel, consideration may be given to allying with legal counsel experienced in termination of condominium regimes and sales of condominium-terminated property to third-party purchasers. The counsel representing the association in the condo­minium termination and sale endeavor, whether existing counsel, additional specialized coun­sel, or both, is referred to in this commentary as the “association’s counsel.”

Determine who is the client, whether the association, the board, the unit owners, or some combination of those. The answer impacts sections A.2. and A.3. below. If the client will be the association and not the unit owners, the engagement letter should specify that and specify that communications between the association’s counsel and the association’s officers and directors are attorney-client-privileged and work product.

A.2.Communications.      Confirm how communications are to be made with the association’s counsel and who will be doing that communicating. Establish protocols for han­dling questions and requests from unit owners addressed to the association’s counsel. The association’s counsel will need to exercise care in emailing directors to ensure that all direc­tors are included. Sometimes the board may decide that a smaller group of directors are to act as a subcommittee of the board to negotiate with third-party purchasers, with the subcommit­tee being charged with bringing its proposed sales contract to the full board for approval, exe­cution, and circulation to the unit owners.

A.3.Identification of Client

A.3.a.Attorney-Client Privilege; Work Product.      Confirm by the engagement letter and by subsequent email from the association’s other counsel that attorney-client privilege is claimed for all emails between the members of the board and the association’s counsel.

A.3.b.Disgruntled Unit Owners.      Presumably, the board will retain the association’s counsel only if the board believes that the requisite number of votes (e.g., a supermajority) of the unit owners supports the board negotiating with prospective buyers, even if the board is aware of some unit owners that oppose the termination of the condominium regime and sale of the property. Prospective buyers will be unlikely to engage in sales contract negotiations if a significant number of unit owners oppose termination of the condominium and sale of the property.

A.3.c.Unit Owners That Are Attorneys.      It is likely that one or more of the members of the board of directors or the unit owners are practicing attorneys. Obtain acknowledgment from those attorneys and the board that if those attorneys are included on emails to the board, any responses from those attorneys do not constitute practicing law or giving legal advice.

B.Gathering Necessary Information.      The association’s counsel should obtain the fol­lowing:

B.1.Voting Roll.      Obtain the voting roll used by the association and the contact list for owners.

B.2.Condominium Documents.      Obtain a copy of the condominium documents: (a) the association’s articles of incorporation or certificate of formation, bylaws, and minutes of members’ and directors’ meetings and (b) the condominium declaration and amendments.

B.3.Title

B.3.a.Title Company Selection.      The title company selection process should include the following:

i.Prior Qualifying Experience.      Interview the title company about its experience handling insuring and closing sales of properties of terminated condominium regimes (e.g., disgruntled unit owners, owners that voted against approving termi­nation; lawsuits filed seeking to challenge determinations to terminate and sell).

ii.Title Underwriter Requirements.      Have the prospective title company review the condominium documents and advise the association of the title underwriter’s requirements, including approval of amendments to the condominium documents as may be required to implement the condominium termination process. See, for example, form 24-26’s paragraph L.2.b.i. (“Submission to Title Company in Advance”) and section L.6. (“Title Insurance”) and form 24-22.

iii.Title Company Fees, Charges, and Premium.      Ask what the title company’s charges will be to handle the closing and issue title insurance (e.g., its method of calculating the escrow fee, whether as an amount per unit or a lump sum; fees for wire transfer for multiple unit owner loan payoffs and lien releases, overnight cou­riers, and out-of-town acknowledgements; and a preliminary estimate of owner’s title policy premium and its calculation). It is typical that the escrow fee charged by the title company is a separate fixed fee for each unit that is then collected from the respective unit owner upon closing. See, for example, form 24-26’s section H.4. (“Transaction Costs”) and Exhibit K (“Settlement Activities with Unit Own­ers”) and form 24-27’s section D.3.d. (regarding distributing the net proceeds to the unit owners).

B.3.b.Title Commitment.      Get a pro forma title commitment before signing a real estate sales contract for the sale of the condominium property to identify potential issues. See, for example, form 4-2’s paragraph C.2. (“Title Commitment; Title Policy”), which will become the same-titled paragraph in form 24-26, and form 24-26’s paragraph L.2.a.iii. (“Title Company’s Commitment to Insure Termination of Condominium”), paragraph L.2.b.i. (“Sub­mission to Title Company in Advance”), section L.6. (“Title Insurance”), and paragraph L.7.a.iii. (“Pro Forma Policy”).

