Understanding Co-ops and Co-ownership 

What are co-ops and co-ownerships?

The housing market may finally be cooling off a bit, but for many, the prospect of owning a home is still out of reach. You may think that owning and renting are your only two options, but we’re here to tell you there are more.  

At Northern Birch we are proud to offer financing for co-ops & co-ownerships. These are unique products offered by very few financial institutions and we are experts in the field.

What is a co-op?  

In contrast to purchasing a condo or a house where you own the property, when you buy into a co-op, or cooperative, you become a shareholder in a corporation that owns the property.  

As a shareholder, you are entitled to exclusive use of a housing unit within the property. All the owners share the use and enjoyment of common elements, or common areas. Typically, the Board of Directors of the co-operative corporation must give its approval before an owner can sell his or her shares and assign the leasehold interest to someone else.  

Since a co-op does not include ownership of the unit, co-op financing differs from a typical mortgage. Northern Birch is proud to be experts in this department, and offer very competitive financing options for co-ops. 

What is a co-ownership?  

Unlike a co-operative, a co-ownership buyer does not generally obtain shares of the corporation, instead the buyer acquires a percentage ownership in the building and the land on which it is located.  

The buyer then has exclusive right to occupy a particular unit, and like co-ops, has shared rights with each of the other owners for access and use of common elements and common areas. Generally, an owner in a co-ownership corporation does not need the consent of the Board of Directors to lease or mortgage his or her unit. The co-ownership Board does not need to be made aware of the mortgage funding. 

Interested in learning more about co-ops and co-ownership? Looking for co-op or co-ownership financing? Get in touch with Northern Birch Credit Union today!

Author: NorthernBirchCU

A co-operative financial institution based out of Toronto, Ontario.

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