Do you know the difference between living in a condo, an apartment or a co-op? Though they might be similar, co-ops operate on a very different level when it comes to buying. Here’s how they differ from other options:
1. YOU BUY INTO A CORPORATION. you don’t own real property. When purchasing a condo or apartment you are buying that specific unit all for yourself. But when you buy into a co-op, you don’t own the actual unit. Instead, you purchase shares of a corporation that will grant you exclusive use of the unit you will live in.
2. CO-OPS MAY COST LESS PER SQUARE FOOT. Although co-ops could cost less per square foot than condos, the monthly fees are usually higher with co-ops. Those fees go toward anything fro the building mortgage and taxes to on-site amenities, security and maintenance.
3. YOU WILL NEED TO PLAY BY DIFFERENT RULES.
Since you don’t own the unit you are living in you will have to abide by the rules of the whole organization. Typically, you cant sublet or rent out your unit, you might have pet restrictions, and there may be rules for how you can decorate or use shared areas of the building. Co-op rules may even limit what appliances and feature you can add to your unit. Always fead the fine print.
Another important difference: Large co-ops are run by a board of directors that will have the final say on who can purchase stock and live in the building. Smaller co-ops are run jointly by all residents. If you are interested in buying into a co-op, prepare to provide a package containing financial documentation, character references and other information to be reviewed.