ABA Family Legal Guide

Buying and Selling a Home

The Steps of Buying and Selling a Home

Buying in a Multiunit Building or Development

What is the difference between a condominium and a co-op?

A condominium is a common-interest community in which individual units are separately owned but the unit owners also own an individual interest in the common areas of the building, such as hallways, roofs, exteriors, and any land surrounding the building. With a cooperative, or co-op, buyers generally purchase shares of stock in a corporation that owns a building and then enter into a lease to occupy a particular apartment. A condominium owner has title to his or her unit; a co-op owner receives stock in the corporation that owns the building based on the unit's proportion of the building, and the right to lease a particular apartment in the building.

For the purposes of income tax laws and other laws regarding real estate, condominiums and cooperative units are treated the same as a single-family home. But an association or corporation has the right to impose maintenance fees, demand escrow payments for large repair bills, and manage the overall operation of the entire building. Owners of both types of property must abide by the rules; otherwise, they may ultimately be evicted or sued.

See the section titled "Shared Ownership: Condos and Condominiums" in chapter 5, "Home Ownership," for more on living in this kind of property.