May. 31, 2006 - More Condo Or Co-op

The infamous author of Columbus Best Blog, Maureen McCabe asked me if we have Co-ops in Chicagoland. Why yes Maureen, we sure do.

As I said yesterday, there is more to said about the differences between the two forms of ownership, so why don't I just say some of it now? Remember I said in a condominium you own your unit and in a cooperative you own shares of stock in the corporation that owns the building and you get a proprietary lease to live in one of the units. A proprietary lease means you get to occupy the unit as if you actually owned it.

Co-ops are popular among people who like to kind of choose their own neighbors. By way of setting their own rules they can exclude people who don't fit within their chosen parameters. Since they are actually selling stock in a corporation and not real property so to speak, they can be rather discriminatory about who they let in and who they don't. There have been celebrities who have been denied ownership in co-ops because the other share holders believed that the peace and quiet of their building would be upset by having famous residents. Florida is teaming with co-ops that are age restrictive.

Most of the time you have to pay cold hard cash for a co-op. In a condo, the governing body (the association) can always put a lien on your unit if you fall behind in your assessment. The lender can secure your loan by means of a mortgage lien on your unit. You can't very well put a mortgage on a stock certificate now, can you? And since the other share holders in the co-op would be really thrown off kilter by someone getting into the red on their assessments, you can be pretty sure that you will undergo a very deep, grueling intrusion into your finances if you should desire to live in a co-op. 

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