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SF 4944

Minnesota Senate•In Senate Committee

Summary

SF 4944, “Housing cooperatives organization and operation modifications”, was introduced in the Senate on Apr 7, 2026 by Sen. David Dibble (D) with 4 co-sponsors. It was referred to Judiciary and Public Safety, and last saw action on Apr 7, 2026: Referred to Judiciary and Public Safety.

Record

Text

SF 4944 has 4 co-sponsors.

sf4944/introduced.txt
03/25/26  REVISOR  MS/LN  26-07582      as introduced
  SENATE
  STATE OF MINNESOTA
  NINETY-FOURTH SESSION  S.F. No. 4944
(SENATE AUTHORS: DIBBLE, Kreun, Pappas, Port and Lucero)
  DATE       D-PG  OFFICIAL STATUS
04/07/2026      7906 Introduction and first reading
  Referred to Judiciary and Public Safety
A bill for an act
relating to housing cooperatives; modifying the organization and operation of
housing cooperatives; addressing member violations; requiring certain disclosures
and notice; permitting a purchaser to cancel; establishing express and implied
warranties; requiring insurance; requiring upkeep; making clarifying, technical,
and conforming changes; amending Minnesota Statutes 2024, sections 308C.003,
by adding subdivisions; 308C.005, subdivisions 4, 7, 9, 10, 12, 13, 22, 23, 27, 29,
31, 33, 41, 43, 46, 47, 48, by adding subdivisions; 308C.009, subdivision 1;
308C.201; 308C.205; 308C.215, subdivisions 1, 3; 308C.221, subdivisions 1, 3,
      4; 308C.225, subdivisions 1, 2, 3; 308C.241, subdivisions 1, 2, by adding a
      subdivision; 308C.245; 308C.301, subdivisions 1, 2; 308C.311; 308C.312;
      308C.401; 308C.405; 308C.411, subdivision 1; 308C.415, subdivision 1; 308C.421,
      subdivision 3; 308C.425, subdivision 2; 308C.441, subdivision 1; 308C.451,
      subdivisions 1, 2; 308C.471, subdivisions 4, 6; 308C.475, subdivisions 1, 5;
      308C.501, subdivisions 1, 2, by adding a subdivision; 308C.505; 308C.511,
      subdivisions 1, 3; 308C.525, subdivision 1; 308C.531, subdivisions 2, 6; 308C.535,
      subdivisions 1, 2; 308C.541, subdivision 1; 308C.545, subdivisions 3, 5, by adding
      subdivisions; 308C.601, subdivisions 2, 6, by adding subdivisions; 308C.602;
      308C.603, subdivisions 1, 4, by adding a subdivision; 308C.612, subdivisions 1,
      2, 3, by adding subdivisions; 308C.613, subdivisions 1, 2; 308C.614; 308C.615;
      308C.625, subdivisions 1, 2; 308C.801, as amended; 308C.835; 308C.902,
      subdivision 2; 308C.905, subdivision 1; 308C.925; 308C.935, subdivision 2;
      308C.941, subdivision 2; 515B.1-102; Minnesota Statutes 2025 Supplement,
      sections 308C.411, subdivision 2; 308C.545, subdivision 1; 308C.571, subdivision
      1; 515B.3-101; 515B.3-103; proposing coding for new law in Minnesota Statutes,
      chapter 308C; repealing Minnesota Statutes 2024, sections 308C.003, subdivision
      3; 308C.005, subdivisions 8, 20, 32, 34, 36, 37, 38, 42, 44; 308C.241, subdivisions
      3, 4, 5, 6; 308C.301, subdivisions 3, 4, 5, 6, 7, 10, 11, 12; 308C.411, subdivisions
      5, 6; 308C.415, subdivision 2; 308C.501, subdivisions 3, 4; 308C.502; 308C.601,
      subdivisions 1, 3, 5, 7; 308C.605; 308C.611; 308C.612, subdivisions 4, 5, 6;
      308C.616; 308C.627; 308C.701; 308C.705; 308C.711; 308C.715; 308C.721,
      subdivision 1; 308C.725; 308C.805; Minnesota Statutes 2025 Supplement, sections
      308C.301, subdivisions 8, 9, 13; 308C.721, subdivision 2.
03/25/26  REVISOR  MS/LN  26-07582  as introduced
  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
    Section 1. Minnesota Statutes 2024, section 308C.003, is amended by adding a subdivision
  to read:
      Subd. 4. Homestead exemption. Membership interests in cooperatives governed by
  this chapter are wholly personal property. The characterization of these interests as personal
  property must not affect whether homestead exemptions or classifications apply. Membership
  interests are granted homestead exemptions to the same extent as any other dwelling or
  house is entitled to that exemption. The ownership interest in a membership, which may be
  sold, conveyed, voluntarily or involuntarily encumbered, or otherwise transferred by the
 owner, is supplemented with an appurtenant right of occupancy of a particular unit in the
 cooperative's project under a proprietary lease in addition to the allocated interests of the
 unit or membership. The cooperative's interest in the unit is not affected by the transaction.
 Each individual unit constitutes a homestead and is exempt from execution if the member
 would otherwise qualify for the exemption within the laws of the state.
   Sec. 2. Minnesota Statutes 2024, section 308C.003, is amended by adding a subdivision
 to read:
     Subd. 5. Taxation. The cooperative's real estate is taxed in the name of the cooperative.
 Each member must pay the member's proportionate share of the tax in accordance with the
 proration formula set forth in the cooperative's bylaws. Each member occupying a unit as
 a residence shall receive the member's proportionate homestead tax exemption and credit
 if the member would otherwise qualify for the exemption within the laws of the state.
   Sec. 3. Minnesota Statutes 2024, section 308C.005, subdivision 4, is amended to read:
     Subd. 4. Articles. "Articles" means the articles of organization incorporation of a
 cooperative as originally filed and subsequently amended.
   Sec. 4. Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision
 to read:
     Subd. 4a. Assessment. "Assessment" means all sums chargeable by the cooperative
 against a membership or unit, including monthly charges payable by each member to the
 cooperative pursuant to the terms of a proprietary lease to cover the cooperative's operating
 expenses, real estate taxes, insurance deposits to the replacement and general operating
 reserves, mortgage debt service on any blanket mortgage on the cooperative's project, other
Sec. 4.  2
03/25/26  REVISOR  MS/LN  26-07582  as introduced
  monthly common expense assessments, special assessments, fines or fees levied or imposed
  by the cooperative pursuant to this chapter or the cooperative's governing documents, interest
  and late charges on any delinquent account, and the costs of collection incurred by the
  cooperative in connection with the collection of a delinquent member's account, including
  reasonable attorney fees.
    Sec. 5. Minnesota Statutes 2024, section 308C.005, subdivision 7, is amended to read:
Subd. 7. Business entity. "Business entity" means a corporation, company, limited
  liability company, limited liability partnership, or other legal entity, whether domestic or
  foreign, association, or body vested with the power or function of a legal entity.
   Sec. 6. Minnesota Statutes 2024, section 308C.005, subdivision 9, is amended to read:
Subd. 9. Cooperative. "Cooperative" means a cooperative an association organized
 under this chapter providing to provide housing opportunities on a cooperative plan as
 provided under this chapter.
   Sec. 7. Minnesota Statutes 2024, section 308C.005, subdivision 10, is amended to read:
Subd. 10. Common elements. "Common elements" means all portions of the cooperative
 cooperative's project other than a dwelling unit, a lot, or a manufactured home that is occupied
 as a residence.
   Sec. 8. Minnesota Statutes 2024, section 308C.005, subdivision 12, is amended to read:
Subd. 12. Common expense liability. "Common expense liability" means the liability
 for common expenses allocated to each dwelling unit, which shall be allocated by a method
 provided for in the bylaws pursuant to section 308C.241, subdivision 2, paragraph (a), clause
 7.
   Sec. 9. Minnesota Statutes 2024, section 308C.005, subdivision 13, is amended to read:
Subd. 13. Developer. "Developer" means a real estate developer in the business of
 building dwelling person who builds units that will be owned and operated by a cooperative
 organized under this chapter.
   Sec. 10. Minnesota Statutes 2024, section 308C.005, subdivision 22, is amended to read:
Subd. 22. Limited equity appreciation cooperative. "Limited equity appreciation
 cooperative" means a cooperative governed by this chapter that limits the appreciation and
Sec. 10.  3
03/25/26  REVISOR  MS/LN  26-07582  as introduced
  value of a membership interest to a formula price set forth in the bylaws that is defined as
  the transfer value herein. A limited equity cooperative also sets limits on the extent to which
  a member may transfer a membership interest and provides for a right of first refusal to
  purchase the interest in favor of the cooperative. whose bylaws or articles:
      (1) contain a transfer value formula that limits the appreciation, value, and price of a
  membership for sales or transfer purposes;
      (2) limit the extent to which a member may transfer a membership interest; and
      (3) provide for a right of first refusal or an option in favor of the cooperative to purchase
  or assign to a buyer approved by the cooperative, the cooperative's right to purchase the
 membership of a deceased or departing member.
   Sec. 11. Minnesota Statutes 2024, section 308C.005, subdivision 23, is amended to read:
     Subd. 23. Low income. "Low income" means having income that is less than or equal
 to 80 percent of area median income for the area, adjusted for family size, in accordance
 with federal standards generally accepted at the time of organization and comparable to
 standards of as published annually by the United States Department of Housing and Urban
 Development existing on June 16, 1988.
   Sec. 12. Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision
 to read:
     Subd. 26a. Market rate cooperative. "Market rate cooperative" means a cooperative
 whose bylaws or articles either:
     (1) impose no limitations on the valuation or sales price of a membership for sale or
 transfer purposes; or
     (2) contain a transfer value formula that limits the appreciation, value, and price of a
 membership for sales or transfer purposes. The transfer value may govern some or all
 membership sales under circumstances, conditions, or limitations enumerated in the
 cooperative's bylaws or articles.
 A market rate cooperative may set limits on the extent that a member may transfer a
 membership interest and provide for an option or first privilege in favor of the cooperative
 to purchase the membership or assign to a buyer approved by the cooperative, the
 cooperative's right to purchase the membership of a deceased or departing member.
Sec. 12.  4
03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 13. Minnesota Statutes 2024, section 308C.005, subdivision 27, is amended to read:
      Subd. 27. Member. "Member" means any person who is approved for membership in
  the cooperative pursuant to the articles of organization or bylaws and who is identified as
  a member on the books and records of the cooperative and has been issued a membership
  certificate. Membership certificates include owner members and nonoccupant members.
    Sec. 14. Minnesota Statutes 2024, section 308C.005, subdivision 29, is amended to read:
      Subd. 29. Membership interest. "Membership interest" means a member's interest in
  a cooperative consisting of a member's financial rights, a member's right to assign financial
  rights, a member's governance rights, and a member's right to assign governance rights.
 Membership interest includes occupant membership interests and nonoccupant membership
 interests. the composite ownership of both a membership certificate issued by the cooperative
 and a possessory right of occupancy of a unit pursuant to a proprietary lease, including a
 member's financial rights and a member's governance rights.
   Sec. 15. Minnesota Statutes 2024, section 308C.005, subdivision 31, is amended to read:
     Subd. 31. Membership purchase and sale agreement. "Membership purchase and sale
 agreement" means the a contract for purchase of a membership interest to which a particular
 dwelling unit is appurtenant between the member who is selling the membership interest
 and an incoming prospective member of the cooperative who has been approved for
 membership by the cooperative's board of directors. a purchaser and the departing member.
 Membership purchase and sale agreements may also include the cooperative as a party when
 the cooperative is assigning the cooperative's option or first privilege to purchase the
 membership to the buyer purchasing the membership from the departing member.
   Sec. 16. Minnesota Statutes 2024, section 308C.005, subdivision 33, is amended to read:
     Subd. 33. Moderate income. "Moderate income" means less than or equal to 100 percent
 of area median income for the area, adjusted for family size, in accordance with federal
 standards generally accepted at the time of organization and comparable to standards of as
 published annually by the United States Department of Housing and Urban Development
 existing on June 16, 1988.
Sec. 16.  5
03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 17. Minnesota Statutes 2024, section 308C.005, subdivision 41, is amended to read:
      Subd. 41. Proprietary lease. "Proprietary lease" means an occupancy agreement with
  a cooperative governing a member's right to occupancy under which a member has an
  exclusive possessory interest in a unit or lot.
    Sec. 18. Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision
  to read:
      Subd. 41a. Purchase agreement. "Purchase agreement" means the contract for purchase
  of a membership interest to which a particular unit is appurtenant, including subscription
  agreements and membership purchase and sale agreements.
   Sec. 19. Minnesota Statutes 2024, section 308C.005, subdivision 43, is amended to read:
     Subd. 43. Security interest. "Security interest" means the lien on and security interest
 in a membership interest and occupancy agreement appurtenant proprietary lease.
   Sec. 20. Minnesota Statutes 2024, section 308C.005, subdivision 46, is amended to read:
     Subd. 46. Subscription agreement. "Subscription agreement" means the contract of
 purchase between a prospective member purchaser and the cooperative of a membership
 interest in the cooperative to which a particular unit is appurtenant.
   Sec. 21. Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision
 to read:
     Subd. 46a. Transfer. "Transfer" means any proposed disposition of a membership,
 including, without limitation, disposition by will, gift, sale, exchange, distribution by personal
 representative or trustee, or passage or distribution under judicial order by legal process. A
 transfer does not include succession to an interest by reason of death of a joint tenant,
 succession to a surviving transfer on death beneficiary, or the termination of a life estate.
   Sec. 22. Minnesota Statutes 2024, section 308C.005, subdivision 47, is amended to read:
     Subd. 47. Transfer value. "Transfer value" means the formula price at which the
 cooperative may purchase the membership interest of a deceased or departing member in
 a limited equity cooperative a membership's value, for sale or transfer purposes, as established
 by a formula and circumstances enumerated in the bylaws or articles of a cooperative.
Sec. 22.  6
03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 23. Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision
  to read:
      Subd. 47a. Transfer value formula. "Transfer value formula" means the formula
  contained in the bylaws or articles of a cooperative for establishing a membership's transfer
  value.
    Sec. 24. Minnesota Statutes 2024, section 308C.005, subdivision 48, is amended to read:
      Subd. 48. Unit. "Unit" means a portion of the cooperative property project leased for
  exclusive occupancy by a member under a proprietary lease or leased to a tenant by an
  occupancy agreement. Unit includes but is not limited to dwelling units and lots.
   Sec. 25. Minnesota Statutes 2024, section 308C.009, subdivision 1, is amended to read:
     Subdivision 1. Permissible uses. Businesses (a) Cooperatives subject to this chapter
 may use the term "cooperative" or "housing cooperative" as part of its corporate or business
 name. Nothing in this chapter shall preclude a business cooperative organized under chapter
 308A, or 308B, 317A, or 515B from using the term "housing cooperative."
     (b) A corporation or association cooperative organized in this state may not use the term
 "housing cooperative" as part of its corporate or business name or title, or to represent itself
 as a housing cooperative, unless the corporation or association cooperative has complied
 with and is subject to this chapter or has incorporated under the laws of this state authorizing
 incorporation of business on a cooperative plan organized under chapter 308A or 308B.
   Sec. 26. Minnesota Statutes 2024, section 308C.201, is amended to read:
     308C.201 ORGANIZATIONAL PURPOSE.
     A cooperative may be formed and organized on a cooperative basis and plan under this
 chapter:
     (1) to provide housing on a nonprofit and cooperative basis to older persons in accordance
 with the provisions of this chapter, the Fair Housing Act, Title VIII of the Civil Rights Act
 of 1968, as amended; United States Code, title 42, chapter 3607, section 807(a)(b)(1)(2),
 and the rules and regulations of the United States Department of Housing and Urban
 Development applicable with respect to housing for older persons contained in Code of
 Federal Regulations, title 24, subtitle B, chapter I, subpart E, sections 100.300-308;
     (2) to provide residential housing on a cooperative and nonprofit and cooperative basis
 residential housing either through ownership, leasing, or a combination of both and the
Sec. 26.  7
03/25/26  REVISOR  MS/LN  26-07582  as introduced
  social, recreational, commercial, and communal facilities necessary to serve and improve
  the residential housing; or not-for-profit basis in accordance with the provisions of this
  chapter. A cooperative formed under this chapter may be organized as a limited equity
  appreciation cooperative or a market rate cooperative.
      (3) to establish a limited equity cooperative that provides on a nonprofit and cooperative
  basis residential housing to its members that: (i) limits the appreciation and value of a
  membership interest to a formula price set forth in the bylaws that is defined as the transfer
  value herein, and (ii) sets limits on the extent to which a member may transfer a membership
  interest and provides for a right of first refusal to purchase the interest in favor of the
 cooperative.
   Sec. 27. Minnesota Statutes 2024, section 308C.205, is amended to read:
     308C.205 INCORPORATORS OR ORGANIZERS.
     A cooperative may be organized by one or more incorporators or organizers who shall
 be adult natural persons and who may act for themselves as individuals or as agents of other
 entities.
   Sec. 28. Minnesota Statutes 2024, section 308C.215, subdivision 1, is amended to read:
     Subdivision 1. Requirements. (a) The articles of the cooperative shall include:
     (1) the name and principal place of business of the cooperative;
     (2) the organizational purpose of the cooperative in accordance with this chapter;
     (3) the name and address of each organizer initial director and incorporator;
     (4) the period of duration for the cooperative, if the duration is not to be perpetual;
     (5) the name and address of the registered agent, if any; and
     (6) the address of the registered office.
     (b) The articles of the cooperative may include:
     (1) a statement that assessments to members collected annually for common expenses
 in excess of common expenses shall be refunded annually on the basis of patronage, which
 may, upon resolution of the board of directors, be credited to the following year's
 assessments; and
     (2) if the cooperative is to be organized as a limited equity appreciation cooperative, the
 requirements set forth in section 308C.312.; and
Sec. 28.  8
03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (c) The articles may contain (3) any other lawful provision.
      (d) (c) The articles shall be signed by each incorporator or organizer.
    Sec. 29. Minnesota Statutes 2024, section 308C.215, subdivision 3, is amended to read:
      Subd. 3. Effect of filing. When the articles have been filed with the secretary of state
  and the required fee has been paid to the secretary of state, it shall be presumed that:
      (1) all conditions precedent that are required to be performed by the organizers have
  been complied with;
      (2) the incorporation of the cooperative has been chartered by the state as a separate
  legal entity; and
     (3) the secretary of state shall issue a certificate of organization incorporation to the
 cooperative.
   Sec. 30. Minnesota Statutes 2024, section 308C.221, subdivision 1, is amended to read:
     Subdivision 1. Procedure. (a) The articles of a cooperative shall be amended as follows:
     (1) the board, by majority vote, shall pass a resolution stating the text of the proposed
 amendment. The text of the proposed amendment and an attached mail mailed or alternative
 ballot, if the board has provided for a mail or alternative ballot in the resolution, shall be
 mailed or otherwise distributed with a regular or special meeting notice to each member.
 The notice shall designate the time and place of the meeting for the proposed amendment
 to be considered and voted on; and
     (2) if a quorum of the members is registered as being present or represented by alternative
 vote ballot at the meeting, the proposed amendment is adopted:
     (i) if approved by a majority of the votes cast; or
     (ii) for a cooperative with articles or bylaws requiring more than majority approval or
 other conditions for approval, the amendment is approved by a proportion of the votes cast
 or a number of total members as required by the articles or bylaws and the conditions for
 approval in the articles or bylaws have been satisfied.
     (b) After an amendment has been adopted by the members, the amendment shall be
 signed by the president and secretary and a copy of the amendment filed with the secretary
 of state.
Sec. 30.  9
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 31. Minnesota Statutes 2024, section 308C.221, subdivision 3, is amended to read:
      Subd. 3. Amendment by directors. A majority of directors may amend the articles if
  the cooperative does not have any members with voting rights.
    Sec. 32. Minnesota Statutes 2024, section 308C.221, subdivision 4, is amended to read:
      Subd. 4. Amendment by the organizer incorporator. The organizer incorporator or
  a majority of the organizers incorporators may amend the articles if the cooperative does
  not have directors or any members.
    Sec. 33. Minnesota Statutes 2024, section 308C.225, subdivision 1, is amended to read:
      Subdivision 1. Authority. (a) A housing cooperative organized under chapter 308A or
 308B may convert and become exclusively subject to this chapter by amending the housing
 cooperative's organizational documents to conform to the requirements of this chapter and
 filing a certificate of conversion that complies with this chapter.
     (b) A housing cooperative organized under chapter 308A or 308B that intends to convert
 to a cooperative subject to this chapter must provide its members with a disclosure statement
 of the rights and obligations of the members and the capital structure of the cooperative
 before becoming subject to this chapter. A cooperative organized under chapter 308A or
 308B upon distribution of the disclosure required in this subdivision must obtain the approval
 of its members as necessary for amending its articles under chapter 308A or 308B.
   Sec. 34. Minnesota Statutes 2024, section 308C.225, subdivision 2, is amended to read:
     Subd. 2. Filings. (a) A housing cooperative organized under chapter 308A or 308B that
 is converting to be subject to this chapter must file with the secretary of state and the
 applicable county recorder:
     (1) a certificate of conversion stating:
     (i) the date on which the entity was first organized;
     (ii) the name of the chapter 308A or 308B cooperative and, if the name is changed, the
 name of the housing cooperative to be governed under this chapter; and
     (iii) the future effective date and time, which must be a date and time certain, that it will
 be governed by this chapter, if the effective date and time is not to be the date and time of
 filing; and
 Sec. 34.  10
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (2) a certificate of amendment amending the housing cooperative's articles to conform
  with the requirements of this chapter.; and
      (3) for a cooperative subject to a common interest community declaration that is
  converting to be subject to this chapter, a recordable certificate containing a statement that
  the membership terminated the common interest community declaration and the date the
  member meeting was held signed by the president and secretary and recorded in the county
  recorder's office in the county where the cooperative's project is located.
      (b) The conversion is effective and any common interest community declaration is
  terminated upon the filing with the secretary of state and upon the recording of the written
 certificate in the county recorder's office.
   Sec. 35. Minnesota Statutes 2024, section 308C.225, subdivision 3, is amended to read:
     Subd. 3. Effect of being governed by this chapter. The conversion of a housing
 cooperative organized and operating under chapter 308A or, 308B, or 515B to a cooperative
 governed by this chapter does not affect any obligations or liabilities of the cooperative
 before the conversion or the personal liability of any person incurred before the conversion.
 When the conversion is effective, the rights, privileges, and powers of the cooperative; real
 and personal property of the cooperative; debts due to the cooperative; and causes of action
 belonging to the cooperative remain vested in the cooperative and are the property of the
 cooperative as converted and governed by this chapter. Title to real property vested by deed
 or otherwise in the housing cooperative organized and operating under chapters 308A and,
 308B, and 515B does not revert and is not impaired by reason of the cooperative being
 converted and governed by this chapter. Rights of creditors and liens upon property of the
 housing cooperative under chapters 308A and, 308B, and 515B are preserved unimpaired,
 and debts, liabilities, and duties of the housing cooperative under chapters 308A and, 308B,
 and 515B remain attached to the housing cooperative as converted and governed by this
 chapter and may be enforced against the housing cooperative to the same extent as if the
 debts, liabilities, and duties had originally been incurred or contracted by the cooperative
 as organized under this chapter. The rights, privileges, powers, and interests in property of
 the cooperative under chapters 308A and, 308B, and 515B, as well as the debts, liabilities,
 and duties of the cooperative are not deemed, as a consequence of the conversion, to have
 been transferred for any purpose of the laws of this state.
 Sec. 35.  11
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 36. Minnesota Statutes 2024, section 308C.241, subdivision 1, is amended to read:
      Subdivision 1. Required. A cooperative shall have bylaws governing the cooperative's
  business affairs, structure, qualifications, and classification, and the rights and obligations
  of members that are not otherwise provided in the articles or by this chapter.
    Sec. 37. Minnesota Statutes 2024, section 308C.241, is amended by adding a subdivision
  to read:
      Subd. 1a. Adoption and amendment. (a) Except as provided in paragraph (b), the
  bylaws of a cooperative may be adopted or amended by the members at a regular or special
  member meeting if:
     (1) the notice of the regular or special meeting contains a statement that the bylaws will
 be voted upon and copies are included with the notice, or copies are available upon request
 from the cooperative, and a summary statement of the proposed bylaws or amendment is
 included with the notice;
     (2) a quorum is registered as being present or represented by mail or alternative voting
 method if the mail or alternative voting method is authorized by the board; and
     (3) the bylaws or amendment is approved by a majority of votes cast, or for a cooperative
 with articles or bylaws requiring more than majority approval or other conditions for
 approval, the bylaws or amendment is approved by a proportion of the vote cast or a number
 of the total members that are required by the articles or bylaws and the conditions for
 approval in the articles or bylaws are satisfied.
     (b) The initial bylaws of the cooperative shall be adopted by the cooperative's board of
 directors. Until the first annual members meeting following admission of members to the
 cooperative, the power to alter, amend, or repeal the bylaws or adopt new bylaws is vested
 in the board of directors.
