Co-ops (approximately 75% of NYC apartment inventory): You buy shares in a corporation that owns the building and receive a proprietary lease for your unit. Board approval required. Condos (approximately 25% of NYC apartment inventory): You own your individual unit and a percentage of common areas with a deed. No board approval required. Key differences: (1) Co-ops typically have stricter financial requirements, (2) Co-ops usually have higher monthly fees that include property taxes, (3) Condos offer more flexibility for subletting and financing, (4) Closing costs differ between the two types. Both can be excellent housing options depending on your circumstances.
Co-op board approval typically involves: (1) Submitting a board package with financial documents, tax returns, reference letters, and personal information, (2) Board review of your application (timeframes vary by building), (3) Board interview (format varies by building), (4) Board decision. Important: Co-op boards cannot discriminate based on protected classes under federal, state, and local fair housing laws (race, color, religion, sex, national origin, familial status, disability, and other protected characteristics). If you believe you have experienced discrimination, you have the right to file a complaint with HUD, NYS Division of Human Rights, or NYC Commission on Human Rights.
Requirements vary by property type and building: Co-ops: Many require 20-50% down payment plus post-closing liquidity (cash reserves). Some buildings have higher requirements. Condos: Typically more flexible financing with 10-20% down payment options. Both: Lenders evaluate debt-to-income ratios and credit history. Individual buildings may have additional requirements. Always verify specific requirements with the listing agent and your lender before making an offer.
Closing costs vary by property type. Co-ops typically: Attorney fees, bank attorney fees (if financing), mansion tax (purchases over $1M), application fees, move-in deposit. Note: Co-op buyers generally do NOT pay NYC transfer taxes or mortgage recording taxes. Condos typically: Attorney fees, title insurance, NYC/NYS transfer taxes, mortgage recording tax (if financing), mansion tax (purchases over $1M). Total closing costs range from approximately 2-6% depending on property type, price, and financing. Consult with an attorney for accurate estimates for your specific situation.
Yes, co-op boards can decline applications, but they CANNOT discriminate based on protected classes under fair housing laws. Protected characteristics include: race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, age, disability, marital status, lawful source of income, and familial status. Legitimate reasons for declining may include financial qualification concerns or building policy issues. If you believe you have experienced discrimination, contact: NYS Division of Human Rights (844-862-8703), NYC Commission on Human Rights, or HUD.
Co-op maintenance: Monthly payment covering your share of building expenses INCLUDING property taxes, building mortgage (if any), insurance, staff, utilities, and reserves. A portion may be tax-deductible. Condo common charges: Monthly payment covering building operating expenses. Property taxes are billed separately to the unit owner. Both vary significantly by building based on amenities, staffing, and building age/condition. Always request a breakdown of fees for any property you are considering.
A flip tax is a fee some co-op buildings charge when units are sold. It typically ranges from 1-3% of the sale price or may be calculated per share. Payment responsibility varies by building (usually seller, sometimes split or buyer). Condos generally do not have flip taxes. Always verify flip tax policies for any building before making an offer, as this affects net proceeds when selling.
Co-ops: Sublet policies vary widely. Some prohibit subletting entirely, others allow it after a waiting period, with time limits, or require board approval and fees. Verify the specific policy before buying if subletting flexibility is important to you. Condos: Generally have fewer sublet restrictions, though some may have minimum lease terms or registration requirements. Check the condo bylaws for specific rules. Investment properties: If buying for rental income, condos typically offer more flexibility than co-ops.