Real estate terminology isn’t always clear and understandable. If you’re thinking of buying a condo or co-op, I strongly recommend working closely with a registered real estate salesperson who can answer your questions, and explain the meaning of certain terms. And when you find the right salesperson for you, make sure you’re open and honest about your budget and the dwelling or ownership model that’s the best fit for your lifestyle. You should also hire a lawyer who knows real estate law before you submit an offer.
Properties can be classified by their physical characteristics or by how they’re owned. One popular ownership model is a condominium (“condo”); that’s where you own your unit within a building, but you don’t own the land or any common areas outside the unit. You may also purchase a parking space and storage unit if they are available. When you buy a condo, you’re expected to pay monthly condo fees for services such as security and maintenance and to follow the condominium corporation’s by-laws, which may prevent you from owning a pet, renting out your unit, or even hanging the wrong window coverings.
It’s important to understand the condo corporation’s by-laws and financial status and to know if the seller is up to date on their fees because that information will provide clues that you may be facing higher fees or be stuck with any outstanding seller’s debts payable to the condominium corporation. Ask your lawyer to take a good look at a condo’s status certificate, which contains information about the physical and financial state of the building before you make an offer. The cost of a status certificate is limited by law to $100.00.
The big difference between a condominium and a cooperative (“co-op”) is what you actually own. Like condominium ownership, buying an interest in a co-operative involves purchasing shares in the corporation that owns your building. Unlike a condo, where you own a specific unit in a building, with a co-op you own shares in a corporation that entitles you to use an available unit in the building under the terms of a lease with the corporation.
Should you decide to buy into a co-op, remember that major decisions are made by the co-op’s board of directors, and you will need the board’s approval to buy shares and move in. If the board approves your purchase, and you comply with the co-op’s by-laws governing the admission of members, you will become a member of the cooperative.
If you have a question for Joe about the home buying or selling process, please email email@example.com.