Being a Canadian and woefully ignorant of all things New York, is a co-op like a condo apartment building. What do the fees cover?

Even New Yorkers can be woefully ignorant of all things New York!

In response to slackerjo's question:

With a condo you own your apartment. With a co-op you own shares in a corporation that owns the building and as a shareholder of that corporation you have proprietary rights to occupy the space that is 'your' apartment.

In a condo your maintenance fees cover the cost of common areas and you are responsible for costs related to what's inside your walls. In a co-op your maintenance covers the costs of entire building including utilities, even your neighbors but sometimes a building can opt to put certian expenses to individual shareholders, such as the cable TV and electric bill.

I hope that helps!

I saw the unit #1 in an open house 2 months ago. Cramped and tiny. The kitchen was so teeny it was unworkable. Maybe it was 5x6 space with an under counter 4 foot tall mini-fridge. Not without its charms, but has to be for a non-cook.

Also, I believe the Chelsea space belongs to a bldg with a land lease. Land lease = very bad idea. In fact there are so many units from that bldg on the market due to its upcomingland lease expiration date.

Basically, if a 1 bedroom is on the market for under 300K, there is a catch. Too good to be true, as I found in the last year of open house viewings.

Yeah, we rented UWS/Morningside Heights for 10+ years, and then got smart and bought a freestanding house on Staten Island for just a little over what these studio apartments cost - with no additional $700 monthly maintenance on top of the mortgage. We're in a nice neighborhood, near parks, shopping, and the free ferry (which is one of the best commutes ever.)

We have co-ops all over Canada :) You basically pay a large deposit (in Victoria, it's usually $2500-5000, give or take) which is like a membership and then you pay your monthly rent. Often, co-ops require you to do some kind of work, sit on a co-op board, do some chores around the building, etc. You usually get your membership/deposit back when you leave.

Though it may differ in places, and might be different in the US.

Er yes, I guess they do differ in the States *embarrassed* though it could be said to be the same thing, just substitute $300K for $5000 membership shares and Monthly Co-op Fees for "rent" in my example above. I don't know if they require you to do work around the building or have required board time or not, but I'm guessing they would have one or the other (or both). And when something needs to be repaired in one suite, everybody pays for it.

with no additional $700 monthly maintenance on top of the mortgage.

So homebody was basically paying a mortgage AND rent! Dude!

And here I was wondering why these places were so cheap.

In SF we have Tenancy in Common (TIC) everyone is on the same mortgage and buys a share of the building. It's risky. If someone loses their job or skips out on the loan everyone else is liable. It's really the only way to get into a place under 450K. I've been told that going condo (everyone gets their own mortgage) increases the value 100K immediately.

I looked at #1 a few months ago, too (when it was listed for $340!) and man is it tiny. I knew that going in (400 sqft is 400 sqft), but like kayonyc said, the "kitchen" is...well, not a kitchen. I think it's irresponsible of agents not to specify "efficiency kitchen" when it clearly is. Plus a waste of time for everyone.

kayonyc is right to be suspicious! A prospective buyer should always ask for a condo/co-op questionaire which asks, 'Are you or the Board aware of anything that would materially effect the value of this purchase'? A landlease that is not reasonably renewed would materially effect the value and therefore should be disclosed.

Land leases are common in Manhattan and other places like Ocean Grove, NJ, where every single home is on a purpetual landlease for $1 per year for 100 years, renewable every 100 years. It's best to always consult with a real estate attorney familiar with underlying land leases if you've found something you want to buy, but a good real estate agent should know which buildings have issues that can effect future value-that's a real time saver!

p.s. I never show a listing that doesn't have photos of the kitchen. No photos in NJ usually means it's a dump. No photos in NY apparently means sh*tty kitchen.

No 'pied a terre' purchasers means it must be your primary residence. Our co-op has the same rule. There is a misconception in this thread. If something needs to be repaired within our walls, we are responsible for it, no the co-op, unless it is caused by another shareholder, such as water damage, which happened when our upstairs neighbors had a gut renovation and a worker hit a water line. That shareholder had to insure her contractor repaired all damage to our apartment.

And another thing not mentioned is that a portion of monthly maintenance fees is tax deductible. In our building it's 45%, but it varies from building to building. But it means a 5 figure refund each year for us.

Just gotta say I LOVED this post! Apartment Therapy should make listings like these a regular fixture!!

@Blandwagon - you don't pay maintenance if you are renting, like we had been, but if you *buy* an apartment in most boroughs of NYC, there are monthly maintenance fees for the building on top of your mortgage. If you check out the listings, there is the sale price (which is what your mortgage would be for) and then there is a maintenance fee listed for shared building expenses. So even if you eventually paid off your mortgage, you'd still have the $700/month (or whatever your fee is) to pay no matter what - a little like perpetual rent. Single family homes obviously have maintenance fees too, but they are based on actual, specific expenses - like the washing machine just broke and you need to replace it.

LoriHeddingerPhotography, after a good night's sleep I can see how my post can read as a misconception. I should have clarified that in a co-op, a shareholder is responsible for the physical portion of the interior space of their apartment plus a share in all the buildings expenses and those can include your neighbors' utilities. Thanks for pointing out the need for clarification!

