What type of lease does the owner of a cooperative possess?

The owner of a cooperative possesses a proprietary lease, which is an essential aspect of how cooperatives function. In a cooperative housing arrangement, individuals buy shares in the cooperative rather than owning a specific unit directly, as is the case with traditional real estate ownership.

The proprietary lease allows shareholders to occupy a specific apartment or unit within the cooperative in exchange for their investment. This lease grants them exclusive rights to their unit, while the cooperative itself owns the property. Consequently, the proprietary lease is unique to cooperatives and reflects the shared ownership model where residents belong to an organization that manages the property collectively.

In a cooperative, the shareholders are responsible for paying a monthly fee that covers the operating expenses of the building, including maintenance, taxes, and utilities, which is different from a traditional lease arrangement found in rental properties. This understanding of the commoditized share structure and the related lease framework underlines the specific fit of the proprietary lease as the correct answer.