What is a Co-op?
Common Misconceptions About Co-ops
Owners in market equity cooperatives can sell their units in the same fashion that condominiums are normally sold: i.e., to find a purchaser who is willing to pay the price. There are a number of real estate agents who are particularly knowledgeable about the cooperative market in Washington, D.C., and owners are free to use any realtor they choose.
Just as condominium associations establish various rules and regulations, cooperatives establish rules to ensure a pleasant living environment and the orderly conduct of the cooperative’s daily operation. For both cooperatives and condominium associations, such rules are generally based on common sense and typically address such matters as noise, pets, subleasing, trash disposal, moveins, maintenance and repairs, and the use of common areas, roof decks, and other available amenities. River Park’s rules can be found in the Members Manual.
If one were the sole stockholder in a corporation that owns a building, then that person would own the entire building. Similarly, cooperative unit owners are co-owners in a corporation that owns the cooperative’s building(s) and land.
The ability of a cooperative to deal with defaults in a practical manner is an advantage that many condominiums may not have. If an owner defaults on a mortgage, the lender, as provided in the Recognition Agreement with the cooperative, is obligated to pay the monthly cooperative fees in order to remain in good standing with the cooperative and to be able to resell the apartment. If no lender is involved, but the owner has defaulted on fees owed to the cooperative, the cooperative can take legal action and sell the unit. When the unit is sold, all costs and outstanding fees and obligations owed to the cooperative are deducted from the proceeds and paid to the cooperative; the remaining amount is then refunded to the defaulting owner.
Looking to understand how co-ops differ from condos? Get more information from the DC Cooperative Housing Coalition.