What exactly is a co-ownership property?

co-ownership property Cambridge-Manor-2626-Fir
Fairview Co-op, Cambridge Manor, 2626 Fir St, Vancouver

Well, in a co-op essentially – residents buy a share allocated to a particular apartment in the co-op building but the building is owned by the Co-op Society. There are two kinds:

Profit and non-profit. The non-profit buildings are mostly government sponsored (through loans), have income restrictions and are meant to be given back at no profit. Actually most subsidies run out by 2020 … will be interesting to see what happens to them then!

The ‘profit’ ones are different. Actually, this style of ownership – while not popular in Vancouver is very much in vogue elsewhere. Most of New York is owned as a co-operative. And if you are paying $800,000 to $3 million for a $1,200 sq. foot co-operative … they can’t be all bad.

As with condominium ownership, maintenance and repairs are paid for through the collection of monthly fees.

NegativesAll of them have restrictions:

  1. No pets
  2. No rentals
  3. No children

Some also have:

  1. Right of first refusal of corporation
  2. Formula to determine fair market value

Worse, the co-op board has the right to reject a prospective buyer. (One seller in an Oakridge co-op was refused to sell to a 70-year old buyer. A New York co-op even refused Richard Nixon!)

Of course a lease has less value than a strata title and they generally appreciate less and are much harder to resell. Banks are really hard on them too. 35% down payments etc. MOSTLY CREDIT UNIONS WILL FINANCE THEM. BANKS – IN GENERAL DO NOT LIKE THEM. Mortgage could be  1% to 1.5% more than on a strata title.

Positives:

  1. They are a lot cheaper
  2. Some buyers may actually like these restrictions
  3. They can be in very nice neighbourhoods – Westside – West End.
Ozzie Jurock

Ozzie Jurock

Ozzie helps members build an action plan toward real estate success with his Real Estate Action Group, arming investors with the best information and insights possible with his Jurock Real Estate Insider. More info OzzieJurock.com

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