What is the difference between a condominium, homeowners’ association, and a residential co-operative?

A condominium is a relatively new form of property ownership created by statute which allows persons to buy and sell apartments within a building.  This form of ownership can take almost any architectural form.  The declaration of condominium sets forth the boundaries of a number of units and of the common elements of the association.  Typically, a unit consists of the air space bounded by the surfaces of the walls, floor, and ceiling.  The property other than the units is the common elements, which typically includes the actual real estate, the  buildings themselves, all structural components, the grounds, and exterior areas.    In addition to owning the air space that consists of a unit, each unit owner also owns a percentage of the common elements (as tenants in common with all other unit owners) according to the percentages set forth in the declaration.  

A residential cooperative is usually an apartment building that is owned by a corporation.  The shareholders or members of the corporation are entitled to lease one of the apartments.  The proprietary lease is entered between the member and the corporation.  In the past, co-operatives would have a mortgage on the entire premises and each member would pay a share.  In recent years and in some places, it has been possible for members to purchase a co-operative through various financing vehicles.  The concept of condominiums was created, in part, due to the problems of cooperative ownership because with a condominium the owner can more easily and  freely buy and sell and obtain mortgage financing on the apartment.  In certain areas of the country, such as New York City, co-operatives are quite common.  

Although both a condominium and cooperative can be considered a homeowners’ association, the HOA is usually thought of as a non-condominium association.  Typically, each members owns his or her own Lot in the same way as a single family homeowner.  However, the surrounding common areas are owned by the Association for the benefit of the homeowners.  Many of these associations are multi-family housing buildings, such as townhouses, and the association performs exterior maintenance on the buildings.  However, a homeowners’ association can be a neighborhood association of single-family homes or of a mixed community, and it can have a very limited scope of operation such as road maintenance, or operation of recreational facilities.  

There are significant differences between these types of community associations and the application of law sometimes turns on these differences.  However most of association law applies generally to all kinds of associations.  One is generally safe in assuming that the law of one type of ownership will be applied to other forms (by analogy) unless there is a specific reason why the law should treat differently the various forms of cooperative ownership.