Co Ops

Hi Everyone,

Had some questions about Co Ops. I was wondering how investors can invest in a Co Op, if at all, and if so, how would they invest in them? Also, what happens if there’s currently a tenant in one of the units?


 When you buy into a Co-op, you become a shareholder in a corporate entity.  Unlike a condominium, townhouse or a house, you do not own real property!  Instead, you own shares of the corporate entity and a exclusive lease allocated to your rights to your apartment.  Because you don't own the building, shareholders have a landlord-tenant relationship with their Co-op.

 Shareholders can receive a tax deduction for Co-op mortgages they may have, in additional to a tax deduction based upon the percentage of their monthly maintenance charges which are used to pay off any underlying mortgage held by the Co-op!

 Like any corporate entity, Co-op´s are run by a Board of directors elected by the shareholders (Tenants), along with the assistance of a managing agent,  Shareholders may be subject to special restrictions imposed at the Co-op Board´s business discretion (e.g., subletting, carpeting their floors). 

These rules and regulations, however, must not violate any existing rights under state or federal law.

It is generally against Co-op rules to rent (Sub-lease) the unit, virtually all Co-ops are owner occupied by buyer or someone within his immediate family! A tenant is probable in the unit against Co-op rules and regulations (Bylaws) and if found out will probable be removed from the premises.

Read the by laws but my bet would be owner occupied only! Virtually all Co-op’s are!


Thanks for the speedy response GR