Final answer:
A co-op buyer receives a stock certificate and a proprietary lease instead of a deed. The stock certificate represents ownership interest in the co-op corporation, while the proprietary lease grants the right to occupy a unit within the co-op. Additionally, the buyer gets a set of house rules that guide the operations of the co-op.
Step-by-step explanation:
When a buyer purchases a unit in a housing cooperative, often referred to as a co-op, they do not receive a deed like one would when purchasing a traditional piece of real estate. Instead, they receive a stock certificate and a proprietary lease. The stock certificate represents the buyer's ownership interest in the co-op corporation, which owns the building.
The proprietary lease grants the buyer the right to occupy a specific unit within the co-op. It is important to note that these documents symbolize ownership of shares within a corporation rather than direct ownership of real property. This structure is unique to co-ops and indicates the buyer's membership in the cooperative, along with their rights and responsibilities towards the collective living community.
Understanding Co-op Documents
Stock Certificate - This document is official evidence of the buyer's ownership in the cooperative corporation.
Proprietary Lease - This lease agreement specifies the terms under which the buyer is entitled to occupy their unit.
House Rules - Often, the buyer will also be provided with a set of rules or bylaws that govern the co-op's operations and the conduct of its residents.
These documents are critical for the co-op buyer because they define not only the ownership but also the conditions of use and the guidelines for participating in the cooperative's governance and decision-making processes.