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Condos and Co-ops, Similar and Different
The shift to condominium ownership is linked directly to the ascendance of the condominium form of ownership along with other perceived difficulties in cooperative ownership.
A Cooperative is a multi-family complex owned by a corporation organized for this purpose. A purchaser of shares in the corporation acquires a proprietary lease and the right to occupy a particular unit along with obligation to pay a pro-rated share of the corporate expense.
The corporation is, in fact, a lessor and the purchaser a lessee.
The corporation is governed by a Board of directors whose duties and powers are set forth in its by-laws.
a. Joint liability (the shareholders in the corporation are jointly and severally liable for all debts incurred by the corporation) has been a major disincentive to the further growth of cooperative housing.
b. Financial institutions apply more rigorous credit standards regarding the shareholders in the cooperative before advancing either construction or permanent financing. As a result of these standards and practices, the effective market for cooperative house is severely reduced, and consequently, the supply of those units is increasing at only a modest rate...in Charlotte, not at all.
Here are the two co-ops in Charlotte, NC.
The Kimberlee off Park Road
Morrocroft , a neighbor to SouthPark
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