Many people confuse the two types of apartment ownership - cooperatives and condominiums (otherwise known as "co-ops" and "condos") - so we're going to explain the differences on the next couple of screens. On this screen, we'll focus mostly on cooperatives.

• In a cooperative, the cooperative owns property; whereas in a condominium, each individual person owns his own unit.
• In a cooperative, members own stock in the cooperative. In a condominium, individual owners can have Fee Simple Ownership.
• As stockholders in a cooperative, individuals have long-term leases (proprietary leases). In a condominium, each individual owns his own unit.
• In a cooperative, individuals make monthly rental payments and taxes, insurance, management, and maintenance payments to the cooperative. In a condominium, everyone makes his or her own mortgage, insurance, and tax payments.
• In cooperative ownership situations, the cooperative receives all the money from the "tenants" and then pays mortgages, taxes, and insurance payments, as well as maintenance of the property and all other costs. If too many stockholders do not pay their obligations, the "co-op" will not be able to pay mortgages, taxes, and other expenses, and could lose the entire property through foreclosure.
• Conversely, in a condominium, if one unit cannot pay, then only that unit is going to be lost through foreclosure. More about condominium ownership in the following slide.