Illinois Real Estate Practice Exam

A couple purchases a cooperative apartment unit. In this situation, the couple will

1. Become shareholders in a corporation

2. Receive a title deed

3. Acquire fee simple ownership

4. Be tenants in common

The correct answer is: Become shareholders in a corporation

The correct answer is that the couple will become shareholders in a corporation. In a cooperative apartment arrangement, the buyers do not purchase real property in the traditional sense. Instead, when they buy a unit in a cooperative, they are actually buying shares in a corporation that owns the building. This ownership structure gives them the right to occupy a specific apartment unit as a tenant but does not grant them title to the property itself. In contrast, receiving a title deed pertains to real estate ownership, which is not applicable in a cooperative. Similarly, acquiring fee simple ownership refers to holding complete ownership rights to real property, which is not the case with cooperatives. Lastly, being tenants in common describes a situation where multiple individuals own a share of a property, and that doesn't align with the cooperative ownership structure where the couple would hold shares in the corporation instead.