Building types
Condop
A building split into two condominium units, one commercial and one residential, where the residential unit is owned by a cooperative corporation.
What is a condop and how is it different from a co-op?
Quick Answer
What is the property interest, legally?
- The building is submitted to a condominium declaration creating separate commercial and residential units
- The residential condominium unit is owned by a cooperative corporation whose shares purchasers buy
- Two document sets govern: the condominium declaration and bylaws, and the co-op’s proprietary lease and bylaws
- The commercial unit owner has voting and cost-allocation rights set by the declaration
- Some condops relax board approval to a right of first refusal, but that varies by building
How is a purchase of this type financed?
- Financing follows the co-op path: a UCC filing against the shares and a recognition agreement
- Lenders review the condominium declaration as well as the co-op’s financials
- Commercial-unit income and expense allocation affect how the lender reads the building
- Approval terms differ by building, so the lender needs the actual documents rather than a description
Which taxes and building fees apply?
- Transfer taxes apply to the share transfer as on a co-op
- No mortgage recording tax, because the loan is a UCC filing rather than a recorded mortgage
- The mansion tax applies at the statutory threshold
- A flip tax applies where the co-op’s documents impose one
What does the approval path look like?
- Confirm from the offering plan whether the building requires board approval or only a waiver of first refusal
- Obtain both document sets: condominium declaration and bylaws, and proprietary lease and bylaws
- Package assembled to whichever standard the building actually applies
- Interview where the building requires one
- Closing scheduled once the approval or waiver is in hand alongside the lien search
Does a condop need board approval?
It depends on the building. Some condops keep a full co-op board approval and interview. Others substitute a right of first refusal, which the board either waives or exercises within a stated period. The offering plan and the proprietary lease say which, and the difference changes the timeline materially.
Is a condop financed like a co-op or a condo?
Like a co-op. The purchaser buys shares, so the loan is secured by a UCC-1 filing against the shares and by an assignment of the proprietary lease, with a recognition agreement among lender, corporation and borrower. There is no recorded mortgage and no mortgage recording tax.
Why does the commercial unit matter to a residential buyer?
Because the declaration allocates common expenses and voting rights between the units, and the commercial owner’s share affects what the residential corporation pays and what it can decide alone. A large commercial allocation is a term worth understanding before the contract is signed.
What else should you read before closing?
In the glossary
- Co-op lien searchThe search performed on a co-op purchase covering UCC filings, judgments, liens and unpaid building charges tied to the shares and to the selling s...
- UCC searchA search of UCC filings for security interests in personal property, run against the seller and, on entity deals, against the entity itself.
- Flip taxA transfer fee charged by a co-op or, less often, a condominium when a unit changes hands. It is a creature of the building's governing documents, ...
- CovenantA recorded promise or restriction that runs with the land and binds future owners. Restrictive covenants limit what the property may be used for or...
- Transfer tax (RPTT and NYS)Taxes on the conveyance itself, one City and one State. Rates step up at higher prices, and who pays is set by custom and then confirmed by the con...
Questions this raises
- What documents do I sign at closing?Note, mortgage, title affidavit, settlement statement and transfer tax returns for buyers; deed and releases for sellers. What each document actual...
- What do I need to bring to a closing in NYC?Photo ID, funds in the form the agent instructed, a checkbook for adjustments, and every signer. The New York City closing checklist for buyers and...
Building types
- Standard co-opThe ordinary New York City cooperative: you buy shares in a corporation and receive a proprietary lease to occupy a specific apartment.
- Standard condoA New York City condominium unit: real property conveyed by deed, recorded in ACRIS, with an undivided interest in the common elements.
- Mixed-use condo with commercial unitsA condominium holding both residential and commercial units, where the declaration allocates common charges, voting rights and use restrictions bet...
- Land-lease co-opA cooperative that owns its building but leases the ground beneath it from a separate landowner, on a lease with a reset schedule and an expiry date.
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Legal Disclaimer: This page is general information about New York practice. It is not legal advice, it does not account for the terms of any particular contract, building or transaction, and reading it does not create an attorney-client relationship. This is attorney advertising. Prior results do not guarantee similar outcomes.