What’s the difference between a condo and a co-op?
If you find yourself wondering what differentiates a condo from a co-operative in San Francisco, you’re not alone. This handy chart may be of help to you. Let’s look at some of its highlights.
First, let’s define the difference between ownership when it comes to these two different property types. In a condo situation, ownership means unit airspace owned by an individual, plus an undivided share of common elements. In a cooperative, the residents are shareholders in a corporation that owns the property. Owning a share entitles you to occupy the unit.
Now let’s talk monthly cost. Here the two are similar, with a bit of an exception: whereas in a cooperative members pay for their share of the actual operating cost, building mortgage (if applicable) and real estate taxes, based on the nonprofit operation of the entire community, with a condo mortgage payments and taxes go straight to the lender.
What about move-in cost? With a condo, a purchaser must buy the property, usually with a mortgage with a down payment of at least 5 percent and closing costs of 3 percent more. They must also pay the first month’s condo fee and often a “contribution to capital” of one to two months’ fee. However, with a cooperative, new members buy their share and also pay the first monthly charge in advance.
Then there’s community control. Both condos and cooperatives provide a natural base for service and activity desired by its members. However, in the case of the former, there may be state law limitations.