What is the difference between a co-op and a condominium?

Co-op (Cooperative) and condo (Condominium) are two different forms of property ownership, commonly found in the real estate market. Here's an overview of the key differences between co-ops and condos:

Co-op (Cooperative):

1. Ownership Structure: In a co-op, the building is owned by a corporation or cooperative housing corporation. When you buy a co-op unit, you are purchasing shares in the corporation rather than directly owning the physical unit itself.

2. Shareholder Status: As a co-op owner, you become a shareholder in the corporation and receive a proprietary lease or occupancy agreement that gives you the right to occupy a specific unit within the building.

3. Governance and Control: Co-op buildings are typically governed by a board of directors elected by the shareholders. The board has the authority to set rules, regulations, and policies regarding the building and its occupants.

4. Approval Process: Purchasing a co-op unit often involves a more rigorous approval process compared to condos. The co-op board reviews potential buyers and can impose certain requirements, such as financial qualifications, personal interviews, and reference checks.

5. Monthly Fees: Co-op owners pay a monthly fee known as a maintenance fee. This fee covers the building's operating expenses, property taxes, underlying mortgage (if any), and other shared costs. The maintenance fee is typically higher than the condo association fees but may be tax-deductible since the shareholder doesn't directly pay property taxes.

6. Financing: Co-op financing is typically more restrictive compared to condos. Lenders may have stricter requirements and higher down payment percentages for co-op purchases.

Condo (Condominium):

1. Ownership Structure: With a condo, you own the individual unit outright, including the interior space, while the common areas and building are collectively owned and managed by a condo association.

2. Individual Title: Condo owners receive a deed or title to their specific unit, granting them ownership rights and responsibilities for that unit.

3. Association and Governance: Condos are managed by a condo association, which consists of unit owners. The association is responsible for managing and maintaining the common areas, enforcing rules and regulations, and collecting condo fees.

4. Approval Process: The approval process for purchasing a condo unit is typically less stringent compared to co-ops. Condo associations generally have fewer restrictions and may not have the same level of oversight or control over potential buyers.

5. Monthly Fees: Condo owners pay monthly fees known as condo fees or maintenance fees. These fees cover the maintenance and upkeep of the common areas, building insurance, amenities, and other shared expenses.

6. Financing: Condo financing is generally more accessible compared to co-ops. Condo purchases can qualify for traditional mortgage loans, similar to single-family homes, as the buyer owns the unit outright.

It's important to note that the specific rules, regulations, and fees can vary between different co-op and condo properties. It's advisable to review the governing documents, financials, and consult with a real estate professional or attorney to understand the details and implications of ownership in a specific co-op or condo community.