Co-op

Type of Ownership - Own shares in a corporation that owns the building. Proprietary Lease establishes occupancy terms. There is no deed or recording of sale information.

Condo

Type of Ownership - The deed is recorded at the county clerk. It is transferable, like any other property

Co-op

Board Approval - The Board, usually consisting of elected residents, co-op owners, that accept or reject prospective owners or tenants. There is no appeal. Board may or may not charge an application fee, typical fees range from $200 to $500 and are non-refundable.


Condo

Board Approval - Almost never required

Co-op

Maintenance - Co-op owners pay a monthly maintenance fee that usually consists of real estate taxes, general building maintenance and loan payments on the underlying property mortgage, commonly taken when the building was converted to a Co-op from an apartment building. In most instances up to 60% of the maintenance is tax deductible.


Condo

Common Charges - Condo owners pay a monthly fee that consists of basic common area building maintenance. Generally not tax deductible.

Co-op

Real Estate Taxes - Usually included in monthly maintenance fee. Some Co-ops have abatements that do run out and will increase taxes later on.

Condo

Real Estate Taxes - Each Condo owner pays tax on their unit.

Co-op

Coop Attorney - A Lawyer will handle the closing, transfer documents and legal matters for the co-op.

Condo

Condo Attorney - Usually does not exist

Co-op

Financing - Most co-ops will have strict financing restrictions (down payment minimum, income minimum, etc.).

Condo

Financing - The only restrictions are lender required.

Co-op

Sublet or Renting - Co-op Boards require prior Board approval. Most Boards will not permit subletting or renting.

Condo

Sublet or Renting - Usually there are no restrictions.

Co-op

Sale - Requires Board approval of the buyer. Most Co-ops have a transfer fee or flip tax that each Co-op seller must pay when they sell.

Condo

Sale - Usually no approval required or Condo fees required.

When financing a co-op property, there are usually a list of approved title companies that will write the title insurance.

Co-op Liability - shared by all

Condo Liability - either by the association or the individual condo owner responsible for the occurrence, not shared equally.

Co-op No ownership of "real property" therefore there is no Mortgage Tax on financing (this is very applicable in New York City where mortgage tax is almost 2% of the loan amount).

Condo Ownership of "real property" and therefore the borrower must pay mortgage tax.

The majority of lenders will allow condo financing in almost any of the lower 48 states, however co-op mortgages are generally limited to areas with high cooperative housing density, such as New York, New Jersey, Washington DC, etc.

 

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