Home Buying in Laguna Woods>Question Details

Carla, Home Buyer in Laguna Woods, CA

What is a Stock Cooperative?

Asked by Carla, Laguna Woods, CA Fri Oct 7, 2011

Help the community by answering this question:


Purchasing into a stock cooperative involves the transfer of a "license" to occupy a lot or particular airspace, and shares of stock in the corporation that owns the land and hires an accountant to handle administration, and a manager to handle the maintenance and operation of the common areas and or other real property owned by the corporation.

Financing, while not handled by most conventional lenders, is available in many established stock cooperative developments. Typically, even if a buyer is paying cash, they still have to be creditworthy to pass vetting by the corporation board members.

One notable Stock Cooperative in my area of Los Angeles county is Malibou Lake Mountain Club. Malibou Lake has a rich history of Hollywood film production, and has a thriving business as a wedding (and other parties) venue.
1 vote Thank Flag Link Sat Jul 21, 2012
A housing cooperative is a legal entity (corporation) that owns real estate. The corporation is membership based, with membership granted by way of a stock certificate for occupancy of a particular unit. When purchasing a co-op in Laguna Woods, the stock certificate is turned into the management company by the seller through escrow. A new stock certificate is issued to the buyer for the unit that is being occupied. In LWV, there are some advantages to owning a co-op in that there are certain maintenance items that are taken care of by the management company such as periodical replacement of appliances, kitchen/bath countertops, certain flooring and certain plumbing fixtures; with some restrictions. Co-op properties in Laguna Woods Village cannot be rented for more than a total of six months in any given twelve month period of time.


Call Vera 949. 510-0929 or Marie 949. 929-6834 with questions. SELLING in Laguna Woods Village for 15+ years!
0 votes Thank Flag Link Wed Jul 11, 2012
Do you know of any lender in Northern California for Stock Cooperative?
Flag Mon Nov 17, 2014
Do you know of any lenders who refinance those properties. Ricky, Broker Claremont Ca rickymm65@gmail.com
Flag Fri Jan 17, 2014
Stock Cooperatives can now be rented for more than six months in Laguna Woods Village. They are now treated the same as Condo's.
Flag Thu Jan 2, 2014
Bad, bad, bad idea. I was involved in a number of SC's in Florida in '04 & '05 whereby I purchased stock options to buy into several Manufactured Home parks for potential investment after the fearsome four hurricanes devastated most of Florida and especially MH communities..

Biggest mistake I ever made. Albeit the $3 to $5k shares I purchased allowed me a very affordable entry into some pretty nice MH communities it was a big step backwards. Why and How? Because, in Florida anyway, what you pay for a share you have to sell tor the same amount when you go to sell your MH.

So I spend $5k for a share, install a brand new home for $50k and hold it for five years as a rental. Then when I sell it my share goes along with it for the original $5k adjusted downward for inflation I've actually lost money on my share. Dah!

Add to that there is absolutely no leverage-ability with this type of investment inasmuch as you cannot borrow against it i.e. a 2nd mortgage. You're basically held hostage to your Co Op until you sell it. If you can't make a profit on your option, which is the faux equivalent to fee simple deeded ownership, then your're left with a slowly depreciating asset in much the same way as you would be if you were merely renting a space in a MH park.

I've been an investor and developer in manufactured housing for over 20 years and have never lost money on a MH investment. Luckily I escaped from Florida with a very modest profit albeit a profit. This is by far the worst scenario you could ever get involved with whether an investor or an owner/occupier. Just my humble opinion.
0 votes Thank Flag Link Sat Oct 8, 2011
Hi Carla,

A housing co-op is people who together own or control the building(s) in which they live, instead of buying "real" property, you buy stock, or a membership, and in the case of Laguna Woods Village, in a cooperative Nonprofit Mutual Benefit Corporation. This corporation owns the building, land and in some cases any common areas. The corporation also carries a blanket insurance policy that covers damage to the cooperative property from hazards such as fire or water. Additional homeowner's insurance is recommended for all members to cover personal contents inside individual units. Listed below is the monthly association fee for a Laguna Woods Village coop and what it covers.

Cooperative – Approximately $528 is the basic monthly Homeowners Assessment Fee. Property taxes are added to the monthly association fee. Each manor must be computed individually for the total monthly fee. The basic fee includes the following:

1. Building insurance (fire and damage excluding earthquake damage).
2. Cable television.
3. Water.
4. Trash pickup.
5. Exterior building maintenance (painting & roof care).
6. Grounds maintenance.
7. Appliance repair and replacement (based on HOA discretion).

Resident pays electricity and telephone.

Right now the prices are very good on Laguna Woods Village coops. Any property that enters escrow after January 1, 2012 will be subject to a $1500 facilities fee. If you see something you like, I would recommend buying it before the new fee goes into effect. Please e-mail me if you have any additional questions. Lisa.Mills@century21.com Thanks Lisa Mills
0 votes Thank Flag Link Fri Oct 7, 2011
As Emily stated "Normally you have to pay all Cash for a Co-op property." The primary reason is financing on a co-op is difficult to find. You may be able to pay all cash. When it comes time to sell you will be severely limited with the amount of buyers that are also have the ability to pay cash.

Happy funding, Rudi
Web Reference: http://www.umboc.com
0 votes Thank Flag Link Fri Oct 7, 2011
This is the Real Estate version of the answer:

Stock cooperative
A multi-unit property owned by a corporation in which individual ownership is acquired through purchase of stock and exclusive right of occupancy to a portion of the property is acquired through a proprietary lease
If your looking to purchase in one of the handful of communities that have this, it is really just another legal layer and is really just owned by a corporation versus a private owner, and requires full disclosing. When you go thru escrow, this type of property has some additional paperwork, and its pretty straight forward.

When you go to sell, again it is just additional paperwork. Not a big deal at all!!! Good Luck!!!

Nikki Patnoe
Prudential California Realty
(949) 370-8710
Web Reference: http://www.nikkioc.clm
0 votes Thank Flag Link Fri Oct 7, 2011
A Stock Cooperative is: is a legal entity—usually a corporation—that owns real estate, consisting of one or more residential buildings. (This is one type of housing tenure.) Each shareholder in the legal entity is granted the right to occupy one housing unit, sometimes subject to an occupancy agreement, which is similar to a lease. The occupancy agreement specifies the co-op's rules.

Normally you have to pay all Cash for a Co-op property. Are you looking at Leisure World?

Source: wikipedia

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0 votes Thank Flag Link Fri Oct 7, 2011
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