A housing cooperative, or co-op, is a form of ownership in which a corporation owns the entire building and residents buy shares in that corporation. Owning shares grants a proprietary lease giving the right to occupy a specific unit, rather than direct ownership of real estate.
Because buyers purchase shares rather than real property, co-ops work differently from condos. Monthly maintenance fees cover the building's underlying mortgage, taxes, and upkeep. Co-op boards often screen prospective buyers and can approve or reject them, and they may restrict subletting.
Co-ops are especially common in New York City and some other urban markets. They can be more affordable to buy than condos but come with stricter approval processes and rules, and financing them can be more complex.