Because co-ops are corporations, a co-op board, or board of directors, runs the show. It sets the rules and can determine who is allowed to buy shares and what improvements can be made to the units.

For some people, that’s an attractive feature; they feel the units hold their value better. In reality, who gets to live in the building can be tightly controlled, and contrasts greatly with a condo, where whoever has the money to buy a unit is in.

Likewise, condo rules often allow for the owners to sublet, or rent out their units to others, whereas those situations are rarely allowed in a co-op. However, this co-op exclusiveness can make selling the unit difficult and more time consuming than with a condo, because any new ownership is subject to lengthy and extensive review.

Although a co-op board can’t discriminate based on race, sex, or religion, it can reject your application if your income level indicates that you won’t fit in. They also often reject applicants who won’t be using it as their primary residence, as they want true stakeholders in the building’s welfare. Also, be aware that if you want to buy a co-op, the board will want as much financial information on its application as a mortgage lender.