In addition to normal items listed in Texas title commitments for the sale of properties, the title company should be required by the association’s counsel to address the following in the title commitment:

i.Unit Owners.      Require the title company to set out in schedule C a separate list­ing by condominium unit number of the record names of the unit owners and iden­tification of the title vesting documents for each unit owner. See, for example, form 24-26’s paragraph L.7.a.vi. and Exhibit K (both “Settlement Activities with Unit Owners”).

ii.Lenders.      Require the title company to set out in schedule C the record name of the holder of liens on each unit and identification of the recorded documents creat­ing the liens on each unit. See, for example, form 24-26’s item L.6.e.iv. (regarding insufficient unit owner proceeds to release liens) and paragraph L.7.b.ii. (“Mort­gage Payoffs”).

iii.Underwriter’s Approval Requirements.      Require the title company to set out in schedule C a list of each of the title underwriter’s requirements to insure title to the prospective buyer of the terminated condominium project, including—

(a)requirements to approve the termination of the condominium regime,

(b)amendments to the condominium documents, and

(c)the method of voting.

See forms 24-20 through 24-25, 24-27, 24-28, 24-31, and 24-32.

B.3.c.Lenders.      A review of the condominium documents and the unit owners’ lien documents will indicate if approval is required by the unit owners’ lenders to terminate the condominium regime unless avoidance actions are taken by the association.

i.Condominium Documents Requirements.      Sometimes condominium documents provide lenders with protective provisions that require—

(a)a high percentage (e.g., 100 percent) of lenders (e.g., first lien lienholders) to approve termination of a condominium regime;

(b)lienholders to approve by a high percentage (e.g., 100 percent, 75 percent, or 67 percent) or a majority vote (51 percent) an amendment reducing or elimi­nating requirements protective of lenders’ rights under the condominium doc­uments; or

(c)lienholders to be notified in advance of a proposed termination of the condo­minium regime.

ii.Names.      Review of a title commitment will confirm whether the association’s voting roll is accurate.

iii.Loan Documents.      Some or all of the unit owners’ loan documents may require approval of amendments to the condominium documents’ lender protective provi­sions or the termination of the condominium regime.

B.3.d.Unit Owners.      Review of the title commitment before undertaking a condo­minium termination can indicate the following:

i.Owners.      If unit owners do not match the names of the persons on the associa­tion’s voting roll, the roll will need to be updated to ensure that all owners are included on it and in voting. For example, (a) if there are multiple unit owners, all unit owners listed in the title commitment will need to be included; (b) if a unit owner on the voting roll is married, the spouse’s name will need to be included; and (c) if a unit is owned by an entity, the entity’s proper name will need to be included.

ii.Title Underwriter’s Requirements.      The nature of a record unit owner might require additional documentation to be signed by the unit owner at closing of the sale by the association of the former condominium property, for example—

(a)for an entity owner, a corporate resolution of the entity approving the associ­ation’s condominium termination agreement, or

(b)for an individual owner, a marital affidavit as to whether the record owner is married and required joinder by the non–record owner spouse.

B.4.Prior Efforts.      If the association has considered or sought termination of the condominium regime in the past, obtain a copy of the prior effort’s work product, including the voting practice employed.

B.5.Association Status

B.5.a.Nonprofit Corporation.      If the association is unincorporated, form the associa­tion as a nonprofit corporation and file a certificate of formation required under chapter 82 of the Texas Property Code and the Texas Business Organizations Code.

B.5.b.Existence and Good Standing.      Confirm existence and good standing of the association with the state.

B.5.c.Association Financial Status.      Confirm that no judgments have been taken against the association that have not been satisfied and released. Confirm that there is no lien on association property or a third-party loan to the association coupled with an assignment assessment.

B.6.Contracts with Third Parties

B.6.a.Association.      Determine if the association has contracts with third parties that will survive closing of the sale of the property, for example, with service providers; with the city (e.g., encroachment licenses for overhangs, landscaping in medians or adjoining prop­erty); with master associations governing the property; with leasing agents; or with manage­ment companies. Do any have restrictions on sale without the third party’s consent? Do any require advance notice of sale of property?

