Coops vs. Condos

New York City Real Estate is likely the most complex real estate market in the world. This is due to the various types of properties that exist in the city. Whereas most other real estate markets consist primarily of single family homes, New York City has a vast array of property types: Cooperatives, Condominiums, Townhouses, and Multi-Family homes. It is important that buyers choose the correct type of property to consider for purchase early on in the process.

A cooperative unit (“coop”) is a unit in a building owned by a corporation (the cooperative). Since the building is owned by a business entity, you won’t own real property when buying a coop. Instead, you own shares of the corporation that grant you the right to live in the property. This ownership (stock) and right to live in the property (proprietary lease) are issued to you by the corporation. Coops are traditionally more difficult to buy into, and the process includes completing a board package and board interview. Roughly 70% of New York City’s Real Estate sales market is coops.

A condominium unit (“condo”) is a unit that is sold as real property within a condominium building. It is true ownership of real property that means you own the property, and have both the title to the property and a deed which conveys title transfer to you as the new owner. Most new construction buildings are condominium buildings. Condos are more rare and more desirable, thus commanding a price premium over comparable coop units.

For both coops and condos, you have to pay monthly fees. If you own a coop, you pay the cooperative a monthly maintenance fee that already includes your share of the Real Estate taxes for the property. In the case of condos, you pay a monthly common charge, which goes towards maintaining the building’s exterior and common areas, and a separate Real Estate property tax paid directly to the city.

In addition to condos and coops, there are also Condop (condo+coop) buildings. Condop buildings are typically condo buildings with an additional commercial portion. They tend to operate under condo rules, however it depends on each individual condop building.

Traditionally, there have been distinct differences between condos and coops. More recently however, condos have become more strict (requiring board packages and interviews, having restrictive rental policies, etc.) while some coops have gotten less strict to improve their reputation of being difficult to buy into.

Can’t decide between purchasing a condo or a coop? Give me a call!

The information provided herein are not to be deemed legal advice and provide general information that is usually applicable to real estate transactions in New York City. Please consult with your attorney regarding the specifics of your transaction.