At $3 million and up, the biggest difference between a co-op and a condo is approval power. A co-op board can reject a buyer outright, usually after reviewing two years of tax returns, a detailed financial statement, liquidity, and an interview. A condo board typically holds only a right of first refusal, which it rarely exercises.
This guide from Sean Brewer and Elina Brewer of The Brewer Team at Compass explains what each type of board reviews, how much cash you need on hand, what a new 2026 city law changes for co-op timelines, and how the costs compare on a $3.5 million purchase.
What is the real difference between a co-op and a condo board?
In a co-op, you buy shares in a corporation that owns the building and receive a proprietary lease for your apartment. The board approves or rejects every transfer of those shares. As Brick Underground summarizes it, co-op boards can reject a buyer and do not have to give a reason, although the decision cannot be discriminatory.
In a condo, you buy the apartment itself as real property. Most condo boards hold a right of first refusal: the option to buy the unit at the contract price instead of you. In practice, boards almost always waive it, and Brick Underground describes an actual exercise of the right as very rare. The right exists mainly to protect the building against distressed sales priced well below market.
That difference shapes everything else, from what goes into the application to how long closing takes.
What do co-op boards ask for in a board package?
A co-op board package is a full financial and personal file. According to Brick Underground, a typical package includes:
A detailed financial statement covering assets, liabilities, income, debt-to-income ratio, and liquidity.
Two years of federal tax returns.
Bank, brokerage, and retirement account statements.
Written letters of recommendation from personal and professional contacts, not just a list of references.
Authorization for a credit check.
Signed disclosures, house rules, and building-specific forms.
If the numbers clear, the final step is an in-person interview with board members.
Condo applications usually ask for less. Brick Underground notes that a lender pre-approval is often sufficient, references are typically contact details rather than formal letters, and tax returns may or may not be required depending on the building. Some condos have added interviews in recent years, but the board still lacks the co-op's power to say no.
How much cash do co-op boards want to see after closing?
This is where high-end buyers are most often surprised. Boards look past income and focus on post-closing liquidity: the liquid assets you will still hold after paying the down payment and closing costs.
StreetEasy reports that two years of maintenance, mortgage, and other debt payments remaining after closing is relatively standard. Only liquid assets usually count, such as cash, publicly traded stocks and bonds, Treasuries, mutual funds, and money market funds. Retirement accounts, real estate, private company stock, and cryptocurrency typically do not.
Here is how that works on a hypothetical $3.5 million co-op with a combined monthly mortgage and maintenance payment of $20,000:
24 months x $20,000 = $480,000 that the board may expect to see in liquid assets after closing, on top of the down payment and closing costs.
Boards also review debt-to-income ratio. Brick Underground has reported that most co-ops look for a ratio around 25 to 30 percent. If that $20,000 monthly payment were your only debt, a 30 percent ratio implies gross income of about $66,667 per month, or roughly $800,000 per year. At 25 percent, it implies about $80,000 per month, or $960,000 per year.
Every building sets its own thresholds, and some are stricter than these ranges. Ask for the building's requirements in writing before you submit an offer.
How much can you finance in a co-op versus a condo?
Co-ops set their own financing limits, and those limits are often stricter than what a lender would allow. Brick Underground has reported that co-ops typically require 20 to 30 percent down, some high-end buildings require 50 to 60 percent, and a small number require all-cash purchases. Many condos, by comparison, allow financing with as little as 10 percent down.
On a $3.5 million purchase, that range looks like this:
10 percent down: $350,000.
20 percent down: $700,000.
30 percent down: $1,050,000.
50 percent down: $1,750,000.
The financing cap is set by the building, not the bank, so a buyer who qualifies for a large loan can still be limited by a co-op's rules. Confirm the maximum financing allowed before you negotiate price.
How long does co-op board approval take under the new NYC law?
Until this year, New York City set no deadline for co-op boards to decide. That changed with Local Law 58 of 2026 (Int. 1120-B). The City Council passed the bill in December 2025, the Council overrode a mayoral veto, and the law took effect for applications submitted on or after July 28, 2026.
Under the law, as summarized by Herrick, Feinstein and Habitat magazine:
The board must acknowledge an application within 15 calendar days by email and registered mail, and state whether it is complete or list what is missing. If the board does not respond, the application is deemed complete.
