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If you live in a condo or co-op, you pay a monthly fee—but these fees are structured differently, depending on which type of apartment you own, reflecting the different types of ownership.
Knowing the difference is very important for comparing prices between condos and co-ops.
Simply put: When you live in a co-op, you pay maintenance fees, and when you live in a condo, you pay common charges.
For both types of buildings, monthlies cover the costs of running the building (like staff and building upkeep). But they diverge from there. Find out more about the ownership structures in Brick Underground’s “What’s the difference between a condo and a co-op.”
What common charges cover
If you buy a condo, you get a deed just as you would if you were buying a single-family house. You own your place, and your monthly common charges pay for the upkeep of common areas and amenities. But your property tax is paid separately—it is not a part of your common charges
What maintenance fees cover
A co-op building is structured as a corporation, so instead of receiving a deed when you buy a co-op apartment, you become a shareholder with a proprietary lease that entitles you to occupy your apartment and lays down rules and rights similar to a lease in a rental building. Your monthly maintenance fee pays for the building’s operating costs, any underlying mortgage, and importantly (unlike condos) includes your property taxes.
Technically speaking, you're a "tenant" or "shareholder," not an "owner," so if legal problems arise, they're usually decided in accordance with landlord-tenant law.
Since co-op residents own shares in the building (as opposed to owning the property outright as you do in a condo), maintenance includes the cost of the building's mortgage, whereas common charges do not.
The biggest difference: The building mortgage
"The biggest difference between maintenance and common charges is that common charges almost never include any type of mortgage payment [on the building itself]," says Dean Roberts, an attorney with the law firm Norris McLaughlin who represents co-ops and condos. "The co-op can take out a loan or mortgage against the building, while a condominium cannot."
Similarly, co-op maintenance fees also include the owner's share of the building's property taxes, while condo owners pay property taxes on their apartments separately. "For this reason, maintenance tends to be a much larger number than common charges," says Roberts. "In most condos, the only thing [everyone pays for] is heat and maintenance for the building."
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