Humber/Ontario Real Estate Course 2 Exam Practice

What must Buyer LeBlanc do if she wishes to purchase an equity co-op?

1. Obtain approval from the board of directors before completion of the sale.

2. Sign just an agreement of purchase and sale, no need for occupancy agreement.

3. Only pay for her individual unit’s mortgage, not the blanket mortgage registered against the building.

4. Make separate payments for property taxes and monthly occupancy charges.

5. Ensure the co-op board provides a letter of approval within 30 days.

6. Negotiate directly with the seller without involving the board.

The correct answer is: Obtain approval from the board of directors before completion of the sale.

When purchasing an equity co-op, the correct answer is to obtain approval from the board of directors before completion of the sale. In a co-op arrangement, each resident owns shares in the cooperative corporation rather than owning real property outright. The board of directors of the co-op generally has the authority to approve or disapprove of potential buyers to maintain the quality and standards of the cooperative community. Therefore, buyer LeBlanc must seek approval from the board before finalizing the purchase to ensure that she meets the criteria set by the cooperative and is a suitable member for the community. This step is crucial in the co-op purchasing process and distinguishes it from other types of real estate transactions where buyer approval is not a mandatory step.