MarylandHB 00852026 Regular SessionHouseWALLET

Corporations and Associations - Cooperative Limited Equity Housing Corporations - Establishment

Sponsored By: Lorig Charkoudian (Democratic)

Signed by Governor

Corporations and AssociationsReal PropertyAssociations -see also- Cooperative AssociationsBuilding CodesCooperative AssociationsCorporations -see also- Municipal Corps; Public Corps & InstDisclosureElderly Persons (65+) -see also- Elder Abuse and NeglectGrantsHousing and Community Development, Department ofLaws and Ordinances -see also- Pub Local Laws; Uniform LawsLeases and RentLow-IncomeModerate-IncomeNoticesPenalties and Sentences -see also- Death PenaltyReal Estate -see also- Agents and BrokersReimbursementsRules and RegulationsVoting -see also- Absentee and Mail-In VotingZoning and Planning

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 3 benefits, 0 costs, 1 mixed.

Purchase rights and moving protections for renters

Beginning October 1, 2026, converted cooperatives must promptly notify households and offer eligible tenants a cooperative interest. Eligible households must have lived there legally on the conversion date and for at least 180 days beforehand. An offer counts as rejected unless accepted within 89 days after receipt. Households not eligible for an offer get at least 90 days after written notice before being required to leave. Eligible households that reject an offer get at least 90 days after receiving both the offer and move-out notice. Low-income households get at least 12 months when a qualifying household member has a disability or is age 62 or older. That person must have been a household member for at least 12 months immediately before the move-out notice. The household must notify the cooperative within 30 days that it intends to stay longer than 90 days. These minimum periods do not protect against earlier removal for unpaid rent or a lease violation. Low-income households required to leave receive reimbursement for actual, reasonable moving costs, with a minimum of $375 and a ceiling below $751.

Affordable cooperative housing with limited resale gains

Beginning October 1, 2026, at least 75% of counted cooperative members must belong to low-income households; the rest must be moderate-income. Low-income means income at or below 80% of the area median for the same household size. Moderate-income means above 80% and at or below 120%. Households acquiring an interest through the law’s conversion offers are excluded from this membership calculation. Cooperative interests can be sold only to low- or moderate-income buyers, or eligible households that accepted a conversion offer. The resale price cannot exceed the member’s original cost adjusted for inflation, plus improvements approved by the cooperative in advance. These rules preserve affordability for eligible buyers but limit sellers’ gains and who can buy.

New path to resident-run housing cooperatives

Beginning October 1, 2026, Maryland nonstock corporations can convert acquired rental buildings into limited-equity housing cooperatives. These cooperatives have one membership class and own or lease residential property. Before voting, members must receive notice and copies of the documents submitted to Maryland’s housing department. The vote must happen within 60 days after notice. A majority of all members must be present, and a majority of those present must approve. The department has 30 days to accept or deny the submission; acceptance completes conversion. A failed vote requires a wait of at least 12 months before another attempt. After conversion, each member-occupied unit has one vote. Required records include governing documents, occupancy and subscription agreements, annual budgets, and disclosures. The department can add rights and requirements consistent with the law, using a standard method and an individual cooperative review. It can draw on existing cooperative housing rules. Maryland nonstock corporations can also merge or consolidate with these cooperatives.

Grants and fewer barriers for housing cooperatives

Beginning October 1, 2026, Maryland’s housing department must create a grant program helping Maryland nonstock corporations establish limited-equity housing cooperatives. No grant amount or appropriation is specified in this provision. Local building and zoning rules still apply, but must treat cooperative property like comparable property based on its use. Local governments cannot impose extra burdens based on cooperative ownership; conflicting rules are void and unenforceable. They also cannot restrict sales of rental buildings to Maryland nonstock corporations planning these conversions.

Sponsors & Cosponsors

Sponsor

Lorig Charkoudian
Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 138 • No: 41

Senate vote • 4/13/2026

Third Reading Passed

Yes: 35 • No: 8 • Other: 3

House vote • 2/26/2026

Third Reading Passed

Yes: 103 • No: 33

Actions Timeline

Approved by the Governor - Chapter 260
4/28/2026
Returned Passed
4/13/2026House
Third Reading Passed (35-8)
4/13/2026Senate
Second Reading Passed
4/9/2026Senate
Favorable Adopted
4/9/2026Senate
Favorable Report by Judicial Proceedings
4/9/2026Senate
Referred Judicial Proceedings
2/27/2026Senate
Third Reading Passed (103-33)
2/26/2026House
Second Reading Passed with Amendments
2/25/2026House
Favorable with Amendments {833122/1 Adopted
2/25/2026House
Favorable with Amendments Report by Economic Matters
2/24/2026House
Hearing 2/10 at 1:00 p.m.
1/19/2026House
First Reading Economic Matters
1/14/2026House
Pre-filed
9/17/2025House

Bill Text

Enacted
4/28/2026
PDF
Third Reading
2/25/2026
PDF
First Reading
1/14/2026
PDF

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