   Sec. 38. Minnesota Statutes 2024, section 308C.241, subdivision 2, is amended to read:
     Subd. 2. Contents. (a) If not stated in the articles, the bylaws must state The bylaws
 may contain any provision relating to the management or regulation of the affairs of the
 cooperative that is not inconsistent with law or the articles. At a minimum, the bylaws must
 provide:
     (1) the purpose of the cooperative in accordance with this chapter;
 Sec. 38.  12
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (2) the capital structure of the cooperative to the extent not stated in the articles, including
  a statement of the classes and relative rights, preferences, and restrictions granted to or
  imposed upon each class of member interests, and the authority to issue membership interests,
  which may be designated to be determined by the board the qualifications for membership
  in the cooperative and limitations on the number of memberships issuable;
      (3) a provision designating the voting and governance rights, to the extent not stated in
  the articles, including which membership interests have voting power and any limitations
  or restrictions on the voting power, which shall be in accordance with the provisions of this
  chapter a statement that membership interests in the cooperative are personal property;
     (4) a statement that occupant membership interests with voting power shall be restricted
 to one vote for each member in the affairs of the cooperative or a statement describing the
 allocation of voting power allocated as prescribed in this chapter the manner of admission,
 withdrawal, suspension, and expulsion of members;
     (5) a statement that membership interests held by a member are transferable only with
 the approval of the board or as provided in the bylaws generally, the governance rights,
 financial rights, assignability of governance and financial rights, and other rights, privileges,
 and obligations of members and their membership interests, which may be further described
 in member agreements; and
     (6) if nonoccupant membership interests are authorized, a statement as to how profits
 and losses will be allocated and cash will be distributed between occupant membership
 interests collectively and nonoccupant membership interests collectively to the extent not
 stated in the articles, a statement that net income allocated to an occupant membership
 interest as determined by the board in excess of dividends and additions to reserves shall
 be distributed on the basis of patronage, and a statement that the records of the cooperative
 shall include occupant membership interests and, if authorized, nonoccupant membership
 interests, which may be further described in the bylaws of any classes and in the reserves.
 property, voting, and other rights and privileges of members;
     (7) the number of members of the board of directors and their respective terms of tenure;
     (8) the manner of appointment or election of a president, vice-president, treasurer, and
 secretary by the board of directors;
     (9) the qualifications, powers and duties, terms of office, and manner of electing and
 removing board members and officers and filling vacancies of the members and officers;
     (10) the manner of appointment of committees and their authority;
 Sec. 38.  13
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (11) the time, place, and manner of calling, conducting, and giving notice of member,
  board, and committee meetings, or of conducting mail ballots;
      (12) the timeframe and manner for issuing reports and financial statements to members;
      (13) that a meeting of the members must be held at least once each year and a specified
  officer must give notice of the meeting as provided in section 308C.511;
      (14) that an annual report must be prepared by the cooperative and a copy of the report
  must be provided to each member at or before the annual meeting containing, at a minimum:
      (i) a statement of any capital expenditures in excess of two percent of the current budget
  or $5,000, whichever is greater, approved by the cooperative for the current fiscal year or
 succeeding two fiscal years;
     (ii) a statement of the cooperative's total replacement reserves, the components of the
 cooperative for which the reserves are set aside, and the amounts of the reserves, if any,
 that the board has allocated for the replacement of each of those components;
     (iii) a copy of the statement of revenues and expenses for the cooperative's last fiscal
 year and a balance sheet as of the end of that fiscal year;
     (iv) a statement of the status of any pending litigation or judgments in which the
 cooperative is a party;
     (v) a detailed description of the insurance coverage provided by the cooperative; and
     (vi) a statement of the total past due assessments on memberships or units current as of
 not more than 60 days before the date of the meeting;
     (15) any material restrictions on the use or occupancy of units, transfers or sale price of
 a membership, or the amount that may be received by a member on sale, condemnation, or
 casualty loss to the unit appurtenant to the membership;
     (b) The bylaws may contain any provision relating to the management or regulation of
 the affairs of the cooperative that are not inconsistent with law or the articles, and may
 include the following:
     (1) the number of directors and the qualifications, manner of election, powers, duties,
 and compensation, if any, of directors;
     (2) the qualifications of members and any limitations on their number;
     (3) the manner of admission, withdrawal, suspensions, and expulsion of members;
 Sec. 38.  14
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      (4) generally, the governance rights, financial rights, assignability of governance and
  financial rights, and other rights, privileges, and obligations of members and their
  membership interests, which may be further described in member agreements;
      (5) (16) if the cooperative intends to operate as a limited equity cooperative, use a transfer
  value formula, the circumstances in which the cooperative will use the transfer value formula,
  the use and calculation of transfer value, including limits on the extent to which membership
  interests may appreciate in value, and the extent, if any, of the cooperative's power to exercise
  a right of first refusal or option to acquire a member's interest or assign to a buyer approved
  by the cooperative, the cooperative's right to purchase the membership of a deceased or
 departing member, and the conditions under which that power is exercised;
     (6) (17) the basis for allocating common expenses, charges, outlays, and other
 expenditures or payments of the cooperative among dwelling units memberships. Unless
 limited in the bylaws, the board of directors may use any approach the board believes to be
 fair and that is a reasonable reflection of use or consumption that may be utilized, provided
 that the sum of each category of interests allocated at any time to all memberships under
 any of the provisions must equal one if stated as a fraction, or 100 percent if stated as a
 percentage;
     (7) (18) the circumstances under which the board of directors may execute share loan
 recognition agreements with lenders that provide members with loans to finance the purchase
 of memberships in the cooperative, and the limitations of recognition agreements;
     (8) (19) the circumstances under which liens are imposed against membership interests
 and occupancy rights, how the liens are foreclosed by the cooperative, the process by which
 the cooperative may remove the members and occupants from the dwelling units, and the
 circumstances and processes under which the cooperative may levy fines, suspend member
 voting rights, and terminate the membership and occupancy rights of its members and
 transfer or dispose of a terminated member's membership;
     (9) (20) a statement that the cooperative will observe the basic cooperative principles
 that purchases and sales of memberships and rights under occupancy agreements are not
 for speculative purposes, that investments in the cooperative by members are for the purpose
 of securing homes for members' use and benefit, and that the policies established by the
 cooperative will be designed to discourage and avoid speculation either in the sale and resale
 of memberships and rights under occupancy agreements by members or by the cooperative;
 and
 Sec. 38.  15
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      (10) any provisions required by the articles to be in (21) the method of amending the
  bylaws.
      (c) Any other provision relating to the management or regulation of the affairs of the
  cooperative that are not inconsistent with law or the cooperative's articles.
    Sec. 39. Minnesota Statutes 2024, section 308C.245, is amended to read:
      308C.245 COOPERATIVE RECORDS.
      Subdivision 1. Required records. (a) A cooperative shall retain as permanent records
  minutes of all meetings of its members and of all board meetings, a record of all actions
  taken by the members or the board without a meeting by a written unanimous consent in
 lieu of a meeting, and a record of all waivers of notices of meetings of the members and of
 the board.
     (b) A cooperative shall maintain appropriate account records.
     (c) A cooperative shall maintain its records in written form or in another form capable
 of conversion into written form within a reasonable time.
     (d) A cooperative shall retain a copy of each of the following records at its principal
 office:
     (1) articles and other governing instruments;
     (2) bylaws or other similar instruments;
     (3) a record of the names and addresses of its members, in a form that allows preparation
 of an alphabetical list of members with each member's address;
     (4) minutes of member meetings, and records of all actions taken by members without
 a meeting by unanimous written consent in lieu of a meeting, for the prior three years;
     (5) all written communications within the prior three years to members as a group;
     (6) a list of the names and business addresses of its current board members and officers;
     (7) a copy of its most recent periodic registration delivered to the secretary of state under
 section 308C.121; and
     (8) all financial statements prepared for periods ending during the last fiscal year.
     The cooperative must keep adequate records of the cooperative's membership, members
 meetings, board of directors meetings, committee meetings, contracts, proprietary leases,
 and other agreements in which the cooperative is a party and material correspondence and
 Sec. 39.  16
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  memoranda relating to the cooperative's operations. The cooperative must keep financial
  records sufficiently detailed to enable the cooperative to comply with sections 308C.241,
  subdivision 2, and 308C.612, subdivision 3.
      Subd. 2. Examination of records. All records, except records relating to information
  that was the basis for closing a board meeting under section 308C.425, subdivision 2, clause
  (2), must be made reasonably available for examination by any member or the member's
  authorized agent. The cooperative must provide copies in paper or electronic form as
  requested by the member or the member's authorized agent, provided that the cooperative
  is not required to provide copies in electronic form if the records are not maintained in that
 form by the cooperative.
     Subd. 3. Fees. The cooperative may require the member or the member's authorized
 agent to pay a fee for copies that must not exceed:
     (1) the actual costs of making or electronically transmitting the copies and searching for
 and retrieving the requested records, including the cost of agent or employee time for
 responding to the request; or
     (2) if 100 or fewer pages of black and white, letter or legal size paper copies are requested,
 no more than 25 cents for each page copied.
     Subd. 4. Discretion; retention; disclosure. (e) Except as otherwise limited by this
 chapter, the board of a cooperative shall have discretion to determine what records are
 appropriate for the purposes of the cooperative, the length of time records are to be retained,
 and policies relating to the confidentiality, disclosure, inspection, and copying of the records
 of the cooperative.
   Sec. 40. Minnesota Statutes 2024, section 308C.301, subdivision 1, is amended to read:
     Subdivision 1. Generally Powers of the cooperative. In addition to other powers, a
 cooperative as an agent or otherwise:
     (1) may perform every act necessary or proper to the conduct of the cooperative's business
 or the accomplishment of the purposes of the cooperative;, including but not limited to the
 power to:
     (i) sue and be sued in the cooperative's corporate name;
     (ii) build and construct units;
 Sec. 40.  17
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (iii) purchase; take; receive; lease as lessee; take by gift, devise, or bequest; or otherwise
  acquire and to own, hold, use, and otherwise deal in and with any real or personal property
  or any interest therein;
      (iv) sell, convey, mortgage, pledge, lease as lessor, and otherwise dispose of all or any
  part of the cooperative's property and assets;
      (v) make contracts and incur liabilities that may be appropriate to accomplish the
  cooperative's purposes; borrow money at rates of interest determined by the cooperative;
  issue notes, bonds, and other obligations; and secure obligations by mortgage, pledge, or
  deed of trust for the cooperative's property;
     (vi) elect or appoint officers and agents of the cooperative and define the duties and fix
 the compensation of the officers and agents;
     (vii) make and alter bylaws not inconsistent with the cooperative's articles or with the
 laws of this state for the administration and regulation of the affairs of the cooperative;
     (viii) dissolve and cease cooperative activities as provided in this chapter; and
     (ix) have and exercise all powers necessary or convenient to effect the purposes for
 which the cooperative is organized;
     (2) has other rights, powers, or privileges granted by the laws of this state to other
 cooperatives, except those that are inconsistent with the express provisions of this chapter;
 and
     (3) has the powers given in section 308C.201 and this section.
   Sec. 41. Minnesota Statutes 2024, section 308C.301, subdivision 2, is amended to read:
     Subd. 2. Legal capacity Powers of the board. A cooperative may sue and be sued,
 complain and defend and participate as a party or otherwise in any legal, administrative, or
 arbitration proceeding, in its corporate name. Subject to the provisions of the articles or
 bylaws, the cooperative, through its board, has all the powers and duties necessary for the
 administration of the affairs of the cooperative and may take action except as required by
 law or to be done by the members in the bylaws, including but not limited to:
     (1) adopt, amend, and revoke rules and regulations not inconsistent with the articles and
 bylaws;
     (2) adopt and amend budgets for revenues, expenditures, reserves, and maintenance and
 levy and collect assessments from members;
 Sec. 41.  18
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (3) hire and discharge management agents and employees, agents, and independent
  contractors;
      (4) institute, defend, or intervene in litigation or administrative proceedings on behalf
  of the cooperative or the cooperative's members on matters affecting the cooperative or the
  cooperative's project;
      (5) make contracts and incur liabilities;
      (6) regulate the use, maintenance, repair, replacement, and modification to the common
  elements and the units;
      (7) cause improvements to be made to the common elements and the units;
     (8) acquire, hold, encumber, and convey in the cooperative's name, any right, title, or
 interest to the personal property of the cooperative;
     (9) after securing the affirmative vote of the membership under this chapter, acquire,
 hold, encumber, and convey in the cooperative's name, any right, title, or interest to the real
 estate of the cooperative;
     (10) grant easements for public utilities, public rights-of-way or other public purposes,
 and cable television or other communications through, over, or under the project;
     (11) impose charges, fines, or other sanctions, including the loss of voting rights, for
 late payment of assessments and, after notice and opportunity to be heard, levy reasonable
 fines or terminate the member's membership interest and appurtenant right of occupancy
 for violations of the articles, bylaws, proprietary lease, rules, or policies of the cooperative;
     (12) impose reasonable charges for the review and preparation of documents requested
 by members, statements of unpaid assessments, or furnishing copies of cooperative records;
     (13) provide for the indemnification of the cooperative's officers and directors and
 maintain directors' and officers' liability insurance;
     (14) provide for reasonable procedure for governing the conduct of meetings and election
 of directors;
     (15) exercise powers in relations with members, cooperatives, or business entities from
 which the cooperative is constituted; and
     (16) exercise all other powers necessary or convenient to effect the purposes for which
 cooperatives are formed under this chapter.
 Sec. 41.  19
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 42. Minnesota Statutes 2024, section 308C.311, is amended to read:
      308C.311 OCCUPANCY AGREEMENTS AND PROPRIETARY LEASES.
      Subdivision 1. Authority. A cooperative and its occupant members may make and
  execute an occupancy agreement, a proprietary lease, or other agreements that specify the
  terms of the occupant members' lease or occupancy of a unit or dwelling unit.
      Subd. 2. Title to unit or dwelling unit. Title to cooperative property consisting of a
  dwelling unit or units shall at all times remain the property of the cooperative. Title to any
  manufactured home owned by a member placed in a manufactured home park owned by a
  cooperative pursuant to a proprietary lease remains in the name of the member.
     Subd. 3. Damages for breach of contract. The bylaws, an occupancy agreement, or a
 proprietary lease may include the requirement of the member to pay liquidated damages to
 the cooperative for breach of any provision of an occupancy agreement, a proprietary lease,
 or other agreement. The remedies for breach of contract are valid and enforceable in the
 courts of this state.
   Sec. 43. Minnesota Statutes 2024, section 308C.312, is amended to read:
     308C.312 LIMITED EQUITY APPRECIATION COOPERATIVES.
     A cooperative formed under this chapter may organize as a limited equity appreciation
 cooperative in order to fulfill the public purpose of providing and preserving housing for
 persons and households of low and moderate income at the time that they purchase their
 memberships. In addition to safeguarding the foregoing public purpose, a limited equity
 appreciation cooperative shall meet the following requirements:
     (1) the articles or bylaws shall require that cooperative interests be sold at no more than
 a transfer value determined by a limited equity formula contained in the articles or bylaws.
 That value shall be consistent with the object of maintaining long-term affordability of
 membership interests for persons or households of low and moderate income;
     (2) a limited equity formula, once established by a cooperative in its articles or bylaws,
 may be amended only if that amendment does not make the cooperative membership
 unaffordable for low or moderate income households for which the cooperative was originally
 incorporated. A limited equity appreciation cooperative once organized under this chapter
 may not reorganize as other than a limited equity appreciation cooperative without first
 dissolving;
 Sec. 43.  20
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (3) a limited equity appreciation cooperative shall not sell all or substantially all of its
  assets if such sale is intended to circumvent the public purposes of this section;
      (4) the articles or bylaws shall require that the cooperative shall have the first right to
  repurchase a member's cooperative interest an option or first privilege to purchase the
  membership or assign to a buyer approved by the cooperative, the cooperative's right to
  purchase the membership of a deceased or departing member;
      (5) the articles or bylaws shall require that the total distribution out of capital to a member
  shall not exceed the transfer value; and
      (6) the articles or bylaws shall require that upon dissolution of the cooperative, any assets
 remaining after retirement of corporate debts and distribution to members shall be distributed
 to a charitable organization described in section 501(c)(3) of the Internal Revenue Code of
 1986, as amended, a public agency, or another limited equity appreciation cooperative whose
 formula for determining transfer value shall be no less restrictive than that of the cooperative
 being dissolved.
   Sec. 44. [308C.313] MARKET RATE COOPERATIVES.
     A cooperative formed under this chapter may organize as a market rate cooperative. A
 market rate cooperative must meet the following requirements:
     (1) the articles or bylaws must contain a reference as to whether the cooperative will
 impose limitations on the valuation or sales price of a membership for sale or transfer
 purposes;
     (2) if limitations on the valuation or sales price of a membership for sale or transfer
 purposes will be imposed, the articles or bylaws must:
     (i) set forth a transfer value formula which defines the limits on appreciation, value, and
 price of a membership for sales or transfer purposes; and
     (ii) set forth whether the transfer value formula will govern all membership sales and,
 if less than all membership sales, the circumstances or conditions under which a membership
 sales price may be other than the membership's transfer value;
     (3) the articles or bylaws may provide for an option or first privilege in favor of the
 cooperative to purchase the membership or assign to a buyer approved by the cooperative
 the cooperative's right to purchase the membership of a deceased or departing member; and
     (4) the articles or bylaws shall require that upon dissolution of the cooperative, any assets
 remaining after retirement of corporate debts shall be distributed to the members.
 Sec. 44.  21
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 45. Minnesota Statutes 2024, section 308C.401, is amended to read:
      308C.401 BOARD GOVERNS COOPERATIVE.
      Subdivision 1. Board powers; generally. A cooperative shall be governed by its board,
  which shall take all action for and on behalf of the cooperative, except those actions reserved
  or granted to members in the cooperative's articles or bylaws, under subdivision 2, or under
  other provisions of this chapter. Board action shall be by the affirmative vote of a majority
  of the directors voting at a duly called meeting unless a greater majority is required by the
  articles or bylaws. A director individually or collectively with other directors does not have
  authority to act for or on behalf of the cooperative unless authorized by the board. A director
 may advocate interests of members or member groups to the board, but the duty of each
 director is to represent the best interests of the cooperative and all members collectively.
     Subd. 2. Exceptions to board powers. The board must not, without vote or agreement
 of the members:
     (1) amend the cooperative's articles or, except as set forth in section 308C.241,
 subdivision 7, the cooperative's bylaws;
     (2) terminate or dissolve the cooperative;
     (3) convey or encumber the cooperative or the cooperative's project or subject the
 cooperative or its project to a security interest, after the first annual members meeting
 following admission of members to the cooperative;
     (4) elect members of the board, but the board may fill vacancies in the board's
 membership created other than by removal by the vote of the cooperative's members for
 the unexpired portion of any term; or
     (5) determine the qualifications, powers, duties, or terms of office of directors.
   Sec. 46. Minnesota Statutes 2024, section 308C.405, is amended to read:
     308C.405 NUMBER OF DIRECTORS.
     A board of directors must consist of three or more individuals, with the number specified
 in or fixed in accordance with the articles or bylaws. Except for the first board and filling
 vacancies pursuant to section 308C.415, the power to elect or appoint directors is vested in
 the members. If the number of directors is fewer than three, or such greater minimum number
 set forth in the articles or bylaws, a majority of the directors in office may appoint or elect
 the number of additional directors necessary to increase the board to three directors or such
 greater minimum set forth in the articles or bylaws.
 Sec. 46.  22
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 47. Minnesota Statutes 2024, section 308C.411, subdivision 1, is amended to read:
      Subdivision 1. First board. Unless appointed by a developer, the organizer or organizers
  incorporator or incorporators shall elect and obtain the acknowledgment of the first board
  to serve until directors are elected by members. Until election by members, the first board
  shall appoint directors to fill any vacancies. The first board may be named in the articles.
    Sec. 48. Minnesota Statutes 2025 Supplement, section 308C.411, subdivision 2, is amended
  to read:
      Subd. 2. Generally. (a) Directors shall be elected for the term, at the time, and in the
  manner provided in this section and the bylaws.
     (b) Except for the first board, all of the directors shall be members and shall be elected
 exclusively by the members holding occupant membership interests.
     (c) The voting authority of the directors may be allocated according to equity
 classifications of the cooperative provided that at least two-thirds of the voting power on
 general matters of the cooperative shall be allocated to the directors who are members
 holding occupant membership interests.
     (d) (c) A director holds office for the term the director was elected and until a successor
 is elected and has qualified, or until the earlier death, resignation, removal, or disqualification
 of the director.
     (e) (d) The expiration of a director's term with or without election of a qualified successor
 does not make the prior or subsequent acts of the director or the board void or voidable.
     (f) (e) Subject to any limitation in the articles or bylaws, directors shall not be
 compensated, but may be reimbursed reasonable and necessary expenses incurred when
 they are acting on behalf of the board of directors.
     (g) Directors may be divided into or designated and elected by class or other distinction
 as provided in the articles or bylaws.
     (h) (f) A director may resign by giving written notice to the chair of the board or the
 board. The resignation is effective without acceptance when the notice is given to the chair
 of the board or the board unless a later effective time is specified in the notice.
   Sec. 49. Minnesota Statutes 2024, section 308C.415, subdivision 1, is amended to read:
     Subdivision 1. Occupant directors Vacancy. If an occupant member a director's position
 becomes vacant or a new director position is created for a director that was or is to be elected
 Sec. 49.  23
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  by occupant members, the board, in consultation with the directors elected by occupant
  members, the directors shall appoint an occupant a member of the cooperative to fill the
  director's position until the next regular or special members' meeting. If there are no directors
  elected by occupant members on the board at the time of the vacancy, a special members'
  meeting shall be called to fill the occupant member director vacancy. At the next regular
  or special meeting, the members must elect a director to fill the unexpired term of the vacant
  director's position.
    Sec. 50. Minnesota Statutes 2024, section 308C.421, subdivision 3, is amended to read:
      Subd. 3. Removal by members. Any one or all of the directors may be removed at any
 time, with or without cause, by the affirmative vote of the holders of a majority of the entire
 membership of record at any duly called annual meeting, or at any special meeting called
 for the purpose of removing or electing directors; provided that if a director has been elected
 solely by the occupant members or the holders of a class or series of membership interests
 as stated in the articles or bylaws, then that director may be removed only by the affirmative
 vote of the holders of a majority of the voting power of the occupant members for a director
 elected by the occupant members or of all membership interests of that class or series entitled
 to vote at an election of that director.
   Sec. 51. Minnesota Statutes 2024, section 308C.425, subdivision 2, is amended to read:
     Subd. 2. Open meetings. (a) Meetings of the board must be open to all members, subject
 to the following requirements:
     (1) to the extent practicable, the board shall give reasonable notice to the members of
 the date, time, and place of each open board meeting. If the date, time, and place of meetings
 are provided for in the bylaws, announced at a previous meeting of the board, posted in a
 location accessible to the members and designated by the board from time to time, or if an
 emergency requires immediate consideration of a matter by the board, notice is not required;
     (2) meetings may be closed to discuss for the following purposes:
     (i) to discuss personnel matters;
     (ii) to discuss pending or potential litigation, arbitration, or other potentially adversarial
 proceedings between members or between the board or cooperative and members, or other
 matters in which any member may have an adversarial interest if the board determines that
 closing the meeting is necessary to discuss strategy or to otherwise protect the position of
 the board or cooperative or the privacy of a member;
 Sec. 51.  24
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (iii) to discuss criminal activity arising within the cooperative if the board determines
  that closing the meeting is necessary to protect the privacy of the victim or that opening the
  meeting would jeopardize investigation of the activity;
      (iv) meetings to meet with legal counsel the cooperative's attorney for counsel and advice
  on any matter of concern to the board; and
      (v) to review of financial and other lawful information required by the board of directors
  of all applicants for membership in the cooperative; and
      (vi) to discuss contracts, leases, and other commercial transactions to purchase or provide
  goods or services currently being negotiated, including the review of bids or proposals, if
 premature general knowledge of those matters would place the cooperative at a disadvantage;
 and
     (vii) to prevent public knowledge of the matter to be discussed if the board determines
 that public knowledge would violate the privacy of any person; and
     (3) the minutes of any part of a meeting that is closed under this section may be kept
 confidential at the discretion of the board.
     (b) For purposes of this subdivision, a gathering of members of the board at which the
 board members do not conduct cooperative business is not a meeting of the board. Board
 members may not use incidental or social gatherings to evade the open meeting requirements
 of this subdivision.
   Sec. 52. Minnesota Statutes 2024, section 308C.441, subdivision 1, is amended to read:
     Subdivision 1. Method. An action required or permitted to be taken at a board meeting
 may be taken by written action signed by all of the directors. If the articles or bylaws so
 provide, any action, other than an action requiring member approval, may be taken by
 written action signed by the number of directors that would be required to take the same
 action at a meeting of the board at which all directors were present. If the board takes an
 action without a meeting, the written action must be signed by all of the members of the
 board, must state why the action was taken without a meeting, and must be placed in the
 corporate records of the cooperative.
   Sec. 53. Minnesota Statutes 2024, section 308C.451, subdivision 1, is amended to read:
     Subdivision 1. Generally. If the bylaws so provide, the board may establish committees.
 A resolution approved by the affirmative vote of a majority of the board may establish
 committees having the authority of the board in the management of the business of the
 Sec. 53.  25
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  cooperative only to the extent provided in the resolution. Committees may include a special
  litigation committee consisting of one or more independent directors or other independent
  persons to consider legal rights or remedies of the cooperative and whether those rights and
  remedies should be pursued. Committees other than special litigation committees are subject
  at all times to the direction and control of the board. Committees authorized to exercise any
  power reserved to the board must include at least three board members who have exclusive
  voting power for that committee. Committees that are not so composed may not exercise
  the authority of the board and are advisory only.
    Sec. 54. Minnesota Statutes 2024, section 308C.451, subdivision 2, is amended to read:
     Subd. 2. Membership. Committee members must be natural persons members of the
 cooperative. Unless the articles or bylaws provide for a different membership or manner of
 appointment, a committee consists of one or more persons, who need not be directors or
 members, appointed by affirmative vote of a majority of the directors present.
   Sec. 55. Minnesota Statutes 2024, section 308C.471, subdivision 4, is amended to read:
     Subd. 4. Prohibition or limit on indemnification or advances. The articles or bylaws
 either may prohibit indemnification or advances of expenses otherwise required by this
 section or may impose conditions on indemnification or advances of expenses in addition
 to the conditions contained in subdivisions 2 and 3, including, without limitation, monetary
 limits on indemnification or advances of expenses if the conditions apply equally to all
 persons or to all persons within a given class. A prohibition or limit on indemnification or
 advances of expenses may not apply to or affect the right of a person to indemnification or
 advances of expenses with respect to any acts or omissions of the person occurring before
 the effective date of a provision in the articles or the date of adoption of a provision in the
 bylaws establishing the prohibition or limit on indemnification or advances of expenses.
