WHAT IS A CO-OP - Co-op in Fort Lee NJ

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WHAT IS A CO-OP

Co-operative apartment, or co-op, is a form of ownership in which acorporation is established to hold title to property and to lease the property to shareholders in the corporation.

When you buy a co-op, you become a shareholder in a corporation.  Unlike a condominium or a house, you do not own real property. Instead, you own shares of stock and a proprietary lease allocated to your apartment. You have a landlord-tenant relationship with the co-op.

Shareholders can receive a tax deduction for co-op mortgage you may have on your apartment, in additional to a tax deduction based upon the percentage of you monthly maintenance charges which are used to pay off any underlying mortgage - this is a mortgage that the corporation has taken out on the entire co-op building.

Like any corporation, co-ops are run by a "Board of Directors" elected by the shareholders, along with the assistance of a management company. Shareholders may be subject to special restrictions imposed by the co-op Board of Directors. These rules and regulations, however, must not violate any existing rights under state or federal law.

You would probably not be able to tell the ownership from the outward appearance of a building or house. Co-op could be single family house, garden apartment, midrise building or highrise building.

Most Bergen County co-op board requires the buyer to pay minimum 20% - 51% of the total purchase price as the down payment. This is non-negotiable condition and subject to each individual co-op board.