that apartment. The larger the apartment, the more shares within the corporation they own. Monthly maintenance fees cover building expenses including heat, hot water, insurance, staff salaries, and real estate taxes. In a co-op, the building and its tenants are subject to rules and regulations set forth in the bylaws of the corporation. If an owner would like to sublease his or her apartment or perform any alterations or renovations to it, he or she must get permission from the board of directors elected by the tenants in the building. Advantages of Buying a Co-op Co-ops are generally less expensive than comparable condominium apartments and larger square footage. Some of your monthly maintenance fees are tax deductible. Disadvantages of Buying a Co-op All prospective purchasers must be approved by the Board of Directors. The Board approval process is often time-consuming and rigorous -- requiring extensive information regarding finances, employment, and personal background. Monthly maintenance fees for co-ops are much higher than for condos. This is because the monthly fee includes part of the underlying mortgage and real estate taxes for the building. Many co-op boards limit the amount of the purchase price that can be financed and require higher down payments than are usually required for condominiums. It is harder to sub-lease a co-op and a potential tenant must go through the entire board meeting as if the tenant is purchasing the unit. Each co-op building has its own rules, but many limit or forbid subletting. In addition, many co-ops do not allow you to purchase shares unless you are the primary tenant.
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