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Condo, co-op, townhouse and brownstone explained

New York City is comprised mainly of cooperative and condominium apartments with a smaller selection of private homes called townhouses or brownstones. It’s important to understanding the differences between the two.

What is a Co-op?

Cooperative ownership is more common in New York City than elsewhere in the United States. In New York City, most of our apartments available for purchase are in cooperative buildings, while a smaller percentage are in condominiums. There are more apartments to choose from if the buyer includes co-ops into the mix of properties.

Cooperatives are owned by an apartment corporation. Individual tenants do not actually own their apartments as they would real property. One owns “shares” in the corporation which entitles them to a long-term “proprietary lease.” The corporation pays the total amount of the building’s mortgage (importantly, a cooperative may have an underlying mortgage on the entire building, whereas a condominium must be owned outright), real estate taxes, employee salaries, and other expenses for the upkeep of the building. The tenant-owner, in turn, pays a share of these expenses as determined by the number of shares the the apartment has in the corporation. Share amounts are dictated by apartment size and floor level.

What is a Condominium?

A condominium apartment in Manhattan is real property. The buyer gets a deed just as though you were buying a house. Since this is real property, there is a separate tax lot for each apartment. This means you pay your own real estate taxes for your property. An owner will also pay common charges on a monthly basis. Common charges pay for the running & maintenance of the building (heat, doorman, etc.). Condominiums are attractive for a variety of reasons:

  1. Financing the purchase of a condominium apartment is much more flexible than in a cooperative. Generally, a buyer can finance up to 90% of the purchase price.
  2. While there is an application process, this is not as formal as in a cooperative. The likelihood of rejection is minimal.
  3. There is greater flexibility in sub-leasing your apartment. This makes condominiums the choice for investment property.
  4. They are the ideal choice for non-U.S. citizens or for those with their assets held outside of the United States. There are fewer condominiums than cooperatives but the buying process is easier. They are generally more expensive than co-ops. Additionally, monthly combined common charges and real estate taxes in a condo are typically less than a co-op’s monthly maintenance charges, again resulting in higher purchase prices.