The housing market seems absolutely saturated with terminology referring to every kind of home. Whether you want your home Victorian or Spartan, apartments or townhouses, et cetera, there seem to be so many different kinds that it can be somewhat staggering. Some of the most popular housing choices in this day and age are the condominiums, or condos for short, however not all structures that appear to be condominiums are actually that, but rather they can be co-ops, short for cooperative, which are much different that a condo in terms of their ownership and method of renting.
Here we hope to find the top differences between condos and coops, demystifying the cloud that seems to obscure them. The first thing we must do in checking out these facts is to consider the method of ownership. Both structures are almost identical in their design, so it really comes down to the paperwork involved with them, and that is where they are vastly different, much like a house and a townhouse are two different things even if the structures appear similar from the outside. Owning a condo and owning a coop are both with their own separate terms, and this can be the difference in choosing which one to get.
A condominium is owned by a landlord, a single person or a group, usually realtors, who have all the rights to the building and the rooms inside, including the ‘apartments’ within. When someone purchases a condominium they buy the rights to the condo itself and the area within, but not the structure, much like an apartment building might work. The fees given to these parties are much like normal residences, they have a mortgage to pay and utilities, however on top of that they get a ‘common area maintenance’ or CAM tax applied as well, for the upkeep of the building itself and the shared areas.
A coop, on the other hand, is owned by a corporation rather than a group or individual. Instead of selling off the condos inside the tenants instead purchase shares of stock in the corporation. The size of the rooms given are directly proportional to the share ownership within the company, so the people who own larger amounts of shares will be given a lot more space compared to those with less invested in them. The amount paid toward the building is also directly proportional to the shares owned.
With a coop, as well, all of the building’s fees and maintenance are covered by the company that owns the building, rather than the tenants. The company has final say in the entirety of the building, while with condos there’s an elected board of directors formed out of condo owners who represent the masses when coming to a decision on how to handle affairs. While the building itself might be owned, because the spaces inside are sold out instead of shared the people who own them have a small say in what goes on in the building and the property.
Jake has written this article for Scott Gordon Realty, A leading Realtor in Palm Beach providing great options for buying, selling and leasing out luxurious Palm Beach Condos.