What distinguishes a cooperative from a condominium?

The distinction highlighted by the correct answer revolves around the ownership structure in cooperatives compared to condominiums. In a cooperative, individuals do not own their specific unit outright but rather hold shares in a corporation that owns the entire property. When a person in a cooperative wishes to transfer their residency, they sell their shares in the corporation instead of selling a deed to a specific unit. This communal ownership model is a fundamental characteristic of cooperatives, distinguishing it from the condominium system, where each owner has direct ownership of their individual unit along with a share in the common areas of the property.

This understanding highlights the primary difference in ownership and how it is transferred in each housing structure. In a condominium, owners have a fee simple title to their units, which allows for more direct control and the ability to sell the unit itself. Additionally, while there may be rules about modifying a unit in a condominium, it is not accurate to say that condo owners cannot modify their units, as they typically can do so within the constraints of community or association guidelines.

Overall, the ownership dynamic in a cooperative is what sets it apart from a condominium, reinforcing why this is the defining characteristic of cooperatives.