Frequently Asked Questions

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• A housing cooperative or "co-op" is a type of residential housing option that is actually a corporation whereby the owners do not own their units outright. 
• Each resident is a shareholder in the corporation based in part on the relative size of the unit that they live in.
• When you buy into a co-op, you’re not purchasing a piece of property – rather, you’re personally buying shares in a nonprofit corporation that allows you to live in the residence.
• Everyone who resides on premises enjoys access to certain common areas of the building (which, like the interior and exterior of the property, are owned by the corporation). 
• All residents share in the expenses and responsibility for maintaining the upkeep of the common property.
• A co-op is governed by a board of directors (composed of residents) who will establish a set of by-laws that outline rules for inhabiting and respectfully cohabiting the property. 
• Every shareholder gets a say in how the overall property will be run.

• The main advantage of purchasing a co-op is that they are often cheaper to buy than a condo.
• Co-ops are typically more financially stable.
• The instance of foreclosure is rare.
• Co-ops are typically going to have a higher owner occupancy rate.
• You can typically get better square footage for your money.
• If you are looking for a primary home that you would like to live in for several years, a co-op can be a wonderful option.
• Owning a co-op apartment may feel similar to renting in that you’ll find that you aren’t responsible for major items of upkeep that take place beyond the boundaries of your own unit.
• You will probably have better insight into your neighbors because co-op boards require detailed and extensive financial records and character references from applicants, you’ll at least have some idea who they are and some sense of any interests or values that they may share.
• After contacting a qualified tax professional, you may be allowed to deduct interest on your loan for your share of the property, and your share of the interest on the blanket mortgage that the co-op holds for the building. 

• Most co-ops require a substantial down payment or all cash buy-in.
• The rules for renting/subletting your co-op unit are often quite restrictive.
• Your loan options are restricted because there are a limited number of lenders who do co-op loans.
• Co-ops have monthly fees that tend to be higher, based on what expenses that these fees cover. 
• If you are looking to buy a home as an investment property that you plan to rent/sublet, then buying a co-op is probably not the right property to choose. 
• If you need to purchase or sell a home very quickly (i.e. in less than a week) a co-op is not going to be the best choice.
• Cooperatives have a limited buying pool because by-laws incorporated into co-op housing residences can place significant restrictions on shareholders’ ability to resell their shares. 

When you buy a condo, 

• You’re effectively buying ownership of an individual unit in the building in which you’ll reside. 
• You hold the deed to the property. 
• You get to benefit from any equity or additional value that accrues in the property.
• You may enjoy a relative measure of flexibility when it comes to renovating, upgrading, or performing DIY (do-it-yourself) updates to your condo unit. 
• Purchasing and acquiring financing for a condo is generally easier.
• Association fees usually are for community property upkeep expenses and EXCLUDE unit mortgage/property tax fees – thereby monthly fees are usually significantly lower than co-op charges.
  
   

When buy into a co-op, 

• You’re effectively buying shares in the corporation that owns the overall property.
• You’re paying for the right to live in a specific unit of a building, 
• You don’t actually own this unit outright – and may have fewer options when it comes to making changes, additions or renovations to the residence. 
• It tends to involve a more demanding application process and may involve being interviewed by the co-op board and financially vetted before you’re approved to purchase shares.
• Association fees are for community property upkeep expenses and INCLUDE unit mortgage/property tax fees – thereby monthly fees are usually significantly higher than condo charges.

• A co-op is a nonprofit organization.
• A co-op has a board of directors and shareholders as well. 
• Board of directors are elected shareholders.
• Shareholders (those who buy into the co-op) own a portion of the company that owns the building in which they reside. 
• The co-op board is responsible for setting policies and making decisions that are in the co-op’s best interest. 
• Policies handed down by the board, which govern life within the co-op, are generally referred to as by-laws – and these by-laws commonly come in the form of rules and restrictions. For instance, members of the co-op may be prevented from renting/subletting their apartment or require that all new shareholders seeking to buy into the co-op (aka to buy out an existing resident) must be preapproved by the board in advance.