Certified Residential Appraiser Practice Exam

Cooperative ownership is primarily characterized by which of the following?

1. Individual ownership of property units

2. Shared ownership with a trust or corporation

3. Joint tenancy among families

4. Equal responsibility among partners

The correct answer is: Shared ownership with a trust or corporation

Cooperative ownership primarily involves shared ownership in which residents collectively own the entire property through a corporation or a cooperative entity. In this arrangement, instead of owning individual units, a resident purchases shares in the corporation that owns the building, which entitles them to occupy a specific unit. This model facilitates a more communal approach to property management, as decisions regarding the property are typically made through a board elected by the shareholders, fostering collaboration and shared responsibility for the property’s maintenance and operation. This structure stands in contrast to other forms of ownership. For instance, individual ownership of property units signifies that each owner holds title to their specific units, which does not apply to cooperatives. Similarly, joint tenancy refers to a form of ownership where two or more individuals hold full rights to a property and cannot be likened to cooperative ownership, as it does not involve a shared corporate structure. Lastly, equal responsibility among partners applies more to partnerships than to cooperatives, where the corporation itself manages responsibilities through its board in alignment with the interests of all shareholders. Thus, cooperative ownership is defined fundamentally by its shared corporate structure that enables collective property management.