Condominiums and co-ops can be confusing since both types of projects can look the same. The main difference is what you actually own.
A condo means an undivided interest in common with the other condo owners in a portion of real property together with a separate interest in space called a unit. A “Stock co-op” (also called a co-op) means a development in which a corporation is formed for the purposes of holding title to the improved real property, either in fee or by lease, and the shareholders receive a “right of exclusive occupancy” in a portion of the real property and title to which is held by the corporation.
When you purchase a condo what you actually own is the air space within the walls of the unit. The air space is shown and defined on the Condo Plan which shows the dimensions of each unit and and their location within the boundaries of the project. You do not own the land that the condo project sits on. You will also own an interest in the common are of the entire project. The amount of this interest will be established in the Covenants, Conditions and Restrictions (CC & R’s) that govern the use of the entire project. You will also become a member of the Homeowner’s Association (HOA) which is responsible for,among other things, the maintenance and upkeep of the common area, and you will be assessed dues, usually monthly to help fund this maintenance and upkeep.
When you purchase a Co-op you are not purchasing any interest in real property or air space. You become a shareholder in the corporation that holds title to the project.By becoming a shareholder you receive a right of exclusive occupancy in a portion of the project. This right is customarily in the form of a lease between the corporation holding title to the project (Lessor) and the shareholder (Lesee). The portion of the project you gain the right to use will be described in the lease and will be shown and defined on a diagrammatic floor plan which can be recorded as a separate document or made part of some other document. The use of this portion of the project will be regulated by some form of CC& R’s and may be further regulated by the terms of the lease. Just as with a condo you will become a member of an HOA with similar rights and obligations as outlined above.
Remember: A condo is owning real property and a co-op is owning shares in a corporation.