   Sec. 56. Minnesota Statutes 2024, section 308C.471, subdivision 6, is amended to read:
     Subd. 6. Determination of eligibility. (a) All determinations whether indemnification
 of a person is required because the criteria set forth in subdivision 2 have been satisfied and
 whether a person is entitled to payment or reimbursement of expenses in advance of the
 final disposition of a proceeding as provided in subdivision 3 must be made:
     (1) by the board by a majority of a quorum, if the directors who are, at the time, parties
 to the proceeding are not counted for determining either a majority or the presence of a
 quorum;
 Sec. 56.  26
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (2) if a quorum under clause (1) cannot be obtained by a majority of a committee of the
  board consisting solely of two or more directors not at the time parties to the proceeding
  duly designated to act in the matter by a majority of the full board, including directors who
  are parties;
      (3) if a determination is not made under clause (1) or (2) by special legal counsel selected
  either by a majority of the board or a committee by vote under clause (1) or (2) or if the
  requisite quorum of the full board cannot be obtained and the committee cannot be established
  by a majority of the full board, including directors who are parties;
      (4) if a determination is not made under clauses (1) to (3) by the affirmative vote of the
 members, but the membership interests held by parties to the proceeding must not be counted
 in determining the presence of a quorum, and are not considered to be present and entitled
 to vote on the determination; or
     (5) if an adverse determination is made under clauses (1) to (4) or paragraph (b), or if
 no determination is made under clauses (1) to (4) or paragraph (b) within 60 days after (i)
 the later to occur of the termination of a proceeding or a written request for indemnification
 to the cooperative, or (ii) a written request for an advance of expenses, as the case may be,
 by a court in this state, which may be the same court in which the proceeding involving the
 person's liability took place upon application of the person and any notice the court requires.
 The person seeking indemnification or payment or reimbursement of expenses under this
 clause has the burden of establishing that the person is entitled to indemnification or payment
 or reimbursement of expenses.
     (b) With respect to a person who is not, and was not at the time of the acts or omissions
 complained of in the proceedings; a director, general manager, or person possessing, directly
 or indirectly, the power to direct or cause the direction of the management or policies of
 the cooperative; the determination whether indemnification of this person is required because
 the criteria set forth in subdivision 2 have been satisfied; and whether this person is entitled
 to payment or reimbursement of expenses in advance of the final disposition of a proceeding
 as provided in subdivision 3 may be made by an annually appointed committee of the board,
 having at least one member two members who is a director are directors. The committee
 shall report at least annually to the board concerning its actions.
   Sec. 57. Minnesota Statutes 2024, section 308C.475, subdivision 1, is amended to read:
     Subdivision 1. Required officers. (a) The board shall elect:
     (1) a president or chief executive officer;
 Sec. 57.  27
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (2) one or more vice presidents;
      (3) a secretary; and
      (4) a treasurer or chief financial officer.
      (b) The officers, other than the president or a general manager, shall not have the authority
  to bind the cooperative except as authorized by the board.
    Sec. 58. Minnesota Statutes 2024, section 308C.475, subdivision 5, is amended to read:
      Subd. 5. Election of officers. Officers of the cooperative shall be elected at such intervals
  as the articles or bylaws authorize or require and will hold office at the pleasure of the board.
    Sec. 59. Minnesota Statutes 2024, section 308C.501, subdivision 1, is amended to read:
     Subdivision 1. Requirement. A cooperative shall have one or more members under this
 chapter shall be organized on a membership basis without capital stock.
   Sec. 60. Minnesota Statutes 2024, section 308C.501, subdivision 2, is amended to read:
     Subd. 2. Classes One class of members. A cooperative may must have only one class
 of members, all of whom are occupant members or a cooperative may have more than one
 class of members as long as one class of members are occupant members shall occupy a
 unit in the cooperative's project. The designation of that class and the rights of the members
 shall be set forth in the articles of incorporation or the bylaws.
   Sec. 61. Minnesota Statutes 2024, section 308C.501, is amended by adding a subdivision
 to read:
     Subd. 2a. Membership transfer rights. No member may transfer the member's
 membership except as permitted in the articles or the bylaws.
   Sec. 62. [308C.503] MEMBER VIOLATIONS; COOPERATIVE REMEDIES.
     Subdivision 1. Good cause required. The bylaws may provide for the levying of
 reasonable fines against the member and member's membership, the suspension of voting
 rights, or other remedial actions, including termination of the member's membership and
 appurtenant right of occupancy if good cause is required. Good cause includes nonpayment
 of loans, fees, costs, or assessments pertaining to the membership interest, or a material
 violation of the articles, bylaws, proprietary lease, or the rules, regulations, or policies of
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  the cooperative that continues following reasonable notice and reasonable opportunity to
  cure the alleged material violations.
      Subd. 2. Notice to member. (a) Before a cooperative levies a fine or terminates the
  membership and appurtenant occupancy right of a member for good cause, the cooperative
  must issue a dated, written notice to the member that:
      (1) in the case of a fine, states:
      (i) the amount and reason for the fine;
      (ii) the section of the articles, bylaws, proprietary lease, or rules, regulations, or policies
  of the cooperative allegedly violated;
     (iii) the date of the proposed levy;
     (iv) any remaining period of time, if any, that the member may use to cure the alleged
 violation and avoid the imposition of a fine and a description of the specific actions the
 member must undertake to cure the violation; and
     (v) that all unpaid fines are liens which, if not satisfied, could result in an increased fine,
 imposition of attorney fees and other collection costs, foreclosure of the lien against the
 member's membership, or termination of the member's membership and the member's
 appurtenant right of occupancy;
     (2) in the case of a termination of the member's membership and appurtenant right of
 occupancy, states:
     (i) the section of the articles, bylaws, proprietary lease, or rules, regulations, or policies
 of the cooperative allegedly violated;
     (ii) the reason for termination;
     (iii) any remaining period of time, if any, that the member may use to cure the alleged
 violation and avoid termination and a description of the specific actions the member must
 undertake to cure the violation;
     (iv) the intended manner and anticipated timing for transfer and disposition of the
 membership upon its termination; and
     (v) that upon termination of the member's appurtenant right of occupancy, the member
 may be evicted; and
     (3) provides the member with the opportunity to request a hearing before the board on
 the issue and that provides the member with:
 Sec. 62.  29
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      (i) the method the member must use to request the hearing;
      (ii) any deadlines associated with the hearing process;
      (iii) a statement that the member may submit a written communication or memorandum
  to the board in lieu of a hearing and any deadlines for submitting the written communication;
  and
      (iv) the date the board will issue its determination to proceed with levying the proposed
  fine or proceed with membership interest and occupancy right termination in the absence
  of the member's timely request for a hearing or written submission.
      (b) In addition to the member, the notice required under this subdivision must be sent
 to any other person who has a recorded interest in the member's membership interest that
 would be extinguished by the cooperative's termination and transfer of the membership
 interest. The notice required under this subdivision may be sent to any address reasonable
 under the circumstances.
     Subd. 3. Loss of voting rights. A cooperative may suspend the voting rights of a member
 due to nonpayment of a monetary obligation owed to the cooperative that is more than 60
 days delinquent. A voting interest or consent right allocated to a membership which has
 been suspended by the cooperative may not be counted toward the total number of voting
 memberships for any purpose, including but not limited to the number of voting interests
 necessary to constitute a quorum, the number of voting interests required to conduct an
 election, or the number of voting interests required to approve an action under this chapter
 or pursuant to the cooperative's governing documents, articles, or bylaws. The suspension
 shall end upon full payment of all obligations currently due or overdue to the cooperative.
 The notice and hearing requirements under subdivision 2 do not apply to a voting right
 suspension under this section.
     Subd. 4. Transfer of membership posttermination. In addition to the cooperative's
 authority to accept a deed in lieu of foreclosure or to foreclose its lien against the membership
 for a default in the member's obligation to pay assessments and dispose of the membership
 as provided in section 308C.615, a membership terminated for good cause may be transferred
 as provided in the bylaws, including through:
     (1) the purchase of the membership for its book or transfer value by the cooperative or
 a buyer to whom the cooperative assigns a purchase option reserved to the cooperative in
 the bylaws; or
 Sec. 62.  30
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      (2) the sale of the membership by the cooperative at a private sale for a price determined
  between the cooperative and purchaser. The sale price need not be the membership's transfer
  or book value, but every aspect of the sale, including the method, advertising, time, place,
  sales price, and terms, must be reasonable.
    Sec. 63. Minnesota Statutes 2024, section 308C.505, is amended to read:
      308C.505 MEMBER NOT LIABLE FOR COOPERATIVE DEBTS.
      A member is not, merely on the account of that status, personally liable for the acts,
  debts, liabilities, or obligations of a cooperative. A member is liable for any unpaid
  subscription for the membership interest, unpaid membership fees or carrying charges
 assessments, or a debt for which the member has separately contracted with the cooperative.
   Sec. 64. Minnesota Statutes 2024, section 308C.511, subdivision 1, is amended to read:
     Subdivision 1. Annual meeting. Regular member meetings shall be held annually at a
 time determined by the board, unless more frequent meetings are otherwise provided for in
 the bylaws.
   Sec. 65. Minnesota Statutes 2024, section 308C.511, subdivision 3, is amended to read:
     Subd. 3. Business and fiscal reports. Unless additional information is required by the
 bylaws, the officers shall submit reports to the members at the regular member meetings
 covering the business of the cooperative for the previous fiscal year that show the financial
 condition of the cooperative at the close of the fiscal year. The report must contain, at a
 minimum, the following:
     (1) a statement of any capital expenditure in excess of two percent of the current budget
 or $5,000, whichever is greater, approved by the cooperative for the current fiscal year or
 succeeding two fiscal years;
     (2) a statement of the balance of any reserve or replacement fund or any portion of the
 fund designated for any specific project by the board of directors;
     (3) a copy of the statement of revenues and expenses for the cooperative's last fiscal
 year and a balance sheet as of the end of the fiscal year;
     (4) the status of any pending litigation or judgments naming the cooperative as a party;
     (5) a detailed description of the insurance coverage provided by the cooperative; and
 Sec. 65.  31
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (6) a statement of the total past due assessments on all memberships and units, current
  as of not more than 60 days before the date of the annual meeting.
    Sec. 66. Minnesota Statutes 2024, section 308C.525, subdivision 1, is amended to read:
      Subdivision 1. Quorum. At any annual or special meeting of the members, unless other
  increased by the Unless provided otherwise in the articles or bylaws, a quorum necessary
  for the transaction of business at any annual or special meeting of the members shall be ten
  20 percent of the total number of members memberships and the subsequent departure of
  members from the meeting at which a quorum was initially established shall not destroy a
  quorum.
   Sec. 67. Minnesota Statutes 2024, section 308C.531, subdivision 2, is amended to read:
     Subd. 2. Member meetings held solely by means of remote communication. To the
 extent authorized in the articles or the bylaws and determined by the board, a regular or
 special meeting of members may be held solely by any combination of means of remote
 communication through which the members may participate in the meeting, if notice of the
 meeting is given to every owner of a membership interests interest entitled to vote as would
 be required by this chapter for a meeting, and if the membership interests held by the
 members participating in the meeting would be sufficient to constitute a quorum at a meeting.
 Participation by a member by that means constitutes presence at the meeting in person if
 all the other requirements of this chapter for the meeting are met.
   Sec. 68. Minnesota Statutes 2024, section 308C.531, subdivision 6, is amended to read:
     Subd. 6. Revocation. Any ballot, vote, authorization, or consent submitted by electronic
 communication under this chapter may be revoked by the member submitting the ballot,
 vote, authorization, or consent so long as the revocation is received by a director or the chief
 executive officer president of the cooperative at or before the meeting or before an action
 without a meeting is effective.
   Sec. 69. Minnesota Statutes 2024, section 308C.535, subdivision 1, is amended to read:
     Subdivision 1. Action of affirmative vote of members. (a) Unless otherwise provided
 by this chapter, the members shall take action by the affirmative vote of a majority of the
 membership interests present and entitled to vote on that item of business, except as provided
 under subdivision 2.
 Sec. 69.  32
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (b) If the articles or bylaws require a larger proportion than is required by this chapter
  for a particular action, the articles or bylaws shall have control over the provisions of this
  chapter.
    Sec. 70. Minnesota Statutes 2024, section 308C.535, subdivision 2, is amended to read:
      Subd. 2. Greater quorum or voting requirements. (a) The articles or bylaws adopted
  by the members may provide for a greater quorum or voting requirement for members or
  voting groups than is provided for by this chapter.
      (b) An amendment to the articles or bylaws that adds, changes, or deletes a greater
  quorum or voting requirement shall meet the same quorum requirement and be adopted by
 the same vote and voting groups required to take action under the quorum and voting
 requirements then in effect or proposed to be adopted, whichever is greater.
   Sec. 71. Minnesota Statutes 2024, section 308C.541, subdivision 1, is amended to read:
     Subdivision 1. Method. An action required or permitted to be taken at a meeting of the
 members may be taken by written action signed or consented to by authenticated electronic
 communication, by a majority of the entire membership of record or such other percentage
 of membership as is defined in the cooperative's articles of incorporation or bylaws, that
 would be required to take the same action at a meeting of the members at which all members
 were are present.
   Sec. 72. Minnesota Statutes 2025 Supplement, section 308C.545, subdivision 1, is amended
 to read:
     Subdivision 1. Generally. One membership shall be issued by the cooperative for each
 dwelling unit or lot in the project such that the resulting number of memberships outstanding
 at all times is equal to the number of dwelling units or lots in the project. Each membership
 shall have one vote in the affairs of the cooperative. If the cooperative has both occupant
 and nonoccupant members, on any matter of the cooperative, the entire occupant members
 voting power shall be voted collectively based upon the vote of the majority of occupant
 members voting on the issue and the collective vote of the nonoccupant members shall be
 a majority of the vote cast unless otherwise provided in the bylaws. The bylaws may not
 reduce the collective occupant member vote to less than 15 percent of the total vote on
 matters of the cooperative. A nonoccupant member has the voting rights in accordance with
 nonoccupant membership interests as granted in the bylaws, subject to the provisions of
 this chapter.
 Sec. 72.  33
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 73. Minnesota Statutes 2024, section 308C.545, subdivision 3, is amended to read:
      Subd. 3. Voting method. A member's vote at a member meeting shall be in person or
  by mail if a mail vote is authorized by the board or by alternative method if authorized by
  the board. Except as provided in subdivisions 6 and 7, a member's vote must not be made
  by proxy.
    Sec. 74. Minnesota Statutes 2024, section 308C.545, subdivision 5, is amended to read:
      Subd. 5. Jointly owned membership interest Unit occupied by more than one
  member. If membership interest is owned by two or more individuals, any individual may
  vote on a matter that is before the members, unless the cooperative receives written notice
 denying the authority of an individual to vote on the behalf of the jointly owned membership
 interest a unit is occupied by more than one member, only one person may cast the vote for
 the membership. If the members fail to agree and notify the cooperative as to who shall cast
 the vote, the vote must not be cast.
   Sec. 75. Minnesota Statutes 2024, section 308C.545, is amended by adding a subdivision
 to read:
     Subd. 6. Spouse may vote for member. If a vote of members is taken on any matter,
 the spouse of the member may vote on behalf of the member unless the member has indicated
 otherwise.
   Sec. 76. Minnesota Statutes 2024, section 308C.545, is amended by adding a subdivision
 to read:
     Subd. 7. Members represented by delegates, conservator, or attorney-in-fact. A
 cooperative may provide in its articles or bylaws that a member is entitled to be represented
 at member meetings by a delegate chosen by the member or by the conservator or
 attorney-in-fact of the member, or another person in charge of the member's business affairs.
 The delegate, conservator, or attorney-in-fact may vote on matters at the member meeting
 in the same manner as the member.
   Sec. 77. Minnesota Statutes 2025 Supplement, section 308C.571, subdivision 1, is amended
 to read:
     Subdivision 1. Member approval. A cooperative, by affirmative vote of a majority of
 the board present, may sell, lease, transfer, or otherwise dispose of all or substantially all
 of its property and assets, including its good will, not in the usual and regular course of its
 Sec. 77.  34
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  business, and grant a security interest in all or substantially all of the cooperatives property
  and assets whether or not in the usual and regular course of its business upon those terms
  and conditions and for those considerations, which may be money, securities, or other
  instruments for the payment of money or other property, as the board considers expedient,
  when approved at a regular or special meeting of the members at which a quorum is present,
  by the affirmative vote of two-thirds of the owners of a majority of the voting power of the
  interests entitled to vote entire membership of record. Written notice of the meeting must
  be given to all members whether or not they are entitled to vote at the meeting. The written
  notice must state that a purpose of the meeting is to consider the sale, lease, transfer, or
 other disposition of all or substantially all of the property and assets of the cooperative.
   Sec. 78. [308C.572] GRANT OF A SECURITY INTEREST IN COOPERATIVE.
     Subdivision 1. Generally. (a) Unless otherwise provided in the cooperative's articles or
 bylaws, following the first annual meeting of the members, the cooperative may grant a
 security interest in all or substantially all of the cooperative's property and assets upon those
 terms and conditions and for those considerations as are recommended by the board and
 approved by the affirmative vote of a majority of the entire membership of record, at a duly
 called regular or special meeting of the members at which a quorum is present.
     (b) Written notice of the meeting must be given to all members according to sections
 308C.511 and 308C.515, as applicable. The written notice must state that the purpose of
 the meeting is to consider the grant of a security interest in all or substantially all of the
 cooperative's property and assets.
     (c) Before the first annual meeting of the members, the power to grant a security interest
 in all or substantially all of the cooperative's property and assets is vested in the cooperative's
 initial board.
     Subd. 2. Confirmatory documents. Confirmatory contracts, notes, security instruments,
 mortgages, and other documents may be signed and delivered at any time in the name of
 the cooperative by its current president of the board or authorized agents.
   Sec. 79. [308C.580] INSURANCE.
     Subdivision 1. Insurance required. Beginning no later than the initial commencement
 of project occupancy by members, the cooperative shall maintain, to the extent reasonably
 available:
 Sec. 79.  35
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (1) subject to subdivision 2, property insurance on the common elements, for broad form
  covered causes of loss, and in a total amount of not less than the full insurable replacement
  cost of the insured property, less deductibles, at the time the insurance is purchased and at
  each renewal date, exclusive of items normally excluded from property policies; and
      (2) commercial general liability insurance against claims and liabilities arising in
  connection to the ownership, existence, use, or management of the property in an amount
  sufficient in the judgment of the board, insuring the board, the cooperative, the cooperative's
  management agent, and their respective employees, agents, and all persons acting as agents.
  The members shall be included as additional insureds. The insurance shall cover claims of
 one or more insured parties against other insured parties.
     Subd. 2. Specific coverage; member requirements. (a) The insurance maintained under
 subdivision 1 shall include the units or structures within the units and the common elements.
 The insurance shall cover the following items owned by the cooperative within the units:
     (1) ceiling or wall finishing materials;
     (2) finished flooring;
     (3) cabinetry;
     (4) finished millwork;
     (5) electrical, heating, ventilating, and air conditioning equipment, and plumbing fixtures
 serving a single unit;
     (6) appliances; or
     (7) other improvements and betterments owned and installed by the cooperative,
 regardless of when installed by the cooperative.
     (b) If any improvements and betterments are covered under this subdivision, increased
 costs may be assessed by the cooperative against the units affected. The cooperative may
 also, in the case of a claim for damage to a unit or units:
     (1) pay the deductible amount as a common expense;
     (2) assess the deductible amount against one or more of the units affected in any
 reasonable manner;
     (3) require the members of one or more of the units affected to pay the deductible amount
 directly;
 Sec. 79.  36
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (4) require the members to maintain insurance commonly known as gap insurance for
  their respective units; and
      (5) direct members to report losses and pay deductibles before taking any other action
  under this subdivision.
      Subd. 3. Notice to members; other insurance. If the insurance described in subdivisions
  1 and 2 is not reasonably available, the cooperative shall promptly send notice of that fact
  to be hand-delivered or sent prepaid by United States mail to all members. The cooperative
  may carry any other insurance it considers appropriate to protect the cooperative, the members
  or officers of the cooperative, or directors or agents of the cooperative.
     Subd. 4. Insurance policy provisions. Insurance policies carried pursuant to subdivisions
 1 and 2 must provide that:
     (1) each member and holder of any blanket mortgage on the project is an insured person
 under the policy with respect to liability arising out of the member's use of the common
 elements in the cooperative's project;
     (2) the insurer waives its right to subrogation under the policy against any member and
 members of the member's household and against the cooperative and members of the board
 of directors;
     (3) no act or omission by any member or secured party, unless acting within the scope
 of authority on behalf of the cooperative, shall void the policy or be a condition to recovery
 under the policy; and
     (4) if at the time of loss under the policy there is other insurance in the name of a member
 covering the same property covered by the policy, the cooperative's policy is the primary
 insurance, but the board may nonetheless direct that a member report losses under the
 member's gap insurance policy and pay deductibles as required by that policy.
     Subd. 5. Insurance proceeds; trust. Any loss covered by the property policy under
 subdivision 1 shall be adjusted by and with the cooperative. The insurance proceeds for the
 loss shall be payable to the cooperative, or to an insurance trustee designated by the
 cooperative for that purpose. The insurance trustee or the cooperative shall hold any insurance
 proceeds in trust for members and secured parties as their interests may appear. The proceeds
 shall be disbursed first for the repair or restoration of the damaged common elements and
 units. If there is a surplus of proceeds after the common elements and units have been
 completely repaired or restored or the cooperative is dissolved, the board may retain the
 Sec. 79.  37
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  surplus for use by the cooperative or distribute the surplus among the members on an
  equitable basis as determined by the board.
      Subd. 6. Member's gap insurance. In addition to the insurance carried by the
  cooperative, a member may obtain personal insurance coverage, commonly known as gap
  insurance coverage, at the member's own expense, covering the building deductible under
  property insurance maintained by the cooperative and fire insurance or other casualty
  insurance for the interior of the unit, such as decorations, improvements, and betterments
  installed by the member, to the member's personal property, including the replacement cost
  of approved upgrades in excess of the replacement cost of the cooperative's standards for
 such property items, and liability insurance on the interior of the unit as established by the
 cooperative.
     Subd. 7. Certificates. An insurer that has issued an insurance policy under this section
 shall issue certificates or memoranda of insurance, upon request, to any member or secured
 party. The insurance may not be canceled until 60 days after notice of the proposed
 cancellation has been mailed to the cooperative, each member, and each secured party for
 an obligation to whom certificates of insurance have been issued.
     Subd. 8. Repairs. (a) Any portion of the project that is damaged or destroyed as the
 result of a loss covered by the cooperative's insurance shall be promptly repaired or replaced
 by the cooperative unless:
     (1) the cooperative is dissolved;
     (2) repair or replacement would be illegal under any state or local health or safety statute
 or ordinance; or
     (3) 80 percent of the members, including every member and holder of a security interest
 in the member's membership that is appurtenant to a unit that will not be rebuilt, vote not
 to rebuild.
     (b) Subject to subdivision 2, the cost of repair or replacement of the common elements
 and units in excess of insurance proceeds and reserves shall be paid as a common expense.
     (c) If less than the entire project is repaired or replaced:
     (1) the insurance proceeds attributable to the damaged common elements and units shall
 be used to restore the damaged areas to a condition compatible with the remainder of the
 cooperative's undamaged common elements and units;
 Sec. 79.  38
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (2) the insurance proceeds attributable to the units and common elements that are not
  rebuilt shall be distributed to members whose memberships are appurtenant to those units,
  and the secured parties relative to those units, as their interests may appear; and
      (3) the remainder of the proceeds shall be distributed to all the members and secured
  parties as their interests may appear in proportion to their common expense liability.
      Subd. 9. Effect of dissolution. If the cooperative is dissolved, the insurance proceeds
  not used for repair or replacement shall be distributed in the same manner as sales proceeds
  pursuant to section 308C.905.
    Sec. 80. [308C.582] UPKEEP OF COOPERATIVE.
     Subdivision 1. Division of responsibility. Except to the extent provided by the bylaws,
 proprietary lease, subdivision 2, or section 308C.580:
     (1) the cooperative is responsible for the maintenance, repair, and replacement of the
 common elements, the units, and property owned by the cooperative within the units; and
     (2) each member is responsible for:
     (i) the maintenance, repair, and replacement of the member's personal property and
 household goods in the member's unit; and
     (ii) the replacement cost of approved upgrades within the unit in excess of the replacement
 cost of the cooperative's standards for such property items.
     Subd. 2. Damage by member, guest, or subtenant. Damage to the common elements
 or any unit as a result of the negligent or intentional acts or omissions of a member or the
 member's guest or subtenant is the responsibility of the member.
     Subd. 3. Maintenance plan; modifications; copies. The cooperative's board shall, no
 later than the cooperative's first annual meeting as provided in section 308C.603, prepare
 and approve a balance sheet and a written preventative maintenance plan, maintenance
 schedule, and maintenance budget for the common elements and units. The maintenance
 budget may be included in the cooperative's annualized budget for the project. The
 cooperative must follow the approved preventative maintenance plan. The cooperative's
 board may amend, modify, or replace an approved preventative maintenance plan or an
 approved maintenance schedule from time to time. The cooperative must provide all members
 with a paper copy, electronic copy, or electronic access to the preventative maintenance
 plan, the maintenance schedule, and any amendments or modifications to or replacements
 of the preventative maintenance plan and the maintenance schedule.
 Sec. 80.  39
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      Subd. 4. Access to units. The cooperative shall have access through and into each unit
  for purposes of performing maintenance, repair, or replacement within the cooperative's
  responsibility. The cooperative and any public safety personnel shall have access for purposes
  of abating or correcting any condition in the unit that: (1) violates any state or local law,
  ordinance, or regulation; (2) may cause material damage to or jeopardize the safety of the
  cooperative's units, buildings, or project; or (3) may constitute a health or safety hazard for
  occupants of the units.
    Sec. 81. Minnesota Statutes 2024, section 308C.601, is amended by adding a subdivision
  to read:
     Subd. 1a. Generally. A membership interest in a cooperative subject to this chapter is,
 at all times, personal property. A member has no interest in specific cooperative property
 except the right to occupy a unit pursuant to a proprietary lease and use of the common
 elements. All property of the cooperative is property of the cooperative itself.
