This week, we’ll discuss the co-operative system of property ownership. Co-operative ownership is commonly with apartment buildings in Manhattan and other northern metropolitan areas of the US. However, there are some opportunities to become co-operative in Florida.
If you are from overseas, or from outside of major metropolitan areas in the US, you may not be familiar with how co-operative property ownership works. Basically, it goes like this: the co-operative is a corporation that owns the building and all the occupants of the individual units receive shares in the corporation in proportion to the size and location of their apartment. As the co-operative operates as a corporation, there is a board of directors elected by the occupants (in their capacity as shareholders), who are responsible for the running of the co-operative. The directors are responsible for collecting maintenance fees from shareholders and ensuring communal areas are maintained, and all liabilities that the corporation faces are paid.
The directors are also responsible for approving or rejecting new entrants into the co-operative, based on the criteria agreed by all shareholders. This may sound a little scary for a prospective buyer, but the purpose of this is to protect the existing residents from financial risk and also to ensure that the overall atmosphere of the building is retained. Co-operatives, therefore, tend to have a better community feel than buying a condominium, as residents tend to take more responsibility for themselves and the building. Some co-operatives become very exclusive indeed. As the residents define their own co-operative agreements, each co-op is different. It is important that your lawyer checks that you can use your prospective apartment for the purpose that you intend, e.g. sometimes it may not be possible to buy into a co-operative with a mortgage, or to sub-let your apartment.
Another big advantage, perhaps the biggest advantage, with co-operatives over condominiums is that you tend to get better value for money, with both the capital price of the shares and also property taxes. As you own shares rather than a piece of real-estate, it is more difficult for authorities to make an accurate valuation for property taxation, and therefore the assessed property values are usually much lower than for an equivalent condominium.
If you fancy looking into becoming co-operative, a fantastic opportunity has come to the market right in the heart of the most upmarket area of Miami Beach, SoFi, just two blocks from one of the nicest parts of South Beach itself...A 700sq ft one bed apartment at only $138,499, this is a truly unique opportunity to get in with the in-crowd in a fantastic location!
Contact Kelly if you are interested in becoming co-operative in South Beach!
www.BritishMiamiRealtor.com
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