Multiple Property Owners
October 12, 2020
Ownership in a Cooperative
In multiple owner properties, we will contrast ownership in a cooperative versus ownership in a condominium. The original idea behind a cooperative was tenants in an apartment complex would cooperate with each other, pool their money together, and buy the apartment complex outright as a group of people. Let's say they gave themselves a name, ABC cooperative. Then every month the people would still be tenants and would make rent payments, but they would make rent payments to themselves as a group of people, and that is to the ABC cooperative. Keep in mind, the cooperative would actually own the property in severalty, which is one only. The individual people, the tenants would own stock in the cooperative, and that would allow them to lease out the property. The lease in a cooperative is called a proprietary lease.
Ownership in a Condominium
Here is where someone would own their own individual unit and have fee simple title to that condominium unit. Unit owners are obligated to maintain, repair, and replace physical assets designated as within the boundaries of the unit. There can be rules about how much you can individualize the interior of your unit. These are justified by statements that the units must be in a condition to be easily sold in the marketplace. There are common areas that everyone shares such as the roof, the parking lot playground equipment, things like that. Those would all be considered common areas and are owned as tenants in common. All the members would share in the costs and maintenance of the common areas as well. Keep in mind that when an individual owner owns a condominium unit, they will need their own insurance to cover items inside the unit, such as if someone slips and falls on the property. The insurance would not cover, however, the common areas.
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