What is the difference between a condo, a townhouse, and a co-op?

The distinctions are legal rather than architectural, which is why they confuse people. In a condominium, you own the interior of your unit outright and hold an undivided share of the common elements, meaning the structure, land, hallways, roof, and amenities, jointly with the other owners, governed by an association that collects dues and maintains the shared property. A townhouse is typically fee-simple ownership: you own the structure and the land beneath it, sharing only walls with neighbors, though many townhouse communities also have an association for shared spaces. The same physical building can be sold either way depending on how the developer structured it.

A cooperative is different in kind. You do not own real property at all; you own shares in a corporation that owns the building, and a proprietary lease gives you the right to occupy your unit. Co-ops are concentrated in New York and a few other cities. Their boards can approve or reject buyers with broad discretion, financing is structured as a share loan rather than a mortgage, monthly charges often include the building's underlying mortgage and property taxes, and many restrict subletting sharply. Prices are typically lower than comparable condos to reflect those constraints.

Practical implications for a buyer. Condo and co-op financial health matters as much as the unit: review the reserve study, budget, and meeting minutes for pending assessments and litigation, and know that many lenders will not finance units in buildings with inadequate reserves, high delinquency, or ongoing structural issues, a scrutiny that intensified after the 2021 Surfside collapse. Insurance differs too, with a condo owner needing an HO-6 policy covering the interior while the association's master policy covers the structure, and the boundary between them, called the studs-in or walls-in line, is defined in the association documents.