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Assessments and Special Fees for Co op vs Condo in New York

Whether you are considering buying a condo or co op, there are many factors to consider. In addition to monthly maintenance fees, buyers also need to budget for property taxes, HOA dues (if applicable), and special assessments. When comparing the costs of owning a co op vs condo, it's essential to take all these financial aspects into account.

Co ops and condos have different financing and maintenance structures, but both have some similarities. In NYC, both share common ownership with a board of directors or trustees that manages the building and sets rules for residents to follow. In both types of housing, you will likely need to meet with the board before buying. This is where you will be asked for mountains of character references, financial documents, and credit information to get an approval letter from the board indicating you can buy. The approval process for a co op vs condo is more in-depth than a condo. The boards will usually have a lot of power over their residents and are more concerned about enforcing the House Rules, approving or rejecting buyers, and working with the building's management company to maintain the co op's property.

The boards of both condos and co ops can impose special assessments or temporary increases to maintenance or common charges when the building needs money for improvements like a new roof, facade, or elevator. These are typically paid in installments over a certain period of time and can be an effective way for the building to raise funds without raising regular monthly maintenance. Co op buildings often levy these assessments to cover the cost of capital improvements and top-up reserves. The decision-making process for such assessments can vary between a co op vs condo, with co op boards generally having more control over these matters.

Both condos and co ops can impose a special assessment to pay for a tax abatement program. This is a good way for a building to bolster its cash flow while the abatement is in effect. In a co op, this will be added to the shareholder's cost basis which could reduce capital gains taxes on a sale of the unit in the future.

Condo fees are usually higher than co op fees because they include a combination of maintenance costs, taxes, and utilities. However, this can be a disadvantage for those who have multiple utilities in their apartment or are located on the fringes of the city where property taxes may be more expensive. In contrast, co op maintenance fees tend to be lower because the costs of a co op are spread out over all the shareholders in the building and are less expensive per unit. The financial structure of a co op vs condo can have a significant impact on the monthly expenses for residents.

One thing that can make a condo more attractive than a co op is that a purchaser will receive a deed to their apartment at closing. This is because condos are considered real property and they have a separate property tax bill from the city, unlike a co op where you are buying shares in the corporation that owns the building rather than a piece of real estate. This can be advantageous for those who are thinking about selling their condo in the future since they will have a deed to sell and avoid the hassle of having to go through a co op board approval process and re-buy their condo. The ownership structure is a key differentiator between a co op vs condo, influencing how ownership is legally represented and transferred. 

Co-Op Vs Condo - Which is Right for You?

Buying an apartment is one of the most significant purchases you’ll ever make. To ensure you’re making the best decision for your needs, it’s important to weigh all the factors, including whether you want to go for a co op vs condo. Some of these factors include the amount of sunlight, neighborhood amenities, building violations and complaints, and more.

You also need to decide if you want to be in a co op vs condo. Both operate similarly, but their differences can have a significant impact on your lifestyle. For example, in a condo, you’ll own your individual space—think of it as a house in the suburbs—and you’ll receive your own property tax bill (instead of having your city and property taxes compiled into your monthly maintenance as seen in co ops). Condos also often feature more amenities than a typical building.

Both have rules on how you can alter your space. Co ops typically have stricter rules and a more rigorous approval process. In addition, they often have more restrictive rules on subletting. Condos, on the other hand, tend to have looser rules and are more flexible regarding subletting. Additionally, condos are usually more comfortable with lending money to investors.

Condos are the more traditional real estate type that allows purchasers to own an actual deed. As a result, buyers should expect to pay more upfront than they would when purchasing a co op. In addition, closing costs for condos are usually higher than those for co ops due to the required mortgage recording tax and title insurance.

Co ops are a great option for those who prefer to live in a community where the neighbors have a shared interest in the building and its success. In addition, co op buildings typically have more prestigious neighborhoods and offer a certain old-money flair that many other apartment types lack. They’re also a good choice for those who plan to use their apartments as investment properties since they tend to appreciate value faster than condos. When considering your housing options, it's essential to weigh the benefits of co op vs condo living.

The disadvantage of buying a co op is that it can be difficult to sell. The reason is that the board must approve a buyer before the sale can proceed, and it’s possible it could take 2 to 4 months for the board to review an application. On the other hand, condos are easier to sell because there is a less rigorous sales process and the boards are typically more friendly toward buyers, highlighting the differences in the co op vs condo sales process.

It’s important to weigh all the pros and cons of each type before deciding which is right for you. A knowledgeable real estate attorney can help you navigate the apartment-buying process and understand all of the nuances that come with it, including how each building operates and what kind of restrictions are in place. As you look for your dream home in New York, be sure to ask your agent about the differences between co ops and condos so you can find the perfect apartment for you. Whether you're considering a co op vs condo, having expert guidance can make your decision-making process smoother. 

Co op vs Condo Occupancy Agreements in New York

Whether you’re a new buyer who is just starting to consider buying or a seasoned seller looking to take the plunge, the decision to buy into either a condo or co op depends on your investment goals and lifestyle. There are pros and cons to both co op vs condo, and some factors may be more important than others when making your decision.

For example, many condos offer a more flexible leasing policy and are more suitable as pieds-a-terre than most co ops. Condos often have more amenities, such as a gym and pool. They also have better resale value and the ability to be used as income-generating properties (without board approval). The 421A tax abatement that many condos enjoy can bring taxes down significantly for the lifetime of ownership.

Co ops, on the other hand, often have a more rigid leasing policy and stricter financial requirements for prospective buyers. Many require applicants to submit detailed documentation, including net worth, liquid assets, and annual income, which can be a significant barrier for some first-time buyers. Additionally, co op sales usually require an interview with a member of the board before approval, highlighting the differences between co op vs condo purchasing processes.

Another difference between co ops and condos is who owns what: Typically, a co op owner will only own the interior of their unit; the exterior and common areas are owned by the corporation or association. This can affect renovation and repair costs, as residents must seek board approval to make certain changes. In addition, co ops impose a flip tax upon resale, which can be as high as 3% of the sale price or the number of shares sold. This levy is designed to help cover expenses for the corporation’s treasury.

Additionally, a co op’s bylaws or proprietary lease will stipulate what is and isn’t allowed in the building. This includes things like if owners can sublet their units, and if so, for how long.

Both condos and co ops charge monthly maintenance fees, which cover everything from building upkeep and amenities to property taxes. However, monthly co op fees are often higher, since they include contributions to the co op’s blanket mortgage. Condos also have more financing options than co ops, since lenders are more likely to lend money for condo purchases, illustrating the differences in financial considerations between co op vs condo ownership.

When deciding between co op vs condo, it’s essential to read the bylaws in detail and talk with brokers about the building’s history. This will give you a sense of the building’s culture and how it operates today, and what to expect in the future.


For instance, it’s worth asking about a building’s policies regarding pets and subletting, as well as the overall quality of the building’s amenities. In addition, it’s always a good idea to ask the board about their spending habits and what discretionary projects they have in the pipeline, providing insights into the management practices of both co op and condo properties. This can help you gauge how much the board prioritizes the community’s needs and if the building is a good fit for your own. You can also ask for a copy of the most recent monthly fees and charges to see how much you’d be expected to contribute each month, shedding light on the financial commitments associated with co op vs condo ownership. 

Avenue Law Firm

Avenue Law Firm

99 Park Ave 10th Floor, New York, NY 10016, United States

(212) 729-4090