People not familiar with home buying in New York often wonder about the hybrid condop, and how it differs from a co-op and a condominium. When you purchase a condo, you can rest assured of owning the apartment, however; when you buy a co-op, you are buying a part of a corporation that is technically shares.
So what about a “Condop”, a co-op inside a condo? This term is commonly misused to describe a cooperative corporation that behaves like a condominium as they said a condop is a “co-op with condo rules” but this is not the case. It in fact has the flexibility like a condo, but what makes it different than coop or condo is that a condop is the result a building having both a residential and commercial usage. The income from the commercial section needs to be over 20% to call it condop, which could be a retail store, office space, garage, or a restaurant.
Condops have been around since the 1960s. Recent surveys show that in NYC, there are over 300 condops, 2,300 condominiums, and 6,500 co-ops. New York used be a co-op city, but recently so many condos were built and still more are coming up that it looks like condos will take over the city in the next 10 years.
Take a note, home buyers. This could be a great arrangement for you! The only thing is that you really have to hunt for one.
Typically a condo will require a lower down payment, a board approval, to sell or sublet and does not include many of the restrictive measurements. Additionally, restrictions on alterations to the apartment are more consistent with cooperatives than condos. In comparison, co-ops require higher down payments and have much lower closing costs. Condops would fall in between condo and coop rules.
Conclusion, when a coop’s commercial space starts earning more than 20% of the total income the board becomes more flexible just like condo boards. The more money they make, the more flexible they get. Interesting….