Co-op land-leasing to itself?

fire your lawyer immediately

That's quite a jump, "looking into buying" to being in contract and coughing up 10% without knowing what the story was and whether you could get a loan.

There'd be no point to a land-owning co-op leasing the land to itself.

Please just tell us which co-op it is.

(1) As to your question, something isn't right I suspect with your understanding of the exact arrangement.
(2) Please explain, so others can learn from your experience, how you signed a contract without understanding all this before hand. Did you have a lawyer look at everything before you signed? Did the attorney perform due diligence prior to you signing?
(3) Do you have a mortgage contingency clause in the contract you signed?

What apartment building?

I'm also curious as to how this happened. Details, barts. Details!

Yep, deets pls.

Didn't the seller's broker disclose anything about this?

Yeah the lawyer we're using hasn't been great. She said she knew it was a land lease from the beginning but didn't think it was a big enough deal to bring it up. It was only after we got the contract and tried to get a mortgage that the banks had problems with it (they didn't see anything during the pre-approval process). The seller's agent also didn't have a great response, saying that Battery Park apartments don't have any trouble for this (but they're a totally different situation with the gov't owning their land and guaranteeing to renew leases on it in the future).

I'm not sure what prompted the lawyer to dig deeper to find out about the co-op owning the land lease. She finally got the management company to provide more information and write something for the bank. We were already getting a contract for another place when she found this out, so now we're trying to back out of that and get back to this place. But again, I'm not sure why the management company didn't think to clarify this sooner.