WHAT IS A CO-OP?

Cooperative apartments, commonly known as co-ops, are a unique type of residential real estate ownership arrangement. In a co-op, instead of owning an individual unit, you purchase shares in the corporation that owns the building. These shares entitle you to a long-term proprietary lease on a specific unit in that building.

Co-ops usually have a board of directors made up of shareholders who are elected by other shareholders. The board is responsible for managing the building, including setting rules, enforcing regulations, and making decisions about maintenance, repairs, and capital improvements.

One main characteristic of a co-op is the strict screening process for potential shareholders. The board has the right to reject applicants for any reason it deems necessary, including financial stability, employment history, and personal background. This helps ensure a cohesive community and financial stability of the co-op.

Another unique feature of co-ops is the monthly maintenance fee. This fee covers your share of the building's operating expenses, such as taxes, utilities, staff salaries, and ongoing maintenance. The amount of the monthly fee is typically determined by the size of the unit you own and your ownership percentage of the building.

In conclusion, co-ops offer a distinct form of ownership and community living that is not found in other types of residential real estate. Understanding the co-op's underlying structure, financial obligations, and board dynamics is essential for potential buyers who are considering this type of ownership.