Co-Ops Can Be Cheaper For Those Who Pass Muster
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When it came time to purchase a home in New York City, actor Matthew DeCapua chose to go with a co-op. For him, the decision came down to the dollar sign.
“A condo in any borough, but of course Manhattan, can be very expensive, whereas a co-op is much more reasonable. So that was definitely the biggest factor,” says DeCapua.
What separates co-ops from condos is more than cost. For one thing, it's a matter of what exactly the homeowner owns.
“In a condo, you own a property. In a co-op, you get shares of a corporation,” says Jim Grossman, a board member of Fieldston Gardens in Riverdale, Bronx.
In buying those shares, a co-op member is essentially agreeing to collectively care for the common assets of the property and the quality of life that comes with them.
“Such as a doorman, such as landscaping that we would not otherwise be able to afford, or wouldn't even be available to us,” says President Steve Budihas of the Association of Riverdale Co-Ops.
But perhaps the most unique aspect of purchasing a co-op is the need to get approval from the board - a panel of residents who comb through your life and finances, leaving no stone unturned.
“We look at your income tax forms, your credit history, your assets, your debts,” says Grossman.
For many, being scrutinized can be a stressful and scary scenario.
“It's somewhat like pledging a college fraternity, where a group sits around and decides whether or not a person is eligible to live in the building,” says real estate attorney Gerrold Gold.
The boards may not hold toga parties and hazing rituals, but Gold says that like a fraternity, boards have almost complete discretion over who they accept. While it's illegal to discriminate on the basis of race or religion, board members rarely have to answer for their answer.
“Particularly if they reject the applicant, they will just say that the applicant is rejected,” says Gold.
DeCapua says in hindsight it was all worth it. While the process was lengthy, with the economy the way it is, he says it gives him piece of mind to know everyone in his building has been as carefully vetted as he was.
“Buying a co-op is like applying to an Ivy League school,” says DeCapua. “Getting in is the hardest part and once you are in, you're in a great situation.”