The Virginia Pilot - Realtor Q & A Original Article 5/13/2017

Q. My wife and I are ready to dip our toes into homeownership but do not want yardwork (not even the little bit of grass that could come with a townhouse), so we’re considering condos and co-ops. What’s the difference between a condo and a co-op, and do they both entail monthly fees? They seem like the same thing to us.

A. Though it may seem at first glance that these types of ownership are similar, they are actually quite different.

Rare outside the northeast region, and even rarer to find in Hampton Roads, cooperatives – better known as “co-ops” – are multi-unit properties owned by a corporation consisting of shareowners, not unit owners. This means that as a co-op owner, you own the right to live in a unit of the building, but you don’t actually own that particular unit. And, since ownership interest in a co-op is not considered real property, you do not own a deed to the unit; you own a share of the corporation.

Conversely, ownership in a condo is considered real property where you do own the deed to the unit you live in as well as the shared “common areas” of the neighborhood, such as a pool, clubhouse, green areas, etc.

Each ownership type has either a homeowners board and/or association that binds its owners to certain rules and regulations and charges either monthly and/or annual fees to cover the costs of maintaining the buildings, grounds, administration, and general operations. However, the regulation from a co-op board can be a little trickier and more restrictive. Some co-ops have interview or application requirements for prospective buyers, which can make the process more challenging. Thinking ahead, when it comes time to sell your share in the co-op, this may limit the pool of potential buyers you can feasibly sell your share to since they will also have to go through the same or possibly more restrictive process than you did.

Co-ops are often found in higher-cost, more-populous, big-city-type areas such as New York, where the demand for people to own their own space overrides their need to own their own land, and where the cost to do so is typically more affordable and stable than renting. Co-op living also affords owners an opportunity to buy into a home life that suits their interests where they can have an active say in what happens to the care and improvements of the building in which they live.

Based purely on your above-mentioned desire for no yard maintenance whatsoever, one could say, in theory, that either situation could work for you. However, it is important for you to research the rules and bylaws of the community you find yourselves interested in so that you’re thoroughly informed on what you’re buying into. The Condo Conversations column that runs on the last Saturday of the month in this Home + Living publication may further enlighten you. Good luck with your home search.

– Leigh Sturm, MRP, Realtor with the Hampton Roads Realtors Association and Berkshire Hathaway HomeServices RW Towne Realty, Chesapeake