What is a proprietary lease?

A proprietary lease is specifically associated with shareholders in a cooperative corporation, making their leasing arrangement unique compared to traditional lease agreements. In a cooperative, residents don't technically own their individual apartments; instead, they own shares in the corporation that owns the entire building. This structure entitles them to a proprietary lease for their specific unit, allowing them exclusive rights to occupy that space.

This arrangement is different from a standard rental agreement where tenants lease from a landlord without any ownership stake. In a cooperative setting, the proprietary lease not only grants the right to occupy, but it often also outlines the responsibilities of the shareholders and their obligations to the cooperative. Thus, the definition of a proprietary lease is grounded in the context of cooperative housing, distinguishing it from other types of leases that would apply to commercial rental situations or individual tenant agreements in typical rental properties.