Condominiums and cooperatives are considered to be types of common interest communities. Rarely can one distinguish cooperatives and condominium communities by just looking at the structure of the residence. You can determine whether you are dealing with a cooperative or a condominium community by looking at the residential regulations of the community.
Both condominiums and cooperatives are forms of common interest communities. They have various similarities, but can be distinguished by their form of ownership. Typically, common interest communities have:
- A Single Developer -One who initially regulates the community
- A Board, Governing Body or Association – When the developer leaves, a board usually takes over and governs the community. The board’s duties include:
- Enforcing any covenants or restrictions against the residents
- Collects fees for maintaining and improving the common areas of the community
- Levy fines if any resident does not follow the regulations of the community
- Laws or Regulations – While states do have laws regarding common interest communities, these communities are usually governed by their own documents. You can usually find the common interest community’s regulations in these documents:
- The master deed from the developer
- The bylaws of the community, which usually include duties and powers of the governing body
- The constitution of the association or community
In a cooperative, a corporation or association owns the building and the land. The individual pays rents for the maintenance and repair of the common areas in the building. The rents are also usually equivalent to mortgage payments for the property and property taxes. In the cooperative, the "buyer" owns nothing. The "buyer" is essentially the tenant with the association acting as the landlord.
In a condominium community, people literally own their own units and the air space within the unit. The people who purchase a condominium have legal title to the unit. They share ownership and obligations for the common areas with the other condominium owners. Often, the condominium owners pay a periodic fee for the repair and maintenance of the common areas. The association or board does not actually own anything and is merely the regulatory body of the community.
Each common interest community has a unique set of regulations and a different governing body. A real estate attorney can help you sift through all the documents and regulations of your common interest community to determine your rights. A real estate attorney can also assist you if you have a dispute with the governing body or a common interest community neighbor.