B.6.b.Unit Owners.      Determine if unit owners have leases to third parties with terms extending beyond a prospective closing date for the sale of the property, and if so, whether the leases are terminable at the will of the unit owner? An example of a unit owner lease which may extend beyond a prospective closing date is a student housing lease, which will be unlikely to have a landlord right-of-termination provision or which may grant the student a right to extend the lease term to a date beyond a prospective closing date.

B.7.Entitlements.      Are any governmental entitlements for the property implicated by sale of the property, for example, inclusion of protected historic structures into the improvements on the property that either are prohibited by municipal regulation from being demolished or require approval of a city commission to be demolished, in whole or in part?

C.Amendments to Declaration and Bylaws.      Take the following steps to amend the declaration and bylaws to facilitate termination of the condominium.

C.1.Amend Condominium Documents.      Review the existing condominium declara­tion to determine if any provisions need to be amended to facilitate termination of the condo­minium, including, for example, the following.

C.1.a.Condominium Declaration

i.Delete Approval of Mortgagees to Amend Declaration.      Amend the condo­minium declaration to permit amendments without having to obtain approval of mortgagees.

ii.Elect In to Application of Texas Property Code, Chapter 82.      Amend the condo­minium declaration to adopt chapter 82 of the Texas Property Code including specifying that the condominium regime can be terminated on approval by unit owners holding 80 percent or more of the votes.

C.1.b.Bylaws.      Amend the bylaws to address cumbersome or out-of-date meeting requirements.

i.Delete any requirement to publicly record the notice of members’ meetings in advance of those meetings.

ii.Revise attendance “in person” requirements.

iii.Add proxy voting rights.

C.1.c.Charter.      Review the association’s charter to determine if revisions are needed (e.g., any restrictions on amending condominium documents or to terminate the condominium regime).

C.2.Title Company Review.      Obtain the title company’s advance approval of amendments and the process to be employed to amend the condominium documents.

C.3.Prescreen with Owners.      It will be useful to first send out a draft of the decla­ration and bylaw amendments to the unit owners to get their input, and to revise the proposed amendments accordingly, before sending out the amendments to be voted on by the unit own­ers at a special meeting of the members.

C.4.Schedule Members’ Meeting

C.4.a.Types of Notice Required

i.Publicly Record Notice of Meeting.      Some condominium declarations require that the notice scheduling a meeting be recorded in the county clerk’s records for a prescribed number of days. See, for example, form 24-22’s section B. (“Second Set of Amendments”) and the explanation of those amendments in form 24-23’s section B. (“Second Proposed Set of Amendments”).

ii.Notice to Members

(a)Types.      The condominium documents may require any or all of the follow­ing types of notice to be given to unit owners for a members’ meeting to con­sider amendments to the condominium documents: regular mail, certified mail, registered mail (see comment below), overnight service, telefax, email, or personal delivery.

(1)Separate Folders.      Set up a separate folder for each unit owner into which is filed a copy of all notices and correspondence to and from the unit owner, and file memos as to discussions with the unit owner.

(2)Regular Mail.      If notice is specified to be by regular mail, also send by certified mail; obtain a post office stamped proof of mailing to which is attached a copy of the mailing envelope showing address and postage and a copy of the enclosed notice materials.

(3)Certified Mail.      Certified mail should be sent with the following spec­ifications: deliver to the addressee only and require signature of the recipient; obtain a post office stamped proof of mailing to which is attached a copy of the mailing envelope showing address and postage and a copy of the enclosed notice materials; obtain a post office stamped proof of certified mailing (the white slip) to which is attached a copy of the mailing envelope showing address and postage and a copy of the enclosed notice materials, and into which will be filed the proof of delivery (the green card) upon its return by the post office.

(4)Registered Mail.      Note that the post office no longer provides for reg­istered mail.

(5)Overnight Service.      For overnight service, follow a similar process as above to prove sending and receiving of notice.

(6)Telefax.      For telefax, follow a similar process as above to prove send­ing and receiving of notice.

(7)Email.      Email can be employed if provided for in the condominium declaration or bylaws, but note that most unamended first-generation condominium declarations and the bylaws adopted pursuant thereto do not provide for email delivery, as the method was instituted after the adoption of these vintage condominium declarations and bylaws.

(8)Personal Delivery.      If personal delivery is used, make a file copy of the notice materials that are to be delivered to the unit owner, obtain a signed receipt from the recipient, and attach the receipt to the file copy to be kept by the association.

