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Comparison of Housing Cooperatives to Condominiums

Due to select similarities, the chart below is a simplified display comparing the housing cooperative and condominium. While both are considered common interest communities, the internal structures are completely separate.

Cooperatives  Condominiums 
Ownership Members own shares of the corporation that owns the building; the larger the living unit, the more shares owned. Members cannot transfer title or ownership at any point because when they decide to move, ownership transfers back to the corporation.  Just like buying any other property on an individual plot of land, the buyer receives a deed that enables the option to sell outright or sublet the unit.
Cost Lower-typically less expensive per square foot, the cooperative pays the real estate taxes, mortgage of the building, salaries and maintenance; split the amount among the owners in relation to each share. Higher-maintenance charge for Co-op is similar to an HOA charge for Condo which includes salaries and property maintenance, real estate taxes are paid based on each individual unit which are apprised separately from the building. 
Qualifying No Financing-Members buy their share of the corporation plus the first month’s maintenance fee.  An application and interview is common, the Board of Directors effectively decide whether or not a person qualifies. Financing available-property must be bought and paid in full to the seller.  Many financing options are common, depending on many qualifying factors such as income, credit, etc.  Personality and compatibility with the community is not considered. 
Structure Board of Directors-an elected group of leaders that democratically run the property and typically outsource mini groups to get everyone involved. Home Owners Association-a board of volunteers that decide most actions to the building.  Usually, most Condo owners aren’t kept very informed and a census can be difficult to come by. 
Taxes Lower-appears on tax roll as a single piece of property, is paid by the corporation and usually included in monthly maintenance fee.  Identically tax deductible. High-every time a unit is resold, it is appraised and the higher sales prices are recorded individually creating higher assessed values and in turn, higher property taxes.  Identically tax deductible. 
Downfall Getting in-rigorous and selective application process and little to no financing options to help with initial payment of shares. More Expensive-overall, condo is more expensive per square foot.  Owner’s also take depreciation hits individually and pay higher taxes.  HOA fees generally go up as well, and owners have little control.
Benefit Stronger sense of community-everyone in the cooperative is seen as an equal voice and has a say in everything.  Often a smaller property, the selective application process brings like people into a neighborly atmosphere, as you pick you next neighbor. Simple form of ownership, easy to transfer/sell



The following sources were considered to form the above conclusion:

opens in a new windowElika Real Estate

opens in a new windowNational Association of Realtors

opens in a new windowNational Association of Housing Cooperative

opens in a new windowThe University of Wisconsin Cooperative Study


For more details please feel free to contact an attorney familiar with cooperative housing law.