by Winnie Saunders
(Georgia, Atlanta, USA)
If you are out in the market looking for a home without maintenance hassles, odds are you have run across the option of purchasing either a condo or a co-op apartment. On the surface, they appear to be the same option with little difference – you purchase an individual unit, pay a monthly fee, and come and go as you please without worrying that the grass was mowed or the roof needs patched. But condominiums and co-operative apartments are not the same, and the differences are quite significant.
Co-ops have been around a bit longer than condos, first appearing as a form of property ownership in the late 19th Century in Chicago. A band of wealthy merchants, bankers, and businessmen got together, purchased a building as a corporation, and each of them receivedstock in the corporation which gave them the right to live in a specific apartment within the building. Along with a board of directors to oversee the day to day operations of the property, they created a committee to decide who else they would let live in the building with them. (Ironically, Al Capone lived in one of these early co-ops).
Condos came into being in the 1960s, when a hardware salesman in Chicago with an entrepreneurial bent and a passion for history came across the idea of condominiums while reading about ancient Rome, which permitted the urban dwellers of that densely populated capital to own an actual piece of the building they lived in. He was familiar with co-ops, having been denied the right to live in one by its committee.
And therein lie the two central differences between condos and co-ops
Major Property Right Differences and Mortgageability
The most financially significant difference between a co-op and a condo is that with a cooperative apartment you do not own real estate and do not hold actual title or deed to real estate. You are a shareholder in a corporation which owns the building. When you purchase a condominium, you get title to real estate, with a recordable and mortgageable deeds.