How does co-op ownership differ from other types of home ownership?

Canada is fortunate to have a number of homeownership models that give buyers some choice when they are looking for a place to call home.

Buyers are probably most familiar with freehold homeownership and condominium ownership. With the former, you own the home and the land. With the latter, you own your individual unit while the rest of the condo complex – including the lobby, parking garage and other amenities – are considered shared common elements and owned by the condominium corporation.

Less well-known is co-operatives, or co-ops, as a form of home ownership.

Co-ops are often compared to condominiums because they both can be multi-unit residences – usually townhouses or mid-size high-rises. They are also both run by an elected board of directors.

The major difference between the two is how you “own” the home.

With a condominium, you purchase your individual unit outright or with a conventional mortgage. In addition to the purchase price, you pay monthly fees for the upkeep of the shared common elements mentioned above. Condominiums have legal descriptions that are registered in their local Land Registry Offices, which means that you can buy or sell an individual condominium unit, including a parking space or storage locker if they have separate legal descriptions and deeds.

Co-operatives, on the other hand, are not considered real property. When you buy into a co-op, you purchase a share in a corporation that owns the property. With that share, you get exclusive use of a unit in the co-op as well as the right to vote in how the co-op is operated. In fact, all shareholders are encouraged to be active participants in running the co-op.

You also pay a monthly “charge” that is very similar to rent or condo fees. This fee funds operating costs, including the upkeep of the co-operative’s amenities.

Another key difference between co-op housing and other forms of homeownership is how you acquire your unit.

For co-op housing, as part of the purchase process, you must apply to be a member, and the co-operative’s board determines whether you are able to become a shareholder in that particular co-op community.

Many co-ops have a strong sense of community and are known for focusing on providing housing for niche groups of people, such as artists, for example.

Co-ops are also known for having stable occupancy, so if you are interested in becoming a share holder of a particular co-op, it may take some time before a unit becomes available.

However, if it does, I would encourage you to practice the same due diligence you would in any real estate transaction.

Before buying a share in a co-op, I recommend hiring a real estate sales person and real estate lawyer with experience in these types of transactions, who can help you determine the corporation’s financial health and any fees you will have to pay as a shareholder. You should be aware that financing options for co-ops may be limited compared to those available for condos, since there is no separately-deeded title that can be secured by a mortgage in the case of a co-op.

You should also meet with members of the co-operative. Remember, they will be fellow shareholders who have a financial stake in how the co-op is being run, and you want to make sure they have the same priorities as you do in being part of the co-op community.

By taking this careful approach, you will be able to determine whether co-op housing is the right choice of homeownership for you.

If you have a question for Joe about the home buying or selling process, please email

Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at, follow on Twitter @RECOhelps or on YouTube at

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