Which is better Condo or Coop?

I’ve lived in Coops and Condos, I was a coop board president for almost 15 years and a condo board president for 5 years. What’s the difference anyhow? For most of us, not much but there are some fine points and legal distinctions that might make one preferable. In a condo you own your apartment, in a coop you own shares and have a lease on your apartment. Coops tend to be older buildings that were converted from rental apartments, many during the boom of the 1980s. Newer apartments are almost 100% condominiums, pre-wars are coops. Depending on your price range and the area you want to live in, you may not have much of a choice. In condo, you pay common charges, your own taxes, and usually are responsible for your own heat and electricity. In a coop, these charges are all rolled into the monthly maintenance. Unlike Condominiums, most coops have mortgages on the building - so you are effectively taking on a share of that in addition to any mortgage on your apartment. These mortgages were originally used for the purchase of the building for conversion, but today are often used to finance long-term capital improvements without passing a one time charge to the shareholders. Each year the coop will provide you with financial statements and a 1098 reporting your pro-rata share of the buildings tax and mortgage interest, which you may be able to deduct when filing income taxes. Real estate taxes can be higher for condos, because they are newer and may have more amenities. Coop mortgage rates are generally .25% higher for coops than for condos or homes because they are not “real property” - but closing costs are lower because there usually is no escrows, title insurance or a mortgage recording tax. Instead of recording the mortgage on a coop with the county clerk, a lien is placed on your shares. However, most - not all - coop boards require purchasers to make a downpayment of 20%, and they often have more restrictive financial qualifications than the banks. You will have to apply for admission into the coop and will be interviewed by the board, but a good agent will help prepare you for the interview. So think of it is a chance to meet your new neighbors and not something stressful. Know that if you make it to the interview, you are pretty much “in”. Condos generally have much less restrictive policies, if any, regarding sublets, pets, alterations and sales and do not require board approval for sales or transfers - although the board usually has a right of first refusal. But for me, those widely perceived advantages of condos can also be a disadvantage. A cooperative board has much more latitude in dealing with problem owners and forcing them to sell and move. Years ago, my friends’ condo had an escort service running out of one of the apartments and it was difficult to shut them down. As a condo president, I struggled to bring an owner in line who was highly disruptive to fellow residents. It’s true that some boards can be difficult, and some have been in place for so long that they are out of touch with current buyers and the marketplace. But for me, a well run coop is as good if not better than a condo, and I am lucky to be living in one.