Once the package is complete, the board has 45 calendar days to approve or reject the buyer.
The board may take one 14-day extension. Further extensions require the buyer's written consent.
Deadlines pause during a summer recess, but only if the recess is disclosed to buyers in advance.
The Department of Housing Preservation and Development enforces the law, with penalties of $1,000 for a first violation, $1,500 for a second, and $2,000 for each one after that.
The law applies to larger co-ops and excludes HDFC and government-supervised co-ops. Condos are not covered. Importantly, the law does not require boards to explain a rejection. It sets a clock, not a standard.
What can a co-op board legally ask in an interview?
Boards can ask about your finances, your plans for the apartment, renovation intentions, and whether you understand the house rules. They cannot base a decision on a protected characteristic. The NYC Human Rights Law protects housing applicants on grounds including age, citizenship status, color, creed, disability, family status, gender, lawful occupation, lawful source of income, marital status, national origin, partnership status, race, sexual orientation, and military or veteran status.
The practical advice is to treat the interview as a confirmation of the package, not a negotiation. Answer what is asked, keep responses consistent with the documents you submitted, and review the proprietary lease and house rules beforehand.
How do co-op and condo rules differ on part-time use and subletting?
If you plan to use the apartment as a second home, building rules matter as much as price. Habitat magazine reports that the overwhelming majority of co-ops restrict overnight guests when the shareholder is not in residence, including co-ops that allow part-time ownership. Lending the apartment to visitors can violate building rules even when no money changes hands. Subletting in co-ops is also commonly limited by the proprietary lease and board policy.
Condos tend to be more flexible on guests and leasing, though each building's declaration and bylaws control. In either case, read the governing documents before you sign a contract, not after.
How do closing costs compare between a co-op and a condo?
Two costs drive most of the difference.
The first is the mortgage recording tax. In New York City, a residential mortgage of $500,000 or more on a condo or house carries a mortgage recording tax of 1.925 percent paid by the borrower. Co-op loans are not subject to it, because co-op shares are not real property. On a $3.5 million condo with 30 percent down, the $2,450,000 loan would carry about $47,163 in mortgage recording tax. The same loan on a co-op would carry none.
The second is title insurance. Condo buyers purchase title insurance. Co-op buyers instead order a lien search, which Brick Underground notes brings down closing costs.
Watch for the flip tax as well. This is a building fee, not a government tax, paid at resale. Brick Underground reports most buildings charge 1 to 2 percent of the sale price, with some prestige buildings higher. On a $3.5 million sale, 1 to 2 percent is $35,000 to $70,000. Historically sellers paid it, but some buildings have shifted it to buyers, and it is negotiable. Condos increasingly charge similar transfer fees.
Work With The Brewer Team
Choosing between a co-op and a condo at this level is a decision about approval risk, liquidity, financing flexibility, and how you plan to use the home. The right choice depends on the specific building as much as the property type, whether you are comparing a prewar co-op in Greenwich Village or Brooklyn Heights with a condo in Tribeca or DUMBO.
The Brewer Team at Compass, led by Sean Brewer and Elina Brewer, brings 30 combined years of experience, more than $400M sold, and 2,500 transactions across Downtown Manhattan and Brooklyn, along with 1,000+ rental units at 95% occupancy. For a step-by-step look at the purchase process, from pre-approval through closing, read our Buyer's Guide.
Frequently Asked Questions
Can a co-op board reject you without a reason in NYC?
Yes. Co-op boards in New York City are not required to explain a rejection, although they cannot discriminate based on protected characteristics. Local Law 58 of 2026 sets deadlines for board decisions but does not require boards to give reasons.
How long does a co-op board have to approve a buyer in NYC?
For applications submitted on or after July 28, 2026, covered co-op boards must acknowledge an application within 15 days and decide within 45 days of it being complete. They may take one 14-day extension, and deadlines pause during a summer recess disclosed in advance.
Do condo buyers in NYC need board approval?
Generally not in the same way. Most condo boards hold a right of first refusal to buy the unit at the contract price, and they almost always waive it. Condos still require an application, but the board does not have a co-op's power to reject a buyer.
Is the mortgage recording tax charged on co-op loans?
No. In New York City, the mortgage recording tax applies to loans secured by real property, such as condos and houses. Co-op loans are secured by shares, so they are not subject to it.
