What Is a Cooperative (Co-Op)?
When you buy a standard condominium, you receive a deed proving you outright own the physical walls and airspace of your specific unit. A Cooperative (Co-Op) operates on a completely different legal structure.
In a Co-Op, a single corporation owns the entire building—every unit, the roof, the lobby, and the land underneath it. When a buyer 'purchases' a Co-Op apartment, they are not actually buying real estate. They are buying shares of stock in the corporation. The size of the apartment dictates how many shares they must buy. Owning those shares gives the buyer a proprietary lease, which grants them the legal right to live in a specific apartment.
The Co-Op Board's Extreme Power
Because Co-Op owners are technically business shareholders living in a shared corporate asset, the Co-Op Board of Directors possesses extreme legal power—far more power than a standard Homeowners' Association (HOA).
If you want to sell your Co-Op shares to a new buyer, the Co-Op Board must interview and approve the buyer. They can demand to see the buyer's tax returns, bank statements, and character references. In Florida, a Co-Op Board can reject a buyer for almost any reason (provided it does not violate the Fair Housing Act), without having to explain why. This makes selling a Co-Op significantly harder than selling a condo.
Eviction vs. Foreclosure
If a condo owner stops paying their HOA dues, the HOA must file a lengthy foreclosure lawsuit to take the unit. In a Co-Op, because the resident is technically a "tenant" holding a proprietary lease from the corporation, a Co-Op Board can often use the much faster eviction process to remove a shareholder who stops paying their monthly maintenance fees.
Related Terms
- Condominium — The alternative to a Co-Op where the buyer actually owns the real estate
- Corporation — The legal entity that actually owns the Co-Op building
- Eviction — The legal tool used to remove a defaulting Co-Op shareholder
Barnes Walker Association Law
Barnes Walker's association attorneys represent Florida Co-Op Boards in drafting strict proprietary leases, legally navigating buyer rejection procedures, and aggressively pursuing evictions against shareholders who default on their corporate maintenance obligations. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC