In a cooperative, which statement is true?

• A. The association owns all real estate in the cooperative in all cases.
• B. The owner has two legal relationships—ownership in the cooperative and a lease for the unit.
• C. Cooperatives cannot be for-profit entities.
• D. Members do not lease units.

Answer: (B)

In a cooperative, residents do not own their units outright. Instead, they own shares in the cooperative corporation that owns the building and they hold a proprietary lease that gives them the right to occupy a specific unit. This creates two legal relationships for the resident: ownership in the cooperative and a lease for the unit. The cooperative (the association) owns the real estate, while the individual owns shares and holds the unit through the proprietary lease. This dual arrangement is what makes the described statement true. The other statements aren’t universally true: cooperatives can be for-profit or nonprofit, and members do lease units through the proprietary lease.