PRIA, Government Policy, Made Personal

Summary

Unit owners or their association can cancel, without penalty, certain management, operation, or maintenance contracts made after October 8, 1980. This applies when the contract is with the developer (or the developer’s affiliate), was signed while the developer controlled the association or held a voting majority, and lasts more than three years or can auto-renew at the developer’s sole option. The cancellation must happen in the two-year period that starts when special developer control ends or when the developer owns 25 percent or fewer of the units, whichever comes first. At least two-thirds of the non-developer unit owners must vote to end the contract. The cancellation becomes effective 90 days after giving or mailing a prepaid notice to the contract parties.

Title 15, §3607

Commerce and Trade, Source: USLM XML via OLRC

(a)Operation, maintenance, and management contracts; penalty

Any contract or portion thereof which is entered into after October 8, 1980, and which—

(1)provides for operation, maintenance, or management of a condominium or cooperative association in a conversion project, or of property serving the condominium or cooperative unit owners in such project;

(2)is between such unit owners or such association and the developer or an affiliate of the developer;

(3)was entered into while such association was controlled by the developer through special developer control or because the developer held a majority of the votes in such association; and

(4)is for a period of more than three years, including any automatic renewal provisions which are exercisable at the sole option of the developer or an affiliate of the developer,

may be terminated without penalty by such unit owners or such association.

(b)Time of termination

Any termination under this section may occur only during the two-year period beginning on the date on which—

(1)special developer control over the association is terminated; or

(2)the developer owns 25 per centum or less of the units in the conversion project,

whichever occurs first.

(c)Vote of owners of units

A termination under this section shall be by a vote of owners of not less than two-thirds of the units other than the units owned by the developer or an affiliate of the developer.

(d)Effective date of termination

Following the unit owners’ vote, the termination shall be effective ninety days after hand delivering notice or mailing notice by prepaid United States mail to the parties to the contract.

Editorial Notes

Codification In subsec. (a), “October 8, 1980” was substituted for “the

Effective Date

of this title”. See

Effective Date

note set out under section 3601 of this title.

§3607 Termination of Self-dealing Contracts

Summary

Title 15, §3607

Notes & Related Subsidiaries

Editorial Notes

Effective Date

Effective Date

Citations & Metadata