A co-op apartment is a type of housing tenure where the building is owned by a legal entity, usually a cooperative or a corporation, and the residents own shares in that entity rather than owning the individual units themselves. When someone buys into a co-op, they are buying shares in a nonprofit corporation that allows them to live in the residence. The key features of a co-op apartment include:
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Ownership: When someone buys a co-op apartment, they are not purchasing a piece of property, but rather they are personally buying shares in a nonprofit corporation that allows them to live in the residence.
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Proprietary Lease: Each owner is granted the right to occupy a specific apartment, which is called the "proprietary lease" for that apartment. The proprietary lease and shares are a package deal, meaning that the buyer gets shares in the overall building plus the right to live in the apartment they bought.
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Approval Process: Prospective buyers must be approved by the co-op board after submitting a detailed application and going through a rigorous interview process.
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Maintenance Fees: Co-op residents split the property taxes and maintenance fees.
Co-op apartments are commonly found in big cities such as New York City, where they make up about 75% of apartment buildings. They offer some advantages over condos, such as lower prices and less responsibility for maintenance needs, but they also have their drawbacks, such as a lengthy approval process and higher monthly fees.
