Home ownership is a big part of the American dream. And, when you think of a "home," the first thing that often comes to mind is a house, big or small, in a city or suburb. But that's not necessarily the ideal setup for everyone.

Young couples, retirees and others who don't want the costs and trouble of maintaining a home, for instance, often turn to condos and co-ops. They're forms of common interest ownership in real estate where you and others share ownership of land or a building.

Find out if one of these options is right for you.

Owners' Associations

Condos and co-ops are usually part of what's called an owners' association. All owners must be members of this association and must follow its rules. These rules are usually in governing documents that may include bylaws, as well as separate covenants, conditions and restrictions (CC&R's).

The owners elect a board of directors that oversees the affairs of the association and enforce the association's rules. You're not always going to agree with the board's decisions, but you'll probably be stuck with them as the board has a great deal of power under the bylaws and CC&R's.

Condominiums

With a condo, you usually hold title to your own unit. Sometimes, your unit may be defined simply as the "airspace" of your unit, and not the unit itself. Units may be in high-rise buildings, as well as townhouses.

As an owner, you have rights to the use and enjoyment of the common areas with the other unit owners. These areas may include amenities such as parking, hallways, walk ways, road ways, recreational facilities and so forth.

Each state has laws covering enforcement of condo rights and duties, and particularly the association's financial and recordkeeping duties. But laws on selling and buying condos are common, too.

Cooperatives

A cooperative is much like a condominium, except that residents typically don't actually own their particular units. Instead, a cooperative entity (usually a corporation) holds title to the land and building. In turn, the residents hold ownership interests (such as stock) in the cooperative.

Each resident shareholder usually has the right to:

• Elect the directors who oversee building operations
• Lease a particular apartment unit on a long-term basis, with an option to renew

Next, Tips for Buyers

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Related Web Links

- Information and Resources for Home Buyers and Sellers from the National Association of Realtors