When you purchase a co-op, you become a shareholder in a corporation that owns the property. As a shareholder, you have secured the exclusive use of a housing unit located on the premises. Unlike a condo, co-ops are owned by a corporation. So when you buy an apartment that is in a co-operative building, you are not buying real property (like you would in a condo). ... Usually, the larger the apartment, the more shares you will have in the corporation where you have purchased a residence. Cooperative housing refers to an apartment building or buildings. Instead of buying an individual unit, the residents are a corporation that owns the entire building. Each shareholder is then entitled to reside in a unit. As long as the shareholder owns the stock, they can reside in that unit.
To purchase shares in a co-op, each buyer takes out a "share loan" in the form of a mortgage. The share loan pays the cost of buying into the partnership. These loan payments are to be repaid to the lender, and co-op residents are also responsible for paying a pro-rata share of the costs of running and maintaining the building. Known as the "maintenance" or “common charges,” these costs are paid to the partnership monthly and charged on an at-cost basis. Prices rise when the cost of goods and services go up based on repairs, renovations, or capital improvements.
The property's mortgage may also be incorporated into the monthly fee: Even if an individual tenant has paid off his or her share of the loan, it's possible for the building itself to have a mortgage on it, held by the corporation, not by an individual partner. Cooperative buyers are entitled to all of the tax deductions enjoyed by homeowners, including the deductions for interest and real estate taxes.