Corporate Ownership. In condominium developments, units are owned separately with the remainder of the development owned in common by the membership. In stock cooperatives, the units and the common areas are owned by a corporation formed for that purpose.

Shares of Stock. Members of a stock cooperative buy shares of stock in the corporation. Shareholders are then given the exclusive right to occupy a particular unit in the building. The exclusive right is usually in the form of a lease.

QUESTION: I’m on our bylaw rewrite committee and we’re stymied. We fit the definition of a stock cooperative under Davis-Stirling but Section §1352 says it applies “provided ALL of the following are recorded”: a Declaration and parcel map. Our corporation never filed these, so it appears the Davis-Stirling does not apply to us. Are we reading this right?

ANSWER: You’ve discovered an inconsistency in the Davis-Stirling Act that resulted from unfortunate drafting. Even with the current flaw in the provision your stock coop falls under the Davis-Stirling Act. Civil Code §1351(c)(4) stock cooperatives as common interest developments subject to the statute. The owners' interest in the corporation, whether evidenced by a share of stock, a certificate of membership, or otherwise, is deemed to be an interest in a common interest development.Civil Code §1351(m). Because stock cooperatives meet the definition of a common interest development, they fall under the Davis-Stirling Act. Golden Rain Foundation v. Franz