Condo or Co-op? What’s the difference?

C.F. writes:

Dear Paul:

I was wondering if you can tell me what the difference is between a condo and co-op?

Paul replies:

Dear C.F.:

A condominium is a real estate arrangement whereby purchasers own their particular unit in addition to a share of the common elements. Common elements can be the land upon which the building sits, the stairways, the hallways, the common room, and more — common elements are described in the governing documents. The value of the share that purchasers own of the common elements is usually determined by factors such as the size of their unit, the location of the unit, whether it is a corner unit, or on the top floor. Again, each development will have its criteria. Condo owners pay monthly fees for the upkeep of the common elements and make contributions to a reserve fund that used to cover major one-time expenses (e.g., roof replacement, elevator repair).  Condo owners are essentially business partners in the condominium corporation and governed by a board of directors elected from among the owners. Condo owners pay property taxes, have a deed to the unit they occupy and may have a mortgage.

Co-op residents do not own their apartment; they own a share of a company (the co-operative) that owns the building. An interested person must first apply for membership in the co-op and purchase a share once approved. As a member, the person may apply for a proprietary lease to a unit. If no unit is available, the member will be placed on a waitlist. Some waitlists are long. If the member wants to move into the co-op building quickly, she may not have a choice of unit. While condo owners can get a mortgage against their property (unit) a co-op dweller can only get a loan since they do not own their unit, the co-op corporation is the owner. A co-op owner does not pay property taxes directly, but these will be included in the monthly fees.

Most housing co-ops are owned by not-for-profit organizations, some of which may qualify for government subsidies.  While co-op residents, as members of the co-operative, participate in the election of a board of directors, they are electing the board of directors of the co-operative along with other members who may not reside in the building.  

You can learn more about the differences by speaking with a qualified real estate agent familiar with condominium developments or contact the co-op housing association for your province.

This Post Has One Comment

  1. claire

    Thank you!

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