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...One other thing which I found interesting about Co-Ops...
If a shareholder goes in to default, the building can foreclose on the shareholder... If the unit is sold, if the shareholder is in arrears in Maintenance, the building is senior debt to the bank... that almost guarantees the building will be made whole, even if the unit is sold at a loss... This is versus a condo where there is very little recourse-- I am pretty sure the Bank is senior debt in that case which would mean that the other owners would get caught paying for deadbeats...
I could be wrong about the condo angle here, but I think that is how it works.
I own a co-op. I have been here for 25 years. I rented the apartment on the first floor, my friends on the 4th were getting a divorce, they asked the bank if I could assume the mortgage, long story, the bank agreed, so they were let out of their mortgage and i was put on. So in reality they lost the 7 years payments they made. I think they just wanted to get rid of it fast. So was lucky for me. My apartment has been long paid off for many years now.
The maintenance has gone up a few times, nothing terrible, but we did have 3 assesments for terms of 1 year to bring up the reserve fund.
Our LL's, the owners of the building are very leaninet. I can do what ever i want in the apartment and he has his own construction crew that will do the work, so that is a win win situation for me.
have not had any problems in all the years I live here.
The end of the year I get a star tax tax relief which lets me have no maint payment for the month of jan and part of Feb,
We are also allowed to rent our apartments for indefinite. We are not allowed dogs, but i dont want one anyway. We are allowed to have washers.
The owners of my building are a family owned business and they own several other buildings in the neighborhood. We ll get along fien. It also helps that they are Greek, and so am I..... LOL
...One other thing which I found interesting about Co-Ops...
If a shareholder goes in to default, the building can foreclose on the shareholder... If the unit is sold, if the shareholder is in arrears in Maintenance, the building is senior debt to the bank... that almost guarantees the building will be made whole, even if the unit is sold at a loss... This is versus a condo where there is very little recourse-- I am pretty sure the Bank is senior debt in that case which would mean that the other owners would get caught paying for deadbeats...
I could be wrong about the condo angle here, but I think that is how it works.
you are correct by about the maintenance. by the same token you can be current on your mortgage and the building defaults on theirs and the buildings loan is senior so you can loose everything.
I am guessing that it all depends on the building, as to rules and regulations and all that stuff.
For I too, am a "happy camper", I go to work, come home and repeat the process. The apartment I own, suits my needs. Could I use another closet, of course, but will I fret over it, no.
I took over the mortgage as stated above as to adventualy have an apartment that could be paid off while I am still young enough to travel and eat out and all the little luxuries that add up.
My sons are grown and do not live with me, so the space I have, again, is sufficient for my needs.
I have a few friends that also own co-ops in Brooklyn and have not problems either. I go to the board meetings and it keeps me abreast of what things cost to run the building. My building also has zero amenities, and is a walk up and I do live on the 4th floor. Again, to some people this would not be acceptable, thus needing more ammenities, but I don't need them, therefore the maintenance is a lot cheaper.
If you are interested in a co-op, I can only give you my experience, and my best friends as well, we are both happy living in our apartments, and have no problems.
My plan is also to retire and have a small place out in Palm Springs, where I can be called a snow bird. I will keep this here and have that there, and be a really happy snow bird camper.
AS a new Co-op owner, I cant say anything has been bad. Ive rented apartments an always felt like i was throwing my money in a hole. I understand as a shareholder I dont actually own my apt - but shares, but you own nothing when you rent.
It works for us as a young family, we got a huge place, for a good price. And we intend to be here for 15 yrs+ . No probs w the Board, they are our neighbors, and are all very nice. The only problem in the building are the left over Renters who have been there before the building went Co-op. But they will be dead soon, so theres that. (they are all over 70)
We didnt have a choice as far as condo vs co-op, down payment requirements for condos were too high for us.
And we are lucky, we can pretty much do anything we want in the co-op aside of knocking down walls - which we can do, we just need to go through a process, get insured contractors, etc. But that only makes sense.
AS it stands, co-op was the best choice we made, for our circumstances. Having said that, we just got hit w a 3% increase in maintenance - but id rather the building stay in good standing then suppress cost in living expenses and fall in default a few yrs down the road.
1. The condo was well below market prices for condos in NYC
2. I own all of my unit, instead of shares in a coop
3. My ability to buy and re-sell, without outside approval
Quote:
Originally Posted by sirk98
...One other thing which I found interesting about Co-Ops...
If a shareholder goes in to default, the building can foreclose on the shareholder... If the unit is sold, if the shareholder is in arrears in Maintenance, the building is senior debt to the bank... that almost guarantees the building will be made whole, even if the unit is sold at a loss... This is versus a condo where there is very little recourse-- I am pretty sure the Bank is senior debt in that case which would mean that the other owners would get caught paying for deadbeats...
I could be wrong about the condo angle here, but I think that is how it works.
The conditions stated above are some of the reasons that I decided against buying a coop when I looked into it several years ago.
1. The condo was well below market prices for condos in NYC
2. I own all of my unit, instead of shares in a coop
3. My ability to buy and re-sell, without outside approval
But there can be drawbacks:
1. Condo does not have much power to screen out potential bad neighbors who buy. Excercise of right of first refusal would be costly to the condo
2. Common charges, which are not tax deductible, pay for the outside of your home, not inside. You, yourself are solely responsible for the inside of your unit
3. Property taxes assessed in addition to common charges.
Now to my knowledge since you own all of the (condo)unit, if there is a fire, you have to fix everything, where as a co-op, the sponsor has to replace the walls, windows, floors and all that crap, and my insurance will cover my personal belongings.
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