Belmont Chambers Cooperative

Coop Housing since 1985

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The Cooperative’s Financial Structure and Shareholders Equity



Cooperative Permanent Financial Structure


The Cooperative Corporation holds the deed to the building with a primary or blanket mortgage to Boston Private Bank. There are two other secondary mortgages to the Symphony Area Renaissance Trust (SART), each dating from 1988. These are called the 4th and 5th Mortgage loans based on their original priority. To the extent necessary to adequately fund SART’s needs relating to Belmont Chambers, a portion of the principal only of the 4th mortgage may be recast and made payable by Belmont Chambers over a reasonable term in accord with an Agreement entered with SART in July 2018. This 4th mortgage is otherwise subject to renewal for successive fifteen year terms, up to a total of seventy years, provided certain renewal conditions are met. The 5th mortgage is for a term of seventy years. Both the 4th and 5th mortgages would, with exception of certain extraordinary occurrences, most of which are typically found in mortgage documents, and in a limited way on account of the SART funding through the 4th mortgage as described above, only become payable prior to maturity or renewal if the Cooperative is in breach of its covenants and agreements primarily intended to preserve the building as a limited equity cooperative.

Market Value and Owner/Shareholder Equity


The equity in the building is represented by the Cooperative Corporation’s shares. Because of the covenants and the mortgages, and a Right of First Refusal held by SART, it is unlikely that the building would be sold on the open market, and so the notion of a market value is academic to the operation of the Cooperative. The maximum resale price of the Cooperative shares is limited by a formula (limited equity) to approximately a 5% annual increase. Practically speaking, however, the actual transfer price of the Cooperative’s shares is limited by available financing and the income limits imposed on applicants.

Applicant Due Diligence


The foregoing is just an attempt to broadly summarize certain aspects of the Cooperative’s financial structure. A purchaser should, with his/her attorney, always review the actual documents, available on request from the Cooperative and in some instances on-line in the Suffolk Registry of Deeds. If there is a conflict between the terms of the actual documents and this summary, the terms of the actual documents shall control.