Definition
A residential property where residents own shares of a building corporation rather than owning their units directly. Co-ops offer more affordable ownership but with more restrictions.
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In a co-op, residents lease their units from the corporation and own shares representing their percentage ownership. Financing can be more difficult for co-ops as some lenders are reluctant to finance share purchases. Co-ops often have strict approval processes for new residents and renovation restrictions.
Pro Tip
Co-op financing is complex. Work with a lender experienced in co-op transactions.
Example
The co-op apartment in Manhattan was less expensive than comparable condos but required approval from the board of directors and had restrictions on subletting.