Q: My mother wants to buy a co-op apartment. Are they real condos? How about resale value?

A: Yes, they are real condos, just owned differently. There are two kinds of co-op apartment buildings. Profit and non-profit.

The non-profit buildings are mostly government sponsored (through loans), have income restrictions and are meant to be given back at no profit.

The ‘profit’ ones are different. Actually, this style of ownership -while not popular in Vancouver -is very much in vogue elsewhere. Most of New York City is owned as a co-operative.

The residents of a cooperative do not actually buy their individual apartments. Rather, they buy the shares in the apartment corporation allocated to a particular apartment. Ownership entitles purchasers to a proprietary lease. As with condominium ownership, maintenance and repairs are paid for through the collection of monthly fees. Generally a ‘co-operative’ forms a company that owns the land under Companies Act, then gives shares in the company and lease to you.

Negatives: Most of them have these three restrictions: No pets, no rentals, and no children.

Some also have right of first refusal of corporation, use a formula to determine fair market value. Worse, the coop board has the right to reject your prospective buyer. (A few years ago, a seller in an Oakridge co-op was refused permission to sell to a 70-year-old buyer.)

Most banks don’t like to give regular financing on these buildings. You may have to use a credit union, and interest rates may be higher.

These are the positives: They are cheaper, some buyers may actually like these restrictions and they can be in very nice neighbourhoods.

If your mother wants to retire there and understands the differences, there is nothing wrong with living in a co-op.