What is a Co-Op?

What is a Co-Op?

If you were to do an online home search and looked at pictures of condos and co-ops you may be asking yourself what is the difference between the two? They look exactly the same.

In large metropolitan areas, both of these property types are very popular as you can build more of them in less space and you can offer more amenities. Looking into the further details of each type of property you will quickly see that the terms of purchase are very different. So, if you are planning to move to a more urban area it is good to know the differences between a co-op and a condo and which purchase might be better for you personally.

Both of these property types allow for the owner to use community amenities which can include pools, gyms, meeting rooms, courtyards, and, in some cases, even a restaurant or bar. But there are some big places in which they differ.

The Details of a Co-Op

Housing co-op residents do not officially own their individual dwelling units. Instead of owning a piece of property, a person holds shares in a nonprofit corporation that is the true owner of the title and grants leases to every resident. The lease allows residents the ability to live in a specified unit and use all common areas of the building in accordance with bylaws and regulations.

In a co-op community, there is a co-op manager that is responsible for collecting monthly maintenance fees and helps to enforce covenants, conditions, and restrictions to help ensure the continued quality and upkeep of the community.

Living in a co-op makes you a shareholder and allows you the ability to be deemed as a voting manager of the building. This means that you have the ability to put in your opinion on how the co-op should be run and maintained. All residents will vote on any decision that affects the building.

If you decide you would like to sell your shares,  members of the co-op board of directors will need to approve the person that you sell your shares to and will become a new resident. In this process, the governing board is much more involved as compared to the sale of a condo. This can mean a more drawn-out process.

A co-op is similar to a condo in that it is a common interest community, but the governing documents have very different legal parameters in determining how the main functions of the board and overall community operates. And how it relates to the lives of the residents and the cost of living, control of individual dwellings, and can even affect your overall culture of living within the building.

Differences between co-ops and condos and things to consider before moving in

Buying In

In simpler terms, a co-op is essentially like buying into an apartment as there is no actual purchase of the real property. The price per square foot is lower as compared to purchasing actual property in a condo building. Another thing to consider however is that finding financing to purchase into a co-op can be a little more difficult than finding a mortgage for a condo. Much of this has to do with the fact that a lender cannot foreclose on an actual owned property with a co-op.


The monthly fees associated with living in a co-op can be more as compared to condo association fees. Co-op fees can include payments for the building’s underlying mortgage, amenities, maintenance, property taxes, security, and utilities. The more amenities within a co-op community the more likely it is to pay higher monthly fees.


Buying shares into a co-op to become a resident means meeting with the board and this can mean extensive interviews and questions far beyond what is typical of purchasing a unit in a condo building. In some cases, it could mean providing substantial personal information like tax returns, personal and business references, and more.


A co-op is going to come with more restrictions on how you can renovate the inside of your individual unit as you are not the actual owner. Condos will come with restrictions as well where the condo association is concerned, but it can also restrict the parameters for renting out the unit should you decide to do so. It is always good to check out any co-op or condo conditions and restrictions.

For more information on purchasing a home in St. George or more details on co-op properties in and around St. George and Washington County, please contact me anytime.

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