Showing posts with label Cooperatives. Show all posts
Showing posts with label Cooperatives. Show all posts

Tuesday, July 6, 2021

Condominium vs. Co-operative: What’s the Difference?

Condominium vs. Co-operative: What’s the Difference?

 Being a homeowner can be irksome and can take the fun out of homeownership itself.  If that’s the case, it might be time to make a move to either a condominium (condo) or co-operative (co-op).

 Condos and co-ops offer the benefit of not having to handle all of the routine upkeep you get in a house, but, as with everything in life, there a pros and cons to both.

 What is a co-op?

 First, please understand that co-ops are unique as far as ownership is concerned. Co-ops are different from condominiums and other residential arrangements because they aren’t considered “real property.” They are “interests in real property.” When you buy into a co-op you are buying shares in a corporation which owns the land and building.  You ownership in the co-op corporation entitles you to an apartment or unit usually embodied in a proprietary lease. But that’s not the only difference between a co-op and condo.

 The basic differences:

 Ownership

 Condo: Buying a condo means you own the real estate, including an interest in common areas.  Those common areas can be lawns, the swimming pool, or the parking garage.  There is no approval process when you buy your condo, and you don’t get a chance to pick your neighbors.

 Co-op: When you buy into a co-op apartment, you’re buying shares that entitle you to a portion of the building. A co-op board will have to approve you in as a new owner.  Proceedings, in the vast majority of cases are not subject review.  When you sell your co-op, the buyer has to go through the same procedures you did when you bought.

 Fees and expenses

 Condo: Condos charge maintenance fees, usually on a monthly basis. This covers maintenance costs for the building’s common areas.  They can include expenses ranging from lawn maintenance, pool upkeep, snow removal and certain routine maintenance that all buildings need.  See below about real estate taxes and mortgages.

 Co-op: Co-ops will also charge fees, but they are often higher in a co-op and sometimes include items like utilities. They will include a proportionate share of the building’s mortgage and real estate taxes.  See below.

 Keep in mind maintenance fees for condos and co-ops may increase over time.

 Cost

 Condo: Condos usually cost more to buy than a co-op, but you have more flexibility with your investment. It’s usually easier to sell or lease out a condo.

 Co-op: While co-ops will have higher fees, the initial cost of buying into a co-op is usually cheaper than a condo. However, it is almost impossible to rent out your co-op apartment.

 Property taxes

 Condo: Condos are individually owned, so owners are taxed separately just as they would be in a single-family home.

 Co-op: Co-ops are considered a single property, with a single property tax assessment that is split among the owners and usually included in the maintenance fee. Property taxes are typically lower on co-ops than on condos.

 Tax deductions

 Condo: If you own a condo, the mortgage interest and property/real estate taxes are deductible – just like a home.

 Co-op: Co-op residents can deduct their share of property taxes and mortgage interest.

 Disclaimer:

The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Vested Land Services LLC and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided. 

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!


For your real estate purchase or mortgage refinance or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
@vestedland
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Tuesday, April 23, 2013

Condo and Coop - what's the difference between them

Cooperatives and Condominiums, Coop or Condo, they go by several names, is a legal form of property ownership with big differences between them.  Here's an informative article from Realty Times that you can fnd here.  Abstracts follow.
The general public often confuses condominiums with cooperatives. In reality, as far as living standards go, there are few differences. However, from a legal - and financing - point of view, there are major differences.
There are many definitions of cooperatives, but the one I like best is that a cooperative is a multi-unit apartment building, in which each resident has an interest in the entire building, and a lease (or contract or share of stock) enabling the owner to occupy a particular apartment unit within the building.
If you own a condominium, you actually own your entire apartment, as well as a percentage of the common areas (called the "common elements"). A cooperative owner -often called a shareholder -- does not own the unit. In fact, you could call such owner a "tenant".
Perhaps the most important distinction between a condominium and a cooperative is that most cooperative associations require that a prospective purchaser be approved by a membership committee comprised of current cooperative owners.
Remember that each state has different regulatory laws for coops and condos.  Before purchasing either, we recommend that you consult an attorney with real estate experience.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. We are the title insurance agent that does it all for you.
 
For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow AT vested.com
Sphere: Related Content