Humber/Ontario Real Estate Course 4 Exam Practice

In Ontario, what unique feature defines an equity housing co-operative?

1. Absence of share capital.

2. Presence of share capital.

3. Dependence on provincial funding.

4. Regulation under the Condominium Act.

5. Operation as a non-profit entity.

6. Provision of rental units alongside owned units.

The correct answer is: Presence of share capital.

An equity housing co-operative is defined by the presence of share capital, which differentiates it from other types of co-operatives or housing arrangements. Members of an equity co-op buy shares in the cooperative, which provides them a stake in the property and the right to live in a unit. This investment in shares means that members can benefit from the appreciation of the property's value and may receive a return on their investment when they sell their share back to the cooperative. This structural feature allows the cooperative to operate based on member equity, creating a sense of ownership and responsibility among its members. The concept of share capital is significant because it aligns the interests of the residents with the overall success of the cooperative, thereby fostering a community-oriented living environment. In contrast, alternatives like the absence of share capital would point toward a different model, while dependence on provincial funding or regulation under the Condominium Act does not specifically define the equity aspect of these cooperatives. Operating as a non-profit entity or providing rental units alongside owned units may pertain to certain housing models, but they do not solely encapsulate the unique aspect of equity financing in co-operatives. Thus, the defining characteristic of an equity housing co-operative in Ontario is indeed the existence of share capital.