The New York City housing market is a unique and often challenging one. One type of housing that is more common here than in many cities is the cooperative, or "co-op." Even though co-op residents outnumber condo residents in New York City, condos are gaining via new construction.
Sometimes, people confuse co-ops with condominiums, but they're very different. It's essential for both home buyers, those interested in investing in these properties and people involved in the management of them to understand the differences.
Most people in other parts of the country are more familiar with condos than co-ops. Condos are purchased, just as you would purchase a house, generally with the help of a mortgage. Condo owners pay property taxes just as other home owners do. Condo owners also pay a fee each month to cover the maintenance of common areas like the pool, walkways and amenities.
Co-ops, which comprise about three-fourths of the housing market in Manhattan, are owned by corporations. People who live in a co-op building don't own their apartments. They own shares of the corporation. Generally, the number of shares is based on how large the apartment is.
In order to buy into a co-op, you have to be approved by the co-op board. Some New York City co-op boards are notoriously famous for being extremely selective about whom they will and won't accept. Therefore, not only can buying an apartment in a co-op be a challenge, but selling it can be as well.
Just as with a condo, those who live in co-ops pay monthly fees. However, in addition to the upkeep of the building, those fees cover expenses that condo owners pay themselves, including utilities and real estate taxes.
It's essential for both co-op and condo boards in New York City to have experienced legal counsel. Experienced condo and co-op attorneys can help ensure that the boards are complying with the many laws that apply to them, be available for meetings and elections and also help in the resolution of issues with residents.
Source: Huffington Post, "Co-Op vs. Condo: What You Need to Know," Greg Jacobs, accessed June 09, 2016