Home Buying in 11232>Question Details

Jimmy Sidz, Other/Just Looking in 10309

What is the difference between a Co-Op and a Condo?

Asked by Jimmy Sidz, 10309 Sun Dec 26, 2010

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Simply put- when you purchase a unit in a Co- Op building you acquire shares in a Cooperative (hence 'co-op'...) and your ownership is limited to a portion of the ownership of the building not the actual real estate or the specific unit which you’ll occupy. When you purchase a condo, you physically own everything from the studs in, including the ‘air’ between the floor and the ceiling. As it relates to the costs associated with such a purchase, in a co-op normally you taxes are going to be significantly lower, while your assessments much higher. The last major difference between buying a condo or a unit in a co-op, is that in a co-op you actually have to go through a board committee that decides whether or not you ‘fit’ the building and if they would allow you to buy there or not- a real nice and legal way to discriminate.
Web Reference: http://www.dreamtown.com
1 vote Thank Flag Link Wed Dec 29, 2010
Hi Jimmy,
A condominium isn't a certain type of building or architecture. It can take many different shapes and forms. Primarily, it's ownership of an individual share in an owner's association. The definition of a "unit" is defined in the governing documents. It can be anything from a commercial or industrial building to a boat dock. You'll have a deed to the unit, which you will own, and an interest in the common elements. You'll pay association dues and abide by the rules and restrictions set forth in the CC&Rs. A standard mortgage loan can be used to purchase a condominium.

A cooperative is housing that is collectively owned and managed by its occupants. Members do not own their individual units, instead they own shares in a not-for-profit corporation which holds title to the property and grants proprietary leases to unit occupants. The lease grants permanent right to occupy the unit and to use the common elements of the property according to the cooperative bylaws, rules and regulations. Instead of the typical "mortgage" obtained to purchase a condominium unit for which the unit itself is collateral, co-op purchasers obtain a "share loan", with their membership certificate or stock share and occupancy agreement as collateral. Only a handful of lenders in the DC area finance co-ops. For lender references, or more information about condos or co-ops, you can email me at susanisaacsrealtor@ gmail.com.

For more on co-ops:
1 vote Thank Flag Link Sun Dec 26, 2010
I'm known as the co-op and condo queen in my office, feel free to check out my website that explains the differences and payment structure.

If you have any questions or you're interested in buying or selling a co-op or condo feel free to call or email me.
0 votes Thank Flag Link Tue Jan 4, 2011
Jimmy, you have already gotten the basics, but I would like to add a few things, and correct some others. Dream Town mentioned something about the difference in taxes. That might be the case in Illinois, and I will assume he is familiar with the relatively few co-op in Chicago, which I am not and have no idea how they work. However, In NYC, I would not necessarily say whether taxes are any different, it is just that in a condo, you have property taxes attributable specifically to your unit, and most people end up escrowing them with the bank. Common Charges on a condo are paid separately to the condo association, generally through a managing agent. In a co-op, you pay a pro-rata share of all expenses, including the property taxes on the entire building. This is included in part of your maintenance. That is one of the reasons why a portion of your maintenance is tax deductible. The other portion that is deductible is any interest on the underlying mortgage that the co-op may have. There is no underlying mortgage on a condo building.
One more thing to keep in mind, you can get the STAR exemption for your portion of property taxes on a co-op.
0 votes Thank Flag Link Wed Dec 29, 2010
Hello and happy holidays! I have sold many co-ops over the years and I have the answer you're looking for to your questions. Click on the link below for a detailed answer.

-Below Find Out The Differences From Purchasing A Co-op Vs Condo

Difference Between Co-op and Condo
0 votes Thank Flag Link Tue Dec 28, 2010
i feel that the mail difference is :-
in a condo you own a piece of land
in a co-op you own pape/sharesr.
0 votes Thank Flag Link Sun Dec 26, 2010
.Dear Jimmy Sidz:

Read my blog entry regarding the difference between co-ops and condos here: http://tinyurl.com/qh8zle

I have several co-ops and condos listed in the area you are looking. If I can be of further assistance, please let me know.

Mitchell S. Feldman
Madison Estates & Properties, Inc.
Office: (718) 645-1665
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Sun Dec 26, 2010
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 Sun Dec 26, 2010
In a cooperative building containing the 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, but they can vary, depending on what expenses the fee covers.
0 votes Thank Flag Link Sun Dec 26, 2010
Condominiums, in real estate, are simply defined as apartment units, within a building, which are individually available for sale. When purchasing a condominium, the condo owner has full access and rights to the condo plus the common shared areas of the building and property. With no provisions for subleasing implied, condominiums are considered a more popular real estate purchase over the Co-op. Essentially, when purchasing a condominium, it is similar to a home purchase, in that tax, insurance and repairs are the responsibility of the condominium owner.

In contrast to condominiums, a Co-op, available for purchase, simply involves taking a piece of ownership in an entire apartment building. Under a Co-op, the building is usually financed with an underlying mortgage and the Cooperative Corporation's Board of Directors maintains control of all units and the building as a whole. As a Co-op real estate owner, ownership is limited to shares in the building with monthly payment attributed to the underlying mortgage of the building.

In both Co-op and condominiums, there are, generally, required monthly maintenance fees which are paid in addition to the monthly real estate, or mortgage, payment. This maintenance fee is paid directly to the building owner to ensure common areas of the building are repaired and maintained. It is, however, the responsibility of the individual homeowner to make necessary repairs within the specifically individually owned condominium or Co-op.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Sun Dec 26, 2010
They are two different forms of ownership.

In a condo, a condo owner generally owns his/her own unit. Everything within the four walls of the unit belong to the owner. He/she can sell the property, paint the walls, install new appliances (there may be some limitations), and so on. The condo owner has a separate mortgage for his property. In a condo, there are also "common areas"--such as the lobby--which are jointly owned by all the members of the condo association. The association is made up of the condo owners.

In a coop, a coop owner has the right to occupy a unit within a building. The structure is entirely owned by the coop--a corporation. The owner purchases the right--through shares--to occupy a unit. Historically, this has made financing a coop somewhat more difficult since the mortgage for an individual unit isn't secured (can't be secured) by the unit itself. Often, though, there are a limited number of lenders who are willing to provide mortgages for coop purchases. Also, since a coop owner doesn't own his/her individual unit, the coop board generally has the right to approve/disapprove transfers of its stock. Bluntly put, the coop board can approve/disapprove sales.

Hope that helps.
0 votes Thank Flag Link Sun Dec 26, 2010
Don Tepper, Real Estate Pro in Burke, VA
In Condo we have a Deed to Real propery, in a Co-op we own shares of a corporation, as simple as that.
0 votes Thank Flag Link Sun Dec 26, 2010
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