Cooperative
National Real Estate Exam glossary · Property Ownership
Definition
A form of ownership in which a corporation holds title to the building and land, and residents own shares of the corporation coupled with a proprietary lease to occupy a particular unit. The owner holds personal property (stock and a lease), not real property; because the corporation carries one blanket mortgage, the default of one shareholder can threaten all.
Cooperative in plain English
In a co-op, you don't actually own your apartment the way you'd own a house. Instead, a company owns the whole building, and you buy SHARES in that company — and owning those shares gives you a special lease letting you live in one specific unit. So legally you own stock and a lease (personal property, like owning shares of a business), not a piece of real estate. The catch: since the company has one big mortgage covering the entire building, if enough neighbors stop paying their share, the whole building's loan can be at risk — you're all financially in the same boat, literally rowing together.
Practice Cooperative
An individual lives in a residential building where they… What form of ownership is this?
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