For a not-for-profit corporation, what is the allowed extent of real estate activity for its own use?

• A. Unlimited
• B. Not at all
• C. Limited amounts
• D. Only through a licensed broker

Answer: (C)

A not-for-profit corporation may own and use real estate to support its programs, but the amount of real estate activity is limited. The law aims to prevent nonprofits from operating as a real estate brokerage or turning property into a large-scale real estate business. They can hold title to buildings or land and use them directly for their mission (offices, facilities, housing for clients, storage, etc.), but they should not conduct ongoing brokerage activities or real estate investments as a business. If the organization’s involvement in real estate becomes more than incidental and resembles a brokerage operation, licensing would come into play. So, the correct idea is that the allowed extent is limited amounts: enough to support the nonprofit’s use, not an expansive real estate enterprise.