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Condos and Co-ops in New York City

It is important to know your needs and goals ahead of time and know that   thattt ththtatthatthe building you chose meets them!!! 

Manhattan Properties > Condominiums (Condos)

A condominium is real property, best described like owning a home where you own the physical floors, walls, etc. The owner of a condo holds title by deed of the apartment and a percentage of the building’s common areas. Owning a condominium can be much more flexible than owning a coop, as condos could be far less restrictive and far less invasive to the buyer than coops.

Generally, but not always, condos allow subleases with far fewer restrictions, as well as foreign and corporate ownership and easier financing criteria. Condo owners pay property taxes to the city and common charges to the condominium.

Traditional financing can be obtained for condominium purchases with only a 10% down payment in most cases for U.S. residents, but that varies, and goes higher depending on lending institutions and borrower and a higher % down payment for foreign nationals (non-U.S. citizens). The fewer restrictions, low down payment requirements, easy access to financing, and less inspection into the buyer's finances, work history and personal life, does increase the marketability and salebility of condos and townhouses.

Due to the physically lower number of condominiums to coops and condops which are approximately 15% of the available inventory, there is a higher demand for fewer property, and due to the higher degree of marketability, less inspection into the buyer's personal history and finances by the boards, Condos are generally more expensive than coops. Despite the higher purchase price the ease and convenience in buying and selling condos makes them a very attractive investment as a home or investment vehicle for personal, foreign and corporate purchasers.

Manhattan Properties > Cooperatives (Coops)

Potential owners (and tenants, if allowed by that building) must be interviewed by the coop board and present formal applications and required documentation in order to be approved by that board. The process of closing takes approximately 60 to 90 days. While condos require only an application, buyers and renters are not interviewed.

It’s important to note coops are and can be an excellent choice for a buyer and their specific needs and a great means to save money. To increase the probability to get board approval and be allowed to buy the apartment, it is highly important for the buyer to match their goals, criteria and financial means with the coop buildings that fit their needs. Coops vary from building to building.

Cooperatives (or Coop) are buildings which are owned by a corporation and that corporation sells shares of stock in that specific corporation which the buyers then become a shareholder in and in turn sign a long-term proprietary lease for the unit they are living in.

The proprietary lease allows a shareholder to live in that specific apartment for that coop building. The larger the apartment, the higher the floor, the better the views etc, the more the number of shares will be given to that unit. The shareholder will pay their share of maintenance costs based on that amount of shares given to that unit. The more the shares, the higher the maintenance.

Maintenance charges are paid to the corporation typically through the managing agent for the coop and include all of the building expenses, including property taxes and mortgage interest if the corporation holds a mortgage on the building.

Coops make up rules and bylaws they feel are in the best interest of that coop (building) and the shareholders are required to adhere to those rules. The larger number of coops in Manhattan require shareholders to occupy their apartments as their primary residence, so the buyer cannot buy it as a vacation home that may be their second or third home, etc. Only the shareholder may be allowed to use and occupy the apartment as well, so any other person staying in the apartment would not be allowed without board approval first. Most coops also have rules sharply limiting or prohibiting subleases, therefore investors and non-U.S. citizens should not be looking at coops as a viable investment. Knowing your goals and objectives and matching them to the right buildings so you can get board approval plus be happy owning and using the apartment is everything!

Financing requirements of a coop varies from coop to coop. The coop sets the maximum loan amount for that building which can be financed. More liberal coops are typically 25% down and then move up to 50% and 75% or even 100% down payment of the value of the property. The percentage down depends on the building.

Although coops all vary, there are a few exceptions, but among the majority of coops these common coop rules apply: no corporate ownership, no foreign ownership, and no renting or subleasing upon the first day of ownership. So know your needs and goals ahead of time and know  that the building you chose meets them.

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