Co-op vs. Condo: The Great NYC Divide

Approximately 70% of the owned apartments in New York City are Co-ops, a structure nearly unique to the city. When you "buy" a co-op, you are not buying real property. You are buying shares in a corporation that owns the building, and those shares come with a proprietary lease to live in a specific unit.

The Co-op Board

Because you are joining a corporation, the existing shareholders (represented by the Board) have immense power to accept or reject you. They will demand to see every detail of your financial life, including two years of tax returns, letters of reference, and proof of post-closing liquidity (often requiring 1-2 years of maintenance payments in cash).

They can reject you for any non-discriminatory reason, and they do not have to tell you why.

Condos: Real Property

Condos operate like normal real estate. You own the walls. Condos only have a "right of first refusal," meaning if the board doesn't want you to buy it, they have to buy it themselves (which they never do). Consequently, condos trade at a 15-30% premium over equivalent co-ops due to the ease of purchase and lack of strict subletting rules.

Maintenance vs. Common Charges

Co-op monthly fees are called "Maintenance" and Condo fees are "Common Charges." Co-op maintenance is generally higher because it includes the building's underlying mortgage and the building's property taxes (which the corporation pays as a whole). Because of this, a portion of co-op maintenance is tax-deductible.

Calculate Effective Co-op Maintenance