Most apartments for sale in New York City are cooperative apartments (coops). Only about 15-20% of our market are condominiums. We even have a property type called a condop which is sort of a hybrid of the two. This scarcity makes the demand, and thus price, for condo units significantly higher than equivalent coop units. Generally a condo will sell for 20-25% more than an equivalent coop apartment.
When you buy a condo, you are buying real estate. It is very similar to purchasing a free-standing building or land. The owner of a condo unit holds a deed.
When you buy a coop, you are purchasing shares of stock in the coop corporation. Based on your board application and acceptance, the board will grant you the right to inhabit the premises by issuing you a proprietary lease. A coop owner holds a stock certificate and a proprietary lease. It is like buying shares of stock in IBM or Coca-Cola. And with those shares, you are granted by permission of the Board of Directors, the right to inhabit the apartment based on the Proprietary Lease. If you violate the rules of the Coop, the Board of Directors can revoke the proprietary lease and begin eviction proceedings. It is rarely done and its a very complicated process, but it is possible and it does obligate cooperators to obey the House Rules.
There are many specific advantages and disadvantages for purchasing either a coop or a condo in Manhattan. Few markets other than New York City even have the coop structure as a possibility and I believe only Manhattan is dominated with them. They present unique complications in the buying process. The aide of a knowledgeable real estate broker can really guide a buyer through this process and help to educate a buyer as to the advantages and disadvantages of each type of property for their specific needs.
For a short, detailed description of the pros and cons of both condos and coops, please email me at mdybec@elliman.com and tell me a bit about your Manhattan property search. I'll email you the info immediately.
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