(9)Certificate.      Consideration should be given to supplementing the above listed types of notice with an affidavit by the person undertaking the notice to memorialize the process undertaken.

(b)When Is Notice Effective?      Review the condominium documents to deter­mine if they address when notice to a unit owner is effective, and schedule the members’ meeting for after the passage of any requisite period between effective notice to the unit owners and the members’ meeting.

C.4.b.Voting Roster.      Maintain a voting roster for each notice sent (e.g., name and address of voter and proof of receipt of notice, including a check-off for sending and receipt of the notice).

C.4.c.Materials for Meeting.      Include the following materials in the notice to mem­bers: (i) the notice of the meeting, (ii) a copy of the proposed written amendments, and (iii) an explanation of the proposed amendments.

D.Sales Contract.      Consideration by unit owners of the terms for the sale of the condo­minium property and of amendments to the condominium documents may overlap. In such a case the real estate sales contract can provide a period for the unit owners to amend the condo­minium documents to adopt chapter 82 to govern the approval of the condominium termina­tion process and the approval of the sale to a buyer (“two-approval process”). Form 24-26 contemplates a two-approval process. Note that the second approval, that is, the approval of the sale to a buyer, itself has two steps. First, the board and the prospective buyer negotiate a real estate sales contract with execution by the association as the seller and the prospect as the buyer, subject to the conditions subsequent of both the approval by the unit owners and recording in the county clerk’s real property records of the approval. Second, the unit owners approve the board-recommended termination of the condominium regime with sale to the buyer on the terms of the real estate sales contract to be effective on recording of the approval in the county clerk’s records. The approval is drafted so that it is not effective until it is recorded in the county clerk’s records, and recording is delayed until after the lapse of the buyer’s inspection period without termination of the contract by the buyer. Also good practice is to delay recordation until immediately before undertaking the closing day closing activities.

D.1.Letter of Intent.      Consider entering into a letter of intent before proceeding to a contract. See form 4-33, which can be modified to include additional terms addressing the steps and processes involved in approving condominium document amendments, condo­minium regime termination, and sale of the property.

D.2.Terms of Sale

D.2.a.Title Company

i.Advance Review and Input on Contract.      Have the title company review and pro­vide input on the contract before it is finalized.

ii.Advance Review of Two-Approval Process.      The title company will need to over­see and approve the condominium declaration amendment and condominium ter­mination processes.

D.2.b.Ratification by Unit Owners.      See ; form 24-26’s sections L.1.d. (“TUCA’s Condominium Termination Provisions”) and L.2. (“Condominium Termination Conditions”); and form 24-27 (“Condominium Termination Agreement”), which will become Exhibit F to form 24-26.

i.Appraisal.      See form 24-26’s paragraphs L.1.d.iii. (“Owner’s Sales Proceeds Per­centage per TUCA Appraisal”), L.2.a.ii. (“TUCA Appraisal Not Disapproved by Disapproval Number”), and L.2.b.iv. (“TUCA Appraisal”).

(a)Hiring Appraiser.      Identify and hire an appraiser. Confirm that the appraiser has chapter 82 experience and can testify in the event of litigation. Determine the fees and costs. Review with the appraiser the appraisal concepts to be employed by the appraiser.

(b)“Fair Market Value.”      Determine the method of allocation of the sales price.

(c)Confirm with Title Company.      Have the appraiser obtain approval of its appraisal means from the title company.

ii.Vote by Unit Owners.      See form 24-26’s paragraph L.2.a.i. (“Requisite Number Approve Termination”) and .

(a)Notice to owners

(b)Voting roll

(c)Confirmation of notice

(d)Ballot form

See form 24-27’s Exhibit 3 (“Ratification”).

D.2.c.Leases.      See form 24-26’s paragraph L.9. (“Postclosing Lease to Unit Owner at Closing; Postclosing Subleases”).

i.New Leases Before Closing.      Address leasing by unit owners before closing. For a provision to add to a condominium’s declaration prohibiting new leases from extending beyond a specified period after the closing date of the sale by the associ­ation to the buyer, see section E. of form 24-22.

ii.As of Closing.      Address the status of continuation of unit owner possession after closing and continuation of tenants under leases existing as of closing for a period after closing and vacating units. Set up a process for the buyer to lease former units back to former owners for a period after closing. See form 24-26’s para­graphs L.7.b.iii. (“Postclosing Leases and Subleases”) and L.9. (“Postclosing Lease to Unit Owner at Closing; Postclosing Subleases”).

