I am a student working on a program for starting one's own business. One aspect is leasing with option to buy the first floor of a building that is to become a restaurant. Apartments occupy the two top floors. What are the essential differences between a condiminium and cooperative agreement?What basic conditions should one look for in a mortgage contract relative to taxes, tax benefits, building supervision, and down payment percentages? D. B.
Rather than develop your class project, I can offer information on only two of your questions that may be of general reader interest. Condominiums differ from co-op buildings principally in their organization. Each condo is precisely defined in space and is bought by the owner without referrence to other owners. Each condo owner also owns an undivided share of common areas such as the land, halls, elevators (if any), and amenities, such as a swimming pool.
Co-op owners do not own their specific property but own a share in an organization that owns the building and grounds. Generally, I prefer the condominium arrangement over the co-op organization, as you have more control over your own space.
A mortgage loan agreement will ordinarily require you to pay all taxes and insurance to the limit of the mortgage's financial interest. Since you pay the taxes, you get any tax deduction benefits. Building maintenance for the good of all condo or co-op owners is handled by a building association of owners or their representatives. Down payment percentages are negotiable with 20-25 percent being reasonable. A higher down payment will sometimes lower the rate of loan interest.