Humber/Ontario Real Estate Course 1 Exam Practice

Which of the following statements is accurate about an equity co-operative?

1. Allows ownership of specific units within the building.

2. Equates to a non-profit co-operative regarding share ownership.

3. Grants occupants ownership of land/buildings but not shareholding rights.

4. Involves share certificate ownership and an occupancy agreement.

5. Only allows temporary residency without an ownership stake.

6. Requires all shareholders to participate in management.

The correct answer is: Involves share certificate ownership and an occupancy agreement.

The statement regarding equity co-operatives that is most accurate is the one about share certificate ownership and an occupancy agreement. In an equity co-operative, individuals do not own their specific units outright; instead, they buy shares in the co-operative. Consequently, these shares grant them the rights to occupy a specific unit, typically outlined in an occupancy agreement. This structure fosters a sense of community and shared responsibility among members. Furthermore, the concept of share certificates is crucial as they represent a member's ownership stake in the co-operative while providing rights to use the property. An occupancy agreement further details the terms under which members may reside in their assigned units. This model encourages collaboration and decision-making among co-op members since their financial investment is shared in the form of equity. The other statements do not accurately reflect the nature of equity co-operatives. Unlike ownership of specific units, which implies traditional property ownership, equity co-operative members share a collective interest in the entire property. Describing it as a non-profit co-operative regarding share ownership does not capture the financial investment and equity aspect present in an equity co-op. Additionally, while all shareholders typically have a voice in management, it is not always mandatory for everyone to actively participate, making the involvement variable rather than a requirement