Humber/Ontario Real Estate Course 4 Exam Practice

What must occur for Buyer Davis to purchase within an equity co-op?

1. Approval from board of directors

2. No need for occupancy agreement

3. Individually liable for unit mortgage

4. Property taxes handled separately from charges

5. Sale agreement sufficient for purchase

6. Licensing agreement post-purchase

The correct answer is: Approval from board of directors

In order for Buyer Davis to purchase a unit within an equity co-op, the approval from the board of directors is a crucial requirement. Equity co-ops operate under a unique structure where buyers do not purchase real property in the traditional sense but rather buy shares in a corporation that owns the property. The board of directors typically has the authority to approve or deny prospective buyers based on various factors, including financial stability, compatibility with existing residents, and adherence to the co-op's rules and regulations. This process is in place to ensure that new members align with the cooperative's values and contribute positively to the community. Having this level of oversight protects the interests of current shareholders and maintains the overall integrity of the cooperative living environment. Thus, board approval is a key step that must be completed before any transaction can proceed within an equity co-op.