Short answer: a condop is a New York City building that is legally divided into condominium units, usually one or more commercial units (such as ground-floor retail or a garage) and one residential unit that is owned by a co-op corporation. Residents buy shares in that co-op and receive a proprietary lease, so buying a condop apartment is legally a co-op purchase, but the building’s structure and rules can make it feel more like a condo.
Condops exist almost only in New York City, and the term is used in two ways. Strictly, it means the two-layer structure described above. Loosely, some listings use “condop” for any co-op that has condo-like rules, such as easy subletting or limited board approval. Because the word does not have one legal meaning, the building’s documents, not the listing, tell you what you are buying.
How a Condop Is Structured
The building is first set up as a condominium under a declaration. The commercial space becomes one or more condo units, often kept by the original developer or sold to an investor. All of the apartments are combined into a single residential condo unit, which is owned by a co-op corporation. Each apartment owner holds shares in that co-op and a proprietary lease for their apartment.
That creates two layers of governance: a condominium board of managers, representing the commercial and residential units, which runs the building as a whole; and a co-op board, which governs the residential shareholders. How costs and decisions are split between the commercial owner and the residents is set in the condo declaration and bylaws.
Condop vs. Condo vs. Co-op
| Condo | Co-op | Condop | |
|---|---|---|---|
| What you own | Real property (a deed to your unit) | Shares in a corporation + a proprietary lease | Shares + a proprietary lease, in a co-op that owns the residential condo unit |
| Board approval to buy | Usually only a right of first refusal | Full board application and interview | Varies by building; often a co-op board, sometimes with condo-like policies |
| Financing | Mortgage on real property | Share loan | Share loan |
| Mortgage recording tax | Yes | No | No |
| Mansion tax at $1M+ | Yes | Yes | Yes |
| Title insurance | Yes | No (lien search instead) | Usually no |
| Subletting | Generally flexible | Often restricted | Varies; some condops follow condo-style rules |
For a deeper comparison of the two main structures, see condo vs. co-op in NYC.
Why Condops Exist
Separating the commercial space lets the developer or its owner run, lease or sell the retail or garage space without needing the residents’ approval, and it isolates the co-op from the commercial unit’s own mortgage and liabilities. For residents, a well-run commercial unit can contribute to building costs; for the commercial owner, the structure keeps control of a valuable asset.
Pros and Cons of Buying a Condop
Potential advantages
- Some condops adopt condo-like policies, with lighter board approval, more flexible subletting and fewer financing restrictions than a traditional co-op.
- Closing costs follow the co-op pattern: no mortgage recording tax and usually no title insurance.
- Commercial common charges can help cover building expenses.
Potential drawbacks
- The commercial unit owner may have significant voting power or rights under the declaration, including over building-wide decisions.
- Disputes can arise over how repair and capital costs are split between commercial and residential units.
- Because the structure is less common, some lenders and buyers are less familiar with it, which can affect financing and resale.
- “Condo-like” rules adopted by a co-op board can usually be changed by the board or shareholders later.
Buying a Condop: What to Review
- The condominium declaration and bylaws: the commercial unit’s rights, voting power and share of common charges
- The co-op’s proprietary lease, bylaws and house rules, including subletting, pet, alteration and flip tax provisions
- Financial statements for both the condo and the co-op, any underlying co-op mortgage, and reserves
- Whether board approval is a full co-op application or a lighter process, and what financing the building permits
- Any litigation or disputes between the commercial owner and the residents
Closing Costs for a Condop
Because you are buying co-op shares, closing costs generally follow the co-op pattern. Buyers pay the mansion tax on purchases of $1 million or more but no mortgage recording tax; sellers pay NYC and NYS transfer taxes and any flip tax. See who pays closing costs in New York and the NYC buyer closing cost calculator (choose the co-op option).
Looking at a condop? Our NYC real estate attorneys review both the condo and co-op documents so you understand who controls the building and what you are agreeing to before you sign.
Frequently Asked Questions
What is a condop?
A condop is a New York City building divided into condominium units, typically commercial units plus one residential unit owned by a co-op corporation. Apartment buyers purchase shares in that co-op and receive a proprietary lease.
Is a condop a condo or a co-op?
Legally, buying a condop apartment is a co-op purchase: you get shares and a proprietary lease, not a deed. The building as a whole is a condominium, and some condops adopt condo-like rules for subletting and board approval.
Do you pay mortgage recording tax on a condop?
Generally no. Condop apartments are financed with co-op share loans, which are not recorded mortgages, so no mortgage recording tax applies. The mansion tax still applies to purchases of $1 million or more.
Is it easier to get approved for a condop?
Sometimes. Some condops use a lighter approval process than a traditional co-op, but many require a full co-op board application. Check the building’s documents and ask the managing agent.
Why are condops mostly in New York City?
The structure grew out of NYC buildings with ground-floor retail or garages, where developers wanted to keep or sell the commercial space separately from the residential co-op. It is rarely used elsewhere.
Buying in a Condop Building?
Our real estate attorneys review condo and co-op documents for NYC buyers. Schedule a free consultation.
Contact Us Onlineor call (212) 920-5989