   Sec. 82. Minnesota Statutes 2024, section 308C.601, is amended by adding a subdivision
 to read:
     Subd. 1b. Number of membership interests. One membership shall be issued by the
 cooperative for each unit in the project. The resulting number of memberships outstanding
 at all times is equal to the number of units in the project.
   Sec. 83. Minnesota Statutes 2024, section 308C.601, subdivision 2, is amended to read:
     Subd. 2. Issuance of membership interests; certificated. (a) Authorized membership
 interests may be issued on terms and conditions prescribed in the articles, or bylaws, or if
 authorized in the articles or bylaws as determined by the board. The cooperative shall
 disclose to any person or entity acquiring membership interests to be issued by the
 cooperative, the organization, capital structure, and known business prospects and risks of
 the cooperative, the nature of the governance and financial rights of the membership interest
 being acquired and of other classes of membership and membership interests.
     (b) The membership interests of a cooperative must be certificated. The interest of each
 individual member in the cooperative shall be evidenced by the issuance of a membership
 certificate. The membership certificate is coupled with a possessory interest in the real and
 personal property of the cooperative that entitles each member to a proprietary lease with
 the cooperative under which the member has an exclusive possessory interest in a unit and
 a possessory interest in common with all other members in that portion of the cooperative's
 Sec. 83.  40
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  real and personal property not constituting units. The proprietary lease creates a legal
  relationship of landlord and tenant between the cooperative and member.
      (c) Membership certificates shall be issued upon certification of full payment by the
  cooperative's secretary.
    Sec. 84. Minnesota Statutes 2024, section 308C.601, is amended by adding a subdivision
  to read:
      Subd. 2a. Signature; prima facie evidence. (a) Membership certificates must be signed
  by an agent or officer authorized in the articles or bylaws to sign membership certificates
  or, in the absence of an authorized agent or officer, by the president or vice president and
 secretary of the cooperative. If a person signs or has a facsimile signature placed upon a
 certificate in the presence of an authorized agent or officer, the certificate may be issued
 by the cooperative with the same effect as if the agent or officer had authorization on the
 date of the certificate's issuance if the agent or officer is not authorized when the certificate
 is issued.
     (b) A certificate signed as provided under this subdivision is prima facie evidence of
 the ownership of the membership interest referred to in the certificate.
   Sec. 85. Minnesota Statutes 2024, section 308C.601, is amended by adding a subdivision
 to read:
     Subd. 2b. Form of certificate. A certificate representing a membership interest of a
 cooperative shall contain on its face:
     (1) the name of the cooperative;
     (2) a statement that the cooperative is organized under the laws of the state and this
 chapter;
     (3) the name of the person to whom the certificate is issued and, in the case of a life
 estate, trust, or transfer on death registration under section 308C.602, the name of the member
 occupant and the remainderman, trustee, or transfer on death beneficiary, as applicable;
     (4) statement that the membership represented by the certificate is, except as between
 spouses, transferable only as an entirety and only to a natural person approved by the board
 for membership in the cooperative;
     (5) if the cooperative's articles or bylaws create an option or first privilege in favor of
 the cooperative to purchase the membership of a deceased or departing member or assign
 Sec. 85.  41
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  the cooperative's purchase option to a buyer approved by the cooperative for membership,
  a statement of the option, which may be made by reference back to the articles or bylaws
  that further describe the option, and a statement that any transfer of the membership
  represented by the certificate is subject to the option;
      (6) a statement of any other restrictions on transfer, including approval of the board;
      (7) a statement that the cooperative has a lien on the membership and unit represented
  by the certificate for all assessments due and to become due under the proprietary lease;
  and
      (8) a statement that the cooperative may refuse to consent to the transfer of the
 membership presented by the member to the cooperative until all outstanding sums due
 under the proprietary lease are paid or for other reasonable cause described in the bylaws.
   Sec. 86. Minnesota Statutes 2024, section 308C.601, subdivision 6, is amended to read:
     Subd. 6. Cooperative first right to purchase membership interests. The articles or
 bylaws may provide that the cooperative or the occupant members, individually or
 collectively, have the has an option or first privilege of purchasing the membership interests
 of any class of membership interests offered for sale to be sold. The option or first privilege
 may be exercised by the cooperative through (1) purchasing the membership, or (2) assigning
 the cooperative's purchase option to a buyer approved by the board for membership in the
 cooperative. The cooperative's option or first privilege to purchase membership interests
 may be satisfied by notice to other members that the membership interests are for sale and
 a procedure by which members may proceed to attempt to purchase and acquire the
 membership interests. A membership interest acquired by the cooperative may be held to
 be reissued or may be retired and canceled exercised under the circumstances, conditions,
 or limitations enumerated in the cooperative's bylaws or articles.
   Sec. 87. Minnesota Statutes 2024, section 308C.602, is amended to read:
     308C.602 TITLE TO MEMBERSHIP IN THE COOPERATIVE.
     (a) Title to membership in a cooperative governed by this chapter may be held by:
     (1) a natural person who satisfies the member restrictions set forth in this chapter member
 individually;
     (2) members through joint tenancy or tenancy in the entirety or, to the extent not
 prohibited by the articles or bylaws, tenancy in common;
 Sec. 87.  42
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      (3) a member or members holding title as joint tenants, subject to a transfer on death
  beneficiary registration in accordance with the Minnesota Uniform TOD Security Registration
  Act, sections 524.6-301, et. seq., except as prohibited, limited, or otherwise provided by
  the cooperative;
      (2) (4) a natural person who does not satisfy the restrictions set forth in this chapter but
  who purchases a membership interest for a natural person who satisfies the restrictions set
  forth in this chapter and who is a member of the cooperative and shall, for purposes of this
  section, be referred to as a "third-party purchaser", except as prohibited, limited, or otherwise
  provided by the cooperative;
     (3) (5) a natural person who is the trustee of a trust, except as prohibited, limited, or
 otherwise provided by the cooperative. If title to a membership interest is held by a trustee
 of a trust, a beneficiary of the trust must be a natural person who satisfies the restriction set
 forth in this chapter and who exercises the right of occupancy appurtenant to membership.
 In order to apply for membership in the cooperative following the death of a member or
 members who occupied the cooperative under the trust's title, a successor beneficiary of the
 trust must satisfy the restriction structure set forth in this chapter. The cooperative may
 require successor beneficiaries who did not occupy the dwelling unit with the deceased
 cooperative member or members to offer the membership interest back to the cooperative
 for sale pursuant to any cooperative right of first refusal, cooperative purchase option, or
 other membership sale requirements or restrictions established by the cooperative in its
 bylaws or through the cooperative's policies, rules, or regulations the members residing in
 a unit must be beneficiaries of the trust and the member or spouse of the member must be
 the grantor of the trust; and
     (4) (6) an adult natural person remainderman, subject to a life estate retained by a natural
 person who satisfies the restrictions set forth in this chapter and who exercises the right of
 occupancy appurtenant to membership in the dwelling unit, except as prohibited, limited,
 or otherwise provided by the bylaws. In order to apply for membership in the cooperative
 following the death of the life tenant member or members of the cooperative, a remainderman
 must satisfy the age restriction structure set forth in this chapter for membership in the
 cooperative. Following the death of the life tenant member, a cooperative may require a
 remainderman to offer the membership interest back to the cooperative for sale pursuant to
 any cooperative right of first refusal, cooperative purchase option, or other membership
 sale requirements or restrictions established by the cooperative in its bylaws or through the
 cooperative's policies, rules, or regulations; member, except as prohibited, limited, or
 otherwise provided by the cooperative.
 Sec. 87.  43
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (5) transfer on death (TOD) beneficiaries upon the death of a member in the cooperative
  and in accordance with the Minnesota Uniform TOD Security Registration Act, sections
  524.6-301, et. seq., except as prohibited, limited, or otherwise provided by the cooperative.
  A natural person who, as a TOD beneficiary, becomes the title holder of a membership
  interest in the cooperative following the death of a member must satisfy the restriction
  structure set forth in this chapter in order to apply for membership in the cooperative. A
  cooperative may require a TOD beneficiary who becomes the title holder of a membership
  interest in the cooperative following the death of a member to offer the membership interest
  back to the cooperative for sale pursuant to any cooperative right of first refusal, cooperative
 purchase option, or other membership sale requirements or restrictions the cooperative may
 have developed in its bylaws or through the cooperative's policies, rules, or regulations;
 and
     (6) with respect to nonoccupant membership interest, any person as defined by this
 chapter.
     (b) In each instance in which title to a membership interest is held by a trustee,
 remainderman, or third-party purchaser who purchases a membership interest for a member
 who will occupy the cooperative, the trustee, remainderman, or third-party purchaser shall
 agree to abide by the cooperative's articles, bylaws, occupancy agreement or proprietary
 lease of with the member, and rules, policies, and regulations of the cooperative, and shall
 not, by virtue of their status of holding title to the membership interest, have any voting
 rights that a member of the cooperative would otherwise have by reason of being the holder
 of a membership certificate. All voting rights shall be vested solely with the member who
 occupies the cooperative.
     (c) The cooperative may, through the cooperative's bylaws or articles:
     (1) require the successor trustee, remainderman, third-party purchaser, or transfer on
 death beneficiary to offer the membership interest back to the cooperative for sale, upon
 the death of the member, pursuant to any cooperative option or first privilege to purchase
 that is set forth in the cooperative's articles or bylaws or other membership sale requirements
 or restrictions established by the cooperative in the cooperative's bylaws or through the
 cooperative's policies, rules, or regulations; or
     (2) allow the remainderman, third-party purchaser, transfer on death beneficiary or, in
 the case of a trust, another beneficiary of the trust, to apply for membership in the cooperative
 following the death of the member, provided:
 Sec. 87.  44
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      (i) the remainderman, third-party purchaser, or transfer on death beneficiary satisfies
  the restrictions under this chapter and the membership eligibility criteria; and
      (ii) in the case of a trust, the current trustee of the trust agrees to continue to pay all
  assessments levied against the membership if the trust beneficiary does not pay assessments
  levied against the membership.
      (d) For purposes of this section, "third-party purchaser" means a natural person under
  paragraph (a), clause (4).
    Sec. 88. Minnesota Statutes 2024, section 308C.603, subdivision 1, is amended to read:
      Subdivision 1. Developer control. If a developer causes a cooperative to be organized
 under this chapter, the developer shall have the right to appoint an initial board of directors
 consisting of three persons. The developer's control of the board shall terminate on the date
 of the first annual meeting of members. The first annual meeting shall occur on or about 60
 90 days after the date of the certificate of occupancy issued for the project by the municipality
 in which the project is situated and, subject to any requirements under the mortgage for
 permanent financing related to the project.
   Sec. 89. Minnesota Statutes 2024, section 308C.603, subdivision 4, is amended to read:
     Subd. 4. Developer's obligation for assessments. (a) Prior to the commencement of
 occupancy of the project by the members, the developer shall pay all accrued expenses of
 the cooperative.
     (b) After the commencement of occupancy of the project by the members, the developer
 shall pay all common expenses and payments to reserves allocated to the dwelling unit
 appurtenant to the membership interests that have not been conveyed to members, and the
 payment obligation shall remain in effect until each unissued membership interest has been
 conveyed to a member pay all assessments allocated to the unsold membership interests
 and units appurtenant to the interests until the earlier of:
     (1) five years from the date of the cooperative's first annual meeting under section
 308C.603; or
     (2) the date the last of the memberships remaining unsold on the date of the first annual
 meeting are sold to the initial purchasers.
 Sec. 89.  45
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 90. Minnesota Statutes 2024, section 308C.603, is amended by adding a subdivision
  to read:
      Subd. 5. Developer's obligation to complete and restore. Except for improvements
  labeled "NEED NOT BE BUILT", the developer shall complete all improvements depicted
  on the plans and specifications for the project's construction and as-built survey with respect
  to the project.
    Sec. 91. Minnesota Statutes 2024, section 308C.612, subdivision 1, is amended to read:
      Subdivision 1. Generally. The senior housing (a) A cooperative organized under this
  chapter shall provide to each subscriber for prospective purchaser of a membership in the
 cooperative:
     (1) an occupancy agreement or a purchase agreement;
     (2) a proprietary lease;
     (2) (3) the articles, bylaws, rules, regulations, and policies of the cooperative;
     (3) the bylaws;
     (4) an annualized budget for the current fiscal period; and
     (5)(i) for the initial purchase of a membership interest to which a particular dwelling
 unit is appurtenant, an information bulletin and a subscription agreement; and
     (ii) (4) for any purchase of the sale of any membership to the first purchaser and member,
 an information bulletin; and
     (5) for the resale of a membership interest after its the initial purchase, a resale disclosure
 statement and a membership purchase and sale agreement, all of which shall minimally
 include the contents of the provisions set forth in subdivisions 2 to 6, as applicable certificate.
     (b) A cooperative is not required to prepare or deliver an information bulletin or resale
 disclosure certificate in the case of:
     (1) a gratuitous transfer;
     (2) a transfer pursuant to a court order;
     (3) a transfer to a government agency;
     (4) a transfer to a secured party by foreclosure or deed in lieu of foreclosure; or
     (5) an option to purchase a membership, until exercised.
 Sec. 91.  46
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 92. Minnesota Statutes 2024, section 308C.612, subdivision 2, is amended to read:
      Subd. 2. Information bulletin. (a) With respect to an initial sale of a cooperative's
  authorized membership interests to older persons, each subscriber for prospective purchaser
  of a membership shall be given an information bulletin that shall fully and accurately
  disclose:
      (1) the name and principal address of the cooperative;
      (2) the number of dwelling units in the project;
      (3) a general description of the project, including, at a minimum:
      (i) the number of buildings;
     (ii) the number of dwellings units per building or per lot;
     (iii) the type of construction;
     (iv) whether the project involves new construction or rehabilitation;
     (v) whether any building was wholly or partially occupied, for any purpose, before it
 was added to the project and the nature of the occupancy;
     (vi) a general description of any roads, trails, or utilities that are located on the common
 elements and that the cooperative is required to maintain;
     (vii) the name of the developer, the developer's credentials, and the credentials of the
 persons constituting the initial board of directors of the cooperative; and
     (viii) a statement that the developer shall pay and be financially liable for all of the
 common expenses and costs assessments allocated to the unsold membership interests
 remaining unsold on the date of the cooperative's first annual meeting, and dwelling the
 units appurtenant thereto, until such membership interests are sold the earlier of five years
 from the date of the cooperative's first annual meeting under section 308C.603 or the date
 upon which the last of the memberships remaining unsold on the date of the first annual
 meeting are sold to the initial purchasers thereof;
     (4) the names of the cooperative's initial board members;
     (4) (5) the cooperative's anticipated schedule of commencement and completion of
 construction of any buildings and other improvements that the cooperative or developer is
 obligated to build;
     (6) a statement regarding whether the cooperative's units will be substantially completed
 at the time the units are conveyed through execution of proprietary leases and issuance of
 Sec. 92.  47
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  executed membership certificates and, if not substantially completed, the person responsible
  to complete and pay for the construction of the units;
      (7) the terms of any warranties provided by the developer, including copies of sections
  308C.630 to 308C.633, and any other applicable statutory warranties and a statement of
  any limitations on the enforcement of the applicable warranties or on damages;
      (8) a statement that:
      (i) within ten days after the receipt of an information bulletin, a purchaser may cancel
  any contract for the purchase of a membership from the cooperative, provided that the right
  to cancel terminates upon the earlier of the purchaser's:
     (A) execution of a proprietary lease;
     (B) acceptance of a membership certificate evidencing ownership of a membership in
 the cooperative; or
     (C) waiver of the right to cancel in the manner provided under this section;
     (ii) if a purchaser receives a disclosure statement more than ten days before signing a
 purchase agreement, the purchaser cannot cancel the purchase agreement;
     (iii) if the cooperative is obligated to deliver an information bulletin and fails to deliver
 to the purchaser an information bulletin that substantially complies with this chapter during
 any period of time that the developer controls the cooperative's board pursuant to section
 308C.603, the developer is liable to the purchaser in the amount of $5,000, in addition to
 any damages or other amounts recoverable under this chapter or otherwise;
     (iv) if after termination of the developer's control of the board pursuant to section
 308C.603, the cooperative is obligated to deliver an information bulletin and fails to deliver
 to the purchaser an information bulletin that substantially complies with this chapter, liability
 to the purchaser for the amounts recoverable under section 308C.612, subdivision 4,
 paragraph (d), as between the cooperative and developer, is assumed by the party who is
 controlling the marketing and sales of any memberships to the initial purchasers;
     (v) any action brought by a purchaser under this section shall be commenced within the
 time period specified in section 308C.633; and
     (vi) if a developer or the cooperative has, in good faith, attempted to comply with the
 requirements of section 308C.612, subdivisions 1 and 2, and has substantially complied
 with the disclosure requirements of this chapter, nonmaterial errors or omissions in the
 disclosure materials are not actionable;
 Sec. 92.  48
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (9) a statement, with the name and address of the escrow agent, describing how earnest
  money tendered by a purchaser in connection with the purchase of a membership will be
  held in and disbursed from the escrow account, as set forth in section 308C.6121, and that
  the earnest money will be returned to the purchaser if the purchaser cancels the purchase
  agreement pursuant to this section;
      (5) (10) any expenses or services not reflected in the budget that the cooperative pays
  or provides that may become a common expense and the projected common expense
  attributable to each of those expenses or services;
      (11) any special fees or charges, separate from the members' monthly assessments, to
 be paid by members for the use of common elements, including guest suites, banquet rooms,
 or other facilities;
     (6) (12) identification of any liens, defects, or encumbrances that will continue to affect
 the title to a dwelling unit or to any real property owned by the cooperative after the
 contemplated conveyance;
     (7) (13) a statement disclosing to the extent of the cooperative's or an affiliate of a
 cooperative's actual knowledge, after reasonable inquiry, any unsatisfied judgments or
 lawsuits to which the cooperative is a party, and the status of those lawsuits which are
 material to the project or the dwelling unit appurtenant to a membership being purchased;
     (8) (14) a summary of the insurance coverage provided by the cooperative for the benefit
 of members, and a detailed description of the insurance coverage that members are
 encouraged to purchase for their own benefit;
     (9) (15) a statement describing:
     (i) whether the members are entitled for federal and state tax purposes to deduct payments
 made by the cooperative for real estate taxes and interest paid to the holder of a security
 interest encumbering the cooperative;
     (ii) a statement as to the effect on the members if the cooperative fails to pay real estate
 taxes or payments due the holder of a security interest encumbering the cooperative
 cooperative's project; and
     (iii) the principal amount and a general description of the terms of any blanket mortgage
 contract for deed, or other blanket security instrument encumbering the cooperative property
 cooperative's project; and
 Sec. 92.  49
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (iv) any other financial arrangements, including contingencies, that have been made to
  provide for the completion of all improvements to be constructed on the cooperative's
  project;
      (10) (16) a statement:
      (i) that real estate taxes for the dwelling unit or any real property owned by the
  cooperative are not delinquent, or if there are delinquent real estate taxes, describing the
  property for which the taxes are delinquent, stating the amount of the delinquent taxes,
  interest, and penalties, and stating the years for which taxes are delinquent; and
      (ii) setting forth the amount of real estate taxes expected to be allocated to the dwelling
 units, including the amount of any special assessments certified for payment with the real
 estate taxes, due and payable with respect to the dwelling unit in the year in which the
 information bulletin is given if real estate taxes were separately assessed against the unit;
     (11) (17) any recorded covenants, conditions restrictions, and reservations affecting the
 project; a statement that the occupancy agreement proprietary lease must be signed at the
 closing; and a statement that members are required to abide by the bylaws, the articles of
 incorporation, and the rules, regulations, and policies of the cooperative, including
 amendments from time to time;
     (12) (18) a brief narrative description of any material agreements entered into between
 the cooperative and a governmental entity that affect the project;
     (13) a budget prepared by the developer; and
     (14) (19) a statement that purchase and sales of memberships and rights under occupancy
 agreements proprietary leases are not for speculative purposes and that investments in the
 cooperative by members are for the sole purpose of securing and acquiring a dwelling unit
 for their residential use and benefit.;
     (20) a description of the circumstances under which the cooperative may impose liens
 against membership interests and occupancy rights, how the cooperative forecloses on a
 lien, the process the cooperative may use to remove a member and an occupant from a unit,
 and the circumstances and processes under which the cooperative may levy fines, suspend
 member voting rights, and terminate the membership and occupancy rights of a cooperative's
 member and transfer or dispose of a terminated member's membership; and
     (21) copies of the following documents:
     (i) articles, bylaws, rules and regulations, and policies of the cooperative;
 Sec. 92.  50
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (ii) any recorded covenants, conditions, restrictions, or reservations affecting the
  cooperative's project land;
      (iii) any agreement excluding or modifying any implied warranties;
      (iv) any agreement reducing the statute of limitations for enforcing warranties;
      (v) the subscription agreement for the purchase of a membership from the cooperative;
      (vi) the proprietary lease for occupancy of the member's unit;
      (vii) a projected budget for the first year of the cooperative's operation;
      (viii) a balance sheet, if developed at the time the information bulletin is issued, as
  required under section 308C.582; and
     (ix) an initial maintenance plan, initial maintenance schedule, and maintenance budget,
 if developed at the time the information bulletin is issued, as required under section 308C.582.
     (b) Copies of documents under paragraph (a), clause (21), may be provided in proposed
 form if the closing on a construction loan or blanket mortgage that will finance the
 construction of the cooperative's project has not yet occurred.
     (b) (c) A cooperative shall promptly amend the information bulletin to reflect any material
 change in the information required by this chapter.
   Sec. 93. Minnesota Statutes 2024, section 308C.612, subdivision 3, is amended to read:
     Subd. 3. Resale disclosure certificate. (a) In the event of a resale of a membership
 interest by either the departing member or by the cooperative, the departing member or,
 with the assistance of the cooperative, as applicable, shall furnish to the purchaser before
 the execution of any purchase and sale agreement for the applicable membership interest
 the following documents relating to the cooperative:
     (1) copies of the articles and, bylaws, any rules and, regulations, policies, and any
 amendments thereto; and
     (2) a resale disclosure certificate that is dated not more than 90 days before the date of
 the membership purchase and sale agreement or subscription agreement, containing the
 information set forth in paragraph (b).
     (b) The resale disclosure certificate must provide the following information:
     (1) the name and address of the cooperative;
 Sec. 93.  51
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (2) the number of the dwelling unit appurtenant to the subject membership interest,
  including the principal unit and any auxiliary units, such as garage stalls or storage lockers;
      (3) the amount of the monthly common expense assessments payable under the occupancy
  agreement proprietary lease applicable to the subject dwelling unit;
      (4) the amount of other additional fees or charges payable by members, such as late
  payment charges;
      (5) extraordinary expenditures, if any, approved by the cooperative and not yet assessed
  to members for the current and two succeeding fiscal years;
      (6) the current balances in the cooperative's replacement reserve and the general operating
 reserve, and any other reserves maintained by the cooperative;
     (7) copies of the most current financial statements of the cooperative, including the
 current annualized budget, maintenance plan, balance sheet, and income and expense
 statements;
     (8) a disclosure of any unsatisfied judgments against the cooperative;
     (9) a statement that there are no pending lawsuits to which the cooperative is a party
 except as specifically disclosed or, if there are any pending lawsuits in which the cooperative
 is a party, a statement of the case caption, case number, and court in which the lawsuit is
 pending and a summary of the lawsuit's status;
     (10) a description of the insurance coverages carried by the cooperative and a statement
 of any insurance coverage that the cooperative requires or recommends the members procure;
     (11) a description of the circumstances under which the cooperative may impose liens
 against membership interests and occupancy rights, how the cooperative forecloses on a
 lien, the process the cooperative may use to remove a member and an occupant from a unit,
 and the circumstances and processes under which the cooperative may levy fines, suspend
 member voting rights, and terminate the membership and occupancy rights of a cooperative's
 member and transfer or dispose of a terminated member's membership;
     (10) (12) a radon disclosure pursuant to the requirements of section 144.496; and
     (13) a description of any restrictions on the transfer of the membership interest, including
 but not limited to:
     (i) a description of an option or first privilege of the cooperative to purchase the
 membership or to assign the option to purchase to a prospective purchaser; and
 Sec. 93.  52
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      (ii) any affordability or income, age, or other restrictions that would limit the prospective
  purchasers to whom the membership may be sold or by whom the appurtenant unit may be
  occupied;
      (14) a description of any transfer value or other restrictions on the price for which the
  membership can be sold and any conditions or limitations on the transfer value or other
  sales price restriction; and
      (11) (15) the resale disclosure certificate shall contain a certification by the subscribing
  party that the information contained therein is true and correct as of the date of the
  certification.
   Sec. 94. Minnesota Statutes 2024, section 308C.612, is amended by adding a subdivision
 to read:
     Subd. 7. Purchaser's right to cancel a purchase agreement after receipt of an
 information bulletin. (a) A cooperative must provide at least one of the purchasers of the
 membership with a copy of the information bulletin and all amendments before conveyance
 of the membership, through issuance of a membership certificate, and conveyance of the
 unit through execution of a proprietary lease. If the cooperative does not provide the
 purchaser with an information bulletin more than ten days before execution of the purchase
 agreement, the purchaser may, before conveyance of the membership and unit, cancel the
 purchase agreement within ten days after first receiving the information bulletin. If the
 cooperative provides the purchaser with the information bulletin more than ten days before
 execution of the purchase agreement, the purchaser may not cancel the purchase agreement
 pursuant to this section. The ten-day rescission period may be modified or waived, in writing,
 by agreement of the purchaser of a membership to which the unit is appurtenant only after
 the purchaser has received and had an opportunity to review the information bulletin. The
 cooperative may not condition the sale of the membership on the purchaser agreeing to
 modify or waive the purchaser's ten-day right of rescission, contractually obligate the
 purchaser to modify or waive the purchaser's ten-day right of rescission, or include a
 modification or waiver of the ten-day right of rescission in any purchase agreement for the
 membership. To be effective, a modification or waiver of a purchaser's ten-day right of
 rescission must be evidenced by an instrument separate from the purchase agreement signed
 by the purchaser more than three days after the purchaser receives the disclosure statement.
