Buying into a co-op versus a condo
What’s the difference between a condo and a co-op?
Real estate terms aren’t always clear and understandable. If you’re thinking of buying a condo or co-op, I strongly recommend working closely with aregistered real estate salesperson who can answer your questions, and explain the meaning of certain terms.
And when you find the salesperson that’s right for you, make sure you’re open and honest about your budget and the dwelling or ownership model that’s the best fit for your lifestyle.
You should also hire a lawyer who knows real estate law, and get their advice, before you submit an offer.
Properties can be classified by their physical characteristics, or by how they’re owned. One popular ownership model is a condominium, or condo, that involves owning your unit within a building, but not owning the land or any common areas outside the unit. You may also purchase a parking space and storage unit, if they are available. When you buy a condo, you’re expected to pay monthly condo fees for services such as security and maintenance, and to follow the condominium corporation’s bylaws, which may prevent you from owning a pet, renting out your unit, or even hanging the wrong window coverings.
It’s important to understand the condo corporation’s bylaws and financial status — and also to know if the seller is up to date on their fees. That information will provide clues that you may be facing higher fees or be stuck with any outstanding seller’s debts payable to the condominium corporation. Ask your lawyer to take a good look at a condo’s status certificate, which contains information about the physical and financial state of the building before you make an offer. The cost of a status certificate is limited by law to $100.
The big difference between a condominium and a co-operative, or co-op, is what you actually own. Like condominium ownership, buying an interest in a cooperative involves purchasing shares in the corporation that owns your building. Unlike a condo, where you own a specific unit in a building, with a co-op you own shares in a corporation that entitles you to use an available unit in the building under the terms of a lease with the corporation.
Should you decide to buy into a co-op, remember that major decisions are made by the coop’s board of directors. You will need the board’s approval to buy shares and move in. If the board approves your purchase, and you comply with the coop’s bylaws governing the admission of members, you will become a member of the cooperative.
The big difference between a condominium and a co-operative, or co-op is what you actually own