Home Personal Finance What is the Difference Between a Condo and Co-Op?

What is the Difference Between a Condo and Co-Op?

by My Journey to Millions

The difference between a Condominium (Condo) and Cooperative Corporation (Co-Op) is often confused, however, the difference is relatively easy to understand.  First and foremost it should be noted that the difference has nothing to do with how the building looks.  If the difference between the two has nothing to do with how the units look, what does it have to do with?  The difference between a Condo and a Co-op has to do with the ownership structure.

What is a Condo?

Generally, in a condo ownership structure you own “sheet rock to sheet rock” and an equal piece of the general/common areas.  Put a little bit more formal by Wikipedia,

Typically, a condominium consists of multi-unit dwellings where each unit is individually owned and the common areas, such as hallways and recreational facilities, are jointly owned (usually as “tenants in common”) by all the unit owners in the building. It is also possible for condominiums to consist of single family dwellings: so-called “detached condominiums” where homeowners do not maintain the exteriors of the dwellings, yards, etc. or “site condominiums” where the owner has more control and possible ownership (as in a “whole lot” or “lot line” condominium) over the exterior appearance.

These types of properties usually cost more but have lower maintenance costs.

What is a Co-op?

A cooperative corporation is a bit different.  In this ownership structure the entire property is owned by one corporation and then each individual ‘property owner’ owns one share of the corporation.  Again, put formally,

Each resident or resident household has membership in the co-operative association. Members have occupancy rights to a specific suite within the housing co-operative as outlined in their “occupancy agreement”, or “proprietary lease” which is essentially a lease.

Since Co-Ops are corporations ran by corporate boards they are usually the type of ownership structure you hear about causing headaches when trying to sell or buy, because the board can deny who becomes a shareholder.   Additionally, Co-Ops often have lower selling prices but have higher maintenance costs.

What about Town Houses?

Town houses refer to just the style of the home.

How Easy is that explanation?!

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Elle 06/21/2010 - 4:33 pm

Great post and explanation! We bought a condo earlier this year and it’s kind of funny when we tell some people that. It’s a townhouse, so that throws people off.

My advice would be to ask about the HOA from current owners. We checked with our friends who’ve lived there for years to see how it really was.

Thanks again for the post 🙂

Don 06/22/2010 - 4:38 pm

Thanks for the explanation of the tow options! I knew what a Condo was defined as, but not a Co-op!

I don’t know of many Co-op around me, but I’m sure they exist in the larger cities…

Evan 06/24/2010 - 11:24 am


Bucksome Boomer 06/23/2010 - 11:22 pm

I’m another one who didn’t know the definition of a co-op. we live in a condo (townhouse like Elle) so I’m very familiar with that.

Are co-ops mostly in the East?

Evan 06/24/2010 - 11:39 am

I don’t know if they are just in the East but they are huge in NYC and in pocket of Long Island.

There is a huge problem with them now because it is TOUGH to find any buyer and then you have the boards rejecting those buyers!


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