Humber/Ontario Real Estate Course 3 Exam Practice

What differentiates condominium ownership from equity co-operative ownership?

1. The condominium is managed by a board of directors and the co-operative is not

2. The condominium levies monthly fees to unit owners, but no comparable fee is levied in the case of the co-operative

3. The condominium provides the ability to participate in ownership, while the co-operative does not offer this possibility

4. The condominium unit owner can sell his or her ownership of a specific unit, while such is not possible with the co-operative

5. The co-operative grants property usage rights, but the condominium does not

6. The condominium includes joint maintenance responsibilities, the co-operative does not

The correct answer is: The condominium unit owner can sell his or her ownership of a specific unit, while such is not possible with the co-operative

The correct choice emphasizes a fundamental difference between condominium ownership and equity co-operative ownership: the ability to sell individual units. In a condominium, each owner holds a deed to their specific unit, which allows them the freedom to sell it independently. This not only facilitates individual ownership but also enables potential appreciation of property value, as each unit can be bought and sold based on market conditions. In contrast, equity co-operatives function differently; individuals do not own their units outright but rather own shares in the cooperative corporation that owns the entire property. This structure means that when a member wishes to leave or sell their interest, they typically must sell their shares back to the cooperative rather than to the general market. This limitation on selling and the need for approval from the co-op board can affect how quickly or easily members can transfer ownership. While other factors do contribute to the differences between the two forms of ownership, the ability to sell individual units is a clear structural distinction that significantly affects the nature of ownership and the flexibility for owners in a condominium setting compared to those in a co-operative.