Condominiums and Co-Ops
Welcome to the Condominiums and Co-Ops section of FindLaw's Real Estate Center. Condominiums and co-operatives (co-ops) are "common interest" properties that offer ownership interests that are different from those associated with traditional home ownership. "Co-ops" are very similar to condominiums or apartments. Most condominiums are owned by corporations or a single landlord, but co-ops are owned by the residents. The residents, therefore, have more say in how the property is managed and the rules by which residents must abide. This section provides practical and legal information on condominiums and co-ops, including the types of co-op arrangements that exist and how to buy or sell an interest in a co-op.
Basics of Condominiums
Condominiums (or simply "condos") are individually owned, just like houses and mobile homes, but are part of a larger community with shared interests and amenities. The individually owned units typically are sections of a single building or otherwise closely grouped together, but the exterior (outside walls, roof, etc.) are maintained by a homeowners' association (HOA). The HOA is responsible for shared areas, such as courtyards, landscaping, paved roads, mailboxes, and recreation facilities. Homeowners pay monthly dues to cover these costs.
Some condominiums are actually converted apartments or townhouses (and vice-versa), the key difference being the fact that ownership is limited to the interior of each unit.
Basics of Co-Ops
Co-ops often resemble apartments and townhouses but have a different ownership scheme. The main difference is that "owners" do not actually own their unit, but rather holds shares in the corporation that owns the development. The amount of shares purchased is based on the size of the unit, and they are paid for with a loan (not a traditional mortgage). However, this loan is very similar to a mortgage. Residents are referred to as "shareholders" and also pay a monthly maintenance fee to pay for property upkeep, maintenance, and property taxes (similar to HOA dues).
As with most rental properties, co-op shareholders generally cannot make improvements, additions, or other major changes to the unit since they are not owners of the individual unit. However, co-opt usually have on-site maintenance staff for repairs and maintenance.
Condos and Co-Ops: Advantages and Disadvantages
The main alternatives to purchasing a condo or buying shares in a co-op are to rent an apartment or buy a standalone home. There's no one option that works for everyone, but condos and co-ops do have certain advantages that may appeal to some, including:
- Affordability - Condos and co-ops ease the burden of maintaining one's home, compared to the ongoing and often-unexpected costs of owning a house
- Stability - Unlike a rental unit, owning a condo or shares in a co-op provides more stability because people are less likely to move and more likely to take care of their home
But a condo or co-op may not be for everyone. The disadvantages of condos and co-ops include the following:
- Ongoing Costs - In addition to the monthly mortgage or loan payment, condo and co-op owners must also pay either HOA fees or a monthly maintenance fee
- Restrictions - Most condos restrict what you can and cannot do to the outside portion of your unit, while co-ops are even more restrictive (including the interior)
This section includes articles and resources to help you understand the legal and financial implications of condo and co-op living. Click on a link below.