What is a leasehold agreement?

A leasehold agreement is a specific type of arrangement where a shareholder of a cooperative association enters into a lease with that association, which holds title to the property. This agreement allows the shareholder to occupy a unit within the building while the cooperative maintains ownership of the entire property. It is distinctive because the shareholder does not own the real estate directly but has a proprietary interest in the cooperative, and the lease grants them the right to use and enjoy the space in accordance with the cooperative's rules.

In cooperative living arrangements, the cooperative corporation takes care of common areas and overall property management, while each shareholder holds a lease providing them rights and responsibilities regarding their individual unit. This relationship is fundamentally different from a traditional landlord-tenant lease, where the property ownership is clear-cut, and the landlord retains significant authority over the property.

This clarification highlights the nature of leasehold agreements, particularly in cooperative settings, setting them apart from other arrangements that might involve direct rental agreements or shared living situations between tenants.