Share and Share Alike Understanding the Intricacies of Co-op Shares

They’re the smallest pieces of the co-op puzzle. The one item without which the whole endeavor could not function. Just like in a Fortune 500 corporation, the shares in a co-op reflect value, and can be highly sought-after prizes—depending, of course, on the exclusivity of the address. But for all the talk of shareholders and shares, what do these items really represent, and how do they function? Even co-op owners themselves are sometimes unsure about exactly what it means to own shares, and how those shares are allocated.

Definition, Please

Very simply put, shares represent portions of stock in a corporation. This distinction is what sets a co-op apart from its real estate cousin, the condo. With a co-op, the resident owns shares in the corporation that owns the building, explains attorney Gail Miranda Schmidt of the firm Milbank Tweed Hadley & McCloy. There is a long-term proprietary lease that gives individuals their rights as a shareholder in the company and as a tenant in the apartment itself.

“In a condo, you actually own the real estate,” Schmidt says. “You own a percentage of the underlying building, and a portion of the common elements. You get title insurance. You’re taxed as an individual. You physically own the box you bought.”

Or, as attorney Diana Lipsig of Pisapia & Lipsig in Manhattan puts it, “In a co-op, it’s a community. In a condo, it’s like everyone has their own little fiefdom.”

While condo owners receive four walls and a roof, co-op shareholders receive actual certificates of stock, although they may only catch a brief glimpse of them at closing. “The bank holds the certificate, and the owner does not see it again until he or she pays off the security agreement,” says attorney Robert Tierman of the Manhattan-based law firm Litwin & Tierman.


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  • Excellent infrmation to better undersatand co-op shares. Most co-op buyers are not well informed on this matter.
  • I recently moved into 5 unit building and I am paying 5 percent of the maintenance since I own 5 percent of the shares. One of the other tenants, who owns a larger portion of the shares (being in the penthouse unit) would like each apartment to pay equal shares of the maintenance (no longer based on number of shares). In the bylaws, it indicates that maintenance is based on shares. I am a bit worried. Can he out-vote me and change the bylaws or possibly allocate more shares to my unit in order to increase my proportion of the maintenance?
  • If myself and fiancee share the coop, and we are not getting along, and I want out and he doesn't. What happens. It is in both our names. Do we have to sell and vacate. Truth be told he no longer want to be with me. I want to sell because if I can't have it. I don't want him to have it.
  • Can a Super who maintains the building and lives in it, buy his own unit?
  • A shareholder dies and leaves the share to a daughter or administrator however the mortgage is not paid for 2 years can the bank auction off the coop to a third party without the authorization of the coop management and it's board.