New York State Real Estate Salesperson Licensing Exam

What type of ownership is associated with a cooperative (coop) property?

1. Fee simple

2. Leasehold

3. Joint tenancy

4. Tenancy in common

The correct answer is: Leasehold

In a cooperative (coop) property, ownership is associated with a leasehold arrangement. Essentially, when an individual buys into a coop, they are purchasing shares in a corporation that owns the entire building rather than acquiring the property itself. This means that they receive a proprietary lease that grants them the right to occupy a particular unit in the cooperative. The nature of this ownership structure is important because it differentiates cooperatives from other forms of real estate ownership like fee simple, which refers to outright ownership of property, and forms of joint ownership such as joint tenancy or tenancy in common, where individuals own a share of a specific property in a more traditional real estate sense. In a cooperative, residents collectively own the building through their shares, but their actual occupancy is governed by a leasehold agreement, which is what makes this ownership structure unique.