What is the difference between a condo and a co-op?
Question Details: My son is buying a co-op in NY and I don't understand what that is exactly.
A condominium ("condo") is a form of real estate ownership in which individual units of a larger complex are sold. You purchase a unit and own everything from their walls inward. You along with the other homeowners have shared rights to the common areas, such as the hallways, elevators, pools, club houses, etc. Maintenance of these areas is the responsibility of the condo association. Every owner owns a share of interest in the association, plus an obligation to pay monthly dues or special assessments for larger maintenance problems. A cooperative ("co-op")apartment building is owned by a not-for-profit corporation. As a member of a co-op, you would not own real estate, you would instead own stock in the corporation that owns the building and all the apartments and you would lease your apartment from the corporation. Ownership of stock shares entitles you the right to live in a specific unit and a vote in matters concerning the cooperative as a whole. As a general rule, the larger the apartment the more votes you have. Cooperatives elect a board of representatives, which handles issues and enforces the bylaws of the co-op. You must pay a monthly fee, which goes towards paying the underlying mortgage for the entire co-op building and covers maintenance fees, insurance, real estate taxes, some utilities, and the salaries of any building staff.