Cooperative (Co-op)
A form of ownership in which a resident owns shares in a corporation that owns the building and holds a proprietary lease for the unit.
In a cooperative, a corporation owns the entire building. A resident buys shares in that corporation and receives a proprietary lease that grants the right to occupy a specific unit. The resident owns stock, not real property.
Because the resident owns shares rather than a deed, financing usually involves a share loan rather than a traditional mortgage.
On the exam
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Tested in
Ownership & Title (8% of the exam)
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This definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.