What is what does it mean when a building goes co op?

Converting an apartment building to a co-op, or cooperative, means that instead of individual apartments being owned outright, the residents collectively own shares in a corporation that owns the building. Each shareholder then receives a proprietary lease, giving them the right to occupy a specific apartment. Here's a breakdown:

• Ownership Structure: Instead of owning real estate directly, residents own shares in a corporation. The number of shares usually correlates with the size and desirability of the apartment.
• Proprietary Lease: This gives the shareholder the right to occupy a specific unit. It outlines the rights and responsibilities of both the shareholder and the co-op corporation.
• Co-op Board: This board, elected by the shareholders, manages the building. They make decisions regarding maintenance, finances, and prospective residents.
• Board Approval: One of the defining features of co-ops is the board's ability to approve or deny potential buyers. They evaluate the financial stability, background, and overall compatibility of applicants.
• Financing: Mortgages for co-ops can be different from traditional mortgages for condos or houses. Co-op financing is often referred to as a "share loan," and interest rates may be slightly higher.
• Fees and Assessments: Residents pay monthly maintenance fees, which cover operating expenses such as utilities, building upkeep, and staff salaries. Special assessments may also be levied for major repairs or improvements.
• Advantages: Can be more affordable than condos in some markets. Residents have more control over the building's management.
• Disadvantages: The approval process can be lengthy and difficult. Resale can be more challenging due to board approval requirements. Subletting restrictions are often stricter than in condos.