The difference between a condominium and a co-op|
Both are forms of property ownership. In a cooperative building, the owners do not buy their individual apartments. Instead, they buy shares in the coporation that owns the building and real estate, and those shares are allocated to a particular apartment. Share owners receive a long-term proprietary lease for the apartment. Usually, there is a mortgage loan on the building itself, which is paid by the cooperative corporation. The cooperative that owns the building must pay the property taxes, the building mortgage expenses, fuel charges, payroll and other costs of operating the building. These expenses are referred to as maintenance charges, and the buyer of shares for an apartment pays a portion of the expenses, which are tax deductible to various degrees depending upon each individual development. The building is managed by a board of directors elected by the owners of shares, and the board is governed by corporate by-laws. The rights and obligations of the share owner (apartment owner) are spelled out in the lease and by-laws.
A condominium is a form of ownership in which the buyer purchases an apartment itself plus an individual interest, with other owners of apartments, in the common areas such as the land, lobby, stairway, hallways, heating and electrical systems and recreational facilities. There is no intermediate corporation and no proprietary lease. The apartment owners are responsible for a proportionate share of the cost of maintaining common area expenses, and generally pay their own utilities, taxes, etc. However most building repairs and maintenance are covered by the common charges. A condominium is governed by a board of managers elected by the apartment owners. Its functions are the same as a board of directors, and its authority to operate is known as a condominium declaration. There are also detailed by-laws providing for the conduct of the affairs of the condominium.