A Guide to Understanding the Differences Between Coops, Condos and Townhouses

Coops, condominiums and townhouses are all forms of attached housing. They are great for people who want to own their own homes or apartments, but do not want to have to do the maintenance which is normally involved with owning a home. They come in different forms and have different financial and governmental set ups. So before you purchase housing of this type, be sure that you understand all the facts.

What's the Difference?

Here is a summary of each of these three types of housing.

Townhouses

Townhouses are usually a two floor unit which share at least one wall with another townhouse. They are usually found in clusters or groupings. Townhouses tend to look like houses which happen to be attached on one or more sides. They may have a less 'apartmentish' look than coops or condos.

Townhouses will often have many amenities to offer their residents. There may be a main clubhouse, a pool, tennis, golf, etc. If the community happens to cater to Seniors, you may find many services which cater to their needs.

Each owner of a townhouse has title to his or her unit and the land underneath it. They also share the ownership of the common areas if there are any (these are areas used and shared by all owners). Townhouses are usually governed by a Homeowners Association. This Association is usually elected by the residents.

Condos

Condominiums are usually a single unit with one or more floors. They often resemble apartment buildings or attached apartments. They can be found in clusters of a few units or high rise buildings.

Condos will often offer amenities which are similar to those of Townhouses, such as pools, clubhouses, tennis, golf etc. Again, you may find that the amenities cater to the specific residents. Each owner has title to the interior space within his or her unit and shares title to the common areas as well.

Condominiums are governed by a board of directors which is elected by the residents. They will have to adhere to the condo's bylaws and covenants, conditions and restrictions.

Coops

Cooperative Apartments, or Coops, for short are single unit apartments. They can be in large buildings, or smaller garden style apartment buildings.

Coops are owned only as shares in a corporation, partnership or trust which, in turn, owns the entire building. The owner has the corresponding number of shares in the corporation and has the proprietary ease to live in the unit. A board of directors is usually responsible for governing coops.

Buying a Condominium

Before you purchase a condo of your own, you should research the project or speak to a real estate attorney. There are certain documents that you will want to check before you make your purchase. You should be able to get these from the board of directors.

1. Master Deed. This documents the project as a condominium. It gives the residents the authority to form an operating association and includes the legal description of all units and common areas.
2. By Laws. These are the operating rules for the condo association. They authorize the board of directors to hire a management team, create a budget and much more.
3. House Rules. These rules govern what owners can do in the common areas of the condominium.
4. Covenants, conditions and restrictions. These are often created by the developer and may place restrictions on the use of the property.
5. Other Papers. You may also want to see the current budget and financial statement of the homeowners' association.

Buying a Coop

Most coops have budgets and rules which govern them. Some may prohibit renting, or others won't allow pets. Make sure that you know what the restrictions are before purchasing.

1. Coop rules. Make sure you review all rules, including membership regulations and house codes.
2. Legal Documents. Review all documents including incorporation, bylaws and proprietary lease.
3. Budget. Make sure to review the financial statements and operating budget.

Things to Look Out For

1. More than half of the units are rentals. Maintenance may be poor and some lenders will not fund a loan for this type of complex.
2. The Condo Association does not have a healthy reserve fund. Members may have to pay a special assessment to cover the cost of major repairs.
3. Members of the Board who don't get along. If they can't agree, they won't be able to make good decisions for the other residents.

Enjoy Your New Home

Now that you understand the basic differences between condos, coops and townhouses, you can make your purchase wisely. Enjoy your new home.