TYPES OF HOMEOWNERSHIP IN NYC
Cooperative
In Manhattan, cooperatives have been the traditional way to own an upscale apartment for nearly a century, and comprise two thirds of all apartments available for purchase. Co-ops are owned by an apartment corporation. When you purchase an apartment in a co-op building, you are buying shares of the corporation that entitle you as a shareholder to a “proprietary lease.” Typically the larger your apartment, the more shares of the corporation you own. Co-op shareholders pay a monthly maintenance fee to cover building expenses like heat, hot water, insurance, staff salaries, real estate taxes and the mortgage debt of the building. Portions of the fee are tax deductible and shareholders can deduct their portion of the building’s real estate taxes. Approval to purchase shares of a co-op must be granted by a board of directors, who also have the authority to determine how much of the purchase price may be financed and minimum cash requirements. All prospective purchasers must submit a "board package” containing a purchase application, personal and professional letters of recommendation plus detailed information on income and assets. The board will also require an interview so they can meet you and ask any questions regarding the information you provided. They can approve or deny any applicant without stating a reason. Purchasing a co-op can be an intricate process, and subletting can be challenging. Each co-op has its own rules and should be considered carefully. I am an expert in this area and am well equipped to help you decide whether a co-op, and which one, is best for you.
Condominium
Each individual apartment in a condominium receives a separate tax bill from the city. There is still a monthly common charge similar to the maintenance charges in a co-op, which is paid to the condominium association to pay for such items as payroll, building maintenance and supplies, management fees and building repairs. These charges do not include your real estate taxes and are not tax-deductible. They also tend to be lower than in co-ops because there is no underlying mortgage for a condominium building. Unlike a co-op, a condominium apartment is real property, and a purchaser is given a deed as if they were buying a house. The difference between owning a condo and a house is that in addition to owning the apartment, you also own a small percentage of the common elements of the building like the halls, stairwells, basement, etc. The straightforward nature of buying a condo, plus the fact that in some cases you can finance up to 90% of the purchase price and sublet your apartment at will, makes this form of owner-ship a top choice for flexibility, especially among investors, foreign buyers and parents purchasing for their children.
Cond-op
A cond-op is a residential cooperative where the ground floor (typically commercial units) is converted into a separate condominium that’s either owned by an outside investor or the original building sponsor. So while the residential units are a co-op, the commercial units are owned as a condominium by an entity other than the co-op. The co-op does not receive the benefit of the income from these units. People often refer to cooperatives that operate under condominium rules as cond-ops, though this is inaccurate
Townhouse
Owning a townhouse provides the owner with a "fee simple" ownership of real property. There are single-family and multi-family townhouses, which can be lived in or rented out at will. In either case, the owner is responsible for payment of all real estate taxes, maintenance and repairs of the property. The sale of the property may be conveyed to any party without prior approval by anyone other than the homeowner.