In Central Terrace, David Martin, a member of the Central Terrace Co-Operative (CTC), appealed from a judgment in favor of CTC on its complaint for forcible entry and detainer. The trial court, relying on this court's earlier decision in Sinnissippi Apartments, Inc. v. Hubbard, 114 Ill. App.3d 151, 448 N.E.2d 607 (1983) (hereafter Sinnissippi), found that a landlord-tenant relationship was created by the cooperative lease agreement and thus CTC's cause was properly brought under the forcible statute. On appeal, this court reversed.

Illinois courts have considered whether a housing cooperative situation should be viewed as a situation involving a leasehold. In Sinnissippi Apartments, Inc. v. Hubbard, 114 Ill. App.3d 151, 448 N.E.2d 607 (1983), the court reviewed at length the nature of a cooperative and noted the similarities between cooperatives and leaseholds. In a typical cooperative situation, proprietary leases which contain provisions common to other leases are issued by the cooperative to member/occupants.

Ill. Rev. Stat. 1989, ch. 110, par. 9-102(c). In its letter opinion, the trial court cited this court's decision in Sinnissippi Apartments, Inc. v. Hubbard (1983), 114 Ill. App.3d 151, in support of its finding that a leasehold arrangement was established by the "Cooperative lease agreement." In Sinnissippi, the plaintiff was a corporation organized to operate a cooperative apartment complex.

In other words, "[s]hares of stock are sold to persons who will occupy the housing units, the number of shares depending on the value of the particular apartment or unit. `Proprietary' leases are issued by the corporation to the shareholders." Sinnissippi Apartments, Inc. v. Hubbard, 114 Ill.App.3d 151, 69 Ill.Dec. 889, 448 N.E.2d 607, 610 (1983) (citation omitted). Because an individual's stock ownership and proprietary lease are intertwined, Illinois courts have acknowledged the unique, hybrid nature of cooperative apartments.

The primary interest of every stockholder in such a corporation is the long-term proprietary lease and the stock is incidental to such purpose and merely affords the practical means of combining an ownership interest with the method of sharing proportionately the assessments for maintenance and taxes.Sinnissippi Apartments, Inc. v. Hubbard, 448 N.E.2d 607, 611 (Ill.App.Ct. 1983). In addition, "the certificate of incorporation, stock offering prospectus, the stock subscription agreement, and the proprietary lease," should all be read together to determine the relationship between the tenant and the cooperative association.

Another court has said that, "The primary interest of every stockholder in such a corporation is the long-term [proprietary] lease and the stock is incidental to such purpose and merely affords a convenient means of combining an ownership interest with the method of sharing proportionately the assessments for maintenance and taxes." Sinnissippi Apartments, Inc. v. Hubbard, 114 Ill. App.3d 151, 448 N.E.2d 607, 611, 69 Ill.Dec. 889, 893 (2nd Dist 1983). On the other hand, other courts have focused on the stock and treated the ownership interest in co-operative apartments as personal property.

The absence of any change of possession of the property itself thus fails to give the notice to the world upon which the concept of perfection by possession is based.See 15A AM.JUR.2D Condominiums and Co-operative Apartments, supra, § 62, at 894 (primary interest of every shareholder in a cooperative apartment is the long term proprietary lease and the stock is incidental to such purpose); see also Sinnissippi Apartments, Inc. v. Hubbard, 114 Ill. App.3d 151, 69 Ill.Dec. 889, 893, 448 N.E.2d 607, 611 (1983) (same). In this regard, the proprietary lease document resembles a document of title more than a security.

The Agreement also listed the Dwelling Unit as being in "New York" and stated that New York law applied to the Agreement. Looking at the Agreement in context with the rest of the loan documents, it is evident that the parties intended to create a security interest in Mr. Dominguez's membership, but used an inappropriate form. ¶ 53 Defendants maintain that the form used for the Security Agreement was intended for use in a "stock cooperative" and cites as an example Sinnissippi Apartments, Inc. v. Hubbard, 114 Ill. App. 3d 151 (1983). Defendants maintain that this type of co-op is distinct from the one in the instant case, arguing that the York Co-op more closely resembles the co-op in Cent. Terrace Co-op. v. Martin, 211 Ill. App. 3d 130, 133-34 (1991), which the court found distinguishable from that in Sinnissippi in that no lease or landlord tenant relationship was created.

The cases defendants cite for this proposition do not support it. Lakeland Property Owners Ass'n v. Larson, 121 Ill. App.3d 805, 810 (1984), actually addresses the issue of the presumption in favor of natural rights and against restrictions when construing a restrictive covenant. Moreover, while Sinnissippi Apartments, Inc. v. Hubbard, 114 Ill. App.3d 151 (1983), addresses the interpretation of the language of the "Shareholder's Proprietary Lease," the court's analysis did not focus on language that was ambiguous but, rather, on the meaning of the plain language contained in that lease. In any event, we agree with the trial court and find no ambiguity in the following sections from the declaration and the bylaws that are relevant to our resolution of this issue.

Lacking authority, the Association could not require an owner to pay the assessed dues. (See generally Sinnissippi Apartments, Inc. v. Hubbard (1983), 114 Ill. App.3d 151 (absent agreement by owner of unit in cooperative housing building, plaintiff could not require him to accept extra shares in building which would have resulted in increased assessments).) Hence, the judgment of the circuit court is affirmed.