Real Estate Appraisal Practice Exam

What must occur for Archie to buy Claire's membership share in a cooperative?

1. Claire must pay a transfer fee

2. The cooperative board must approve Archie's application

3. Archie must be a current resident

4. Claire must obtain a second appraisal

The correct answer is: The cooperative board must approve Archie's application

In a cooperative housing situation, the process of transferring membership shares is subject to specific regulations outlined by the cooperative's governing body. The approval from the cooperative board is a crucial step in this process. The board is responsible for ensuring that new members meet the criteria set forth in their bylaws, which may include financial stability, compatibility with existing members, and adherence to the cooperative's standards and policies. This approval process helps maintain the community's values and promotes a harmonious living environment. While other actions—such as paying a transfer fee, existing residency requirements, or obtaining appraisals—might be involved in certain cooperative transactions, the fundamental requirement for Archie to purchase Claire's membership share hinges primarily on the cooperative board's approval. This step safeguards the interests of the cooperative and its members, making it a critical component of the membership transfer process.