The Differences between a Condominium (Condo) and a Cooperative (Co-op) and How to Decide which is Best for You to Purchase…

The Differences between a Condominium (Condo) and a Cooperative (Co-op) and How to Decide which is Best for You to Purchase…

by Michael McDonald

Purchasing a condominium (Condo), or a cooperative (co-op), is a decision that should not be taken lightly.  In fact, much like purchasing a house, the decision is one that not only affects you as a homeowner short term, but also long term.  It is very important that the person is well-advised on the differences between the two, and informed on which would be best for him or her.

            Below is a condensed description of each.

Condominium (Condo) - Individual Ownership of some aspects, but co-ownership of other areas.  The person gains ownership of his or her own unit (or condo) and common areas through a Deed.  The owner of this Deed has rights and responsibilities of the maintenance and upkeep of common areas such as elevators, pools, roof, etc. (usually paid through a maintenance fee).  The person must also pay Real Estate taxes.  Ownership can be transferred by Real Estate Sale, or it can be given to a person(s) by way of a Last Will and Testament.  Basically when you are ready to sell, you can set the price, refuse offers, etc.

Cooperative (Co-op) -  The person buys stocks into the corporation which owns the Co-op and receives shares of the corporation.  No Deed Is obtained.  Instead the person receives the right to be a tenant and occupy one of the units.  The lease is typically prepared for a long number of years, not month to month, or year to year.  The rent paid by the person is a combination of monthly maintenance fees split amongst all, real estate taxes, and sometimes debt service.   Since the person does not have a Deed, or own a specific unit, he or she is unable to decide what to the sell unit for, or leave it to a person(s) through a Last Will and Testament.

             It is important to take the following into consideration when deciding on a specific condo, or co-op depending on your own personal financial, familial, situation.  Also, don’t be afraid to think of some extra amenities you may wish for.  With extra time and a good real estate agent, you most likely will be able to find a place you can call home that has this amenity. 

Financial

Cost of Real Estate Taxes (condo) or share of real estate taxes to be paid (co-op)

Cost of Maintenance Fees to be Paid

Familial

Do you have children?  How close are the Elementary, Middle, and High Schools in proximity to where you are looking to move?  

How many children, adults will be living with you? Do you need 2+ Bathrooms?

Extras

Is central air a requirement of yours? 

Fireplace?

Outdoor patio?

Do you like to swim? Is there a pool on premise?

Do you golf? Where is closest Golf Course? Is it a public one? Is there a break on fees if I move in to a particular condo, co-op?

Do you play tennis?  Is there a tennis court on premise?

Is there an Exercise Room on premise?

Do you own an expensive or classic car? Is a garage necessary?

These are just a few of the many questions that one should explore when deciding on where to live.  Having a good real estate agent on your side can make all the difference.  If you have further questions on the difference between condos and co-ops, or want to discuss what option is best for you, please feel free to contact me by email: mrmikemcd@gmail.com, or by phone: 732-429-8707.