Certified Residential Appraiser Practice Exam

In which form of property ownership do unit owners hold stock in a cooperative and are provided a proprietary lease?

1. Cooperative

2. General Partnership

3. Fee Timesharing

4. Planned Unit Development (PUD)

The correct answer is: Cooperative

Unit owners in a cooperative, often referred to as "co-ops," hold shares of stock in a corporation that owns the entire property rather than owning their individual units outright. This structure is characterized by a proprietary lease, which grants them the right to occupy a specific unit. The underlying concept of a cooperative is that the collective ownership of the property allows for shared management and maintenance responsibilities among residents, which is distinct from other forms of property ownership. In contrast, in a general partnership, ownership is typically shared equally among partners, and there is no proprietary lease structure associated with residential units. Fee timesharing allows individuals to purchase the right to use a property for specific periods each year, but ownership does not involve stock or leases as seen in co-ops. Similarly, a Planned Unit Development (PUD) encompasses a mix of property types with individually owned lots or units, often subject to HOA regulations but without the cooperative ownership model. Thus, the cooperative structure specifically aligns with the description of unit owners holding stock and a proprietary lease.