Condos and Co-ops and the Differences between them:
Owning a condo is like owning a house; that particular piece of real estate is exclusively yours and you receive a deed to the property, which is considered “real property”. Co-op owners, on the other hand, own shares of stock in the corporation that owns the building and they receive proprietary leases for their apartments.
Both condos and co-ops require board approval, though a condo board has a less rigorous approval process and will rarely turn potential buyers down. However, the condo board does have the first right of refusal, which enables the condominium to protect itself from deflated values and prices resulting from unusually low sales in the building. If the board feels your price and terms aren't favorable, it may take over as purchaser in your sales contract, thereby cancelling your purchase. The co-op board also has the ability to determine how much of the purchase price may be financed, as well as minimum cash requirements.
All prospective purchasers must interview with the co-op board. Prior to the interview, you will have to present your financial situation with supporting documentation. The following is a partial list; further details are available from your agent. Co-ops generally require a purchase application, financial statements, letters of personal reference, financial letters of reference, a letter from your current landlord, an employment verification letter, business letters of reference, copies of your tax returns from the last few years, a credit search, lead paint disclosure and financing information.
Subletting a co-op can be difficult; each co-op has its own rules, which should be reviewed carefully before application to purchase. Condo buildings in New York, however, despite having recently tightened their sublet policies, allow you to rent out your home at any time, though many condos now require the subletter to fill out a complete application disclosing financial and credit information in order to rent from an owner in the building. There are sometimes also minimum lease terms (i.e., six months to a year.)