East vs. West Differences in the Closing Process 'cross Country

Beyond the obvious differences—taxicabs versus cacti, towering high-rises versus wide-open spaces, big business versus big-sky country—there’s more separating the New York real estate scene from the rest of the country than just geography and climate. Approaches to home sales in New York and the urban East differ markedly from sales in the West for a score of reasons. Because of land scarcity, New York and other eastern urban areas have built upward into high-rise apartment buildings, while the West has historically spread outward into private homes, taking advantage of cheap and plentiful land. This fundamental difference underlies the other significant dissimilarities between the regions in the closing process.

New York Co-ops vs. Western Condos

Consider the co-op, for instance. Unique to the East (and nearly 90 percent of New York housing stock), co-ops were conceived in the 19th century by the gentry—wealthy people who wanted to live in town in buildings share-owned by other wealthy people. Courts in New York have long upheld the right of co-ops—now somewhat more egalitarian than their predecessors—to provide in their governing documents that a board has the right to deny a buyer the right of entry to their building for “no reason or any reason whatsoever,” with the exception of obvious civil rights violations. The government also provides co-op owners with a major tax break—one other property owners’ associations and condo owners don’t get. The healthy tax write-off can go for interest payments on the building’s underlying mortgage, which is, in turn, part of shareholder maintenance. There are no underlying mortgages on those condos which typically dominate the West.

Condo associations differ from co-ops in that they issue deeds instead of stock shares. Condos monitor sales and rentals with the “right of first refusal” invariably found in their governing documents. This right of first refusal permits a condo board to meet and pay a seller’s sale or rental terms, and thus control occupancy in its building. This unique style of home ownership flourishes in New York City because it obviously fits the needs of the city’s residents.
By contrast, the West was settled some two centuries after the East, and has developed its own real estate practices and landscape. Co-ops are rare, condos and houses freely transferable, and high-rise apartments are mostly super-luxury buildings confined to downtown commercial areas where space is at a premium.
The principal form of home ownership in the settled West is through membership in a homeowners association. Members own their houses but contribute to common areas, landscaping, and amenities like clubhouses, tennis courts, and swimming pools. Condos in the West are usually attached houses or two-story apartment buildings with similar amenities. Both types of home ownership have governing documents known as Covenants, Conditions, and Restrictions (CC&Rs) which are the equivalent of a co-op’s proprietary lease and by-laws.

The Escrow West vs. Title East

California and Nevada are part of a group of Western “escrow states” which includes Arizona, Texas, New Mexico, Wyoming, and Montana. Escrow states are so- called because their laws permit brokers and escrow-title companies to prepare legal contracts, title documents, hold moneys, and close real estate deals. New York and its sister Eastern states are called “title states” because they allow only lawyers to prepare title documents, hold deposit money, and close deals.


Related Articles

Board Malfeasance

What to Do if You Suspect Foul Play

The Biggest Legal Mistake Boards Make...

and How to Avoid It!

UWS Condo Board's Bid to Stop Bike Lane Falls Short

Judge Rules the City Can Temporarily Proceed to Build the Path



  • I am a lender for a "western escorw" state and in our legal dept they have Wyoming listed as a non-escrow state. I am trying to fight this and need some "ammo" so to speak. Any advice on where I can go to proove my case. I have copied and pasted your info on the subject but would love to find something a tad more " professional" shall we say for lack of a better term.. your help would be most appreciated, hope you can handle the sarcasim:-)
  • Great insight and information. Thank you. I was wondering if these points can be applied to other residential building ownership. Besides co-ops.