In a co-op, the building is owned by shareholders grouped within a legal entity, usually a corporation. Shareholders do not have a real direct ownership in the property, but a property lease granting them the right to occupy their housing unit.

The co-op is managed by a board of directors, which sets the rules concerning the approval of new shareholders, and of course for the life of the building.

 

Thus, even before considering any transaction, the purchaser must be approved by the board, which may refuse the candidate without having to give an explanation. Some co-op perfer to give approval to members working in the same field of activities, such as bankers or lawyers. The same constraint of obtaining a prior agreement is required to rent his apartment, carry out work, have a pet, etc…

In a condominium, a “condo”, a unit can be purchased and owned under freehold scheme. The condominium declaration defines the rules in the residence and the allocation of common expenses. The building is managed by a board of directors.

 

For a foreigner, buying a condominium is the easiest way to purchase an apartment in New York. Besides the fact that almost all co-op do not accept foreigners as shareholders, the obligation of living in your property several years before you can rent it, or the rule requiring that the tenant receives the approval of the board makes such an acquisition incompatible with rental investment project.

The low number of condos available and the fact that there are less constraints than in a co-op induces a higher price for a condo compared to its equivalent in a housing cooperative.