What is a Manhattan Condop ?
A condop is a residential building or portion that includes cooperative and condominium ownership structure. The condominium has a residential cooperative unit separate from the commercial unit and or garage unit. During the late 1980's several new developments were built as "condops" they were "hybrids" because the developer had an underlying mortgage on the residential portion of the project. The residential unit is legally a cooperative. Owners are shareholders in a corporation.
I often get calls from other brokers about The Boulevard since I'm a resident broker that sells there. Many agents think a condop is a coop with condo rules. In many condop buildings that is true but the rules have nothing to do with what makes the building a condop.
Prior to the Bush tax cuts coops were only allowed to receive 20% income/revenue from non maintenance. The retail/commercial revenue could only be 20% of the building's income. Some developments and conversions may have been structured as condops for tax purposes.
The 80/20% IRS rule no longer applies to coops but today there are still new condops. In new construction, in the offering plan, if the developer/sponsor leaves the purchasers/ shareholders/owners with an underlying mortgage the building is usually a condop. The underlying mortgage is included in the maintenance allocated proportionally to each apartment sold as shares.
New construction condops include The Azure and 1 Carnegie Hill on the Upper East Side and 305 West 16th street, a brand new luxury designer condop building in Chelsea and there is a new condop in Harlem.
Many condops have right of 1st refusal, they are investor friendly and have the same unlimited sublet policy and amenities usually found in condos.
A condop can offer the best of both worlds. It can offer rules and amenities of a condo, tax deduction, lower closing costs (no NY state mortgage recording tax) like a coop because a coop is not considered "real property" it is considered "personal property." Condops are usually valued in between a coop and a condo.
There is an advantage to buying a condop if you can find one in the neighborhood and price range you require.