A condo is short for a condominium. This is real property whereby the purchaser is issued a deed representing the property plus a percentage of the common area and will pay real property taxes on both the unit as well as taxes on their percentage of the common areas. Additionally, there is usuually a monthly common charge for the maintenance of the common area. The condo holder can have the taxes included with their mortgage payments, much like a single family homeowner would. Condos may be sold as real property, to any buyer that the seller chooses, at any price that the seller is wiling to accept, without any Board of Directors Approval.
A co-op is short for a cooperative corporation. This is treated in many ways as real property, but it is not. When purchasing a co-op, the purchaser is will receive on closing shares in the corporation plus a proprietary lease for that unit. The shares represent a percentage of the total amount of corporate shares, usually based on the unit's square footage. The unit holder's percentage of property taxes on the entire building are included in the maintenance charges. Many times the maintenance charges will also include the heat (oil or gas), gas for cooking, water, landscaping and snow removal in addition to the unit holder's percentage of the entire building's mortgage principle & interest. To purchase a co-op, the prospective purchaser will complete an application , along with bank statements, references, prospective occupants to the unit, a mortgage committment and whatever application and move-in fees are required by the co-op Board and management company. The Board generally requires a minimum cash payment of 10% and may require 20% of the purchase price. The Board and management company will decide whether a prospective unit purchaser will be permitted to make the purchase . This permission may be denied without cause.
If you have any further questions, please don't hesitate to contact me.
Arlynn B. Palmer, ESQ, CBR, SRES
Associate Broker, Daniel Gale Sotheby's International Realty