Buying real estate in NYC offers several options. When it comes to apartments, purchasers will generally have the choice between purchasing a co-op or a condo. While they make look similar, the structure of the transaction and ownership are very different, and depending on your needs, owning a condo can have significant advantages over owning a co-op in NYC.
It is important to seek the legal advice of a skilled NYC real estate lawyer when dealing with matters such as the purchase of a condo. Having a skilled attorney may be able to help you assess what may be the best option for you and help you avoid making mistakes.
You Own Real Property
With the purchase of a condo, you are purchasing real property, unlike a co-op where you are purchasing shares of a cooperative corporation. With a condo purchase, you get a deed and own the unit in the building as well as a portion of the building’s common areas.
The HOA Can’t Dictate Anything About the Financial Transaction of the Purchase
Unlike a co-op, the condo homeowners association cannot dictate how much money you must put down, what your debt-to-income ratio is, or anything else about the financial transaction of your condo purchase. While you are expected to pay your monthly HOA fees toward the maintenance and expenses of the building, the board of directors of the HOA has no access to any of your financial information and can’t accept or deny you based on that.
A Condo HOA Can’t Deny Your Purchase or Sale
A condo board does not have the right to accept or reject the sales price or you as the purchaser of a condo in the same way a co-op board of directors does. A co-op will want to approve the sales price of a unit and will deny it if it is low enough to impact the value of other units in the building. A condo cannot accept or reject a sales price or you as a buyer, but it does have the right of first refusal to purchase the unit under the same terms and conditions.
You Have More Control Over What You Do With Your Unit
A co-op can have highly restrictive rules. When you own a condo, there are fewer restrictions, and you typically have more latitude about what you can do with it. While you must abide by the rules and by-laws of the homeowners association, in most cases, condos can be sublet and used as investment properties as long as they comply with by-law restrictions.
Sometimes, condo by-laws will restrict rentals to avoid short-term rental of the unit. Consequently, some condos have tried to discourage investors in favor of owner-occupants.
Condos Are Easier to Sell
Co-ops in NYC impose stringent rules on residents, from limiting renovations to limiting subletting. Many also do not allow a unit to be used as pieds-a-terre. Co-ops discourage investors so it is often much easier to sell a condo in NYC than a co-op.
Condos Are Easier for International Purchasers to Buy
Because condos have fewer restrictions, they are more flexible and generally allow international buyers and investors.
If you need guidance regarding a condo purchase in New York City, the NYC real estate attorneys at Sishodia PLLC have worked with clients from around the world, helping them make important decisions about their real estate transactions. Contact us at (833) 616-4646 or schedule a consultation with us via our online contact form.