Bekah Steenbock
co-op apartment

Co-op apartments are worth knowing about, and are fairly common in major metros, including New York and D.C. Apartments within “co-ops” can sometimes be rented, so it’s worth understanding what cooperative buildings are, how they work, and what tenants might expect when looking at renting in a co-op development.

What is a co-op?

Owners who buy into a cooperative housing development become a shareholder of that property. They are a part-owner of the building and also have the right to live on the premises. They do not own a particular unit, but because they are an  owner of the company which owns the building, they are given the right to live in a particular unit.

There may be a mortgage on the building itself, and owners pay their portion of the loan payment, maintenance, taxes, and other fees. Everyone shares the responsibility, and, at times, the burden of the building.

Cooperative buildings must abide by fair housing laws. Discrimination against potential owners based on age, sex, race, sexual orientation, and religion, can lead to a hefty fine or lawsuit.


What renters might expect

Typically, the rate of owner occupancy is much higher than at condominiums, because many co-op buildings don’t allow renters at all. Those that do, however, can insist on very large application fees and can beas high as $1500.  Some buildings also have a two-year limit on leases.

Related: Differences in Condos and Apartments

Many cooperatives maintain very strict control by enforcing all the rules for their building, including lease lengths. Co-op members (owners) are typically going to be much more active in the management of the property than condo owners. Other co-op buildings might allow a tenant to stay  beyond their lease end, on a month-to-month basis.

There are perks and drawbacks to being a co-op member and all these topics are things you’ll want to discuss before moving in.

Understanding perks for the owners

Because each owner is a shareholder in the building, they have a say in how the building is run. Residents have the opportunity to attend voter and board meetings, to have their say, including on the rules and regulations for new shareholders. They are invested in the building as a whole, not simply their individual unit. Cooperative housing tends to be less expensive than owning a condo. That is one reason this type of housing is popular in cities with a high cost of living.

Understanding drawbacks for the owners

Belongings are not covered by the building’s insurance, so you’d still need renters insurance.  Also, since everyone shares the costs, if one person defaults, everyone’s costs would then go up to cover expenses. This is one big difference between cooperative housing and condominium ownership. For this reason, co-ops tend to have more stringent guidelines for whom they will allow to live at the property.

The bottom line

Renting a unit in a cooperative building can be very rewarding. Knowing what’s involved for the owners – who are typically far more involved than those at condo complexes – will get you off on the right foot for interviews, and help you make an informed decision about renting there.

Photo by Mike Petrucci on Unsplash



About The Author

Bekah Steenbock is a freelance writer with a background in real-estate and business growth. She is a native Austinite, but has called Seattle, Mankato, Milwaukee, Las Vegas and Atlanta home. Bekah, her husband, and their three children love exploring the outdoors in their spare time.