Housing Cooperatives are a legal entity that owns real estate, with tenants being shareholders, paying their share of the associated fees. Individual shareholders do not own the real estate they live in, but are essentially shareholders of a corporation that owns real estate. Housing co-ops can take on a variety of forms.They can be one house, with tenants occupying a bedroom and sharing things like a kitchen and common-rooms, or they can be multiple residences similar to a condo or town homes, with each tenant occupying a residence. The former is most common among students, with co-op housing resembling a dorm-type situation, whereas the latter is common for single adults and families in urban settings.

The advantages of being a co-op shareholder are that you have much more control over your living space than if you were simply a tenant in an apartment that someone else owned. Also, they allow the sense of ownership to people who would normally have trouble getting a mortgage loan, as the cooperative itself, as a legal entity, can carry a mortgage. This makes it different from condominium ownership, where each tenant is responsible for their own funding. Another advantage is that co-op members share the real estate taxes. However, sometimes seen as a downside, co-ops do have occupancy agreements, and a shareholders occupancy must adhere to these rules. This agreement, essentially a lease, also dictates who a shareholder can rent or sell to, or even if they can sublet their unit at all. All co-op shareholders are part of the co-operative association, and have the option to serve on the board of directors which is usually a voluntary position (unpaid). The advantage of this is that they can co-create what the tenancy agreement consists of, and therefore have more control over their living situation.

The board of directors serves as a governing body, and in smaller co-ops can consist of all shareholders. In larger co-ops it isn't uncommon for the task to rotate on a yearly or bi-yearly basis, with members being elected by all the shareholders at an annual general meeting. Usually, a Co-op will hire a manager who will then hire contractors to carry out necessary services.

While some people just love co-op housing, others find it stressful to adhere to the tenancy agreement's guidelines. For example, there is a case of a mother moving out and leaving her young-adult daughter in her co-op home, only to have the other members consider her lease void. In other cases, judges have ruled that the children of shareholders had the right to stay in their homes.

If you are considering buying into co-operative housing, look over the tenancy agreement carefully. Consider getting to know some of the shareholders ahead of time, and asking them what they like and dislike about the arrangement. Every tenancy situation, including owning your own real estate, has its challenges and rewards. The important thing is finding something that suits your unique needs.