Cooperative Associations and Apartments Law & Legal Definition

A cooperative is an association of individual businesses, farmers, ranchers or manufacturers with similar interests, who collaborate in marketing, shipping and related activities to sell their products efficiently, and then share the profits based on the production, money or contribution of each. Farmers' cooperatives are the most common type of cooperative association, and are organized primarily for the common marketing of agricultural products. Such associations are expressly authorized by statute in most states and by federal law.

The term cooperative apartment is usually treated as synonymous with a tenant-owned apartment corporation. The residents own the stock (or memberships in the case of nonstock corporations) of the corporate owner of the building and pay monthly or other periodic sums for their appropriate shares of financing costs, taxes, maintenance, upkeep, and other proper expenses.

Cooperative apartments are different from individually owned subdivision properties, ordinary leaseholds,and condominiums. In subdivisions, each individual owns a home in fee. In an ordinary leasehold, the lessee holds no ownership interest in the lessor. In condominiums, each owner holds a fee interest in a particular unit, together with an undivided fee interest in the common areas and facilities.

Cooperatives are often formed by members paying a membership fee or purchasing shares of stock. In a stock cooperative, members are issued stock certificates as evidence of their membership and capital investment. More than one type of stock may be issued.