Gotten to the point where you just can’t keep up with maintaining that single family home? Or maybe your lifestyle is so busy and exciting there’s no room in your life for all that stuff. If mowing lawns, trimming shrubs, shoveling walks, cleaning gutters, painting and repairing the roof make you cringe, a condo or co-op may be right up your alley.
“Millions of baby boomers are looking for alternative living styles that will let them ease into retirement or just simplify their lives,” says John York, a West Palm Beach CPA who has prepared tax returns for condo and co-op owners for more than 16 years. “By purchasing either a condo or co-op, you still enjoy some tax relief and property appreciation, while someone else cuts the grass and takes care of the pool and grounds. But there’s a price attached to it, both in dollars and your sense of independence.”
The day-to-day life in a condo or a co-op is much the same and the typical resident usually wouldn’t notice any difference. However, there are critical distinctions and what you don’t know could cost you money and lots of aggravation. David St. John, a Florida condominium attorney, says, “There are significant differences between a condominium and a cooperative, but each is considered a common interest development or CID.
The terms ‘co-op’ and ‘cooperative,’ are short for ‘cooperative housing project.’ Cooperatives were in existence and common before the condominium scheme of ownership was fully developed in the United States. They were especially common in New York City and the northeast.” In a cooperative says St. John, an attorney whose firm represents more than 600 condominium, cooperative, and homeowner associations, the building containing the residential units or apartments is owned by a ‘cooperative housing corporation.’ “In a condominium, each unit owner owns an individual apartment in fee simple.
In addition, the buyer owns an undivided interest in the common elements such as the exterior walls, roof, pool and other recreational areas.” Both condo and co-op owners have monthly maintenance fees to pay, but they can vary, depending on what expenses the fee covers.