Mary Lowry Smith, REALTOR

Buying a Condo vs. Buying a Co-op

What's good about owning a Condo or a Co-op?   

  • There may be more security with neighbors close by
  • The exterior of the building, landscaping, driveways and common areas are owned by the association which handles and pays for all exterior repairs and maintenance
  • The entry, interior hallways and all common areas are maintained  
  • Some condos/co-ops  include pools, weight rooms and recreational areas


Condo Ownership
Condo ownership is fee simple ownership, the highest form of ownership, and is the same type of ownership as for a single-family home. It is ownership of real property. The major distinction in owning a condo is that it's communal living and so subject to community rules and the shared enjoyment and maintenance of the common areas.  The ownership entity is known as the condominium and it is only as strong as its weakest member. 

Buying a condo makes sense if the buyer intends to own the property for at least 5 years, and wants the ability to rent at some time in the future. Although the ability to rent is highly probable, condominiums usually set maximum investor ratios in order to maintain property values and owners may have to wait until the maximum number allows it. Traditionally, condo owners are first-time home buyers who transition from renting to property ownership and home-owners looking to down-size while enjoying most of the benefits of fee simple ownership. 




Co-op Ownership:  What is a cooperative, or co-op? A housing cooperative is a form of personal property ownership in which a person purchases shares in a corporation formed for the purpose of providing its members with a place to live. Each apt is owned by a corporation and gives owners a proprietary lease to live in the apt as long as the shares are owned. The corporation owns the building, land, apartments and all common elements. The owners/members, in turn, own the corporation

Co-op ownership is collective ownership stressing respect and shared responsibility for the entire cooperative rather than just towards an individually owned apartment. Co-ops can offer great value and substantial savings in property taxes since co-ops are taxed at a lower percentage of the appraised value.  This type of ownership makes sense if the buyer intends to own for 5 for more years, has little or limited need to rent, and agrees with the overall objectives of the cooperative. 

                                                                  CONDO              vs.        COOPERATIVE

 Ownership                              Fee Simple             Personal Property 

 Instrument                               Deed                      Shares/proprietary lease

 Title Insurance                        Yes                        NO

 Board Approval?                     NO                        YES 

 Renting?                                  YES                        Board decision

 Financing/lenders                    All                         If Recognition Agmn't

 Building & land mortgage       NONE                    % during ownership                  

 Transfer/Recordation Tax       YES                        YES


Participation as a member of the Condo or Co-op board can be beneficial especially if you want to participate in the decision-making process.



Mary Lowry Smith, REALTOR®  e-Pro®  Cell:  202-247-5077
-- RLAH Real Estate -- 
4600 N. Park Avenue
Chevy Chase, MD  20815   301-652-0643