Another question for my experts.

No. The thing you own are the shares in the corporation that owns the building and (usually) the underlying land. Your proof of that is the stock certificate you are given at the closing.

There is no title, because you do not own any 'real estate' to which title is given, unlike a condo or a stand-alone property. Because there is no title, if you have a bank loan to pay for your shares (or a subsequent home equity loan), the bank perfects their interest in the securities by filing a UCC (where in a condo purchase or stand-alone property they would hold the title to the property or file a first lien).

Your proprietary lease is only the rental agreement between you as a tenant and the co-op as landlord. It's 'proprietary' in that it you are the tenant by virtue of being an owner of the underlying shares (which then permits you to use a specific unit in the building).

That's a wonderful explanation, Aaron2. To take it further (without offering legal advice, because I am not an attorney) your proof of ownership is your certificate showing your ownership of shares.

One of the functions of the transfer agent during closing is to cancel the seller's shares and issue new shares to the buyer, noting the transfer in their records.

If you have a bank loan, the bank will then take your share certificate as part of their collateral. When you pay off your loan, the bank ought to return that certificate to you -- but usually, instead, they will explain to you that they lost the certificate -- sorry, they're very busy and banking is complicated!

At that point, however, the co-op will step in to issue you a duplicate share certificate, based on their records.

https://www.thefreelibrary.com/Case+highlights+danger+to+co-ops+when+stock+certificates+are+lost.-a020901521

Or, the co-operative could have noted in its records 1) that there was a lien on the apartment and 2) have kept a copy of the recognition agreements in its files under the number of the apartment.

*smh*

Obviously, the shareholder should not have committed fraud, but we are talking about meeting only a minimal level of record-keeping here.

The bank takes the stock certificate and lease as collateral.

Thanks everybody - : )

@front_porch: Thank you, and thanks for the link about potentials for share fraud.