Many New York City residents know the difference between a cooperative and a condominium; but most may not realize all of the work that goes on behind the scenes of these types of housing units -- especially co-ops -- that allows the buildings to properly function.
With a condominium, a potential buyer is actually acquiring real estate. Their condo is their property -- though they still have to pay a monthly condo fee to the collective building. Condos are far less common in New York City than cooperatives, which compose roughly three-quarters of the Manhattan housing market.
Co-ops function in a different way to condos. The entire co-op is owned by a company, which is bought into by people who lease individual units in the co-op. The "renters" actually buy stock in the company and, in return, they get to live in the co-op -- so they trade obtaining actual property for a stake in the whole co-op.
Co-ops have a managing board, the members of which have tremendous responsibilities and must make difficult decisions. They can approve or reject tenants; they hold regular meetings, which delve into a variety of topics; they must compose myriad documents and reports for clerical purposes; they have to hold elections for their board; and, of course, like any housing property, co-ops have their fair share of disputes, which the board must properly deal with.
Given the breadth and depth of issues that a co-op board handles, it behooves these entities to consult an experienced real estate attorney when decisions are being made. Such legal aid can ensure the board that they are acting within their rights and they are upholding the laws that apply to them.
Source: Huffington Post, "Co-op vs. Condo: What You Need To Know," Greg Jacobs, June 28, 2013