When buying an apartment in New York, most buyers are faced with a choice of purchasing either a cooperative or a condominium apartment. Both can be an attractive choice in terms of features, price and amenities. What makes them different is the form of ownership. Most pre-war residential buildings in Manhattan and Brooklyn, that are not rental properties, are owned as co-ops. Most of the newer buildings (built in the 1980's or later) are condominiums. Let's examine them individually.
When you buy a co-op, you become a shareholder in a corporation that owns the building (property). Each co-op building (or community) has their own co-op board, made up of the residents and property management, who scrutinize future shareholders in a process known as co-op board application and interview. During this process the buyer has to submit all required financial documents (proof of assets, cash reserves, credit history, income tax returns, etc.), and has to do an in-person interview with the board. The outcome of the board application and interview can either make or brake the deal. If the board disapproves of the buyer, then the buyer and seller cannot proceed with the transaction. The board can turn down a buyer for a variety of reasons, such as their income, credit history, or past bankcrupcy filings. The reasoning behind it has to do with the board desire to only select potential shareholders who will have a suitable financials, which will allow them to pay the maintenance fees, etc. Those buyers that do pass the board approval process need to know what rules and regulations the coop imposes. Especially, in regards to renting the apartment out, having pets, or even smoking in the apartment. Some coops strictly prohibit renting the apartments, some permit renting to a close family member, while others allow for renting to anyone, usually after a certain grace period (typically a year or more). If you're having a pet, or thinking of having one, t it is important that you check that the building is pet-friendly. In some instances, you can see residents in a particular building having or walking their pets, and yet the building does not permit new residents to own pets. Usually, those existing pets are there because they were "grandfathered", So, make sure you find out the building rule in this regard, and don't assume anything.