Which lease is defined as a lease granted by the corporation that owns the apartment building?

• A. Escalated Lease
• B. Index Lease
• C. Ground Lease
• D. Proprietary Lease

Answer: (D)

In a cooperative building, residents don’t own their units outright. They own shares in the cooperative corporation that owns the building and receive a proprietary lease from that corporation granting the right to occupy a specific apartment. This lease is the legal document issued by the entity that actually owns the building, delineating occupancy rights and obligations for the shareholder-tenant.

Escalated leases involve predefined rent increases over time, not ownership rights. Index leases adjust rent based on a published index like the CPI. Ground leases are long-term leases of land to a tenant, with the building often owned by someone else. So the lease defined as granted by the corporation that owns the apartment building is a proprietary lease.