In a coop,a cooperative corporation owns the entire building and common area When you purchase a coop, you are actually buying shares in this corporation. Usually, the number of shares attributed to each unit varies with the size,height and amenities associated with the unit (a terrace, for example). When you purchase a coop you are actually leasing it from the corporation under the terms of the proprietary lease. The building is run by an elected Board of Directors (who are most often residents of the property), who make the major decisions that pertain to the bulding as well as the selection of new shareholders.

Most Coop buildings have a mortgage on the entire building, known as the Underlying Mortgage. The vast majority of purchasers will need to obtain financing in order to buy their individual unit,and there are down-payment requirements, which vary building to building. Rarely can one buy a coop with less than ten percent down, and more typically the coop will require a minimum down-payment of 20 percent of the purchase price. The bank will use the shares and the proprietary lease as security for the loan. The lender will require a UCC-1 Financing Statement be filed in the county where the apartment is located.

Once you purchase your new apartment the corporation will require you to pay a monthly maintenance charge. This charge is to cover your pro-rata share of the operating expenses of the building which include: real estate taxes, the underlying mortgage, labor costs, fuel, repairs,and management fees. Because these monthly fees include large items, such as taxes and the buyers' pro-rata share of the debt service on the underlying mortgage, they are generally higher than the common charge in a condo. However,your share of the interest on the underlying mortage and your property tax payment is tax deductable, and in most Westchester coops, at least fifty percent of the maintenance is tax deductable. The belief that coop costs are higher than those on a condominium is incorrect. All of the charges included in the maintenance are paid by a condo owner, but through a different process. So, for example property taxes are paid through your mortgage,rather than through Maintenance. Also, in a Condo, your share of the common area is included in your deed, and thus in your mortgage. None of the charges in a Condo's common charges are tax deductable.

Finally, coops often have restrictions as far as subletting your apartment, there is a limit on the time period that you can rent it for, as well as fees that are charged to you by the corporation for doing so. Most Westchester coops wish owners to live in the property, and do not permit sub-leasing, or investors.

In a Condominium, the purchaser is actually buying the apartment ( real property ) and a portion of the common areas of the building.The purchaser will take title by deed which is then recorded with the County Clerk's office. As with a coop you have a monthly common charge that covers the operating expenses of the building. A condominium building has no underlying mortgage and the real estate tax for the building is divided up among all the individual owners.