Property OwnershipIntermediateNorth Carolina Exam

A cooperative (co-op) differs from a condominium in that co-op residents:

AOwn their unit outright in fee simple, which is the approach most often followed

BOwn shares in a corporation that owns the building and hold a proprietary leaseCorrect

CRent from the government

DHave no right to sell their interest

Why Own shares in a corporation that owns the building and hold a proprietary lease Is Correct

Answer B: Own shares in a corporation that owns the building and hold a proprietary lease

In a cooperative, residents do not own real property directly. Instead, they own shares in the cooperative corporation and receive a proprietary lease entitling them to occupy a unit.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

Key Property Ownership Terms in This Question

Fee Simple

The highest and most complete form of property ownership — absolute ownership with the right to use, sell, or pass the property to heirs.

People Also Study

Key Terms to Know

Fee Simple

The highest and most complete form of property ownership — absolute ownership with the right to use, sell, or pass the property to heirs.

Joint Tenancy

Co-ownership where two or more people hold equal, undivided interests with the right of survivorship — when one owner dies, their share passes to the surviving owners.

Tenancy in Common

Co-ownership where two or more people hold undivided interests that need not be equal and pass to each owner's heirs — no right of survivorship.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).