Sotheby's International Realty Donna Stockman

Forms of Ownership in NYC

Ownership of real estate in New York City can be one of four distinct legal types – traditional home ownership of a townhouse or three different forms of ownership for apartments in multi-unit buildings: a coop, a condo or a condop. Someone wishing to buy in a multi-family building must also consider the type of building in which to live. There are townhouses that are divided into multi-family homes and there are low rises, mid rises, high rises and lofts. Buildings are also characterized by their age: pre-war (pre WW2), post war and post 2000. Pre-wars tend to be prized for the details, materials and workmanship. New buildings are valued for the modern layouts, central air conditioning and in apartment washers and dryers, and for building amenities such as children’s playrooms, fitness centers and roof decks.

In NYC about 75% of apartments available for purchase are in cooperative buildings, while 20-25% are in condominiums or townhouses and 3% in condops. Because there is more inventory of cooperatives, they tend to be less expensive relative to condominiums. Further, the recent increase in the number of investors has widened the gap between the per square foot price of condos and coops, with condos becoming increasingly more expensive relative to coops.

Most pre-war buildings tend to be coops, unless a pre-war rental building has been recently converted from rental to ownership. Any new conversions or new developments are condominiums.

For more information on the different property types click on the links below.

Single Family Home

Old New York abounds with single family homes, sometimes called townhouses or brownstones. While some of these structures have been divided into multi-family units, there are still townhouses in NYC that are owned as single family homes. This form of ownership is no different from ownership of a home in any other geographic region. Legally, it’s called “fee simple” ownership and permits the owner all of the traditional rights of owning property that you might think of – you can sell the property to whomever  you want (within the confines of non-discrimination laws) and can alter it as you wish (subject to zoning laws or landmark restrictions).


Cooperatives (coops) are not a new concept for New Yorkers, but many out-of-towners are unfamiliar with this type of ownership. As a legal matter, when you own a coop you do not own real estate. Rather, you own stock in a corporation, whose principal asset is the building in which the apartment is situated, and a proprietary lease on the apartment in which you purchased stock. Each apartment has stock allocated to it according to the size of the apartment, its location in the building (the higher the floor the more stock allocated) and the level amenities (apartments with outdoor space will likewise be allocated additional shares).

The corporation pays the total amount of the building’s expenses including its mortgage, real estate taxes, employee salaries, and other expenses for the upkeep of the building. The tenant-owner, or “shareholder,” pays a share of these expenses as determined by the number of shares the tenant owns in the corporation. The monthly payment is called maintenance. The portion of maintenance allocable to mortgage interest and real estate taxes paid on the building is tax deductible by the shareholder on his income taxes, along with the portion of interest payable on his personal mortgage.

The coop is run by an elected board of directors, and the board must approve new shareholders. To obtain approval a prospective purchaser must submit a board package, typically consisting of an application, financial information and references. If the purchaser passes the initial review, the board will invite the prospective owner for an interview. After the interview a prospective purchaser will learn whether he was approved or not. Coop boards have the power to levy assessments as well as the power to evict a shareholder for nonpayment of maintenance.

Other important considerations when buying a coop:

  • The quality of services and the security of the building are kept at high standards.
  • Each building has its own tax structure, but all coops offer tax advantages. Shareholders can deduct their portion of the building’s real estate taxes and the interest on the building’s underlying mortgage.
  • Each cooperative determines the amount of money that may be used to finance a purchase. Some buildings require substantial down payments. Generally speaking, in Manhattan, buyers should be prepared to “put down” 20-50% of the purchase price. The most premier buildings do not allow financing at all.
  • Subleasing a coop must be approved by the board of the coop, and is generally restrictive. Each corporation has its own rules, and a potential buyer should understand them prior to purchase. However, rules do change over time.
  • Most cooperatives only accept buyers who intend to use the apartment as their primary residence. Coops are not for investors.
  • Buyers do not pay mortgagee recording tax or title insurance on purchases of cooperative apartments (refer to Buyer Closing Costs in the Resources area).

