A condominium is created as a unit in a group of more than one unit/apartments that have come together under a not-for-profit association (Condominium Association) and registered with the government. In the case of New Jersey, the Master Deed and By-Laws for under 10 units and additionally, a Public Offering Statement for those numbering 10 and over are among the documents filed with the Department of Community Affairs and the county register.
Once the Condominium Association has been incorporated in the state, and the Master Deed recorded with the county, the units may be sold to individual buyers. At time of purchase, each unit owner receives an individual deed which is then recorded with the County Register.
The Condominium Association is then formed with a Board of Directors/Officers to run the day-to-day and year-to-year operations of the condominium. The unit owners own everything inside the four walls of their individual unit, and share the common areas such as the hallway, roof, basement and backyard with the other owners of the units in the building.
In addition, a unit may be granted exclusive limited rights to a particular common area. For instance, a penthouse may purchase the roof rights or a ground floor unit may be granted exclusive use of the deck or backyard. In such cases the unit owner is responsible for the maintenance and control of their specific limited element.
The unit owner is responsible to pay to the Condo Association a monthly maintenance fee, based on their percentage ownership of the building. This will include the the costs of upkeep of the common area as well general expenses including insurance, common utilities and management. Property taxes are paid by each individual unit owner.
Unlike a co-op, discussed below, the Board of the Condo Association does not have any determine approval of sales and purchases of the units.
Cooperative Apartments are similar yet different from the condominium.. Originally Co-ops began in New York City as a natural flow from Wall Street, the entire building is incorporated and people purchase stock in the cooperative corporation rather than buying the actual property.
As shareholders in a corporation, co-op owners obtain a stock certificate and a proprietary lease instead of a Deed. The Shareholder/unit owner thus has a percentage share of the entire corporation by virtue of their purchased stock. The maintenance, which will also include their share of the property taxes for the entire building, is paid monthly by the unit owner and again is based on the owner’s percentage share of the corporation.
The cooperative board meets regularly to determine acceptance or rejection of potential purchasers of a unit. They may not arbitrarily discriminate against a potential buyer, but usually base their approval/disapproval decision on an extensive application and factors such as income, assets and debt to ensure that the potential buyer will be able to afford the monthly costs of the unit.
Buying, selling and choosing an apartment to own may be an overwhelming experience. At Winograd and Schwartz we have the experience to help you decide. Contact us today!by