Co-ops & Condos

Proprietary Lease

The lease agreement between a cooperative corporation and a shareholder-tenant, granting the right to occupy a specific unit.


Definition

In a cooperative, residents do not own their units outright. They own shares of stock in the cooperative corporation, which entitle them to a proprietary lease for a specific unit. The proprietary lease outlines the shareholder's rights and obligations: rent (maintenance payments), permitted uses, subletting rules, and board approval requirements. Unlike a standard lease, the proprietary lease has an indefinite term and is tied to stock ownership. The board can set restrictions on subletting and alterations.

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