What is Cooperative Living?
A cooperative is a member owned, self-governed corporation that relies on the membership to keep it running.
Who owns the cooperative?
Cooperatives are owned by all the members, collectively. The cooperative (which is a corporation) owns 100% of the building, land, and any common areas.
Who governs the cooperative?
The members, as a whole, are democratically responsible for overall cooperative governance. The members elect a Board of Directors, who are responsible for the operation of the cooperative.
What do you own as a member?
As a member of the cooperative, you own an interest in the cooperative. Each interest gives the member a pro-rata share in the ownership of the cooperative’s property as a whole.
What is a limited equity cooperative?
A limited equity cooperative is created when restrictions are placed on the resale of cooperative interests to make them more affordable to multiple generations of purchasers.
The term “limited equity” refers to the low equity investment a new member makes, compared to what would be the open market purchase price.
What are the tax benefits for cooperative members?
Members can deduct their pro-rata share of the cooperative’s mortgage interest and real estate taxes on their personal federal income tax returns. They also have the ability to exclude gain on the sale of their cooperative interest from taxation as a traditional homeowner.
What is the difference between a cooperative and condo?
A cooperative member owns a cooperative interest and there is an occupancy agreement between the member and cooperative for the member to occupy a unit.
A condo owner owns fee simple title in the air space to the back of the paint of the walls of a unit, plus an undivided interest in the common property of the condo development.