D.2.d.Termination of Third-Party Contracts.      Regarding the association delivering evidence to the buyer at closing of termination of all relevant third-party contracts, see form 24-26’s item L.7.c.i.(c).

E.Preclosing Process

E.1.Buyer Due Diligence.      See form 24-26’s sections D. and L.5. (both “Inspection Period; Buyer’s Right to Terminate”).

E.1.a.Inspections.      See form 24-26’s paragraph L.5.a. (“Inspections and Investiga­tions”).

i.Inspections of common elements

ii.Inspections of interiors of units

iii.Environmental.      See form 4-2’s paragraph D.5. (“Environmental Assessment”), which will become the same-titled paragraph in form 24-26.

(a)Audit Reports.      Have environmental audit reports addressed to both the buyer and the association as reliance parties.

(b)Likely Hazardous Materials.      Asbestos and lead paint may be present, depending on the age of the subject property.

iv.Inspection Protocols.      See form 24-26’s section L.5.d. (“Protocols”).

(a)Advance notice

(b)Insurance

E.1.b.Entitlements.      See form 24-26’s section L.5.c. (“Buyer Seeking Entitle­ments”).

i.Density

ii.Demolition

iii.Site plan

iv.Building permit

v.Utilities

E.2.Title Approval.      See form 4-2’s section C. (“Title and Survey”), which will become the same-titled section in form 24-26, and form 24-26’s section L.6. (“Title Insur­ance”).

E.2.a.Initial Title Commitment.      See form 4-2’s paragraph C.2. (“Title Commitment; Title Policy”), which will become the same-titled paragraph in form 24-26, and form 24-26’s paragraph L.6.a. (“Title Commitments”).

E.2.b.Updated Title Commitment.      Regarding the title company updating and reissu­ing the title commitment after the unit owners’ ratification of the condominium termination agreement and again before closing, see form 24-26’s paragraph L.6.a. (“Title Commit­ments”).

E.3.Survey Approval.      See form 4-2’s section C.3. (“Survey”), which will become the same-titled section in form 24-26.

E.4.Postclosing Leases.      See form 24-26’s section L.7.b. (“Action by Seller in Connection with Unit Owner Closings”) and paragraph L.9. (“Postclosing Lease to Unit Owner at Closing; Postclosing Subleases”).

F.Closing Process.      See form 24-26’s sections H. and L.7. (both “Closing”).

F.1.Title Company

F.1.a.Review with Title Company

i.Schedule C Requirements for Condominium Termination.      The title company is to confirm approval of the termination process. See form 24-26’s sections L.6.a. (“Title Commitment”) and L.7.a. (“Action by Title Company”).

ii.Schedule C Requirements for Unit Owners.      The title company is to confirm sat­isfaction of each unit’s title issues (A/Js, divorce, deaths and probate, bankrupt­cies). See form 24-26’s sections L.7.a. (“Action by Title Company”) and L.7.b. (“Action by Seller in Connection with Unit Owner Closings”).

F.1.b.Title Underwriter Closing Letter.      Provides title underwriter protections as to closing title company’s actions. See form 24-26’s paragraph L.6.d. (“Insured Closing Let­ters”).

F.1.c.Pro Forma Owner Policy.      See form 24-26’s paragraphs L.6.c. (“Pro Forma Owner’s Policy”) and L.7.a.iii. (“Pro Forma Policy”).

i.Standard Actions.      Standard actions include issuance of typical endorsements: T-19.1 (“Restrictions, Encroachments, Minerals Endorsement—Owner’s Policy”); survey exception emendation; tax proration; deletion of generic “parties in posses­sion” and generic “visible and apparent easement” exceptions. See form 24-26’s paragraph L.6.b. (“Extended Coverage Endorsements”).

ii.Special Actions.      Special actions include deletion of a generic “tenants under leases” exception and replacement with an exception for leases by the buyer as landlord with unit owners as tenants, identified in a rent roll prepared by the buyer and provided to the title company. See form 24-26’s section L.6. (“Title Insur­ance”).

