Cooperative Housing

A cooperative, or “co-op,” is a corporation that owns a building. As a “co-op owner,” you own stock in the corporation, and proprietary rights to occupy a specified unit in the building.

Your number of shares is based upon the size of the unit, the height in the building and, in some cases, other amenities such as exposure or view. Your monthly “maintenance” payments are based on the percentage of your shares to the total number of shares held in the building, both of which were determined at the time the building originally converted to co-op. Generally, the number of shares never changes unless units are combined or subdivided. Your monthly maintenance payment actually covers your share of three different types of expenses: first, the basic operating costs or upkeep of the building, such as heat, water, electricity and gas for the common areas, salaries for the superintendent, doormen, management and maintenance staff, and liability and other insurance for the building; second, real estate taxes assessed by the city; and third, any mortgage on the building itself, transferred to the co-op corporation from the original owner of the building or, in many cases, a refinance or equity loan taken out by the co-op for restoration and capital improvements.