Check out Tudor City - plenty of co-op studios under $300,000!
Pre-war charm? - in spades
Small? - oh, yes.
Unrenovated? - usually
Doorman - yes
Fabulous historic, landmarked neighborhood with 2 lovely parks, glorious Tudor revival architecture with gargoyles & spires , friendly neighbors committed to preservation & beautification? - yes
On-site affordable designer & who can transform your small space into a beautifully functional haven in the heart of mid-town? - yes!! That would be me! - check out http://www.apartmenttherapy.com/ny/house-tours/kitties-tiny-tudor-city-triumphhouse-tour-104222

@ Heather C, as someone who recently bought a condo but looked at lots of TIC, the types of mortgages you described (jumbo loans) are not the only option, and most TICs are now avoiding them. A lot of banks offer fractionalized loans, which are just like traditional loans on a condo. The only problem is, now that banks are being a lot pickier with granting loans, it is much harder to be approved for them. But between their introduction in around 2006/2007, to 2009, they were fairly accessible. Quick trivia: not one owner of a San Francisco has ever defaulted on a loan payment (at least, as of a few months ago).

Wow, I bought my prime Park Slope apt for 300K 11 years ago. 3 bedrooms, 1200 Sq ft., backyard.
It's amazing to see what we could afford now with that same amount of money

I'm not surprised at the price per sqft on these new york co-ops and condos, but I had no idea you guys paid such ridiculous "maitenance" fees. Here in LA $250-$400 condo HOA fees were high enough to make me buy a small 800sq ft house instead of a condo.

man I feel sorry for you guys out there who want to 'own'

USD 700 sounds low for HOA dues in NYC. Christ on crutches, here in S.F. they can border on USD 1,000+ depending on the building. For my condo on Nob Hill, I'm paying USD 960 for my monthly HOA.

I can't believe that some people pay more than our mortgage in monthly maintenance fees!

The midwest may not be cool, but it does have its advantages.

$272,000 with $1,184 in monthly fees!!

A 25 year mortgage + fees would be $2583 a month ... or the same as a $500,000 mortgage with no maintenance fees..

Do the monthly fees cover property taxes and/or any utilities or groundskeeping?

Depending on what they include, it might not be much more than you would pay each month for taxes, utilities, etc. if you owned a condo or a house.

HOA fees generally don't cover property taxes. They cover exterior maintenance and any services provided (doorman, valet service, gym, pool, community meeting space, ad nauseam).

Also, you have to factor in tipping the on-site staff at the end of the year during the Baybee Jeezus holiday.

As a B Boy I say keep your Manhattan prices.....
Come up to the Bronx and get space, parks, Arthur avenue, The BRONX Botanical gardens and a real bedroom or in my case 2 and only 30 minutes by subway to 42nd street east or west side. And spend the extra 100k on renovations like better than builder quality wood floors, a walk in shower, and all new moldings throughout the apartment.
SUCKERS!!!!!

condominiums are individual units, with individual deeds & real estate taxes, like houses. co-operatives are owned by corporations, the purchaser buys proprietary shares as allotted to each unit & r/e taxes are charged to the corp. the number of shares/unit can vary based on perceived relative value of the unit; mtce fees are charged per share. in the us, interest but not principal on home mortgage(s) is tax-deductible & both qualify for this as homes. in the us, rent for a residence is not tax-deductible by the renter. the principal paid for houses, condos & co-ops is equity/investment & may be recouped at sale after any existing mortgages are repaid.
common charges/homeowner association fees (condo) or mtce fees (co-op) for both cover the costs that the board of directors--usually occupants--votes to pay: common areas like roofs, what is in the walls (unless the problem is caused by another occupant), bldg (not occupant) insurance, etc. in nyc apartment houses, it is usual to have a central heat source & master water service, but individually-metered electricity; if the water bill increases, so does the cc/mtce fee. this is not the same for nyc rental units, as many are subject to stabilization & rents do not relate to market price; there is a yearly battle about % rent increases to cover mtce cost increases, which then is divined by a state-related authority. in the us, every type of dwelling has the same basic costs, plus amenities (like a gym or a yard) that affect value. owners of houses are their own board of directors/superintendents & pay for mtce, taxes, amenities.
in nyc, there are more co-ops than condo's, possibly b/c of ease of legal structure & ease to convert from rental, possibly b/c there can be more restrictions, such as interviewing occupants & sublets, possibly b/c the purchase price for a co-op is not public record. the co-op board can sue shareholders to sell if house rules are broken sufficiently. some owners of individual houses also must join hoa's that do mtce or restrict public/publicly-viewed space. cc/mtce fees affect purchase price, as does the way the property is run, the size of the reserve account, the size of the property debt.
land-lease means that bldg space is owned separately from land; in nyc, the assessed value & taxes for each are separate, even if owned together.
the cost of housing in nyc/sf/boston is high in comparison with other parts of the us b/c there is market demand, but those cities also have rent restrictions on a portion of the rental housing, which affects housing supply & demand for rentals & condo's/co-op's/houses. in the us, the classic guideline is 28-30% income for a home, 36% income for total debt, but, in these cities, it can be as much as 45-50%; on the other hand, median income in these cities is higher than in the rest of the us.

if $300,000 in new york seems to good to be true. It is!!! There is always a catch. Most of these so called expensive homes in prime neighborhoods have ridiculous maintenance fees ( around 1,000/ month). some of them need 50%-100% down or require you to have liquid assets ( cash of in the bank) 50% or equal to the price of the home.

My husband and I we're just weighing out if we should move to D.C. or New York... both are expensive but D.C. is winning based off these NYC's crazy condo fees alone

@ ronin democrat, Arthur Ave rocks! Just ate at Dominic's last night, those stuffed artichokes are to die for!

Uh, my husband and I are selling our beautiful 2-bedroom Brooklyn co-op for under $300,000! High ceilings, exposed brick, and >700 sf in a great elevator building. Also, our maintenance is under $800/month. And in a lovely, accessible neighborhood, too. See, it's possible!

JasmineDeja: I'm house-hunting in DC and the condo fees are pretty crazy here, too. My partner and I are looking at townhouses for that reason. You should base your move on which city's "vibe" you like better, and which has the better job market for you. I love NYC but I have a hard time finding jobs there, so DC suits my situation better.