Co-op vs Condo

If you plan to buy an apartment in NYC you may have to deal with the question of "Condo or Co-op?". These are your two options for apartment purchases. Physically, they are the same - you can't tell by standing in an apartment whether it's a condo or a co-op. But the processes of buying a condo versus buying a co-op are quite different. It is important that you'll know the differences between them before you start looking for an apartment. It might save you time, energy and sweat.

What is a "co-operative" apartment?

A co-operative building is owned by an apartment corporation. When you buy a co-operative apartment, you buy the right to live in your apartment by purchasing shares in a corporation. You own "shares" in a corporation entitling you to a long-term "proprietary lease" which is valid if you pay your monthly maintenance and comply with the regulations of the corporation. The corporation pays the total amount of the building's mortgage, real estate tax, salaries and other expenses for the upkeep of the building. The tenant-owner, in turn, pays a share of these expenses as determined by the number of shares the tenant owns in the corporation. The size of the apartment determines the number of shares owned. A managing agent, known as the "the superintendent" or sometimes called a live-in manager, is hired by the corporation to run the building. Several employees are also hired by the corporation to protect and secure the safety of the building and apartments, and a Board of Directors" is elected by all the tenant-owners to supervise and control the management of the corporation. A building is legally set up to be a "corporation" because it does not derive a profit from its operation. Co-ops are usually far more exclusive than condos and owners reserve the right to keep it that way. Some co-ops are so exclusive that they demand that all apartments be purchased outright for cash.

What is a "condominium" apartment?

When you buy a condominium you buy a piece of real property. You own the actual, physical apartment. You get a deed for buying your property as if you were buying a house. You pay your own mortgage to the bank, your taxes to the government and your common charges to the building. There is an elected condo board, but the board's control is limited to the common aspects of the building. The board does not have the right to restrict you from selling your apartment or subletting it if you choose so. Because there are no restrictions on who can buy into the building, you may find that the demographics of your neighbors is regularly in flux. Condominium tend to be more expensive to buy than cooperative apartments in NYC because a condominium may be especially advantageous. The condominium offers more flexibility, but you must remember that there are many more co-operatives available in NYC than condominiums.