In recent times, those who wish to live in apartments have sometimes turned to arrangements under which they own their living space. Cooperative ownership was the first to develop, then Condominium ownership appeared later.
With Cooperative ownership, title to the land and the building is held by a corporation that pays taxes, principal and interest on the building’s mortgage, and operating expenses. The purchaser of the apartment in the cooperative receives shares in the corporation and a long term lease to the living unit and pays monthly charges to cover a share of expenses. The stock in the cooperative is considered personal property. As stockholders they exercise control over the administration of the building through an elected Board of Directors. The Board of Directors are usually who may approve or disapprove of prospective purchasers of the apartment leases.
Cooperative ownership is unique and only exists in a few areas of the country.
With Condominium ownership, each owner holds fee simple title to his/her dwelling unit and also to a percentage of the other parts of the building and land called common elements. Common elements include such items as the land, walls, hallways, elevators, stairways and roof. Lawns and recreational facilities such as clubhouses, swimming pools and golf courses may also be considered common elements. Each Condominium owner receives an individual tax bill and may mortgage his/her dwelling unit.
The condominium property is customarily administered by an association of unit owners, or a Board of managers elected by the unit owners. Expenses for operating the building are collected by the condominium Owner’s Association through monthly assessments.
Both Coops and Condominiums may manage the property on its own or utilize a professional Property management company to do so.