What is a co-operative in real estate?

A co-operative in real estate refers to a specific arrangement where individuals own shares in a corporation that owns a property, which in turn grants them a proprietary lease to a unit within that property. This means that rather than owning a physical piece of real estate outright, the shareholder has a leasehold interest in a specific unit and a shared interest in the corporation that owns the entire building or complex.

This structure allows residents to enjoy similar benefits as traditional homeowners, such as living in a private space and generally having a say in the management and upkeep of the property, all while collectively sharing expenses and making decisions through one governing body—the cooperative corporation. This investment model fosters a community among residents.

In contrast, the other options do not accurately describe a cooperative:

• Individual ownership of a single-family home refers to fee simple ownership rather than a share in a corporation.

• Joint tenancy refers specifically to a form of ownership where two or more individuals share ownership rights and can inherit each other's interest upon death, which does not align with the concept of co-ops.

• A leasehold estate pertains to a rental arrangement rather than ownership shares or proprietary leases associated with a cooperative structure.

Thus, the definition encompassing a proprietary lease and shares in the cooperative corporation accurately captures the essence