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Co-Operative Buildings: A housing cooperative, also known as a “co-op,” is a legal entity—usually a corporation—that owns real estate, consisting of one or more residential buildings. (This is one type of housing tenure.) Each shareholder in the legal entity is granted the right to occupy one housing unit and is sometimes subject to an occupancy agreement,similar to a lease, which specifies the co-op's rules. “Cooperative” is also used to describe a non-share capital co-op model in which fee-paying members obtain the right to occupy a bedroom and share the communal resources of a house that is owned by a cooperative organization. A shareholder in a co-op does not own real estate, but, rather, a share of a legal entity that does own real estate. Cooperative ownership is distinct from that of condominiums where residents purchase and own individual units instead of shares and, as a result, have little say regarding who may occupy other units. Because of this, most jurisdictions have developed separate legislation, similar to laws that regulate companies, to regulate how co-ops are operated and the rights and obligations of shareholders.


The considerations when buying a cooperative are: The Board of Directors has the right to “approve” or "reject" any potential owner. The board, elected by all of the tenant-owners of the co-op, interviews all prospective owners. It has the responsibility of protecting the interests of all tenant-owners by selecting well-qualified candidates.


  1. Determine if the quality of services and the security of the building are kept at high standards.
  2. Ask if ortions of the monthly maintenance are tax deductible. Each building has its own tax structure, but all co-ops offer a tax advantage. Shareholders can deduct their portion of the building's real estate taxes, as well as their proportionate share of the interest on the building's mortgage.
  3. The amount of money that may be financed is determined by each cooperative. Some buildings require substantial down payments. Generally speaking, in Manhattan prospective purchasers should be prepared to "put down" at least 20 to 50% of the purchase price (depending on the building) when purchasing a cooperative apartment.
  4. Subleasing a co-op must be approved by the Board of Directors of the cooperative. Each corporation has its own rules, and they should be examined if a potential owner intends to sublet.


With this in mind, it is important to remember that co-ops are the norm here in Manhattan, not the exception. However, before beginning a search for a cooperative apartment, think about the financing limitations and the application and interview process.



Condominium Buildings: A condominium, or condo, is the form of housing tenure and other real property where a specified part of a piece of real estate (usually of an apartment house) is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent ownership of the whole piece. Colloquially, the term is often used to refer to the unit itself in place of the word "apartment". A condominium may be simply defined as an "apartment" that the resident "owns" as opposed to rents.


Condominiums are attractive for a variety of reasons:


  1. Financing the purchase of a condominium apartment is governed by the financial markets not a board of directors and thereby much more flexible than in a cooperative. Generally, a buyer can finance up to 90% of the purchase price.
  2. An approval process is usually required, and most condo boards are requiring application packages with financial disclosure. Generally, however, the requirements are not as rigorous as the co-op boards. A board meeting may or may not be required. The length of time for approval varies from building to building, but it is usually not as long as a co-op approval process.
  3. There is greater flexibility in sub-leasing your apartment. This makes condominiums the better choice for an investment property.
  4. They are the ideal choice for non-U.S. citizens or for those with their assets held outside of the United States given that co-ops are unlikely to approve a buyer whose funds are not in the U.S.