Co-ops, Condos, & Lofts

If you live in a cooperative (also known as “co-op”) apartment, you are the owner (shareholder) and a tenant at the same time.  You own shares in the corporation which owns the building, but you are also a tenant who rents an apartment from the corporation. You will be considered a tenant/shareholder. The lease between you and the building is called a “proprietary lease.”

You pay a monthly maintenance fee to the corporation to cover the expenses of maintaining and operating the building, the property taxes and sometimes for the underlying mortgage on the building.

Co-ops are managed by a board of directors. The board of directors is elected by and (generally) made up of shareholders.  The corporation board must follow the rules in the by-laws of the co-op and also the proprietary lease.  The by-laws and your proprietary lease state the rights and responsibilities of the corporate building owner and the shareholder/tenants.  For instance, it will spell out which repairs the corporation is responsible for and which ones the tenant/shareholder is responsible for.  Generally, the tenant/shareholder is responsible for repairs inside the apartment and the corporation is responsible for repairs behind the walls, on the building exterior, in the common areas, and to building systems.

If you are a tenant in a co-op, you can be evicted. The board can start a non-payment proceeding or a holdover proceeding against you in Housing Court.  Co-op boards have a lot of freedom in deciding how to run their buildings and whether to evict a tenant for objectionable conduct.  The Housing Court usually will not second-guess the board’s decision when it has decided to terminate a tenant/shareholder’s lease for objectionable conduct.

Condominiums operate like co-ops, except that when you buy a condo, you buy an individual piece of real property, not stock in a corporation.  The condo building is divided into individual units and a common area.  You own your apartment unit and an undivided interest in the common area.  You are responsible for paying your own real estate taxes and your share of common charges for the expenses to maintain and operate the common areas and the building systems.

Lofts are residential units located in buildings that were originally built for commercial or industrial use.  These units generally have no certificate of occupancy for residential use.  The Loft Law (also known as Article 7 of the Multiple Dwelling Law) provides a way to convert some of these units into legal residential spaces. The Loft Law is intended to protect loft occupants by making sure certain renovations are done to the building to achieve minimum safety standards and to give legal rights and rent protection to the tenants.  Not all loft units, however, are covered by the Loft Law.  Whether a particular loft is covered depends on certain facts such as the location of the building and the occupancy history of the loft and the building.

Legal Editors: Douglas Simmons and Eric Zim, July/August 2015 (updated March 2018)