Coop vs Condo in NYC what's the difference?

Amarante

Sun, Sep 30 2018, 5:47 pm

In a coop, the building is owned by a corporation and you get what is called a proprietary lease for your unit. Because of the structure of ownership, coops often have very strict reviews of prospective buyers both from a financial standpoint as well as seeing whether you are the kind of owner they feel is compatible with the building. Because of the restrictions on selling, mortgages for coops are somewhat different than for a condo and often the Board of Directors will require much higher down payment. The proprietary lease will often have restrictions including limits on whether you can sublease your unit. These kinds of restrictions are either good or bad - it's nice to have a building in which undesirable people are not permitted; it's nice to own in a building in which other homeowners are financially stable because if someone stops paying maintenance, the other owners have to make up the difference; it's nice to live in a building which doesn't have renters. However, depending on circumstances, some people find these restrictions prohibitive in terms of passing muster. In the really elite buildings (typically in Manhattan) there were often restrictions on "undesirable" people including Jews and persons of color. Now it is more likely that some buildings don't want celebrities or people who might cause too much attention.

In a condo, you own your individual unit as a fee simple and you also own a proportionate share of the common area - I.e. the lobby and hallways. You can sell a condo freely since the building has no right to review prospective buyers for any reason.

Both types of ownership would have monthly assessments to cover costs of running the building. However, sometimes a coop will have a mortgage on the building and so a percentage of the monthly assessment might be deductible by an individual homeowner.

Last edited by Amarante on Sun, Sep 30 2018, 5:51 pm; edited 1 time in total

amother

Sapphire

Wed, Oct 03 2018, 8:54 pm

Amarante wrote:

My question is now, what if the building is knocked down which one of them do you lose the right to the property?

Amarante

Wed, Oct 03 2018, 9:04 pm

amother wrote:

My question is now, what if the building is knocked down which one of them do you lose the right to the property?

I don't understand your question.

In both cases, the building is owned by the residents - it's the form of ownership that differs.

You would have to look at the specific Bylaws and Governing Documents of the building to find out the procedure for sales of the entire building. In my experience, it's extremely rare for a condo or coop to be sold in its entirety because each individual has property rights. If the building is destroyed by fire for example, the Governing Documents provide how proceeds are distributed and/or how homeowners are assessed for repairs or rebuilding.

amother

Sapphire

Wed, Oct 03 2018, 9:09 pm

Amarante wrote:

My father says he thinks that a condo if there is a fire chas veshalom then one loses the right to the property is that true or is it a condo?

amother

Sapphire

Wed, Oct 03 2018, 9:34 pm

Amarante wrote:

He is wrong. You always own the percentage of ownership that you owned. If the building was destroyed you would collect your percentage of the insurance proceeds. You would also collect your insurance for your unit as you own everything inside the walls and you insure that with condo owners insurance.

With a coop its the same rule? Or is it a leased piece of property?

Amarante

Wed, Oct 03 2018, 9:40 pm

You own shares in the building that owns the coop.

Your brother knows nothing about property law. If this is really an issue, you or he need to educate yourself. Why are you asking these questions. If you already own the property, you should read your governing documents. If you are planning to buy, you should familiarize you self with your rights and obligations.