Florida Broker Practice Exam

How is a cooperative property organized?

1. As a partnership

2. As a corporation

3. As an LLC

4. As a trust

The correct answer is: As a corporation

A cooperative property is organized as a corporation. In this structure, individuals purchase shares in the corporation rather than owning the actual real estate directly. These shares correspond to a unit within the cooperative; thus, shareholders are granted a proprietary lease to occupy their specific units. This corporate structure allows for collective ownership and management of the property, with shareholders having a say in the governance through votes proportional to their shares. This organization method fosters a community living environment where decisions regarding maintenance, finances, and other communal matters are made collectively, reflecting the interests of all residents. The other structures mentioned, while useful in different contexts, do not typically apply to the organization of cooperative properties. Partnerships involve shared ownership and personal liability, LLCs offer limited liability but are typically used for business ventures rather than residential communities, and trusts are more about the management of assets rather than providing a framework for collective ownership and governance of real estate.