In real estate, a cooperative (often called a “co-op”) is a form of property ownership in which an apartment building is owned by a corporation rather than by individual unit owners. Instead of purchasing real property, a buyer purchases shares of stock in the corporation that owns the building. These shares grant the shareholder the right to occupy a specific apartment unit under a proprietary lease, rather than holding title to the unit itself.
The number of shares owned typically corresponds to the size, location, and desirability of the apartment. Cooperative ownership involves a unique approval process, as buyers are often subject to review and approval by the cooperative’s board of directors. Monthly maintenance fees paid by shareholders cover the building’s operating expenses, property taxes, and underlying mortgage. This ownership structure emphasizes collective responsibility and governance, distinguishing cooperatives from other forms of residential ownership such as condominiums.
