Alice's Tips
Homeowner Tips - Condo vs. Co-op Differences
Other tips: Home Staging | Environmental Concerns
| Condominium | Cooperative Apartment (Co-op) |
|---|---|
| Deed ownership to unit and undivided interest in common elements. | Ownership of stock or corporation owning building with right to a lease to a designated unit. |
| Unit owner may finance and refinance his unit with mortgage. | Cooperator may finance and refinance his stock ownership and lease with loan secured by pledge of stock and lease as collateral. Called personal loan (may think and call it a mortgage). |
| Condominium cannot mortgage common elements. | Cooperator may finance and refinance his stock ownership and lease with loan secured by pledge of stock and lease as collateral. Called personal loan (may think and call it a mortgage). |
| Condominium Board of Managers has right to first refusal of match offer to purchase or lease unit. Most never exercise it. | Cooperative apartment corporation can mortgage building. Called underlying mortgage (in addition to buyer tenant's personal loan). |
| Failure of unit owner to pay common charges increases costs to other unit owners for operating expenses - no risk of foreclosure to other unit owners. | Failure of cooperator to pay maintenance (rent) increases costs to other unit owners for operating expenses and debt service on underlying mortgage - risk of foreclosure on entire building. |
| Condominium may foreclose on individual unit for failure to pay common charges. | Apartment corporation foreclose on cooperator's apartment for failure to pay maintenance. |
| Units separately assessed for real estate taxes - each unit owner pays his own real estate taxes and mortgage. | Entire building assessed as a whole - cooperator's maintenance used to pay portion of real estate taxes and underlying mortgage. |
| Each unit owner deducts real estate taxes and mortgage interest paid directly by him. | Each cooperator deducts his proportionate share of real estate taxes and interest on underlying mortgage paid as part of his maintenance - also, deducts interest on individual cooperative apartment loan paid directly by him. |
| On new condos, buyers may be locked into a specific bank or two. On re-sales, most will make a loan. Rates are comparable to a home. | Interest rates and sometimes points are higher because it's a personal loan. |