What is meant by a 'proprietary lease'?

A 'proprietary lease' refers to a unique arrangement typically found in cooperative housing situations. When a person purchases a unit in a cooperative, they do not own the physical property outright. Instead, they own shares in the cooperative corporation, which in turn owns the property. The proprietary lease is the legal document that grants the shareholder the right to occupy a specific unit within the building under the terms established by the cooperative. This lease is long-term and exclusive, reflecting the rights and responsibilities of the shareholder regarding their unit, including details about monthly fees and the rules of occupancy.

This definition distinguishes a proprietary lease from other types of leases. Short-term leases, for example, serve different purposes, often associated with rental agreements between landlords and tenants without the same structural implications as a cooperative housing setup. Similarly, leases related to commercial properties and those that grant landlords complete control over properties do not encapsulate the concept of a proprietary lease, which inherently involves collective ownership and tenant rights within a cooperative framework.