With a condo, you are purchasing real property and receive a deed to the home. However, you share ownership of the exterior and of the common areas, such as the lobby, stairwells, pool, clubhouse, and green space.
There are monthly common charges that cover the maintenance of these elements. You pay your property taxes separately. A board of managers governs the condominium.
Generally, you are allowed to rent out your unit but with some condos, you may have to live there for a year or so, and some condo boards want to approve your tenant. Pets are usually allowed, and some buildings have weight or breed restrictions.
If you purchase a co-op (or co-operative), you are considered a shareholder of the building, and instead of a deed, you receive a proprietary lease and a stock certificate.
The corporation is made up of all the residents in the building. You are entitled to occupy a unit in the building as long as you own the stock.
You pay a monthly maintenance fee which includes your pro rata share of the building’s property taxes, co-op operating costs, and maintenance of the common areas.
Part of the monthly maintenance is tax deductible. We have found that co-ops are generally the most affordable form of ownership in Westchester County.
Board approval is required when purchasing a co-op unless the home is a sponsor unit, owned by the original owner or corporation that converted rental units into co-ops. There is a minimum down payment required, that can range from 10% to 50% down.
Co-ops tend to have more restrictions than condominiums.
Some may include:
* No renting allowed or renting for a finite period with prior owner occupancy.
* Strict pet policies – Many co-ops will not allow dogs and those that allow them may have weight and breed restrictions.
You will be required to submit a co-op board package that includes background, employment, and financial information. Many buildings require a personal interview with the co-op board.
Having an agent who understands the difference between the two types of ownership will help guide you accordingly so you can find the right home.