Definitions: Co-op, Condo, Condop, Townhouse & House
Co-operatives, or co-ops comprise approximately 75-80% of New York City’s real estate market. When purchasing a cooperative apartment, one purchases shares of stock in a corporation that owns the building and possibly the land beneath. A stock certificate representing the purchased shares and a proprietary lease giving the right to occupy the apartment are conveyed at closing.
The size of the apartment and its amenities determine the number of allocated shares, which therefore determines the amount of maintenance. Maintenance fees cover the upkeep of common areas, staff salaries, as well as payment of real estate taxes and interest on any underlying building mortgage.
A Board of Directors, whose duties are to conduct the business of the corporation and oversee the management company of the building, is elected from among the shareholders. Typically, the Board reviews the application of each prospective shareholder or lessee and presides over a personal interview prior to approving any purchase or lease. The Board has the right to approve or deny any applicant without cause.
Most co-ops require shareholders to occupy their apartments as primary residences; however, normally an allowance is made for one or two years of subletting. A prospective lessor is required to submit a formal application and personally interview with the Board for its approval.
If you are renting in a co-op, you may also be subject to approval by the Board.
CONDOMINIUMThe ownership of a condominium apartment is similar to the ownership of real property. A purchaser of a condo takes title by deed for not only the apartment but also a percentage of the building’s common areas. Each owner pays property taxes to the city and common charges to the Board of Managers for their individual units. Real estate taxes are deductible, however common charges are not.
The Board of Managers is elected by the condo residents to oversee building operations and enforcement of the “house rules.” The board uses the common charges to pay employees, as well as repair and improve the building. Lessors should be prepared to submit an application to the Board to receive approval. Estimated time for accepted offer to leasing: 10-30 days to lease.
CONDOPBy definition, a condop is a residential cooperative where the ground floor (typically commercial units) is converted into a separate condominium owned by either an outside investor or the original sponsor of the building. Because the owner of the condo is not the owner of the co-op, the co-op does not receive the benefit from the condo income.
TOWNHOUSE & HOUSEA purchaser of a Townhouse or house receives “fee simple” ownership of real property. The owner is responsible for payment of real estate taxes and maintenance and is solely responsible for approving the sale or lease of the property.