     (b) If an amendment to the information bulletin materially and adversely affects a
 purchaser, the purchaser shall have ten days after delivery of the amendment to cancel the
 purchase agreement in accordance with this section. The ten-day rescission period may be
 Sec. 94.  53
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  modified or waived, in writing, by agreement of the purchaser of a membership only after
  the purchaser has received and had an opportunity to review the amendment. To be effective,
  a modification or waiver of a purchaser's ten-day right of rescission under this section must
  be evidenced by a written instrument separate from the purchase agreement signed by the
  purchaser more than three days after the purchaser receives the amendment.
      (c) If a purchaser elects to cancel a purchase agreement pursuant to this section, the
  purchaser may do so by giving the cooperative or the cooperative's agent written notice that
  is effective:
      (1) upon hand delivery;
     (2) upon mailing if properly addressed with postage prepaid and deposited in the United
 States mail; or
     (3) if the cooperative or the cooperative's agent has provided an electronic address at
 which the cooperative or cooperative's agent agrees to receive electronic communication
 as defined in section 317A.011, subdivision 7a, by electronic communication sent to that
 address.
 Cancellation is without penalty, and all payments made by the purchaser before cancellation
 shall be refunded promptly. Notwithstanding any provision in this section to the contrary,
 the purchaser's cancellation rights under this section terminate upon the purchaser's
 acceptance of a conveyance of the membership and unit.
     (d) If the cooperative is obligated to deliver an information bulletin and fails to deliver
 to the purchaser an information bulletin that substantially complies with this chapter during
 any period of time that the developer controls the cooperative's board pursuant to section
 308C.603, the developer is liable to the purchaser in the amount of $5,000, in addition to
 any damages or other amounts recoverable under this chapter or otherwise. If, after
 termination of the developer's control of the board pursuant to section 308C.603, the
 cooperative is obligated to deliver an information bulletin and fails to deliver to the purchaser
 an information bulletin which substantially complies with this chapter, liability to the
 purchaser for the amounts recoverable under this subdivision, as between the cooperative
 and developer, is assumed by the party controlling the marketing and sales of any
 memberships to the initial purchasers. An action brought by a purchaser under this section
 must be commenced within the time period specified in section 308C.633. If a developer
 or the cooperative, in good faith, attempts to comply with the requirements of this subdivision
 and has, in fact, substantially complied with the disclosure requirements of this chapter,
 nonmaterial errors or omissions in the disclosure materials is not actionable.
 Sec. 94.  54
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 95. Minnesota Statutes 2024, section 308C.612, is amended by adding a subdivision
  to read:
      Subd. 8. Purchaser's right to cancel a purchase agreement after receipt of a resale
  disclosure certificate. (a) Unless a purchaser is given the information required to be delivered
  by subdivision 3 more than ten days before the execution of the purchase agreement for a
  membership interest appurtenant to the unit, the purchaser may, before the conveyance of
  the unit through execution of a proprietary lease, cancel the purchase agreement within ten
  days after receiving the information. The ten-day rescission period may be modified or
  waived, in writing, by agreement of the purchaser only after the purchaser has received and
 had an opportunity to review the information required to be delivered by subdivision 3. The
 person required to deliver the information required under subdivision 3 may not condition
 the sale of the membership interest on the purchaser agreeing to modify or waive the
 purchaser's ten-day right of rescission, contractually obligate the purchaser to modify or
 waive the purchaser's ten-day right of rescission, or include a modification or waiver of the
 ten-day right of rescission in any purchase agreement for the membership interest. To be
 effective, a modification or waiver of a purchaser's ten-day right of rescission must be
 evidenced by an instrument separate from the purchase agreement signed by the purchaser
 more than three days after the purchaser receives the resale disclosure certificate.
     (b) A purchaser who elects to cancel a purchase agreement pursuant to paragraph (a),
 may do so by giving written notice to the seller or the seller's agent that shall be effective:
     (1) upon hand delivery;
     (2) upon mailing if properly addressed with postage prepaid and deposited in the United
 States mail; or
     (3) if the seller or the seller's agent has provided an electronic address at which the seller
 or seller's agent agrees to receive electronic communication as defined in section 317A.011,
 subdivision 7a, by electronic communication sent to that address.
 Cancellation is without penalty and all payments made by the purchaser shall be refunded
 promptly.
   Sec. 96. Minnesota Statutes 2024, section 308C.612, is amended by adding a subdivision
 to read:
     Subd. 9. Required disclosure language to be incorporated into purchase
 agreements. All purchase agreements must contain a provision which substantially conforms
 with the following notices:
 Sec. 96.  55
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(1) "The following notice is required by Minnesota Statutes: The purchaser is entitled
  to receive an information bulletin or resale disclosure certificate, as applicable. The
  information bulletin or resale disclosure certificate contains important information regarding
  the cooperative and the purchaser's cancellation rights."; and
(2) "Buyer's Right to Cancel. THE BUYER IS ENTITLED TO CANCEL THIS
  AGREEMENT FOR ANY REASON WITHIN TEN (10) DAYS FROM AND AFTER
  THE DATE THE BUYER ACTUALLY RECEIVED A COPY OF THE RESALE
  DISCLOSURE CERTIFICATE OR, AS APPLICABLE, AN INFORMATION BULLETIN
  UNLESS THE BUYER HAS CLOSED ON THE PURCHASE OF THE MEMBERSHIP
 INTEREST WITHIN THE TEN (10) DAY PERIOD. IF THE BUYER ELECTS TO
 CANCEL THIS PURCHASE AGREEMENT, PURSUANT TO THIS PROVISION, THE
 BUYER MAY DO SO IN WRITING BY HAND DELIVERING THE NOTICE OF
 CANCELLATION TO THE SELLER OR SELLER'S AGENT, OR BY MAILING SUCH
 NOTICE BY POSTAGE PREPAID, UNITED STATES MAIL, TO THE SELLER OR
 THE SELLER'S AGENT WITHIN THE TEN (10) DAY PERIOD. CANCELLATION IS
 WITHOUT PENALTY AND ALL PAYMENTS MADE BY THE BUYER HEREUNDER
 SHALL BE REFUNDED PROMPTLY."
   Sec. 97. [308C.6121] EARNEST MONEY; ESCROW ACCOUNT.
Subdivision 1. Escrow account required. (a) All earnest money paid or deposits made
 in connection with the purchase or reservation of a membership from the cooperative or
 from a member of the cooperative must be deposited in an escrow account controlled jointly
 by the cooperative or the cooperative's management agent and the purchaser, or controlled
 by:
(1) a licensed title insurer or the title insurer's agent;
(2) an attorney representing either the cooperative or the cooperative's managing agent;
(3) a licensed real estate broker;
(4) an independent bonded escrow company; or
(5) a government agency or instrumentality.
(b) The escrow account must be in an institution whose deposits are insured by a
 government agency or instrumentality.
Subd. 2. Delivery of money. The money or deposits must be held in the escrow account
 until:
 Sec. 97.  56
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      (1) delivered to the cooperative or the cooperative's management agent at closing;
      (2) delivered to the cooperative or the cooperative's management agent because of the
  purchaser's default under a reservation agreement or a contract to purchase the unit;
      (3) delivered to the purchaser pursuant to the provisions of section 308C.612, subdivision
  5, or the provisions of a reservation agreement or a contract to purchase; or
      (4) delivered for payment of construction costs pursuant to a written agreement between
  the cooperative and the purchaser.
    Sec. 98. Minnesota Statutes 2024, section 308C.613, subdivision 1, is amended to read:
      Subdivision 1. Requirements. The annual budget of a senior housing cooperative formed
 under this chapter shall include, without limitation:
     (1) the amount included in the budget as a reserve for replacement replacements;
     (2) the amount included in the budget for the general operating reserve;
     (3) the amount included in the budget for any other reserves;
     (4) the projected common expense for each category of expenditures for the cooperative;
 and
     (5) the projected monthly common expense assessment for each type of dwelling unit.
   Sec. 99. Minnesota Statutes 2024, section 308C.613, subdivision 2, is amended to read:
     Subd. 2. Replacement reserves. The cooperative shall include in its annual budgets
 budget replacement reserves projected by the board to be adequate, together with past and
 future contributions thereto to fund the replacement of those components of the cooperative
 that the cooperative is obligated to replace by reason of ordinary wear and tear or
 obsolescence, subject to the following:
     (1) the annual budgets need not include reserves for replacement of components that
 have a remaining useful life of more than 30 years, unless required otherwise by the lender
 or mortgage insurer relative to the cooperative's master mortgage any blanket mortgage on
 the cooperative's project;
     (2) the cooperative shall keep the replacement reserves in an account or accounts separate
 from the cooperative's operating funds, and shall not use or borrow from the replacement
 reserves to fund the cooperative's operating expenses, except that this restriction shall not
 Sec. 99.  57
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  affect the cooperative's authority to pledge the replacement reserves as security for a loan
  to the cooperative; and
      (3) the cooperative shall reevaluate the adequacy of the cooperative's budgeted
  replacement reserves at least every third year after the filing of the cooperative's articles.
    Sec. 100. Minnesota Statutes 2024, section 308C.614, is amended to read:
      308C.614 LIEN FOR ASSESSMENTS.
      (a) A senior housing cooperative formed under this chapter has a lien on a membership
  interest, the appurtenant occupancy agreement proprietary lease, and the member's associated
  occupancy rights for any assessment levied against that membership interest from the time
 the assessment becomes due. If an assessment is payable in installments, the full amount
 of the assessment is a lien from the time the first installment thereof becomes due. Unless
 the bylaws provide otherwise, any fees, charges, or payments that members must regularly
 pay to the cooperative are enforceable as assessments under this section. Other cooperatives
 formed under this chapter may authorize a lien on a membership interest, occupancy
 agreement, or a proprietary lease in the bylaws.
     (b) A lien under this section is prior to all other liens and encumbrances on a membership
 certificate except (i) liens, encumbrances, or mortgages which the cooperative creates,
 assumes, or takes subject to, or (ii) any first security interest encumbering only the
 membership interest. If a first security interest encumbering a membership interest which
 is personal property is foreclosed, the secured party or the purchaser at the sale shall take
 title to the membership interest subject to unpaid assessments. This paragraph shall not
 affect the priority of mechanics' liens encumbering the project.
     (c) Proceedings to enforce an assessment lien shall be instituted within three years after
 the last installment of the assessment becomes payable, or shall be barred.
     (d) The member and owner of the membership interest, at the time an assessment is due,
 shall be personally liable to the cooperative for payment of the assessment levied against
 the membership interest. If there are multiple owners of the membership interest, they shall
 be jointly and severally liable.
     (e) This section does not prohibit actions to recover sums for which paragraph (a) creates
 a lien nor prohibit a cooperative from taking an assignment of the membership certificate
 and occupancy agreement proprietary lease or other conveyance documents agreed upon
 by the parties in lieu of foreclosure.
 Sec. 100.  58
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      (f) The cooperative shall furnish to a member or the member's authorized agent upon
  written request of the member or the authorized agent a statement setting forth the amount
  of unpaid assessments currently levied against the member's interest. The statement shall
  be furnished within ten business days after receipt of the request and is binding on the
  cooperative and every member.
    Sec. 101. Minnesota Statutes 2024, section 308C.615, is amended to read:
      308C.615 FORECLOSURE OF LIENS OR TO ACQUIRE OCCUPANCY RIGHTS
  FOLLOWING MEMBERSHIP TERMINATION IN A SENIOR HOUSING
  COOPERATIVE.
     (a) A senior housing cooperative's lien shall be foreclosed by a private sale negotiated
 by the cooperative, or by an acceptance by the cooperative of the subject membership interest
 in full satisfaction of the secured indebtedness pursuant to the following:
     (1) a notice of the sale or acceptance shall be served on the member 90 days prior to the
 sale or acceptance;
     (2) if the member was not previously provided notice and an opportunity to request a
 hearing before the board pursuant to section 308C.501, the notice of sale or acceptance
 must, in addition to the statement required under clause (5), include the notice, or the
 cooperative must issue a separate written notice to the member providing an opportunity to
 be heard before the board pursuant to section 308C.501;
     (2) (3) the cooperative shall be entitled to its reasonable costs and attorney fees not
 exceeding the amount provided by section 582.01, subdivision 1a;
     (3) (4) the amount of the cooperative's lien shall be deemed to be adequate consideration
 for the membership interest subject to sale or acceptance, notwithstanding the value of the
 membership interest; and
     (4) (5) the notice of sale or acceptance shall contain the following statement in capital
 letters with the name of the cooperative or secured party filled in:
     "THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of cooperative
 or secured party) HAS BEGUN PROCEEDINGS UNDER MINNESOTA STATUTES,
 CHAPTER 308C, TO FORECLOSE ON YOUR MEMBERSHIP INTEREST FOR THE
 REASON SPECIFIED IN THIS NOTICE. YOUR MEMBERSHIP INTEREST AND
 YOUR RIGHT TO OCCUPY THE DWELLING UNIT APPURTENANT THERETO
 WILL TERMINATE 90 DAYS AFTER SERVICE OF THIS NOTICE ON YOU UNLESS
 BEFORE THEN:
 Sec. 101.  59
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      (a) THE PERSON AUTHORIZED BY (fill in the name of cooperative or secured party)
  AND DESCRIBED IN THIS NOTICE TO RECEIVE PAYMENTS RECEIVES FROM
  YOU:
      (1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS
      (2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS
      (3) $500 TO APPLY TO ATTORNEY FEES ACTUALLY EXPENDED OR
  INCURRED; PLUS
      (4) ANY ADDITIONAL AMOUNTS FOR YOUR MEMBERSHIP INTEREST
  BECOMING DUE TO (fill in name of cooperative or secured party) AFTER THE DATE
 OF THIS NOTICE; OR
     (b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
 FORECLOSURE OF YOUR RIGHTS TO YOUR MEMBERSHIP INTEREST AND
 YOUR RIGHT TO OCCUPY THE DWELLING UNIT APPURTENANT THERETO BE
 SUSPENDED UNTIL YOUR CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF
 BY TRIAL, HEARING, OR SETTLEMENT. YOUR ACTION MUST SPECIFICALLY
 STATE THOSE FACTS AND GROUNDS THAT DEMONSTRATE YOUR CLAIMS
 OR DEFENSES. IF YOU DO NOT TAKE ACTION AS PRESCRIBED IN PARAGRAPH
 (A) OF THIS NOTICE WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE,
 YOUR OWNERSHIP RIGHTS IN YOUR MEMBERSHIP INTEREST AND YOUR
 RIGHT TO OCCUPY THE DWELLING UNIT APPURTENANT THERETO WILL
 TERMINATE AT THE END OF THE PERIOD, YOU WILL LOSE ALL THE MONEY
 YOU HAVE PAID FOR YOUR MEMBERSHIP INTEREST, YOU WILL LOSE YOUR
 RIGHT TO POSSESSION AND OCCUPANCY OF YOUR DWELLING UNIT, YOU
 MAY LOSE YOUR RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU
 MIGHT HAVE, AND YOU WILL BE EVICTED. IF YOU HAVE ANY QUESTIONS
 ABOUT THIS NOTICE, CONTACT AN ATTORNEY IMMEDIATELY."
     (b) If the member or occupant fails to redeem before the expiration of 90 days following
 delivery of the notice to the member, the cooperative may bring an action for eviction against
 the member and any persons occupying the dwelling unit, and in that case section 504B.291
 shall not apply.
     (c) A cooperative may assign its lien rights in the same manner as any other secured
 party.
 Sec. 101.  60
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 102. Minnesota Statutes 2024, section 308C.625, subdivision 1, is amended to read:
      Subdivision 1. How imposed. A restriction on the transfer or registration of transfer of
  membership interests of a cooperative may shall be imposed in the articles, in the or bylaws,
  by a resolution adopted by the members, or by an agreement among or other written action
  by a number of members or holders of other membership interests or among them and the
  cooperative. A restriction is not binding with respect to membership interests issued prior
  to the adoption of the restriction, unless the holders of those membership interests are parties
  to the agreement or voted in favor of the restriction.
    Sec. 103. Minnesota Statutes 2024, section 308C.625, subdivision 2, is amended to read:
     Subd. 2. Restrictions permitted. A written restriction on the transfer or registration of
 transfer of membership interests of a cooperative that is not manifestly unreasonable under
 the circumstances may be enforced against the holder of the restricted membership interests
 or a successor or transferee of the holder, including a pledgee or a legal representative, if
 the restriction is either:
     (1) noted conspicuously on the face or back of the certificate;
     (2) included in this chapter or the articles or bylaws; or
     (3) included in information sent to the holders of uncertificated membership interests.
     Unless a restriction is in this chapter, the articles, bylaws, noted conspicuously on the
 face or back of the certificate, or included in information sent to the holders of uncertificated
 membership interests, a restriction, even though permitted by this section, is ineffective
 against a person without knowledge of the restriction. A restriction under this section is
 deemed to be noted conspicuously and is effective if the existence of the restriction is stated
 on the certificate and reference is made to a separate document creating or describing the
 restriction.
   Sec. 104. [308C.630] EXPRESS WARRANTIES.
     (a) Express warranties made by a developer to the purchaser of a membership, if
 reasonably relied upon by the purchaser, are created under this section.
     (b) An affirmation of fact or promise that relates to the unit to which the purchased
 membership is appurtenant, use of the unit, rights appurtenant to the unit, improvements to
 the project that would directly benefit the purchaser or the unit, or the right to use or have
 the benefit of facilities that are not a part of the project creates an express warranty that the
 unit and related rights and uses will conform to the affirmation or promise.
 Sec. 104.  61
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (c) A model or description of the physical characteristics of a unit or the project, including
  plans and specifications of or for a unit or other improvements located in the project, creates
  an express warranty that the unit and the project will conform to the model or description.
  A notice prominently displayed on a model or included in a description shall prevent a
  purchaser from reasonably relying upon the model or description to the extent of the
  disclaimer set forth in the notice.
      (d) A description of the quantity or extent of the real estate comprising the project,
  including plats or surveys, creates an express warranty that the project will conform to the
  description, subject to customary tolerances.
     (e) The form of the word "warranty" or "guaranty," or a specific intention to make a
 warranty, is not necessary to create an express warranty of quality, but a statement purporting
 to be merely an opinion or commendation of the real estate or the value of the real estate
 does not create a warranty.
     (f) A conveyance of a membership to which a unit is appurtenant transfers all express
 warranties to the purchaser.
   Sec. 105. [308C.631] IMPLIED WARRANTIES.
     (a) A developer warrants to a purchaser that a unit will be in at least as good condition
 at the earlier of the time of the conveyance or delivery of possession as the unit was at the
 time of contracting with reasonable wear and tear excepted.
     (b) A developer warrants to a purchaser that:
     (1) a unit and the common elements in the project are suitable for the ordinary uses of
 real estate of the unit's type; and
     (2) any improvements subject to use rights by the purchaser or made or contracted for
 by the developer or made by a person in contemplation of the creation of the cooperative's
 building or project are:
     (i) free from defective materials; and
     (ii) constructed in accordance with applicable law, according to sound engineering and
 construction standards, and in a workmanlike manner.
     (c) A developer warrants to a purchaser of a membership to which a unit is appurtenant
 and available for residential use that the residential use will not violate applicable law at
 the earlier of the time of conveyance or delivery of possession.
 Sec. 105.  62
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (d) Warranties imposed by this section may be excluded or modified only as specified
  in section 308C.632.
      (e) For purposes of this section, improvements made or contracted for by an affiliate of
  a developer are made or contracted for by the developer.
      (f) A conveyance of a membership to which a unit is appurtenant transfers all implied
  warranties to the purchaser.
      (g) This section does not in any manner abrogate the provisions of chapter 327A relating
  to statutory warranties for housing or affect any other cause of action under a statute or
  common law.
   Sec. 106. [308C.632] EXCLUSION OR CHANGE OF IMPLIED WARRANTIES.
     (a) When a unit is available for residential use, no general disclaimer of implied warranties
 is effective, but a developer may disclaim liability in an instrument separate from the purchase
 agreement signed by the purchaser for a specified defect or specified failure to comply with
 applicable law if the defect or failure entered into and became a part of the basis of the
 bargain.
     (b) With respect to a unit restricted to nonresidential use, implied warranties:
     (1) may be excluded or modified by agreement of the parties; and
     (2) are excluded by expression of disclaimer, including "as is," "with all faults," or other
 language that in common understanding calls the purchaser's attention to the exclusion of
 warranties.
   Sec. 107. [308C.633] STATUTE OF LIMITATIONS; BREACH; WARRANTIES.
     (a) A judicial proceeding for breach of an obligation arising under section 308C.612
 shall be commenced within 12 months after execution of a proprietary lease that conveys
 the right of occupancy in the unit.
     (b) A judicial proceeding for breach of an obligation arising under section 308C.630 or
 308C.631 must be commenced within six years after the cause of action accrues, but the
 parties may agree to reduce the period of limitation to no less than two years. An agreement
 reducing the period of limitation signed by one purchaser of a membership to which a unit
 is appurtenant is binding on any copurchasers of the membership. If an agreement reducing
 the period of limitations is recorded in compliance with applicable law, the agreement is
 binding on the purchaser's and copurchaser's successors in title to the membership interest.
 Sec. 107.  63
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  With respect to a unit that may be occupied for residential use, an agreement to reduce the
  period of limitation must be evidenced by an instrument separate from the purchase
  agreement signed by the purchaser of the membership to which the unit is appurtenant.
      (c) A cause of action under section 308C.630 or 308C.631, regardless of the purchaser's
  lack of knowledge of the breach, accrues:
      (1) as to the unit, at the earlier of:
      (i) the time of execution of a proprietary lease which conveys the right of occupancy in
  the unit by the developer or cooperative to a bona fide purchaser; or
      (ii) the time a purchaser enters into possession of the unit; and
     (2) as to each common element, the latest of:
     (i) the time the common element is completed; or
     (ii) the time the first membership interest appurtenant to a unit in the cooperative's project
 is conveyed to a member with the unit's appurtenant right of occupancy.
   Sec. 108. Minnesota Statutes 2024, section 308C.801, as amended by Laws 2025, chapter
 20, section 245, is amended to read:
     308C.801 MERGER AND CONSOLIDATION.
     Subdivision 1. Authorization. Unless otherwise prohibited, cooperatives organized
 under the laws of this state, including cooperatives organized under this chapter or chapter
 308A or 308B, may merge or consolidate with each other, a Minnesota limited liability
 company under the provisions of sections 322C.1001 to 322C.1015, or other business entities
 organized under the laws of another state by complying with the provisions of this section
 and the law of the state where the surviving or new business entity will exist. A cooperative
 may not merge or consolidate with a business entity organized under the laws of this state,
 other than a cooperative organized under chapter 308A or 308B, unless the law governing
 the business entity expressly authorizes merger or consolidation with a cooperative.
     Subd. 2. Plan. To initiate a merger or consolidation of a cooperative, a written plan of
 merger or consolidation shall be prepared by the board or by a committee selected by the
 board to prepare a plan. The plan shall state:
     (1) the names of the constituent domestic cooperatives, the name of any Minnesota
 limited liability company that is are a party to the merger, to the extent authorized under
 sections 322C.1001 to 322C.1005 and 322C.1015, and any foreign business entities;
 Sec. 108.  64
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (2) the name of the surviving or new domestic cooperative, Minnesota limited liability
  company as required by section 322C.1002, or other foreign business entity;
      (3) the manner and basis of converting membership or ownership interests of the
  constituent domestic cooperatives, the surviving Minnesota limited liability company as
  provided in section 322C.1002, or foreign business entities into membership or ownership
  interests in the surviving or new domestic cooperative, the surviving Minnesota limited
  liability company as authorized in section 322C.1002, or foreign business entity;
      (4) the terms of the merger or consolidation;
      (5) the proposed effect of the consolidation or merger on the members and occupant
 members of each constituent domestic cooperative; and
     (6) for a consolidation, the plan shall contain the articles of the entity or organizational
 documents to be filed with the state in which the entity is organized or, if the surviving
 organization is a Minnesota limited liability company, the articles of organization entity.
     Subd. 3. Notice. The following shall apply to notice:
     (1) The board shall mail or otherwise transmit or deliver notice of the merger or
 consolidation to each member. The notice shall contain the full text of the plan, and the
 time and place of the meeting at which the plan will be considered; and.
     (2) a cooperative with more than 200 members The board may provide the notice in the
 same manner as a regular members' meeting notice.
     Subd. 4. Adoption of plan. (a) A plan of merger or consolidation shall be adopted by
 a domestic cooperative as provided in this subdivision.
     (b) A plan of merger or consolidation is adopted if:
     (1) a quorum of the members eligible to vote is registered as being present or represented
 by mail vote or alternative ballot at the meeting; and
     (2) the plan is approved by the occupant members, or if otherwise provided in the articles
 or bylaws is approved by a majority of the votes cast in each class of votes cast, two-thirds
 of all outstanding memberships of record, or for a domestic cooperative with articles or
 bylaws requiring more than a majority a greater proportion of the votes cast or other
 conditions for approval, the plan is approved by a proportion of the votes cast or a number
 of total members as required by the articles or bylaws and the conditions for approval in
 the articles or bylaws have been satisfied.
 Sec. 108.  65
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (c) After the plan has been adopted, articles of merger or consolidation stating the plan
  and that the plan was adopted according to this subdivision shall be signed by the chair,
  vice chair, records officer, or documents officer president and secretary of each cooperative
  merging or consolidating.
      (d) The articles of merger or consolidation shall be filed in the Office of the Secretary
  of State.
      (e) For a merger, the articles of the surviving domestic cooperative subject to this chapter
  are deemed amended to the extent provided in the articles of merger.
      (f) Unless a later date is provided in the plan, the merger or consolidation is effective
 when the articles of merger or consolidation are filed in the Office of the Secretary of State
 or the appropriate office of another jurisdiction.
     (g) The secretary of state shall issue a certificate of organization of the merged or
 consolidated cooperative.
     Subd. 5. Effect of merger. For a merger that does not involve a Minnesota limited
 liability company, the following shall apply to the effect of a merger:
     (a) After the effective date, the domestic cooperative, Minnesota limited liability
 company, if party to the plan, and any foreign business entity that is a party to the plan
 become a single entity. For a merger, the surviving business entity is the business entity
 designated in the plan. For a consolidation, the new domestic cooperative, the Minnesota
 limited liability company, if any, and any foreign business entity is the business entity
 provided for in the plan. Except for the surviving or new domestic cooperative, Minnesota
 limited liability company, or foreign business entity, the separate existence of each merged
 or consolidated domestic or foreign business entity that is a party to the plan ceases on the
 effective date of the merger or consolidation.
