Fiona, Home Buyer in Brooklyn Heights, Br...

is it wise to buy a coop conversion to condo apartment?

Asked by Fiona, Brooklyn Heights, Brooklyn, NY Wed Jun 16, 2010

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Anna Brocco’s answer
It's a personal decision, based on the type of ownership that is most appealing to you. Generally, 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.
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