I am in NYC for a Managing Partner Conference and I got to enjoy a beautiful day yesterday in Central Park. As I explored all that New York has to offer on a crisp Fall day, I couldn't help noticing the imposing buildings ringing the park. When we see high-rise residential buildings in Florida we usually think "condominium". In fact, most of the architectural beauties I saw were most likely cooperatives.
In case you are entirely unfamiliar with the cooperative form of ownership, individuals purchase shares of stock in the cooperative corporation and their right to live in their particular unit is evidenced by a proprietary lease. Cooperative owners do not receive a deed to their unit; their ownership is evidenced by that stock certificate. The governing documents for a cooperative association are comprised of the Bylaws, Articles of Incorporation, the Proprietary Lease and any additional rules and regulations the board may pass.
NY cooperatives are a different breed entirely from our homegrown Florida variety. These are the same folks who summarily declined a purchase application by the singer/wannabe actress, Madonna, because they didn't think she was "their type". Whether or not that was a wise decision is not the point; NY cooperative boards have great leeway to reject purchases, much more so than their southern brethren do. Some cooperatives still require a full cash purchase price which is getting harder to accomplish all the time.
A decade ago, many Florida cooperatives were exploring the possibility of converting to a condominium form of ownership. Why? Many felt that it would make their real property values increase since the cooperative form of ownership is not readily known or understood in Florida. In addition, many cooperative owners found it nearly impossible to obtain financing since Florida's bankers weren't much more attuned to this form of ownership either. Since then, I've heard less and less about cooperatives converting to condominiums lately. Condominium values have fallen flat and more banks are lending to cooperative purchasers and owners.
The Florida Cooperative Act is Chapter 719 of the Florida Statutes. Over the years, many of the changes made to Chapter 718, the Condominium Act, have not been similarly transported over for cooperatives. As a result, cooperative owners have different rights and responsibilities concerning board member eligibility, insurance and a host of other items. After seeing the voluminous changes made to the Condominium Act over the years (some good, some not so good), Florida's cooperative owners have to ask themselves whether they should be grateful or insulted about the oversight!