     (b) The surviving or new domestic cooperative, Minnesota limited liability company,
 or foreign business entity possesses all of the rights and property of each of the merged or
 consolidated business entities and is responsible for all their obligations. The title to property
 of the merged or consolidated domestic cooperative or foreign business entity is vested in
 the surviving or new domestic cooperative, Minnesota limited liability company, or foreign
 business entity without reversion or impairment of the title caused by the merger or
 consolidation.
     (c) If a merger involves a Minnesota limited liability company, this subdivision is subject
 to the provisions of section 322C.1002.
 Sec. 108.  66
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
    Sec. 109. Minnesota Statutes 2024, section 308C.835, is amended to read:
      308C.835 ABANDONMENT.
      Subdivision 1. Abandonment by members before plan effective date. After a plan of
  merger has been approved by the members entitled to vote on the approval of the plan and
  before the effective date of the plan, the plan may be abandoned by the same vote that
  approved the plan.
      Subd. 2. Generally Abandonment after plan of merger filed but before plan of
  merger effective date. (a) A merger may be abandoned:
      (1) if the members of each of the constituent domestic cooperatives entitled to vote on
 the approval of the plan have approved the abandonment at a meeting by the affirmative
 vote of the holders of a majority of the voting power of the membership interests entitled
 to vote; if the merger is with a domestic cooperative and a Minnesota limited liability
 company or foreign business entity, if abandonment is approved in such manner as may be
 required by section 322C.1003 for the involvement of a Minnesota limited liability company,
 or for a foreign business entity by the laws of the state under which the foreign business
 entity is organized; and the members of a constituent domestic cooperative are not entitled
 to vote on the approval of the plan, the board of the constituent domestic cooperative has
 approved the abandonment by the affirmative vote of a majority of the directors present;
     (2) if the plan itself provides for abandonment and all conditions for abandonment set
 forth in the plan are met; or
     (3) under paragraph (b).
     (b) A plan of merger may be abandoned before the effective date of the plan by a
 resolution of the board of any constituent domestic cooperative abandoning the plan of
 merger approved by the affirmative vote of a majority of the directors present, subject to
 the contract rights of any other person under the plan. If a plan of merger is with a domestic
 or foreign business entity, the plan of merger may be abandoned before the effective date
 of the plan by a resolution of the foreign business entity adopted according to the laws of
 the state under which the foreign business entity is organized, subject to the contract rights
 of any other person under the plan. If the plan of merger is with a Minnesota limited liability
 company, the plan of merger may be abandoned by the Minnesota limited liability company
 as provided in section 322C.1003, subject to the contractual rights of any other person under
 the plan.
 Sec. 109.  67
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
      (c) If articles of merger have been filed with the secretary of state, but have not yet
  become effective, the constituent organizations, in the case of abandonment under paragraph
  (a), clause (1), the constituent organizations or any one of them, in the case of abandonment
  under paragraph (a), clause (2), or the abandoning organization in the case of abandonment
  under paragraph (b), cooperatives shall file with the secretary of state articles of abandonment
  that contain:
      (1) the names of the constituent organizations cooperatives; and
      (2) the provisions of this section under which the plan is abandoned; and
      (3) if the plan is abandoned under paragraph (b), (2) the text of the resolution abandoning
 the plan.
   Sec. 110. Minnesota Statutes 2024, section 308C.902, subdivision 2, is amended to read:
     Subd. 2. Approval. The proposed dissolution must be submitted for approval at the a
 member meeting. The dissolution must be started if a quorum is present and the proposed
 dissolution is approved at a meeting by the affirmative vote of two-thirds of the entire
 membership of record, or for a cooperative with articles or bylaws requiring a greater
 proportion of the votes cast or other conditions for approval, the dissolution is approved by
 the proportion of votes cast or the number of total members required by the articles or
 bylaws, and if the conditions for approval in the articles or bylaws are satisfied.
   Sec. 111. [308C.9031] BUSINESS AFTER DISSOLUTION BEGINS.
     After the notice of intent to dissolve has been filed with the Office of the Secretary of
 State, the cooperative may carry on the business only to the extent necessary for winding
 up the cooperative unless the members revoke the dissolution proceedings. The existence
 of the cooperative continues to the extent necessary to wind up the affairs of the cooperative
 until the dissolution proceedings are revoked or articles of dissolution are filed with the
 Office of the Secretary of State.
   Sec. 112. [308C.9032] REMEDIES CONTINUED.
     The filing with the Office of the Secretary of State of notice of intent to dissolve does
 not affect a remedy in favor of the cooperative or a remedy against the cooperative or the
 cooperative's directors, officers, or members in their capacities, except as provided in section
 308C.975.
 Sec. 112.  68
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    Sec. 113. Minnesota Statutes 2024, section 308C.905, subdivision 1, is amended to read:
      Subdivision 1. Collection and payment of debts. After the notice of intent to dissolve
  has been filed with the secretary of state, the board, or the officers acting under the direction
  of the board, shall proceed as soon as possible:
      (1) to collect or make provision for the collection of all debts due or owing to the
  cooperative, including unpaid subscriptions for shares assessments or unpaid downpayments
  for the purchase of a membership interest; and
      (2) to pay or make provision for the payment of all debts, obligations, and liabilities of
  the cooperative according to their priorities.
   Sec. 114. Minnesota Statutes 2024, section 308C.925, is amended to read:
     308C.925 APPLICATION FOR COURT-SUPERVISED VOLUNTARY
 DISSOLUTION.
     After a notice of intent to dissolve has been filed with the secretary of state and before
 a certificate of dissolution has been issued, the cooperative or, for good cause shown, a
 member or creditor may apply to a court within the county where the registered office is
 located to have the dissolution conducted or continued under the supervision of the courts
 as provided in section 308C.935.
   Sec. 115. Minnesota Statutes 2024, section 308C.935, subdivision 2, is amended to read:
     Subd. 2. Action after hearing. After a hearing is completed, upon notice to parties to
 the proceedings and to other parties in interest designated by the court, the court may appoint
 a receiver to collect the cooperative's assets, including amounts owing to the cooperative
 by subscribers on account of an unpaid portion of the consideration for the issuance of
 shares.:
     (1) third parties;
     (2) members, including but not limited to unpaid assessments; and
     (3) subscribers or purchasers on account of unpaid portions of the consideration for the
 issuance of a membership interest.
 In addition to the powers set forth in chapter 576, a receiver has authority, subject to the
 order of the court, to continue the business of the cooperative and to sell, lease, transfer, or
 otherwise dispose of the property and assets of the cooperative either at public or private
 sale.
 Sec. 115.  69
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    Sec. 116. Minnesota Statutes 2024, section 308C.941, subdivision 2, is amended to read:
      Subd. 2. Powers. A receiver may sue and defend all actions as receiver of the cooperative.
  The court appointing the receiver has exclusive jurisdiction over the cooperative, the receiver,
  and all receivership property under section 576.23.
    Sec. 117. Minnesota Statutes 2024, section 515B.1-102, is amended to read:
      515B.1-102 APPLICABILITY.
      (a) Except as provided in this section, this chapter, and not chapters 515 and 515A,
  applies to all common interest communities created within this state on and after June 1,
  1994.
     (b) The applicability of this chapter to common interest communities created prior to
 June 1, 1994, shall be as follows:
     (1) This chapter shall apply to condominiums created under chapter 515A with respect
 to events and circumstances occurring on and after June 1, 1994; provided (i) that this
 chapter shall not invalidate the declarations, bylaws or condominium plats of those
 condominiums, and (ii) that chapter 515A, and not this chapter, shall govern all rights and
 obligations of a declarant of a condominium created under chapter 515A, and the rights and
 claims of unit owners against that declarant.
     (2) The following sections in this chapter apply to condominiums created under chapter
 515: 515B.1-104 (Variation by Agreement); 515B.1-105 (Separate Titles and Taxation);
 515B.1-106 (Applicability of Local Requirements); 515B.1-107 (Eminent Domain);
 515B.1-108 (This Chapter Prevails; Supplemental Law); 515B.1-109 (Construction Against
 Implicit Repeal); 515B.1-112 (Unconscionable Agreement or Term of Contract); 515B.1-113
 (Obligation of Good Faith); 515B.1-114 (Remedies to be Liberally Administered);
 515B.1-115 (Notice); 515B.1-116 (Recording); 515B.2-103 (Construction and Validity of
 Declaration and Bylaws); 515B.2-104 (Description of Units); 515B.2-108 (d) (Allocation
 of Interests); 515B.2-109 (f) (Common Elements and Limited Common Elements);
 515B.2-112 (Subdivision, Combination, or Conversion of Units); 515B.2-113 (Alteration
 of Units); 515B.2-114 (Relocation of Boundaries Between Adjoining Units); 515B.2-115
 (Minor Variations in Boundaries); 515B.2-118 (Amendment of Declaration); 515B.2-119
 (Termination of Common Interest Community); 515B.3-102 (Powers of Unit Owners'
 Association); 515B.3-103 (a), (b), and (g) (Board of Directors, Officers, and Declarant
 Control); 515B.3-107 (Upkeep of Common Interest Community); 515B.3-108 (Meetings);
 515B.3-109 (Quorums); 515B.3-110 (Voting; Proxies); 515B.3-111 (Tort and Contract
 Sec. 117.  70
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  Liability); 515B.3-112 (Conveyance of, or Creation of Security Interests in, Common
  Elements); 515B.3-113 (Insurance); 515B.3-114 (Replacement Reserves); 515B.3-115 (c),
  (e), (f), (g), (h), and (i) (Assessments for Common Expenses); 515B.3-116 (Lien for
  Assessments); 515B.3-117 (Other Liens); 515B.3-118 (Association Records); 515B.3-119
  (Association as Trustee); 515B.3-121 (Accounting Controls); 515B.4-107 (Resale of Units);
  515B.4-108 (Purchaser's Right to Cancel Resale); and 515B.4-116 (Rights of Action;
  Attorney's Fees). Section 515B.1-103 (Definitions) shall apply to the extent necessary in
  construing any of the sections referenced in this section. Sections 515B.1-105, 515B.1-106,
  515B.1-107, 515B.1-116, 515B.2-103, 515B.2-104, 515B.2-118, 515B.3-102, 515B.3-110,
 515B.3-111, 515B.3-113, 515B.3-116, 515B.3-117, 515B.3-118, 515B.3-121, 515B.4-107,
 515B.4-108, and 515B.4-116 apply only with respect to events and circumstances occurring
 on and after June 1, 1994. All other sections referenced in this section apply only with
 respect to events and circumstances occurring after July 31, 1999. A section referenced in
 this section does not invalidate the declarations, bylaws or condominium plats of
 condominiums created before August 1, 1999. But all sections referenced in this section
 prevail over the declarations, bylaws, CIC plats, rules and regulations under them, of
 condominiums created before August 1, 1999, except to the extent that this chapter defers
 to the declarations, bylaws, CIC plats, or rules and regulations issued under them.
(3) This chapter shall not apply to cooperatives and planned communities created prior
 to June 1, 1994, or to planned communities that were created on or after June 1, 1994, and
 before August 1, 2006, and that consist of more than two but fewer than 13 units; except
 by election pursuant to subsection (d), and except that sections 515B.1-116, subsections
 (a), (c), (d), and (e), 515B.4-107, and 515B.4-108, apply to all planned communities and
 cooperatives regardless of when they are created, unless they are exempt under subsection
 (e).
(c) This chapter shall not invalidate any amendment to the declaration, bylaws or
 condominium plat of any condominium created under chapter 515 or 515A if the amendment
 was recorded before June 1, 1994. Any amendment recorded on or after June 1, 1994, shall
 be adopted in conformity with the procedures and requirements specified by those instruments
 and by this chapter. If the amendment grants to any person any rights, powers or privileges
 permitted by this chapter, all correlative obligations, liabilities and restrictions contained
 in this chapter shall also apply to that person.
(d) Any condominium created under chapter 515, any planned community or cooperative
 which would be exempt from this chapter under subsection (e), or any planned community
 or cooperative created prior to June 1, 1994, or any planned community that was created
 Sec. 117.  71
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  on or after June 1, 1994, and prior to August 1, 2006, and that consists of more than two
  but fewer than 13 units, may elect to be subject to this chapter, as follows:
      (1) The election shall be accomplished by recording a declaration or amended declaration,
  and a new or amended CIC plat where required, and by approving bylaws or amended
  bylaws, which conform to the requirements of this chapter, and which, in the case of
  amendments, are adopted in conformity with the procedures and requirements specified by
  the existing declaration and bylaws of the common interest community, and by any applicable
  statutes.
      (2) In a condominium, the preexisting condominium plat shall be the CIC plat and an
 amended CIC plat shall be required only if the amended declaration or bylaws contain
 provisions inconsistent with the preexisting condominium plat. The condominium's CIC
 number shall be the apartment ownership number or condominium number originally
 assigned to it by the recording officer. In a cooperative in which the unit owners' interests
 are characterized as real estate, a CIC plat shall be required. In a planned community, the
 preexisting plat or registered land survey recorded pursuant to chapter 505, 508, or 508A,
 or the part of the plat or registered land survey upon which the common interest community
 is located, shall be the CIC plat.
     (3) The amendment shall comply with section 515B.2-118(a)(3) and (c); except that the
 unanimous consent of the unit owners shall not be required for (i) a clarification of the unit
 boundary description if the clarified boundary description is substantially consistent with
 the preexisting CIC plat, or (ii) changes from common elements to limited common elements
 that occur by operation of section 515B.2-109(c) and (d).
     (4) Except as permitted by paragraph (3), no declarant, affiliate of declarant, association,
 master association nor unit owner may acquire, increase, waive, reduce or revoke any
 previously existing warranty rights or causes of action that one of said persons has against
 any other of said persons by reason of exercising the right of election under this subsection.
     (5) A common interest community which elects to be subject to this chapter may, as a
 part of the election process, change its form of ownership by complying with section
 515B.2-123.
     (e) Except as otherwise provided in this subsection, this chapter shall not apply, except
 by election pursuant to subsection (d), to the following:
     (1) a planned community which consists of two units, which utilizes a CIC plat complying
 with section 515B.2-110(d)(1) and (2), or section 515B.2-1101(d)(1) and (2), which is not
 Sec. 117.  72
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  subject to any rights to subdivide or convert units or to add additional real estate, and which
  is not subject to a master association;
      (2) a common interest community that consists solely of platted lots or other separate
  parcels of real estate designed or utilized for detached single family dwellings or agricultural
  purposes, with or without common property, where no association or master association
  has an obligation to maintain any building containing a dwelling or any agricultural building
  located or to be located on such platted lots or parcels; except that section 515B.4-101(e)
  shall apply to the sale of such platted lots or parcels of real estate if the common interest
  community is or will be subject to a master declaration;
     (3) a cooperative where, at the time of creation of the cooperative, the unit owners'
 interests in the dwellings as described in the declaration consist solely of proprietary leases
 having an unexpired term of fewer than 20 years, including renewal options;
     (4) planned communities utilizing a CIC plat complying with section 515B.2-110(d)(1)
 and (2), or section 515B.2-1101(d)(1) and (2), and cooperatives, which are limited by the
 declaration to nonresidential uses; or
     (5) real estate subject only to an instrument or instruments filed primarily for the purpose
 of creating or modifying rights with respect to access, utilities, parking, ditches, drainage,
 or irrigation.
     (f) Section 515B.4-101(e) applies to any platted lot or other parcel of real estate that is
 subject to a master declaration and is not subject to or is exempt from this chapter.
     (g) Section 515B.1-106and section 515B.2-118, subsections (a)(5), (a)(7), and (d), shall
 apply to all common interest communities.
     (h) Sections 515B.1-103(33a), 515B.2-110, 515B.3-105, 515B.3-115, 515B.4-102, and
 515B.4-115 apply only to common interest communities created before August 1, 2010.
 Sections 515B.1-103 (33b), 515B.2-1101, 515B.3-1051, 515B.3-1151, 515B.4-1021, and
 515B.4-1151 apply only to common interest communities created on or after August 1,
 2010.
     (i) Section 515B.3-114 applies to common interest communities only for the association's
 fiscal years commencing before January 1, 2012. Section 515B.3-1141 applies to common
 interest communities only for the association's fiscal years commencing on or after January
 1, 2012.
     (j) Section 515B.3-104 applies only to transfers of special declarant rights that are
 effective before August 1, 2010. Section 515B.3-1041, subsections (a) through (i), apply
 Sec. 117.  73
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  only to transfers of special declarant rights that are effective on or after August 1, 2010.
  Section 515B.3-1041, subsections (j) and (k), apply only to special declarant rights reserved
  in a declaration that is first recorded on or after August 1, 2010.
      (k) This chapter does not apply to cooperatives organized under chapter 308C.
    Sec. 118. Minnesota Statutes 2025 Supplement, section 515B.3-101, is amended to read:
      515B.3-101 ORGANIZATION OF UNIT OWNERS' ASSOCIATION.
      A common interest community shall be administered by an association. The association
  shall be incorporated no later than the date the common interest community is created. The
  membership of the association at all times consists exclusively of all unit owners or, following
 termination of the common interest community, of all former unit owners entitled to
 distributions of proceeds under section 515B.2-119 or their heirs, successors, or assigns.
 The association shall be organized as a Minnesota profit or nonprofit corporation, or may,
 in the case of a cooperative, be organized under chapter 308A, 308B, or 308C. In the event
 of a conflict between this chapter and any other chapter under which the association is
 incorporated, this chapter shall control.
   Sec. 119. Minnesota Statutes 2025 Supplement, section 515B.3-103, is amended to read:
     515B.3-103 BOARD OF DIRECTORS, OFFICERS AND DECLARANT
 CONTROL.
     (a) An association shall be governed by a board of directors whose appointment or
 election shall occur no later than the date of creation of the common interest community
 and shall be reflected in the association's records. Except as expressly prohibited by the
 declaration, the articles of incorporation, bylaws, subsection (b), or other provisions of this
 chapter, the board may act in all instances on behalf of the association. In the performance
 of their duties, the officers and directors are required to exercise (i) if appointed by the
 declarant, the care required of fiduciaries of the unit owners and (ii) if elected by the unit
 owners, the care required of a director by section 302A.251, 308B.455, 308C.455, or
 317A.251, as applicable. The officers and directors appointed by the declarant shall have
 a duty to fulfill, and to cause the association to fulfill, their respective obligations under the
 declaration, bylaws, articles of incorporation, and this chapter and to enforce the provisions
 of the declaration, bylaws, articles of incorporation, and this chapter against all unit owners,
 including the declarant and its affiliates, in a uniform and fair manner. The standards of
 conduct for officers and directors set forth in this subsection shall also apply to the officers
 Sec. 119.  74
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  and directors of master associations in the exercise of their duties on behalf of the master
  association.
      (b) The board may not act unilaterally to amend the declaration, to terminate the common
  interest community, to elect directors to the board, or to determine the qualifications, powers
  and duties, or terms of office of directors, but the board may fill vacancies in its membership
  created other than by removal by the vote of the association members for the unexpired
  portion of any term.
      (c) The declaration may provide for a period of declarant control of the association,
  during which a declarant, or persons designated by the declarant, may appoint and remove
 the officers and directors of the association. The period of declarant control begins on the
 date of creation of the common interest community and terminates upon the earliest of the
 following events: (i) five years after the date of the first conveyance of a unit to a unit owner
 other than a declarant in the case of a flexible common interest community or three years
 in the case of any other common interest community, (ii) the declarant's voluntary surrender
 of control by giving written notice to the unit owners pursuant to section 515B.1-115, or
 (iii) the conveyance of 75 percent of the units to unit owners other than a declarant.
     (d) The board shall cause a meeting of the unit owners to be called, as follows:
     (1) If the period of declarant control has terminated pursuant to subsection (c), a meeting
 of the unit owners shall be called and held within 60 days after said termination, at which
 the board shall be appointed or elected by all unit owners, including declarant, subject to
 the requirements of subsection (e).
     (2) If 50 percent of the units that a declarant is authorized by the declaration to create
 have been conveyed prior to the termination of the declarant control period, a meeting of
 the unit owners shall be called and held within 60 days thereafter, at which not less than
 33-1/3 percent of the members of the board shall be elected by unit owners other than a
 declarant or an affiliate of a declarant.
     (3) If the board fails or refuses to cause a meeting of the unit owners required to be called
 pursuant to subsection (d), then the unit owners other than a declarant and its affiliates may
 cause the meeting to be called pursuant to the applicable provisions of the law under which
 the association was created. The declarant and its affiliates shall be deemed to be present
 at the meeting for purposes of establishing a quorum regardless of their failure to attend the
 meeting.
     (e) Following the termination of any period of declarant control, the unit owners shall
 appoint or elect the board. All unit owners, including the declarant and its affiliates, may
 Sec. 119.  75
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  cast the votes allocated to any units owned by them. The board shall thereafter be subject
  to the following:
      (1) Unless otherwise approved by a vote of unit owners other than the declarant or an
  affiliate of the declarant, a majority of the directors shall be unit owners or a natural person
  designated by a unit owner that is not a natural person, other than a declarant or an affiliate
  of a declarant. The remaining directors need not be unit owners unless required by the
  articles of incorporation or bylaws.
      (2) Subject to the requirements of subsection (e)(1), the articles of incorporation or
  bylaws may authorize the declarant or a person designated by the declarant to appoint one
 director, who need not be a member. The articles of incorporation or bylaws shall not be
 amended to change or terminate the authorization to appoint one director without the written
 consent of the declarant or other person possessing the power to appoint.
     (3) Subject to the requirements of subsection (e)(1), the articles of incorporation or
 bylaws may authorize special classes of directors and director voting rights, as follows: (i)
 classes of directors, (ii) the appointment or election of directors in certain classes by certain
 classes of members, or (iii) class voting by classes of directors on issues affecting only a
 certain class or classes of members, units, or other parcels of real estate, or to otherwise
 protect the legitimate interest of such class or classes. No person may utilize such special
 classes or class voting for the purpose of evading any limitation imposed on declarants by
 this chapter.
     (4) The board shall elect the officers. The directors and officers shall take office upon
 election.
     (f) In determining whether the period of declarant control has terminated under subsection
 (c), or whether unit owners other than a declarant are entitled to elect members of the board
 of directors under subsection (d), the percentage of the units conveyed shall be calculated
 using as a numerator the number of units conveyed and as a denominator the number of
 units subject to the declaration plus the number of units which the declarant is authorized
 by the declaration to create on any additional real estate. The percentages referred to in
 subsections (c) and (d) shall be calculated without reference to units that are auxiliary to
 other units, such as garage units or storage units. A person shall not use a master association
 or other device to evade the requirements of this section.
     (g) Except as otherwise provided in this subsection, meetings of the board of directors
 must be open to the unit owners. To the extent practicable, the board shall give reasonable
 notice to the unit owners of the date, time, and place of a board meeting. If the date, time,
 Sec. 119.  76
 03/25/26  REVISOR  MS/LN  26-07582  as introduced
  and place of meetings are provided for in the declaration, articles, or bylaws, announced at
  a previous meeting of the board, posted in a location accessible to the unit owners and
  designated by the board from time to time, or if an emergency requires immediate
  consideration of a matter by the board, notice is not required. "Notice" has the meaning
  given in section 317A.011, subdivision 14. Meetings may be closed to discuss the following:
      (1) personnel matters;
      (2) pending or potential litigation, arbitration or other potentially adversarial proceedings,
  between unit owners, between the board or association and unit owners, or other matters in
  which any unit owner may have an adversarial interest, if the board determines that closing
 the meeting is necessary to discuss strategy or to otherwise protect the position of the board
 or association or the privacy of a unit owner or occupant of a unit; or
     (3) criminal activity arising within the common interest community if the board
 determines that closing the meeting is necessary to protect the privacy of the victim or that
 opening the meeting would jeopardize investigation of the activity.
     Nothing in this subsection imposes a duty on the board to provide special facilities for
 meetings. The failure to give notice as required by this subsection shall not invalidate the
 board meeting or any action taken at the meeting. The minutes of any part of a meeting that
 is closed under this subsection may be kept confidential at the discretion of the board.
   Sec. 120. REPEALER.
     (a) Minnesota Statutes 2024, sections 308C.003, subdivision 3; 308C.005, subdivisions
 8, 20, 32, 34, 36, 37, 38, 42, and 44; 308C.241, subdivisions 3, 4, 5, and 6; 308C.301,
 subdivisions 3, 4, 5, 6, 7, 10, 11, and 12; 308C.411, subdivisions 5 and 6; 308C.415,
 subdivision 2; 308C.501, subdivisions 3 and 4; 308C.502; 308C.601, subdivisions 1, 3, 5,
 and 7; 308C.605; 308C.611; 308C.612, subdivisions 4, 5, and 6; 308C.616; 308C.627;
 308C.701; 308C.705; 308C.711; 308C.715; 308C.721, subdivision 1; 308C.725; and
 308C.805, are repealed.
     (b) Minnesota Statutes 2025 Supplement, sections 308C.301, subdivisions 8, 9, and 13;
 and 308C.721, subdivision 2, are repealed.
 Sec. 120.  77
  APPENDIX
  Repealed Minnesota Statutes: 26-07582
   308C.003 APPLICATION OF OTHER STATUTES.
   Subd. 3. Chapter 515B prevails. In the event of a conflict between this chapter and chapter
515B, chapter 515B shall control.
   308C.005 DEFINITIONS.
   Subd. 8. Chapter. "Chapter" means sections 308C.001 to 308C.975.
    Subd. 20. Housing cooperative. "Housing cooperative" means a housing cooperative governed
by this chapter to provide housing on a not-for-profit and cooperative basis in accordance with the
organizational purposes contemplated in this chapter.
    Subd. 32. Minnesota limited liability company. "Minnesota limited liability company" means
a limited liability company governed by chapter 322C.
