LRoe, Home Buyer in Utica, MI

Can someone tell me what a cooperative is? I posted this question earlier but, I don't see it anyplace. Thanks!

Asked by LRoe, Utica, MI Tue Jul 27, 2010

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Simply put, the traditional housing co-op involves the formation of a corporation for the purpose of acquiring title to a multi-unit building and, in turn, leasing individual units (apartments) to the shareholders of the corporation; whereas condominium ownership involves acquiring title to individual apartments or units. In fact, condominium ownership is, for most practical purposes, only one form of cooperative housing and, like the co-op, must include provisions for management and maintenance of the building(s) and common areas, usually dictated by an elected Board of Managers, in the case of a condominium, and a Board of Directors in the case of a co-op. The condo advantage of individual unit ownership can be compared to the benefit of being able to choose your neighbors in a co-op setting, where the application process is very often quite selective. In the sale of a condo, once a price is agreed upon, the deal is done; whereas the sale of a co-op requires approval by the Board of Directors—which can be (and often is) withheld based upon arbitrary selection criteria—with no recourse to the buyer or seller if the sale is not approved.
Co-op ownership represents an interest (i.e. stock) in realty; condo ownership is actual ownership of realty. Price differences reflect demographic and geographic distinctions. You decide what’s best for you.
0 votes Thank Flag Link Tue Jul 27, 2010
Thank you for the clarity.

Leslie
0 votes Thank Flag Link Tue Jul 27, 2010
Leslie: Sometimes the terms Co-op, Cooperative and Condominium are interchanged when in fact they have different meanings.

The terms "co-op" and "'cooperative" are short for "cooperative housing project".

In a cooperative the building containing the individual but connected by common wall residential units or apartments is owned by a "cooperative housing corporation".

"In a condominium, each unit owner owns an individual apartment in fee simple. In addition, the buyer owns an undivided interest in the common elements such as the exterior walls, roof, pool and other recreational areas."

Both condo and co-op owners have monthly maintenance fees to pay.
Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Tue Jul 27, 2010
Ownership is by "shares". You live in a specific dwelling, but own shares in the whole "corporation". Which means you must pay cash for your home - you cannot get a mortgage because there is no deed.
0 votes Thank Flag Link Tue Jul 27, 2010
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