§514C-6  Powers of association of owners and
cooperative housing corporation.  (a)  The association of owners under
chapter 514A or 514B, or cooperative housing corporation may purchase the
leased fee interest in the land; provided that at least sixty-seven per cent of
the condominium unit lessees or cooperative unit lessees approve of the
purchase.  If the seller is also a condominium unit lessee or cooperative unit
lessee, the seller's interest shall be disregarded in the computation to
achieve the sixty-seven per cent requirement.  As used herein:



(1)  Sixty-seven per cent of the condominium unit
lessees means the lessees of units to which sixty-seven per cent of the common
interests are appurtenant; and



(2)  Sixty-seven per cent of the cooperative unit lessees
means shareholders having at least sixty-seven per cent of the shares in the
cooperative housing corporation.



(b)  If the association of owners or
cooperative housing corporation accepts the seller's offer to purchase the
leased fee interest in the land, the following powers, in addition to any other
powers, shall be conferred upon the association of owners or cooperative
housing corporation:



(1)  To purchase or otherwise acquire, own, improve,
use, and otherwise deal in and with the leased fee interest to the land or any
or all undivided interests therein;



(2)  To incur liabilities, borrow money, and secure
any of its obligations by mortgage or pledge of all or any portion of its
property, assessments, and funds;



(3)  To assess, in a fair and equitable manner, the
condominium unit lessees or cooperative unit lessees for the expenses incurred
in acquiring the leased fee interest to the land, or to service any debt
associated therewith; and



(4)  To sell the leased fee interest appurtenant to a
condominium apartment or unit to any condominium apartment or unit lessee or
subsequent purchaser of such unit.



(c)  No conveyance of the leased fee interest
to or by an association of owners or cooperative housing corporation, and no
borrowing, mortgage, or pledge by an association of owners or cooperative
housing corporation shall be invalid because it was without capacity or power
to do such an act or to make or receive such conveyance, transfer, or loan.



(d)  No condominium unit lessee shall be
compelled to participate in the purchase of the leased fee interest of the
property, but may instead pay lease rent to the association of owners. [L 1988,
c 298, pt of §1; am L 2006, c 273, §30; am L 2008, c 28, §35]



 



Revision Note



 



  Subsections (b) to (d) redesignated pursuant to §23G-15(1).



 



Case Notes



 



  Subsection (a) requires lessees of condominium units to which
75 per cent of the common interests are appurtenant to approve of a leased fee
purchase; because subsection (a) is silent on the method of calculating the
votes of multi-owner units, the bylaws of an association of apartment owners
may govern on how the votes are to be calculated so long as not violative of
any law; if any defects affected the approval process, the 75 per cent
requirement was satisfied by the lessees' subsequent ratification of the
previous vote when they executed deeds necessary for conversion.  108 H. 2, 116
P.3d 644.



  Under subsection (a)(3), an association of apartment owners
may assess a "conversion" surcharge in "a fair and equitable
manner" against lessees who oppose a fee purchase.  108 H. 2, 116 P.3d
644.