Condo vs. Co-op

Condos, co-ops, and condotels… OH MY! If you’ve taken off a bigger bite than you can chew when it comes to the verbiage of real estate in the Big Apple, you might be in dire need of a quick explainer. The terms “condo” and “co-op” are undoubtedly intermixed on the rental websites and broker literature you’ve encountered so far in your search for a New York City rental. There are some key differences between these two living structures. Let’s go over the important distinctions between condos and co-ops.

I keep hearing the words “condo” and “co-op” what’s the difference?

A CONDO is ownership of real property where apartments are individually owned but the common elements of a building are shared. (IE, hallways, laundry room, roof deck etc..) You obtain ownership to your apartment with a deed, which is recorded with a city or a county clerk. A CO-OP also known as a Housing Co-operative is a corporation that owns your building. People who own in a “Co-op” are called SHAREHOLDERS, same as shareholders of stock in a publicly traded corporation. Each shareholder owns a specific amount of shares that correlates to their apartment. Everyone who owns shares in the Co-op are subject to an occupancy agreement which is known as a Proprietary Lease. Owners also own the common elements of the building.

Both CONDOs and CO-OPs have boards that you, the perspective tenant; have to go through in order to rent in their building which brings us to the next question,

I know what a CONDO and CO-OP are, but what does that mean if I want to rent one?

Both condos and co-ops have BOARDS that you have to go through in order for you the tenant to be approved to live there much like being approved by a management company only more difficult. You will have to submit a BOARD PACKAGE. This tends to be way more invasive then renting in a Management Company owned building. There are lots of resources to help you put together an effective board package. This may not seem much different than what I tell you in Question 16 but getting this together times 5-10 board members (depends on how many board members there are, is more difficult)

This typically includes:
1. First months rent, last months rent (CERTIFIED FUNDS UPFRONT…they are returned to you if you are turned down)
2. Signed Leases (this includes guarantor signatures)
3. Employment Letter – stating your length of employment and salary, can be a CPA letter instead if you own your own company
3. Taxes for the last two years
4. Signed “CO-OP/CONDO” rules
5. 2 pay stubs
6. ALL paperwork you need for NYC (IE, lead paint clause, window guards)
7. Recommendations (2 personal, 2 business)
8. Clear photo ID
9. Bank statements
****10. Application fee and other board fees. This could range anywhere from $150- 1000.00 up front. It depends if the owner will cover the additional yearly fees or not.MOST OF THE TIME THEY DO except for the application fee. Application fees range $100-400 on average.

CONDOS are much, much easier to rent in. The BOARD is much more informal and they won’t want nearly as much information as a CO-OP board. This is because the owner is really the one who is responsible for paying their mortgage and taxes, so if you default it is on him or her. A CO-OP board is much more strict because if the owner defaults because you the tenant hasn’t paid them, the entire CO-OP is held responsible.

99% of the time you are renting through a broker if you are trying to rent in a CONDO or CO-OP. Individual owners have a hard time getting together what you need to present to their BOARD so they usually enlist a broker to do it for them.

condo and co-op buildings in New York City

The biggest difference in renting in a co-op vs condo/management company is the THE BOARD INTERVIEW

You will likely have to go through a board interview to live in the CO-OP and never in a CONDO. The owner is allowed to only submit one applicant per month to the board meeting. If you aren’t approved then that owner loses out on rent until they can submit a new applicant for the next month. This means the owners can be tough on you in terms of wanting information.

If the owner picks you as their applicant you will have a scheduled appointment where you will meet with the board (the board typically meets only once a month) to see if they approve you to rent in their building. Boards vary tremendously with how strict they are. You can be very well be qualified to rent this apartment but if they don’t approve you, and they are allowed to disapprove of anyone they want, there is absolutely nothing you can do. They are like the border patrol to their mini country, and you are trying to gain citizenship. I wouldn’t overly stress about the actual questions they ask you in the meeting. Boards are set in their criteria and you will either meet it or you won’t. If you would like to have some idea of what they could ask you, here are sample questions:


  • Do you have a significant other?
  • If you do have a significant other how often do they spend the night?
  • Is there a chance they will move in with you?
  • How long have you been employed?
  • Do you plan on staying at your position?
  • How long have you lived in the city?
  • If you are in school, what are you in school for? …
  • What do you want to do after you get out of school?
  • Are you close with your guarantor?

After waiting for three weeks without looking at other apartments you could very well be turned down and screwed come the first of the month with no apartment to live in.

So, why rent in a co-op?

PRICE!!! Anything this arduous has to have a silver lining, and in this case, that lining is a significantly cheaper price-no doubt a price cheaper than the rest of the apartments in Manhattan. I live in a co-op. I live in a doorman building, with laundry, 2 blocks from the subway in a trendy area in a big one-bedroom apartment for $2100 a month. The building across the street, owned by a management company, rents a one bedroom that goes for $3200 per month. That is a HUGE, HUGE price difference, even if you pay a 15% broker fee and an additional few hundred up front for board fees.

Of course, nothing in life is free. I had to fight tooth and nail for the owner to pick me, and then I still had to face the board. I was fortunate in that my board was not all that strict. At the time I was a graduate student with loans and no real income other than my guarantor. But because I had a solid guarantor, I was approved. Again, there are exceptions to the rule: this was one of them. Often times, boards will not take you if you do not qualify on your own. So, in exchange for a crunch on my personal time and some loss of pride, I was granted a cool apartment at a great price.

How do I search for a condo or co-op rental?

Like I said earlier, most of these types of rentals are available exclusively through brokers. For this reason brokers list the addresses to these units publicly on their brokerage website. To find them, go to the SEARCH RENTALS feature on any brokerage website, and you will be able to tell if a listing is to that brokerage or if it is a general rental that they are advertising. The broker will typically tell you if the listing is a condo or a co-op, even if there is no address listed.

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