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Why Are Condominiums More Expensive than Co-Ops?


Many people use the terms “condominium” and “co-op” interchangeably. While there are some similarities from a standard of living perspective, there are also distinct differences from a financial and legal standpoint.

For example, as the owner of a condominium, your unit, as well as a percentage of common areas, are yours. In comparison, with a co-op you are a shareholder, meaning that you do not actually own the unit. Because of that, you are legally considered a tenant as opposed to an owner. In other words, a co-op is a multi-unit apartment building in which you have an interest in the entire building, and to live there, you maintain a lease.

Other Important Factors

Specific to a co-op, consider some of the other key differences from a condominium.

  • The co-op association typically consists of all the shareholders.

  • The co-op association owns the entire building, including the individual units.

  • For the owner of a co-op, the owner has legal shares in the association. Now, if there are no shares, the owner has a proprietary lease that outlines the obligations and duties of the association, as well as the owner’s rights and responsibilities.

  • By voting at scheduled meetings or through an elected board of directors, financial and management decisions are made.

  • Generally, residents of co-ops receive the same tax treatments as other homeowners.

  • If the co-op association has a mortgage on the entire co-op building, shareholders have the right to receive a proportionate share of interest on the mortgage.

  • Prospective purchasers of a co-op are approved by the co-op association, through a membership committee comprised of current owners.

Higher Selling Price

By understanding what a co-op is, you will find it easier to see why condominiums typically sell at higher prices. Regardless if the interior and exterior of a condo and co-op are identical, there is a difference in property type, which means the condominium will sell for more money. Remember, with a co-op, the board of directors has tighter control over your homeowner rights compared to a condominium association. For that reason alone, condos fetch higher prices.

Also, because of the tighter controls governing a co-op, there are restrictions to upgrades. In comparison, as the owner of a condominium, getting approval for upgrades from the association is easier. For example, owning a condo and getting approval from the association means you could have a professional install solar panels. When the time comes for you to sell the condominium, this upgrade would help boost the asking price for a targeted market.

Obviously, there are pros and con for both condominiums and co-ops. For that reason, you need to learn as much as possible about each type of living. However, as a general rule, owning a condominium allows you to sell at a higher price than if you own a co-op.

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