Coops are the norm in New York City, not the exception. However, having listed all the conventional considerations for coops, I find that often it is useful to think out of the box. While the above are general rules, the usefulness of a broker cannot be stressed enough. There are coops where pied-a-terres are acceptable and where foreign citizens live. Not all coops are alike.


Condominiums (condos) are quite popular and common throughout the rest of the U.S but have only been permitted in New York City for about 30 years. A condo apartment is real property and buyers get a deed just as though they were buying a house. Since this is real property, there is a separate tax lot for each apartment. The condo owner also owns a percentage of all common areas of the building such as the lobby, elevators, hallways and amenities.

Condo owners pay their own real estate taxes for their property. An owner also pays common charges on a monthly basis. Common charges are similar to maintenance in a coop; however, common charges include neither real estate taxes nor the building’s mortgage and interest because, by law, a condo cannot have an underlying mortgage. This often results in lower monthly charges, none of which are typically tax deductible (unless the condo owns the superintendent’s apartment and has a separate mortgage on it for example).

Condos are managed by a board elected by the owners. Condo boards typically do not have the right to reject a purchaser, but almost universally require the submission of financial statements and, sometimes, even an interview.  Instead of rejection, condo boards can prevent a sale by what is known as a right-of-first refusal. This allows the board a period of up to 30 days to match a purchaser’s offer to buy a unit at the same price and on the same terms. These rights-of-first refusal are virtually never exercised although in rare instances it has been known to happen.

Investors can only purchase in condos since they intend to rent out or “sublet” their property. Many foreign citizens purchase condos because the purchase process is less restrictive and the financial requirements less onerous.

Like coops, condo boards have the power to levy assessments. However, as compared to a coop board, condo boards tend to be more hands-off when it comes to rulemaking. Condo boards can fine owners only for the expense related to any rule infraction (or get an injunction to stop it from happening again), but unlike a coop, a condo board can’t evict an owner from an apartment.

New condo developments by necessity are located in less convenient or desirable areas where land was available. Harlem, the Financial District and Midtown West have seen tremendous development compared to other areas. However, there are new developments in Columbus Circle, and along the water in the West Village, among others. Condo conversions of existing structures are taking place all over the city, including Gramercy Park, the West Village and the Upper West Side for example.

Newer condos or new condo conversions of existing buildings tend to have more desirable amenities both inside the apartment (washer/dryers and air conditioning) and outside (roof decks, playrooms, fitness centers etc.) than coops and older condos.  Similarly, if you’re looking for prewar details, the buildings are almost always coops–and when you find a rare pre-war condo, demand and prices are typically high.

You may want to focus your search on condos if:

  • You have a large or undesirable breed of dog
  • You are looking for a newer building
  • You are buying using a trust or an LLC
  • You want to use the apartment as a pied-a-terre
  • You are buying the apartment for your kids
  • You have sued a landlord or your last coop or condo board, or you’re generally litigious
  • You are an attorney, musician or have a home-based business that involves noise or visitors
  • You can’t afford a 20-25% downpayment
  • You’re a foreign citizen

However, there are exceptions to every rule. There are coops that allow pied a terres, guarantors and co-purchasing with children. Further, I have sold coops to several foreign citizens.


A condop in real estate is a term for a building that has a hybrid ownership structure that includes both condominium and cooperative ownership. Typically the condop refers to the residential portion of a building which is treated as a single condominium unit owned through a cooperative ownership structure. Many people also use the term to refer to a cooperative that behaves like a condominium. The term is a contraction of the condo and coop.

Typically, a condop is used to separate the residential and commercial components of ownership. Often, this can be advantageous for the developer or sponsor to retain ownership of the non-residential space in a building. The cooperative portion of the condop is effectively no different than any cooperative building that contains only residential units. However, the term condop is often also used loosely to refer to a cooperative that behaves like a condominium or a “coop with condo rules”. In these situations, unlike a traditional conventional cooperative, the bylaws in a condop will more closely resemble the rules of a condominium rather than a cooperative.

Condops first came into use in the 1960s and were employed by developers that wanted to divest their residential units at a time when condominiums were not yet in popular in major cities, particularly New York. The condop is still a relatively rare item in the US and represents only approximately 3% of the buildings in New York City.