Buyers who aren’t quite ready or able to purchase a single-family home will often find themselves choosing between a co-op or a condo. Both have their benefits, but it’s important to understand the distinctions. While they may seem similar, there are very real differences in terms of ownership and responsibilities that buyers need to know before making a purchase. Also, because the ownership structures of condos and co-ops are vastly different, all the financial and legal matters of buying one will dramatically differ, too.

Condos are pretty straightforward. In a condominium, your unit and a percentage of the building’s common areas (known as the “common elements”) belong to you. Typically, a board is in place to run the building’s condo association and manage the property. Condo boards are fairly hands off when it comes to what you do with your property—remodeling the interior, for instance, or putting it on the market and selling it.

In a cooperative (co-op) owners, also referred to as shareholders, don’t own the unit that they live in. As shareholders, they collectively own shares (or stock) in a corporation that owns the building. A proprietary lease enables a shareholder to occupy an individual unit within the building. The co-op’s bylaws and the proprietary lease describe the responsibilities of the shareholders, as well as obligations and duties of the association. Co-op boards typically hold a lot of power.

We hope that this information is helpful to you in differentiating between condominiums and co-ops, and deciding which type of community best meets your needs. If you have any additional questions about this topic, or real estate in general, please don’t hesitate to give us a call!