  Subd. 34. Nonoccupant membership interest. "Nonoccupant membership interest" means a
membership interest that does not require the holder to be an occupant or resident of the cooperative.
    Subd. 36. Occupant membership interest. "Occupant membership interest" means the composite
ownership of both a membership certificate issued by the cooperative and a possessory right of
occupancy of a dwelling unit or lot pursuant to an occupancy agreement or proprietary lease,
including a member's financial rights and a member's governance rights.
   Subd. 37. Occupancy agreement. "Occupancy agreement" means the agreement between the
member and the cooperative describing the terms and conditions under which the member will
occupy the dwelling unit or lot appurtenant to the member's membership interest.
    Subd. 38. Older persons. "Older persons" means natural persons who are age 55 and older in
accordance with the applicable provisions of the Fair Housing Act, Title VIII of the Civil Rights
Act of 1968, as amended; United States Code, title 42, chapter 3607, section 807(a)(b)(1)(2), and
the rules and regulations of the United States Department of Housing and Urban Development
applicable with respect to housing for older persons contained in Code of Federal Regulations, title
24, subtitle B, chapter I, subpart E, section 100.300-308.
   Subd. 42. Resident. "Resident" means any occupant of space owned by the cooperative or an
owner of a manufactured home who rents a lot in a manufactured home park and includes the
members of the resident's household.
    Subd. 44. Senior housing cooperative. "Senior housing cooperative" means a housing
cooperative governed by this chapter to provide housing on a not-for-profit and cooperative basis
to older persons in accordance with the applicable provisions of the Fair Housing Act, Title VIII
of the Civil Rights Act of 1968, as amended; United States Code, title 42, chapter 3607, section
807(a)(b)(1)(2), and the rules and regulations of the United States Department of Housing and
Urban Development applicable with respect to housing for older persons contained in Code of
Federal Regulations, title 24, subtitle B, chapter I, subpart E, section 100.300-308.
   308C.241 BYLAWS.
     Subd. 3. Adoption. (a) Bylaws may be adopted by the organizer or a nonoccupant member if,
at the time of adoption, the cooperative does not have any occupant members.
   (b) The bylaws of a cooperative may be adopted or amended by the members at a regular or
special member meeting if:
    (1) the notice of the regular or special meeting contains a statement that the bylaws or restated
bylaws will be voted upon and copies are included with the notice, or copies are available upon
request from the cooperative, and a summary statement of the proposed bylaws or amendment is
included with the notice;
     (2) a quorum is registered as being present or represented by mail or alternative voting method
if the mail or alternative voting method is authorized by the board; and
    (3) the bylaws or amendment is approved by a majority vote cast, or for a cooperative with
articles or bylaws requiring more than majority approval or other conditions for approval, the bylaws
or amendment is approved by a proportion of the vote cast or a number of the total members are
required by the articles or bylaws and the conditions for approval in the articles or bylaws have
been satisfied.
  1R
  APPENDIX
  Repealed Minnesota Statutes: 26-07582
   (c) Until the next annual or special members' meeting, the majority of directors may adopt and
amend bylaws for the cooperative that are consistent with subdivisions 4 to 6, which may be further
amended or repealed by the members at an annual or special members' meeting.
    Subd. 4. Amendment of bylaws by board or members. (a) The board may amend the bylaws
at any time to add, change, or delete a provision, unless:
   (1) this chapter, the articles, or the bylaws reserve the power exclusively to the members in
whole or in part; or
    (2) a particular bylaw expressly prohibits the board from doing so.
    (b) Any amendment of the bylaws by the board must be distributed to the members no later
than ten days after adoption and the notice of the annual meeting of the members must contain a
notice and summary or the actual amendments to the bylaws adopted by the board.
   (c) The members may amend the bylaws even though the bylaws may also be amended by the
board.
    Subd. 5. Bylaw changing quorum or voting requirement for members. (a) The members
may amend the bylaws to fix a greater quorum or voting requirement for members, or voting groups
of members, than is required under this chapter. An amendment to the bylaws to add, change, or
delete a greater quorum or voting requirement for members shall meet the same quorum requirement
and be adopted by the same vote and voting groups required to take action under the quorum and
voting requirements then in effect or proposed to be adopted, whichever is greater.
    (b) A bylaw that fixes a greater quorum or voting requirement for members under paragraph
(a) may not be adopted and shall not be amended by the board.
    Subd. 6. Bylaw changing quorum or voting requirement for directors. (a) A bylaw that
fixes a greater quorum or voting requirement for the board may be amended: (1) if adopted by the
members, only by the members; or (2) if adopted by the board, either by the members or by the
board.
    (b) A bylaw adopted or amended by the members that fixes a greater quorum or voting
requirement for the board may provide that the bylaw may be amended only by a specified vote of
either the members or the board, but if the bylaw is to be amended by a specified vote of the
members, the bylaw must be adopted by the same specified vote of the members.
    (c) Action by the board under paragraph (a), clause (2), to adopt or amend a bylaw that changes
the quorum or voting requirement for the board shall meet the same quorum requirement and be
adopted by the same vote required to take action under the quorum and voting requirement then in
effect or proposed to be adopted, whichever is greater.
    308C.301 POWERS.
    Subd. 3. Contracts with members. A cooperative may enter into or become a party to a contract
or agreement for the cooperative or for the cooperative's members or others or between the
cooperative and its members.
    Subd. 4. Holding and transactions of real and personal property. (a) A cooperative may
purchase and hold, lease, mortgage, encumber, sell, exchange, insure, and convey as a legal entity
real, personal, and intellectual property, including real estate, buildings, personal property, patents,
and copyrights as the business of the cooperative may require, including the sale or other disposition
of assets required by the business of the cooperative as determined by the board.
    (b) A cooperative may take, receive, and hold real and personal property, including the principal
and interest of money or other funds and rights in a contract, in trust for any purpose not inconsistent
with the purposes of the cooperative in its articles or bylaws and may exercise fiduciary powers in
relation to taking, receiving, and holding the real and personal property.
   Subd. 5. Buildings. A cooperative may erect buildings or other structures or facilities on the
cooperative's owned or leased property or on a right-of-way legally acquired by the cooperative.
    Subd. 6. Debt instruments. A cooperative may issue bonds, debentures, or other evidence of
indebtedness and may borrow money, may secure any of its obligations by mortgage of or creation
of a security interest in or other encumbrances or assignment of all or any of its property, franchises,
or income, and may issue guarantees for any legal purpose. The cooperative may form special
purpose business entities to secure assets of the cooperative.
  2R
  APPENDIX
  Repealed Minnesota Statutes: 26-07582
    Subd. 7. Advances to occupants. A cooperative may make advances to its members.
    Subd. 8. Deposits. A cooperative may accept donations or deposits of money or real personal
property from other cooperatives, associations, organizations, agencies, municipalities, and local,
state, and federal governments.
    Subd. 9. Lending, borrowing, investing. A cooperative may loan or borrow money to or from
members, other cooperatives, associations, organizations, agencies, municipalities, and local, state,
and federal governments with security that it considers sufficient. A cooperative may invest and
reinvest its funds.
    Subd. 10. Pensions and benefits. A cooperative may pay pensions, retirement allowances, and
compensation for past services to and for the benefit of; and establish, maintain, continue, and carry
out, wholly or partially at the expense of the cooperative, employee or incentive benefit plans, trust,
and provisions to or for the benefit of any or all of its and its related organizations' officers, managers,
directors, governors, employees, and agents; and in the case of a related organization that is a
cooperative, members who provide services to the cooperative, and any of their families, dependents,
and beneficiaries. It may indemnify and purchase and maintain insurance for and on behalf of a
fiduciary of any of these employee benefit and incentive plans, trusts, and provisions.
    Subd. 11. Insurance. A cooperative may provide for its benefit life insurance and other insurance
with respect to the services of any or all of its members, managers, directors, employees, and agents,
or on the life of a member for the purpose of acquiring at the death of the member any or all
membership interests in the cooperative owned by the member.
    Subd. 12. Ownership interests in other entities. (a) A cooperative may purchase, acquire,
hold, or dispose of the ownership interests of another business entity or organize business entities
whether organized under the laws of this state or another state or the United States and assume all
rights, interests, privileges, responsibilities, and obligations arising out of the ownership interest.
   (b) A cooperative may purchase, own, and hold ownership interests, including stock and other
equity interests, memberships, interests in nonstock capital, and evidences of indebtedness of any
domestic business entity or foreign business entity.
    Subd. 13. Fiduciary powers. A cooperative may exercise any and all fiduciary powers in
relations with members, other cooperatives, associations, organizations, agencies, municipalities,
and local, state, and federal governments.
    308C.411 ELECTION OF DIRECTORS.
   Subd. 5. Business entity members may nominate persons for director. If a member of a
cooperative is not a natural person, and the bylaws do not provide otherwise, the member may
appoint or elect one or more natural persons to be eligible for election as a director.
    Subd. 6. Acts not void or voidable. The expiration of a director's term with or without the
election of a qualified successor does not make prior or subsequent acts of the director void or
voidable.
    308C.415 FILLING VACANCIES.
    Subd. 2. Nonoccupant directors. If the vacating director was not elected by the occupant
members or a new director position is created, unless otherwise provided in the articles or bylaws,
the board shall appoint a director to fill the vacant position by majority vote of the remaining or
then serving directors even though less than a quorum. At the next regular or special members'
meeting, the members shall elect a director to fill the unexpired term of the vacant director's position.
    308C.501 MEMBERS.
    Subd. 3. Member violations. (a) A member who knowingly, intentionally, or repeatedly violates
a provision of the articles, bylaws, occupancy agreement, proprietary lease or rules, policies, and
procedures promulgated by the board may be required by the board to surrender the member's
membership interest and occupancy rights or any other financial rights of membership interests of
any class owned by a member, or both.
    (b) The cooperative shall refund to the member for the surrendered membership interest at the
lesser of the book value or the price paid the member for the membership interest payable in not
more than seven years from the date of surrender.
    (c) Membership interests required to be surrendered may be reissued or be retired and canceled
by the board.
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  Repealed Minnesota Statutes: 26-07582
    (d) The board may establish a procedure for members to dispute the basis for an alleged violation.
    Subd. 4. Inspection of cooperative records by member. (a) A member is entitled to inspect
and copy, at the member's expense, during regular business hours at a reasonable location specified
by the cooperative, any of the records described in section 308C.245 if the member meets the
requirements of paragraph (b) and gives the cooperative written demand at least five business days
before the date on which the member wishes to inspect and copy the records. Notwithstanding the
provisions of this subdivision or any provisions of section 308C.245, a cooperative may limit a
member's right to inspect or copy any records of the cooperative relating to the amount of equity
capital in the cooperative held by any person or any accounts receivable or other amounts due the
cooperative from any person, or any personnel records or employment records of any employee.
   (b) To be entitled to inspect and copy permitted records, the member shall meet the following
requirements:
    (1) the demand is made in good faith and for a proper cooperative business purpose;
    (2) the member describes with reasonable particularity the purpose and the records the member
desires to inspect; and
    (3) the records are directly connected with the described purpose.
    (c) The right of inspection granted by this subdivision shall not be abolished or limited by the
articles, bylaws, or any actions of the board or the members.
    (d) This subdivision does not affect:
     (1) the right of a member to inspect records to the same extent as any other litigant if the member
is in litigation with the cooperative; or
    (2) the power of a court to compel the production of the cooperative's records for examination.
    (e) Notwithstanding any other provision in this subdivision, if the records to be inspected or
copied are in active use or storage and, therefore, not available at the time otherwise provided for
inspection or copying, the cooperative shall notify the member and shall set a date and hour within
three business days of the date otherwise set in this subdivision for the inspection or copying.
    (f) A member's agent or attorney has the same inspection and copying rights as the member.
The right to copy records under this subdivision includes, if reasonable, the right to receive copies
made by photographic copying, xerographic copying, or other means. The cooperative may impose
a reasonable charge, covering the costs of labor and material, for copies of any documents provided
to the member. The charge may not exceed the estimated cost of production and reproduction of
the records.
    (g) If a cooperative refuses to allow a member, or the member's agent or attorney, who complies
with this subdivision to inspect or copy any records that the member is entitled to inspect or copy
within a prescribed time limit or, if none, within a reasonable time, the district court of the county
in this state where the cooperative's principal office is located or, if it has no principal office in this
state, the district court of the county in which its registered office is located may, on application of
the member, summarily order the inspection or copying of the records demanded at the cooperative's
expense.
   (h) If a court orders inspection or copying of the records demanded, unless the cooperative
proves that it refused inspection or copying in good faith because it had a reasonable basis for doubt
about the right of the member or the member's agent or attorney to inspect or copy the records
demanded:
    (1) the court may order the losing party to pay the prevailing party's reasonable costs, including
reasonable attorney fees;
    (2) the court may order the losing party to pay the prevailing party for any damages the prevailing
party shall have incurred by reason of the subject matter of the litigation;
    (3) if inspection or copying is ordered under this paragraph, the court may order the cooperative
to pay the member's inspection and copying expenses;
    (4) the court may grant either party any other remedy provided by law; and
   (5) the court may impose reasonable restrictions on the use or distribution of the records by the
demanding member.
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   308C.502 MEMBER RESTRICTIONS.
    Subdivision 1. Older persons. In accordance with the applicable provisions of the Fair Housing
Act, Title VIII of the Civil Rights Act of 1968, as amended; United States Code, title 42, chapter
3607, section 807(a)(b)(1)(2), and the rules and regulations of the United States Department of
Housing and Urban Development applicable with respect to housing for older persons contained
in Code of Federal Regulations, title 24, subtitle B, chapter I, subpart E, section 100.300-308,
membership and housing in a cooperative governed by this chapter may be age restricted to older
persons. As used in this section, "housing for older persons" means housing:
   (1) intended for, and solely occupied by, persons 62 years of age or older, except that:
   (i) as to joint holders of a membership, only one person need be age 62 or older; and
    (ii) as to a trust that is the holder of a membership pursuant to the requirements of this chapter,
only one beneficiary who intends to occupy the cooperative as a member need be age 62 or older;
or
   (2) intended and operated for occupancy by persons 55 years of age or older, and:
    (i) at least 80 percent of the occupied units are occupied by at least one person who is 55 years
of age or older;
   (ii) the housing facility or community publishes and adheres to policies and procedures that
demonstrate the intent required under this clause; and
   (iii) the housing facility or community complies with rules issued by the secretary of housing
and urban development for verification of occupancy, which shall:
   (A) provide for verification by reliable surveys and affidavits; and
   (B) include examples of the types of policies and procedures relevant to a determination of
compliance with the requirement of item (ii). Such surveys and affidavits shall be admissible in
administrative and judicial proceedings for the purposes of such verification.
     Subd. 2. Persons of low or moderate income. In accordance with the applicable provisions of
the Fair Housing Act, Title VIII of the Civil Rights Act of 1968, as amended; United States Code,
title 42, chapter 3607, section 807(a)(b)(1)(2), membership and housing in a cooperative governed
by this chapter may be restricted to persons of low or moderate income.
    Subd. 3. Persons by activity. Membership and housing in a cooperative governed by this chapter
may be restricted to persons engaged in a specific activity or persons who meet a specified
characteristic based on past activity provided such restriction does not violate any provision of the
Fair Housing Act, Title VIII of the Civil Rights Act of 1968, as amended; United States Code, title
42, chapter 3607, section 807(a)(b)(1)(2).
   Subd. 4. Additional restrictions. Cooperatives governed by this chapter may impose the same
age or income restrictions on any nonmember occupants the board may permit to reside at the
housing cooperative.
   308C.601 MEMBERSHIP INTERESTS.
    Subdivision 1. Amounts and divisions of membership interests. The authorized amount and
divisions of occupant membership interests and, if authorized, nonoccupant membership interests
may be increased, decreased, established, or altered, in accordance with the restrictions in this
chapter by amending the articles or bylaws at a regular members' meeting or at a special members'
meeting called for the purpose of the amendment.
    Subd. 3. Occupant membership interests. The occupant membership interests collectively
shall have not less than 60 percent of the cooperative's financial rights to profit allocations and
distributions. If authorized in the original articles as filed, or articles or bylaws adopted by an
affirmative vote of the occupant members, or the articles or bylaws are amended by the affirmative
vote of occupant members, then the cooperative's financial rights to profit allocations and
distributions to occupant members collectively may be not less than 15 percent.
    Subd. 5. Nonoccupant membership interests. If authorized by the articles, the cooperative
may solicit and issue nonoccupant membership interests on terms and conditions determined by
the board and disclosed in the articles, bylaws, or by separate disclosure to the members. Each
member acquiring nonoccupant membership interests shall sign a member control agreement or
agree to the conditions of the bylaws, either of which shall describe the rights and obligations of
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  Repealed Minnesota Statutes: 26-07582
the member as it relates to the nonoccupant membership interests, the financial and governance
rights, the transferability of the nonoccupant membership interests, the division and allocations of
profits and losses among the membership interests and membership classes, and financial rights
upon liquidation. If the articles or bylaws do not otherwise provide for the allocation of the profits
and losses between occupant membership interests and nonoccupant membership interests, then
the allocation of profits and losses among nonoccupant membership interests individually and
occupant membership interests collectively shall be allocated on the basis of the value of
contributions to capital made according to the occupant membership interests collectively and the
nonoccupant membership interests individually to the extent the contributions have been accepted
by the cooperative. Distributions of cash or other assets of the cooperative shall be allocated among
the membership interests as provided in the articles and bylaws, subject to the provisions of this
chapter. If not otherwise provided in the articles or bylaws, distributions shall be made on the basis
of value of the capital contributions of the occupant membership interests collectively and the
nonoccupant membership interests to the extent the contributions have been accepted by the
cooperative.
    Subd. 7. Payment for nonoccupant membership interests. Subject to the provisions in the
articles and bylaws, a member may dissent from and obtain payment for the fair value of the
member's nonoccupant membership interests in the cooperative if the articles or bylaws are amended
in a manner that materially and adversely affects the rights and preferences of the nonoccupant
membership interests of the dissenting member. The dissenting member shall file a notice of intent
to demand fair value of the membership interest with the records officer of the cooperative within
30 days after the amendment of the bylaws and notice of the amendment to members, otherwise
the right of the dissenting member to demand payment of fair value for the membership interest is
waived. If a proposed amendment of the articles or bylaws must be approved by the members, a
member who is entitled to dissent and who wishes to exercise dissenter's rights shall file a notice
to demand fair value of the membership interest with the records officer of the cooperative before
the vote on the proposed action and shall not vote in favor of the proposed action, otherwise the
right to demand fair value for the membership interest by the dissenting member is waived. After
receipt of the dissenting member's demand notice and approval of the amendment, the cooperative
has 60 days to rescind the amendment or otherwise the cooperative shall remit the fair value for
the member's interest to the dissenting member by 180 days after receipt of the notice. Upon receipt
of the fair value for the membership interest, the member has no further member rights in the
cooperative.
   308C.605 ASSIGNMENT OF FINANCIAL RIGHTS.
    Subdivision 1. Assignment of financial rights permitted. Except as provided in subdivision
3, a member's financial rights are transferable in whole or in part.
    Subd. 2. Effect of assignment of financial rights. An assignment of a member's financial rights
entitles the assignee to receive, to the extent assigned, only the share of profits and losses and the
distributions, if any, to which the assignor would otherwise be entitled. An assignment of a member's
financial rights does not dissolve the cooperative and does not entitle or empower the assignee to
become a member, to exercise any governance rights, to receive any notices from the cooperative,
or to cause dissolution. The assignment shall not allow the assignee to control the member's exercise
of governance or voting rights.
    Subd. 3. Restrictions of assignment of financial rights. (a) A restriction on the assignment
of financial rights may be imposed in the articles, in the bylaws, in an operating agreement, by a
resolution adopted by the members, by an agreement among or other written action by the members,
or by an agreement among or other written action by the members and the cooperative. A restriction
is not binding with respect to financial rights reflected in the required records before the adoption
of the restriction, unless the owners of those financial rights are parties to the agreement or voted
in favor of the restriction.
    (b) Subject to paragraph (c), a written restriction on the assignment of financial rights that is
not manifestly unreasonable under the circumstances and is noted conspicuously in the required
records may be enforced against the owner of the restricted financial rights or a successor or
transferee of the owner, including a pledgee or a legal representative. Unless noted conspicuously
in the required records, a restriction, even though permitted by this section, is ineffective against a
person without knowledge of the restriction.
    (c) With regard to restrictions on the assignment of financial rights, a would-be assignee of
financial rights is entitled to rely on a statement of membership interest issued by the cooperative.
A restriction on the assignment of financial rights, which is otherwise valid and in effect at the time
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  Repealed Minnesota Statutes: 26-07582
of the issuance of a statement of membership interest but which is not reflected in that statement,
is ineffective against an assignee who takes an assignment in reliance on the statement.
    (d) Notwithstanding any provision of law, articles, bylaws, operating agreement, other agreement,
resolution, or action to the contrary, a security interest in a member's financial rights may be
foreclosed and otherwise enforced, and a secured party may assign a member's financial rights in
accordance with chapter 336, without the consent or approval of the member whose financial rights
are subject to the security interest.
  308C.611 NATURE OF A MEMBERSHIP INTEREST AND STATEMENT OF INTEREST
OWNED.
    Subdivision 1. Generally. A membership interest is personal property. A member has no interest
in specific cooperative property except the right to occupy a dwelling unit pursuant to an occupancy
agreement, the proprietary lease, and use of the common elements. All property of the cooperative
is property of the cooperative itself.
    Subd. 2. Lien on membership interest. The cooperative may take a lien on the membership
interest and any dwelling unit represented by the membership certificate for all sums due and to
become due under the articles, bylaws, occupancy agreement, and propriety lease whether by means
of assessments or otherwise. The board may refuse consent to the transfer of the membership interest
represented by the membership certificate until all outstanding sums due under the occupancy
agreement are paid or for other reasonable cause described in the bylaws.
    Subd. 3. Terms of membership interests. All the membership interests of a cooperative must:
    (1) be of one class, without series, unless the articles or bylaws establish or authorize the board
to establish more than one class or series within classes;
     (2) be occupant membership interests and if authorized nonoccupant membership interest subject
to this chapter entitled to vote as provided in section 308C.545, and have equal rights and preferences
in all matters not otherwise provided for by the board and to the extent that the articles or bylaws
have fixed the relative rights and preferences of different classes and series; and
    (3) if applicable due to the nature of the cooperative, share profits and losses and are entitled
to distributions as provided in sections 308C.721 and 308C.725.
    Subd. 4. Rights of judgment creditor. On application to a court of competent jurisdiction by
any judgment creditor of a member, the court may charge a member with payment of the unsatisfied
amount of the judgment with interest. To the extent so charged, the judgment creditor has only the
rights of an assignee of a member's financial rights, if any. This chapter does not deprive any member
or a judgment creditor who is an assignee of financial rights of the benefit of any exemption laws
applicable to the membership interest. This section is the sole and exclusive remedy of a judgment
creditor with respect to the judgment debtor's membership interest.
    Subd. 5. Procedure for fixing terms. (a) Subject to any restrictions in the articles or bylaws,
the power granted in this subdivision may be exercised by a resolution or resolutions establishing
a class or series, setting forth the designation of the class or series, and fixing the relative rights
and preferences of the class or series. Any of the rights and preferences of a class or series established
in the articles, bylaws, or by resolution of the board:
    (1) may be made dependent upon facts ascertainable outside the articles or bylaws or outside
the resolution or resolutions establishing the class or series, if the manner in which the facts operate
upon the rights and preferences of the class or series is clearly and expressly set forth in the articles
or bylaws or in the resolution or resolutions establishing the class or series; and
    (2) may include by reference some or all of the terms of any agreements, contracts, or other
arrangements entered into by the cooperative in connection with the establishment of the class or
series if the cooperative retains at its principal executive office a copy of the agreements, contracts,
or other arrangements or the portions will be included by reference.
    (b) A statement setting forth the name of the cooperative and the text of the resolution and
certifying the adoption of the resolution and the date of adoption must be given to the members
before the acceptance of any contributions for which the resolution creates rights or preferences
not set forth in the articles or bylaws. Where the members have received notice of the creation of
membership interests with rights or preferences not set forth in the articles or bylaws before the
acceptance of the contributions with respect to the membership interests, the statement may be filed
any time within one year after the acceptance of the contributions. The resolution is effective three
days after delivery to the members is deemed effective by the board, or, if the statement is not
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required to be given to the members before the acceptance of contributions, on the date of its
adoption by the directors.
   Subd. 6. Specific terms. Without limiting the authority granted in this section, a cooperative
may have membership interests of a class or series:
    (1) subject to the right of the cooperative to redeem any of those membership interests at the
price fixed for their redemption by the articles or bylaws or by the board;
   (2) entitling the members to cumulative, partially cumulative, or noncumulative distributions;
    (3) having preference over any class or series of membership interests for the payment of
distributions of any or all kinds;
    (4) convertible into membership interests of any other class or any series of the same or another
class; or
   (5) having full, partial, or no voting rights, except as provided in section 308B.555.
    Subd. 7. Grant of a security interest. For the purpose of any law relating to security interests,
membership interests, governance or voting rights, and financial rights are each to be characterized
as provided in section 336.8-103, paragraph (c).
    Subd. 8. Powers of estate of a deceased or incompetent member. (a) If a member who is an
individual dies or a court of competent jurisdiction adjudges the member to be incompetent to
manage the member's person or property, or an order for relief under the bankruptcy code is entered
with respect to the member, the member's executor, administrator, guardian, conservator, trustee,
or other legal representative may exercise all of the member's rights for the purpose of settling the
estate or administering the member's property. If a member is a business entity, trust, or other entity
and is dissolved, terminated, or placed by a court in receivership or bankruptcy, the powers of that
member may be exercised by its legal representative or successor.
    (b) If an event referred to in paragraph (a) causes the termination of a member's membership
interest and the termination does not result in dissolution, then subject to the articles and bylaws:
   (1) as provided in section 308C.605, the terminated member's interest will be considered to be
merely that of an assignee of the financial rights owned before the termination of membership; and
   (2) the rights to be exercised by the legal representative of the terminated member will be limited
accordingly.
