Definitions of: House, Townhouse, Condominium Apartment, Cooperative Apartment, and Condop
A House generally refers to a one to four family residence. It is the most common form of home ownership. The purchaser receives a deed to the home and the land that gives “fee-simple” ownership of real property. The purchaser is solely responsible for payment of all real estate taxes, insurance and maintenance for the house. The purchaser is solely responsible for payment of all real estate taxes, insurance, utility, and maintenance costs for a house. In Manhattan and Brooklyn the vast majority of property sales consist of condo and co-op apartments. Apartment living offers numerous benefits that appeal to many buyers, such as on-site maintenance, high-floor views, amenity spaces, a staffed entrance and single-floor living to name a few.
Condominium Apartments, or condos are found in almost all cities, the ownership of a condo apartment is similar to the ownership of a house since you purchase real property and receive a deed to the unit. Since condos are generally found in apartment buildings, you own the interior space of your apartment outright. You also own an undivided portion of the building (known as the common areas or common elements), and you have the right to use these common areas of the building – such as the community facilities, laundry room, parking spaces, and hallways. There are generally few restrictions on your right to alter the interior of your condominium apartment provided that it does not affect the building’s structure or interfere with neighboring apartments.
A condominium is governed by an elected board of managers whose powers are derived from a declaration of condominium and bylaws. The condominium’s board of managers makes financial decisions about the amount of common charges that are needed to pay the building’s operating expenses and to maintain the building’s common areas. A condominium unit owner may mortgage the unit without limitation as to the amount of the loan and pays the real estate taxes on the unit as such taxes are determined by the governmental taxing authorities. A condominium’s board of managers usually does not have decision making powers regarding the sale or the sublet of the condo unit. Purchasers and subtenants of owners must submit an application to the condo’s board of managers. The board reviews the application and must either approve the applicant or exercise the condo’s “right of first refusal” to match the purchase price or rent amount. Although uncommon, the option to purchase or to rent the condominium apartment from the cur- rent owner rather than have it transferred or rented to the applicant is available to the board. Most condominium’s policies toward subletting are more lenient than are coops’ policies – which is why purchasing a condo is often a better choice for investors.
Townhouses are an interesting sector of residential properties in New York City. Townhouses provide a unique level of privacy in our densely populated city and even offer the potential for rental income to offset carrying costs. With a townhouse, there is no condo or coop board involved in the purchase or sale, creating a much faster transaction from contract signing to closing. Townhouses typically come with backyards, decks or terraces, and are often located on idyllic, tree-lined streets. Elements to consider when investing in a townhouse: Property width is one of the first characteristics you'll consider when selecting a townhouse. Most townhouses are between 16 feet and 20 feet wide. Anything wider than 18' is considered valuable and wider than 20' is unusual; 25 feet and wider is a ‘mansion’ by NYC standards. Frequently, a long and narrow layout will be much more difficult to furnish than a wider and shorter home. Most townhouses were built anywhere from the late 19th century to the early 20th century, with the exception of some newer developments, and will display a range of original details. Some offer stunning coffered ceilings, stained glass, original woodwork and floors, marble sinks, elaborate decorative fireplaces, and more. Many owners have had the original details stripped or covered over the years. Some buyers prize these original details while many others prefer to keep the pre-war exterior but create more modern interiors that reflect better their personal aesthetic and how we live today. Modern features include open layouts, clean lines, large closets, spacious bathrooms, and large kitchens that open onto great rooms. How many families? In townhouse-speak the number of "families" refers to the number of units in the home. A two-family townhouse consists of two units, a three-family consists of three units, and so on. Most townhouses are considered residential if they are anywhere from one to four families. In certain cases, buyers will prefer to have a single family and maintain the entire residence for themselves. In other cases, potential income from renting out one or more units will be a key component in the affordability and attraction of a property over a coop or condo. Splitting up a townhouse into multiple units, such as one per floor, or reducing the number of units, can require a change to the Certificate of Occupancy.
Cooperative Apartments or coops are common in New York City but relatively uncommon elsewhere. A cooperative corporation owns the building, including the individual apartments and the common areas. The corporation issues shares of its stock (the stock certificate), which are allocated to each apartment based upon its size and location within the building. As a shareholder in a cooperative corporation, you are entitled to a lease from the corporation (the proprietary lease), which gives you the right to live in the apartment. Most cooperative corporations have a mortgage on the entire building (the underlying mortgage), and each shareholder may obtain a loan for the purchase of their own apartment. Most cooperative corporations limit the amount of money a purchaser may borrow for the purchase of their apartment to an amount equal to between 50 and 80 percent of the purchase price. The stock certificate and proprietary lease allocated to the apartment are pledged to the lender as security for the loan, and a Uniform Commercial Code Financing Statement (UCC-1) is filed in the county where the apartment is located so that the lender has a lien on the stock certificate and the proprietary lease.
Each coop corporation is governed by an elected board of directors whose powers are derived from the certificate of incorporation, the bylaws, the house rules and regulations, and the proprietary lease. The coop’s board of directors makes all decisions regarding the maintenance paid by each shareholder, repairs and capital improvements to the building, the amount of the underlying mortgage, the right to sublet, whether or not a purchaser’s application to purchase in the building will be approved or disapproved, repairs and alterations of individual apartments, and payment of all building expenses. As a coop owner, you pay a monthly maintenance fee to the coop corporation. This fee covers your proportionate share of the costs of operating the building. Typically, operating costs for the building are comprised of property taxes, monthly payments on the underlying mortgage, insurance, utilities, and labor costs.
A Condop is a residential cooperative building where the ground floor (typically consisting of commercial units such as offices or retail stores) is converted into a separate condominium unit owned by either an outside investor or by the original sponsor of the building. Because the coop corporation does not own the condominium portion of the building, the coop corporation generally does not receive the benefit of the income (i.e., rent) from the condominium tenants.