co-ops are similar to condos, although rather than owning physical real estate, a co-op buyer purchases a share in the corporation that owns the building itself. In a co-op apartment, the residents who bought the shares of stock can then rent a particular unit from the corporation under a proprietary lease. While you do not own your condo or apartment, you do get a proprietary lease on your unit and a share in the company, which means you own interest in the entire property.
The lease you receive typically grants you the right to live in your unit for as long as you own your share in the company, although you will likely have restrictions on how you can use the property. For example, many co-ops may not allow you to buy a share with a mortgage or loan. Still, there are some unique types of mortgages called share loans that can be used to buy a co-op. Sometimes, you will need to establish an escrow account to cover co-op fees and taxes. Many co-ops today require buyers to put 6 months to a full year's worth of maintenance costs into an escrow account.
At New Era Escrow, we have decades of experience handling complex co-op escrow accounts. Our escrow officers will help you establish an escrow account that will satisfy the co-op or bank requirements and allow you to move in as soon as possible. Contact us today to get started setting up your co-op escrow account.