Most people have heard of condominiums, but many are not aware of how different a cooperative housing association can be. Please consult professional legal advice, as the following is only offered as information:
a. Co-ops are based on mutual ownership and are still considered a form of homeownership. It’s like everyone being a landlord as well as a tenant in the total complex. Each unit represents a certain number of shares in a corporation that actually owns the building(s). To join a co-op, a buyer becomes a shareholder and receives a certificate for the shares, as well as a proprietary lease authorizing them to live in a specific building unit.
b. When buying a condominium, the homeowner owns their individual unit.
a. To sell or buy co-op shares (for the unit as well as its proprietary lease), a designated Board of Trustees must interview the applicants. If the Board is confident that the applicants meet the financial requirements, the transaction is approved and the buyer continues the purchasing process. No transfers or sales of shares are permitted without the approval of the Board.
b. To sell a condominium unit, the buyer and seller work with each other directly or through representatives. The association does not need to be involved in the process.
a. Co-ops have rules and regulations to follow for smooth running of the association. Depending on the structure and property itself, restrictions may be placed on certain things, such as approved appliances and floor coverings. The rules are created over time, keeping in mind the pros and cons of specific issues that occur in building units versus a single family home. Co-op shareholders agree to follow the rules for the benefit of the whole association.
b. Condominiums also may have rules created over time, but they are specific to the issues of individual condominium unit owners.