F.1.d.Title Company Actions

i.Record Documents.      See form 24-26’s paragraph L.7.a.i. (“Record Documents”).

ii.Closing Statement.      See form 24-26’s paragraph L.7.a.ii. (“Closing Statement”).

iii.Disbursement of Funds.      See form 24-26’s paragraph L.7.a.vii. (“Disbursement of Funds”).

F.2.Property Closing.      See form 4-2’s section H.3. (“Closing Documents; Title Company Documents”), which will become the same-titled section in form 24-26, and form 24-26’s section L.7. (“Closing”).

F.2.a.Association Documents and Actions

i.Condominium Termination Agreement and Ratifications.      The condominium ter­mination agreement together with the ratifications will be recorded first, before the deed and any other closing documents. See form 24-26’s paragraphs L.3. (“Recor­dation of Condominium Termination Agreement and Ratifications”), L.7.a.i. (“Record Documents”), and L.7.c.i.(a) (regarding the seller delivering the exe­cuted and recorded condominium termination agreement and ratifications).

ii.Deed.      See form 4-2’s section H.3.a. (regarding the seller delivering the warranty deed at closing), which will be incorporated into form 24-26, and form 5-3 (“Spe­cial Warranty Deed”), which will become Exhibit G to form 24-26.

iii.Bill of Sale and Assignment.      See form 5-16 (“Bill of Sale”), which will become Exhibit H to form 24-26.

iv.Assignment of Assumed Contracts and Association Leases.      The “Assignment of Assumed Contracts and Association Leases” will be Exhibit I to form 24-26.

v.Settlement Statement.      See form 24-26’s paragraph L.7.a.ii. (“Closing State­ment”).

vi.Affidavits.      See form 4-2’s section H.3.a. (regarding the seller delivering affida­vits at closing) and Exhibit D (“Notices, Statements, and Certificates”), both of which will be incorporated into form 24-26.

F.2.b.Buyer Documents and Actions

i.Sales Price.      Wire transfer into escrow the closing amount. See form 4-2’s sec­tion H.3.b. (regarding the buyer delivering the purchase price at closing) and para­graph H.3.c. (“Payment of Purchase Price”), both of which will be incorporated into form 24-26.

ii.Settlement Statement.      See form 4-2’s section H.3. (“Closing Documents; Title Company Documents”), which will become the same-titled section in form 24-26, and form 24-26’s section L.7.c.iii. (regarding joint closing documents and actions).

iii.Leases.      See form 24-26’s paragraph L.7.c.ii.(b) (regarding the buyer delivering postclosing leases and subleases).

iv.Affidavits.      See form 4-2’s section H.3.b. (regarding the buyer delivering items at closing), which will be incorporated into form 24-26, and form 24-26’s paragraph L.7.c.ii.(a) (regarding the buyer delivering an affidavit to the title company at clos­ing).

F.3.Unit Owner Closings.      See form 24-26’s section L.7.a. (“Action by Title Com­pany”), section L.7.b. (“Action by Seller in Connection with Unit Owner Closings”), and paragraph L.8. (“Removables”). The title company will set up separate “closings” to be held for each of the unit owners. So if there are one hundred units, there will be at least one hun­dred closings.

F.3.a.Scheduling.      Determine if closings will be “in office” or “by mail.” Review with the owners the time involved and what will be the closing process.

F.3.b.Title Company Standard Documents and Actions.      See form 4-2’s paragraph H.3.d. (“Disbursement of Funds; Recording; Copies”), which will become the same-titled paragraph in form 24-26, and form 24-26’s section L.7. (“Closing”). The title company will take the following actions and have “closing” documents for each of the unit owner closings including the following:

i.Settlement Activities.      See form 4-2’s paragraph H.3.d. (“Disbursement of Funds; Recording; Copies”), which will become the same-titled paragraph in form 24-26, and form 24-26’s section L.7.a. (“Action by Title Company”) and Exhibit K (“Set­tlement Activities with Unit Owners”).

ii.Counterpart unit owner settlement statement

iii.Affidavits

iv.1031s, if any

v.Nonforeign affidavit

vi.Lender and Lien Payoffs.      See form 24-26’s paragraph L.7.a.vi. (“Settlement Activities with Unit Owners”), paragraph L.7.b.ii. (“Mortgage Payoffs”), and paragraph A.2. to Exhibit K (“Lien Payoffs and Releases”).

vii.Wire transfers

G.Postclosing

G.1.Association closeout

G.2.Certificate of abandonment

G.3.Final report to comptroller