    Subd. 9. Liability of subscribers and members with respect to membership interests. A
subscriber for membership interests or a member of a cooperative is under no obligation to the
cooperative or its creditors with respect to the membership interests subscribed for or owned, except
to pay to the cooperative the full consideration for which the membership interests are issued or to
be issued.
  308C.612 SENIOR HOUSING COOPERATIVE OFFERING DOCUMENTS; GENERAL
PROVISIONS.
    Subd. 4. Subscription agreement for new project. The subscription agreement must include
the following provisions:
    (1) a statement that all subscription funds received from applicants shall be deposited promptly
without deduction in an escrow account at a bank or banks whose deposits are insured by an agency
of the federal government. The escrow account shall be controlled by a licensed title insurance
company or agent thereof. Money in the account shall be held solely for the benefit of the subscribers
until transferred to the account of the cooperative as provided in clauses (2) and (5). The escrow
account may be interest bearing, in which event interest earnings shall accrue to the benefit of
subscribers, except that subscription funds and interest earned, if any, may be used solely to pay
the escrow agent to administer the escrow account and to pay costs and expenses associated with
the offering;
    (2) a statement of any subscription funds due and payable upon execution of the subscription
agreement and, where less than all of the subscription funds are due and payable upon execution
of the subscription agreement, a statement of the balance due and payable and the estimated time
frame within which that balance must be paid;
    (3) a statement of the estimated monthly carrying charges with respect to the membership interest
being subscribed for;
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  Repealed Minnesota Statutes: 26-07582
    (4) a statement that refundable subscription funds shall be immediately refunded by the escrow
agent to an applicant whose subscription agreement is terminated pursuant to the agreement and a
statement whether the return of subscription funds shall be with or without accrued interest earned
on the escrow;
    (5) a statement concerning the deadline when sufficient subscribers and loan commitments must
be obtained, and a statement that if the deadline is not attained, the subscribers' escrowed funds
will be released;
    (6) a statement that the entire escrow account and accrued interest earned, if any, shall be
immediately paid to the cooperative if sufficient subscribers and loan commitments are obtained
by the disclosed end date and the cooperative proceeds with the project;
    (7) a statement that:
    (i) within ten days after the receipt of an information bulletin, a purchaser may cancel the
subscription agreement for the purchase of a membership in a cooperative, provided that the right
to cancel terminates upon the purchaser's voluntary acceptance of a conveyance of the membership
interest from the cooperative or by the purchaser agreeing to modify or waive the right to cancel
by a separate writing from the subscription agreement and signed by the purchaser more than three
days after the purchaser receives the information bulletin; and
    (ii) if a purchaser receives an information bulletin more than ten days before signing a
subscription agreement, the purchaser cannot cancel the subscription agreement pursuant to this
ten-day cancellation.
    Subd. 5. Membership purchase and sale agreements. In the event of a resale of a membership
interest by either the departing member or by the cooperative, a membership purchase and sale
agreement shall be utilized as the contract for purchase of the membership interest rather than a
subscription agreement. A membership purchase and sale agreement must contain the following
provisions:
    (1) a statement disclosing the identities of the selling and purchasing parties;
   (2) a statement acknowledging that the purchase of a membership interest in the cooperative
constitutes personal property and not an interest in real estate;
   (3) a statement of the purchase price for the membership interest, including any earnest money
due and payable, the date on which the membership interest is due and payable, and any sum which
may be due and payable upon closing;
    (4) a schedule of any items of personal property owned by the seller that the buyer is purchasing
as part of the membership interest;
   (5) a statement acknowledging that the seller and the cooperative have furnished the buyer with
copies of the cooperative's articles of incorporation, bylaws, rules, and policies currently in effect
and a resale disclosure statement;
    (6) a statement that:
     (i) within ten days after the receipt of a copy of the documents set forth in clause (5), a purchaser
may cancel the purchase agreement for the purchase of a membership in a cooperative, without
penalty and with a full and prompt refund of all payments made under the purchase agreement,
unless within that ten-day period the buyer has closed on the purchase of the membership interest;
and
   (ii) if the buyer elects to cancel the purchase agreement pursuant to this provision, the buyer
may do so in writing by hand delivering the notice of cancellation to the seller or seller's agent, or
by mailing such notice by postage prepaid United States mail, to the seller or the seller's agent
within the ten-day period;
    (7) a statement outlining any contingencies or conditions precedent to closing on the purchase
of the membership interest and the impact of a failure of one or more of the articulated contingencies
on the refund of any earnest money to the buyer;
    (8) a statement of the monthly carrying charges allocable to the dwelling unit appurtenant to
the membership interest being purchased and any adjustments or prorations of carrying charges
due and payable in the month of closing as between the seller and buyer;
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  Repealed Minnesota Statutes: 26-07582
    (9) a statement of any dwelling alterations that will be permitted prior to closing, the conditions
under which those alterations may be made, and the parties financially responsible for any such
alterations;
    (10) a statement of the anticipated closing date for the purchase of the membership interest;
    (11) a statement of the remedies available to the seller or buyer as a result of a default by the
other party in its obligation to close on the purchase of the subject membership interest;
    (12) a schedule of the items to be delivered at closing which shall include:
    (i) the seller's delivery of seller's membership certificate to the buyer, duly assigned to the buyer;
   (ii) the seller's delivery to the buyer of a bill of sale in a form reasonably acceptable to the buyer,
conveying to the buyer free and clear of all encumbrances any personal property purchased by the
buyer pursuant to clause (4);
   (iii) the buyer's delivery to the seller of funds representing any balance of the purchase price
due and payable; and
   (iv) the buyer's delivery to the cooperative of an occupancy agreement duly executed by the
buyer; and
    (13) a statement regarding the impact of destruction of the subject dwelling unit prior to the
closing date on the buyer's purchase obligations and refund of any earnest money paid.
   Subd. 6. Occupancy agreement contents. The occupancy agreement must include the following
provisions:
    (1) a statement of the monthly carrying charges due and payable by the member to the cooperative
representing the member's proportionate share of the sum that the cooperative's board of directors'
estimates are required to meet the cooperative's annual expenses, and the method of calculating the
same;
    (2) a statement of when the payment of carrying charges will commence;
    (3) a statement of the circumstances under which the cooperative may issue any patronage
refunds or credits to members;
    (4) a statement that the term of the occupancy agreement is coextensive with membership in
the cooperative, a statement regarding any automatic renewal of the occupancy agreement term,
and a statement of any other terms, conditions, or requirements for renewal of the occupancy
agreement term;
   (5) a statement of the terms under which the member or cooperative may terminate a member's
occupancy agreement;
    (6) a statement that the member may occupy the member's dwelling unit solely as a private
residential dwelling unit;
    (7) a statement outlining the member's rights, duties, and obligations under the occupancy
agreement and as a member of the cooperative;
    (8) a statement outlining member acts prohibited by the occupancy agreement, articles, bylaws,
or the rules, regulations, and policies of the cooperative;
    (9) a statement regarding the circumstances under which assignment of the occupancy agreement
or subletting is to be permitted or prohibited;
    (10) a statement outlining the circumstances and manner in which a membership interest can
be transferred, assigned, or sold;
    (11) a statement outlining the manner in which the cooperative will manage the cooperative
property and operate and administer the cooperative's business, including the payment of all taxes
and assessments levied against the cooperative to the extent not billed by the taxing authority directly
to the member;
   (12) a statement outlining the separate insurance obligations of the cooperative and the member,
and should minimally include the separate insurance requirements set forth in this chapter;
   (13) a statement concerning the circumstances and extent to which the cooperative must repair,
maintain, and replace property owned by the cooperative and the circumstances, if any, under which
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the cooperative may hold the member responsible for repairing, maintaining, or replacing property
owned by the cooperative;
   (14) a statement defining events of default under the occupancy agreement, the effects of default,
and the remedies available to the cooperative;
   (15) a statement through which the member covenants that the member and the member's guests
and subtenants, if any, must preserve and promote the cooperative ownership principles of the
cooperative and abide by the cooperative's articles, bylaws, and rules, policies and regulations;
    (16) a statement that representatives of any mortgagee holding a mortgage on the property of
the cooperative, the officers and employees of the cooperative, and, with the approval of the
cooperative, the employees of any contractor, utility company, municipal agency, or others, has
the right to enter the member's dwelling unit and make inspections at any reasonable hour of the
day with reasonable notice and at any time in the event of emergency; and
    (17) a statement that the cooperative will not discriminate against any person because of race,
color, religion, sex, handicap, or national origin.
    308C.616 CERTIFICATED MEMBERSHIP INTERESTS.
    Subdivision 1. Certificated; uncertificated. The membership interests of a cooperative shall
be either certificated or uncertificated. Each holder of certificated membership interests issued is
entitled to a certificate of membership interest.
    Subd. 2. Signature required. Certificates shall be signed by an agent or officer authorized in
the articles or bylaws to sign share certificates or, in the absence of an authorization, by the chair
or records officer of the cooperative.
     Subd. 3. Signature valid. If a person signs or has a facsimile signature placed upon a certificate
while the chair, an officer, transfer agent, or records officer of a cooperative, the certificate may be
issued by the cooperative, even if the person has ceased to have that capacity before the certificate
is issued, with the same effect as if the person had that capacity at the date of its issue.
    Subd. 4. Form of certificate. A certificate representing membership interests of a cooperative
shall contain on its face:
    (1) the name of the cooperative;
    (2) a statement that the cooperative is organized under the laws of this state and this chapter;
    (3) the name of the person to whom the certificate is issued;
    (4) the number and class of membership interests, and the designation of the series, if any, that
the certificate represents;
    (5) a statement that the membership interests in the cooperative are subject to the articles and
bylaws of the cooperative; and
    (6) any restrictions on transfer, including approval of the board, if applicable, first rights of
purchase by the cooperative, and other restrictions on transfer, which may be stated by reference
to the back of the certificate or to another document.
    Subd. 5. Limitations set forth. A certificate representing membership interest issued by a
cooperative authorized to issue membership interests of more than one class or series shall set forth
upon the face or back of the certificate, or shall state that the cooperative will furnish to any member
upon request and without charge, a full statement of the designations, preferences, limitations, and
relative rights of the membership interests of each class or series authorized to be issued, so far as
they have been determined, and the authority of the board to determine the relative rights and
preferences of subsequent classes or series.
    Subd. 6. Prima facie evidence. A certificate signed as provided in subdivision 2 is prima facie
evidence of the ownership of the membership interests referred to in the certificate.
    Subd. 7. Uncertificated membership interests. Unless uncertificated membership interests
are prohibited by the articles or bylaws, a resolution approved by the affirmative vote of a majority
of the directors present may provide that some or all of any or all classes and series of its membership
interests will be uncertificated membership interests. The resolution does not apply to membership
interests represented by a certificate until the certificate is surrendered to the cooperative. Within
a reasonable time after the issuance or transfer of uncertificated membership interests, the cooperative
shall send to the new member the information required by this section to be stated on certificates.
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  Repealed Minnesota Statutes: 26-07582
This information is not required to be sent to the new holder by a publicly held cooperative that
has adopted a system of issuance, recordation, and transfer of its membership interests by electronic
or other means not involving an issuance of certificates if the system complies with section 17A of
the Securities Exchange Act of 1934. Except as otherwise expressly provided by statute, the rights
and obligations of the holders of certificated and uncertificated membership interests of the same
class and series are identical.
    308C.627 OPERATING AGREEMENT.
    Subdivision 1. Authorization. A written agreement among persons who are then members,
including a sole member, or who have signed subscription or contribution agreements, relating to
the control of any phase of the business and affairs of the cooperative, its liquidation, dissolution
and termination, or the relations among members or persons who have signed subscription or
contribution agreements is valid as provided in subdivision 2. Wherever this chapter provides that
a particular result may or must be obtained through a provision in the articles or bylaws, the same
result can be accomplished through an operating agreement valid under this section or through a
procedure established by an operating agreement valid under this section.
     Subd. 2. Valid execution. Other than occupant member voting control under section 308C.545
and occupant member allocation and distribution provisions under sections 308C.721 and 308C.725,
a written agreement among persons described in subdivision 1 that relates to the control of or the
liquidation, dissolution, and termination of the cooperative; the relations among them; or any phase
of the business and affairs of the cooperative, including, without limitation, the management of its
business; the declaration and payment of distributions; the sharing of profits and losses; the election
of directors; the employment of members by the cooperative; or the arbitration of disputes, is valid,
if the agreement is signed by all persons who are then the members of the cooperative, whether or
not the members all have voting power, and all those who have signed contribution agreements,
regardless of whether those signatories will, when members, have voting power.
    Subd. 3. Other agreements not affected. This section does not apply to, limit, or restrict
agreements otherwise valid, nor is the procedure set forth in this section the exclusive method of
agreement among members or between the members and the cooperative with respect to any of the
matters described.
    308C.701 AUTHORIZATION, FORM, AND ACCEPTANCE OF CONTRIBUTIONS.
    Subdivision 1. Board of directors may authorize. Subject to any restrictions in this chapter
regarding occupant and nonoccupant membership interests or in the articles or bylaws, and only
when authorized by the board, a cooperative may accept contributions, which may be occupant or
nonoccupant membership contributions as determined by the board under subdivisions 2 and 3,
make contribution agreements under section 308C.711, and make contribution allowance agreements
under section 308C.715.
    Subd. 2. Permissible forms. A person may make a contribution to a cooperative:
    (1) by paying money or transferring the ownership of an interest in property to the cooperative
or rendering services to or for the benefit of the cooperative; or
    (2) through a written obligation signed by the person to pay money or transfer ownership of an
interest in property to the cooperative or to perform services to or for the benefit of the cooperative.
    Subd. 3. Acceptance of contributions. No purported contribution is to be treated or considered
as a contribution, unless:
   (1) the board accepts the contribution on behalf of the cooperative and in that acceptance
describes the contribution, including terms of future performance, if any, and states the value being
accorded to the contribution; and
    (2) the fact of contribution and the contribution's accorded value are both reflected in the required
records of the cooperative.
    Subd. 4. Valuation. The determinations of the board as to the amount or fair value or the fairness
to the cooperative of the contribution accepted or to be accepted by the cooperative or the terms of
payment or performance, including under a contribution agreement in section 308C.711, and a
contribution allowance agreement in section 308C.715, are presumed to be proper if they are made
in good faith and on the basis of accounting methods, or a fair valuation or other method, reasonable
in the circumstances. Directors who are present and entitled to vote, and who, intentionally or
without reasonable investigation, fail to vote against approving a consideration that is unfair to the
cooperative, or overvalue property or services received or to be received by the cooperative as a
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  Repealed Minnesota Statutes: 26-07582
contribution, are jointly and severally liable to the cooperative for the benefit of the then members
who did not consent to and are damaged by the action, to the extent of the damages of those members.
A director against whom a claim is asserted under this subdivision, except in case of knowing
participation in a deliberate fraud, is entitled to contribution on an equitable basis from other directors
who are liable under this subdivision.
    308C.705 RESTATEMENT OF VALUE OF PREVIOUS CONTRIBUTIONS.
    Subdivision 1. Definition. As used in this section, an "old contribution" is a contribution reflected
in the required records of a cooperative for a nonoccupant membership interest before the time the
cooperative accepts a new contribution for a nonoccupant membership interest.
     Subd. 2. Restatement required. Whenever a cooperative accepts a new contribution for a
nonoccupant membership interest, the board shall restate, as required by this section, the value of
all old contributions.
    Subd. 3. Restatement as to particular series or class to which new contribution pertains. (a)
Unless otherwise provided in the articles or bylaws, this subdivision sets forth the method of restating
the value of old contributions that pertain to the same series or class to which the new contribution
pertains. To restate the value:
   (1) state the value the cooperative has accorded to the new contribution under section 308C.701,
subdivision 3, clause (1);
    (2) determine what percentage the value stated under clause (1) will constitute, after the
restatement required by this subdivision, of the total value of all contributions that pertain to the
particular series or class to which the new contribution pertains;
    (3) divide the value stated under clause (1) by the percentage determined under clause (2),
yielding the total value, after the restatement required by this subdivision, of all contributions
pertaining to the particular series or class;
    (4) subtract the value stated under clause (1) from the value determined under clause (3), yielding
the total value, after the restatement required by this subdivision, of all the old contributions
pertaining to the particular series or class;
    (5) subtract the value, as reflected in the required records before the restatement required by
this subdivision, of the old contributions from the value determined under clause (4), yielding the
value to be allocated among and added to the old contributions pertaining to the particular series
or class; and
    (6) allocate the value determined under clause (5) proportionally among the old contributions
pertaining to the particular series or class, add the allocated values to those old contributions, and
change the required records accordingly.
    (b) The values determined under paragraph (a), clause (5), and allocated and added under
paragraph (a), clause (6), may be positive, negative, or zero.
    Subd. 4. Restatement method for other series or class. Unless otherwise provided in the
articles or bylaws, this subdivision sets forth the method of restating the value of old contributions
that do not pertain to the same series or class to which the new contribution pertains. To restate the
value:
    (1) determine the percentage by which the restatement under subdivision 3 has changed the
total contribution value reflected in the required records for the series or class to which the new
contribution pertains; and
   (2) as to each old contribution that does not pertain to the same series or class to which the new
contribution pertains, change the value reflected in the required records by the percentage determined
under clause (1). The percentage determined under clause (1) may be positive, negative, or zero.
    Subd. 5. New contributions may be aggregated. If a cooperative accepts more than one
contribution pertaining to the same series or class at the same time, then for the purpose of the
restatement required by this section, the cooperative may consider all the new contributions a single
contribution.
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  Repealed Minnesota Statutes: 26-07582
    308C.711 CONTRIBUTION AGREEMENTS.
    Subdivision 1. Signed writing. A contribution agreement, whether made before or after the
formation of the cooperative, is not enforceable against the would-be contributor unless it is in
writing and signed by the would-be contributor.
     Subd. 2. Irrevocable period. Unless otherwise provided in the contribution agreement, or unless
all of the would-be contributors and, if in existence, the cooperative, consent to a shorter or longer
period, a contribution agreement is irrevocable for a period of six months.
    Subd. 3. Current and deferred payment. A contribution agreement, whether made before or
after the formation of a cooperative, must be paid or performed in full at the time or times, or in
the installments, if any, specified in the contribution agreement. In the absence of a provision in
the contribution agreement specifying the time at which the contribution is to be paid or performed,
the contribution must be paid or performed at the time or times determined by the board, but a call
made by the board for payment or performance on contributions must be uniform for all membership
interests of the same class or for all membership interests of the same series.
     Subd. 4. Failure to pay remedies. (a) Unless otherwise provided in the contribution agreement,
in the event of default in the payment or performance of an installment or call when due, the
cooperative may proceed to collect the amount due in the same manner as a debt due the cooperative.
If a would-be contributor does not make a required contribution of property or services, the
cooperative shall require the would-be contributor to contribute cash equal to that portion of the
value, as stated in the cooperative required records, of the contribution that has not been made.
    (b) If the amount due under a contribution agreement remains unpaid for a period of 20 days
after written notice of demand for payment has been given to the delinquent would-be contributor,
the membership interests that were subject to the contribution agreement may be offered for sale
by the cooperative for a price in money equaling or exceeding the sum of the full balance owed by
the delinquent would-be contributor plus the expenses incidental to the sale.
     If the membership interests that were subject to the contribution agreement are sold according
to this paragraph, the cooperative shall pay to the delinquent would-be contributor or to the delinquent
would-be contributor's legal representative the lesser of:
    (1) the excess of net proceeds realized by the cooperative over the sum of the amount owed by
the delinquent would-be contributor plus the expenses incidental to the sale, less any penalty stated
in the contribution agreement, which may include forfeiture of the partial contribution; and
    (2) the amount actually paid by the delinquent would-be contributor.
    If the membership interests that were subject to the contribution agreement are not sold according
to this paragraph, the cooperative may collect the amount due in the same manner as a debt due the
cooperative or cancel the contribution agreement according to paragraph (c).
     (c) If the amount due under a contribution agreement remains unpaid for a period of 20 days
after written notice of demand for payment has been given to the delinquent would-be contributor
and the membership interests that were subject to the defaulted contribution agreement have not
been sold according to paragraph (b), the cooperative may cancel the contribution agreement, the
cooperative may retain any portion of the contribution agreement price actually paid as provided
in the contribution agreement, and the cooperative shall refund to the delinquent would-be contributor
or the delinquent would-be contributor's legal representatives any portion of the contribution
agreement price as provided in the contribution agreement.
    Subd. 5. Restrictions on assignment. Unless otherwise provided in the articles or bylaws, a
would-be contributor's rights under a contribution agreement may not be assigned, in whole or in
part, to a person who was not a member at the time of the assignment, unless all the members
approve the assignment by unanimous written consent.
    308C.715 CONTRIBUTION RIGHTS AGREEMENTS.
    Subdivision 1. Agreements permitted. Subject to any restrictions in the articles or bylaws, a
cooperative may enter into contribution rights agreements under the terms, provisions, and conditions
fixed by the board.
    Subd. 2. Writing required and terms to be stated. Any contribution rights agreement must
be in writing and the writing must state in full, summarize, or include by reference all the agreement's
terms, provisions, and conditions of the rights to make contributions.
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  Repealed Minnesota Statutes: 26-07582
    Subd. 3. Restrictions on assignment. Unless otherwise provided in the articles or bylaws, a
would-be contributor's rights under a contribution rights agreement may not be assigned, in whole
or in part, to a person who was not a member at the time of the assignment, unless all the members
approve the assignment by unanimous written consent.
    308C.721 ALLOCATIONS AND DISTRIBUTIONS TO MEMBERS.
    Subdivision 1. Allocation of profits and losses. If applicable to the specific type of housing
cooperative formed under this chapter, the bylaws or operating agreement shall prescribe the
allocation of profits and losses between occupant membership interests collectively and any other
membership interests. If the bylaws or operating agreement do not otherwise provide, the profits
and losses between occupant membership interests collectively and other membership interests
shall be allocated on the basis of the value of contributions to capital made by the occupant
membership interests collectively and other membership interests and accepted by the cooperative.
The allocation of profits to the occupant membership interests collectively shall not be less than 50
percent of the total profits in any fiscal year, except that if authorized in the original articles as filed
or in articles or bylaws that are adopted by an affirmative vote of the occupant members or the
articles or bylaws are amended by the affirmative vote of the occupant members, the allocation of
profits to the occupant membership interests collectively may not be less than 15 percent of the
total profits in any fiscal year.
    Subd. 2. Distribution of cash or other assets. The bylaws or operating agreement shall prescribe
the distribution of cash or other assets of the cooperative among the membership interests of the
cooperative. If not otherwise provided in the bylaws, distribution shall be made to the occupant
membership interests collectively and other members on the basis of the value of contributions to
capital made and accepted by the cooperative, by the occupant membership interests collectively,
and other membership interests. The distributions to occupant membership interests collectively
shall not be less than 50 percent of the total distributions in any fiscal year, except that if authorized
in the articles or bylaws adopted by the affirmative vote of the occupant members, or the articles
or bylaws are amended by the affirmative vote of the occupant members, the distributions to occupant
membership interests collectively shall not be less than 15 percent of the total distributions in any
year.
    308C.725 ALLOCATIONS AND DISTRIBUTIONS TO OCCUPANT MEMBERS.
    Subdivision 1. Distribution of net income. A cooperative may set aside a portion of net income
allocated to the occupant membership interests as the board determines advisable to create or
maintain a capital reserve.
    Subd. 2. Reserves. In addition to a capital reserve, the board may, for occupant membership
interests:
    (1) set aside an amount not to exceed five percent of the annual net income of the cooperative
for promoting and encouraging cooperative organization; and
   (2) establish and accumulate reserves for common area items, buildings, depreciation, losses,
and other proper purposes.
    Subd. 3. Occupant distributions. Any net income allocated to occupant members in excess of
dividends on equity and additions to reserves shall be distributed to occupant members on the basis
of patronage of cooperative. A cooperative may establish allocation units, whether the units are
functional, divisional, departmental, or otherwise and pooling arrangements and may account for
and distribute net income to occupants on the basis of allocation units and pooling arrangements.
A cooperative may offset the net loss of an allocation unit or pooling arrangement against the net
income of other allocation units or pooling arrangements.
    Subd. 4. Frequency of distribution. Distribution of net income may be made at least annually.
The board shall present to the members at their annual meeting a report covering the operations of
the cooperative during the preceding fiscal year.
    Subd. 5. Form of distribution. A cooperative may distribute net income to occupant members
in cash, capital credits, allocated patronage equities, revolving fund certificates, or its own or other
securities.
    308C.805 MERGER OF SUBSIDIARY.
   Subdivision 1. When authorized; contents of plan. (a) For purposes of this section, "subsidiary"
means a domestic cooperative, a Minnesota limited liability company, or a foreign cooperative,
and "cooperative" means a domestic cooperative. A Minnesota limited liability company may only
  15R
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  Repealed Minnesota Statutes: 26-07582
participate in a merger under this section to the extent authorized under section 322C.1002. A parent
domestic cooperative or a subsidiary that is a domestic cooperative may complete the merger of a
subsidiary as provided in this section, provided however, if either the parent or the subsidiary is a
business entity organized under the laws of this state, the merger of the subsidiary is not authorized
under this section unless the law governing the business entity expressly authorizes merger with a
cooperative. A parent cooperative owning at least 90 percent of the outstanding ownership interests
of each class and series of a subsidiary directly, or indirectly through related organizations, other
than classes or series that, absent this section, would otherwise not be entitled to vote on the merger,
may merge the subsidiary into itself or into any other subsidiary at least 90 percent of the outstanding
ownership interests of each class and series of which is owned by the parent cooperative directly,
or indirectly through related organizations, other than classes or series that, absent this section,
would otherwise not be entitled to vote on the merger, without a vote of the members of itself or
any subsidiary or may merge itself, or itself and one or more of the subsidiaries, into one of the
subsidiaries under this section. A resolution approved by the affirmative vote of a majority of the
directors of the parent cooperative present shall set forth a plan of merger that contains:
    (1) the name of the subsidiary or subsidiaries, the name of the parent, and the name of the
surviving cooperative;
    (2) the manner and basis of converting the membership interests of the subsidiary or subsidiaries
or parent into securities of the parent, subsidiary, or of another cooperative or, in the whole or in
part, into money or other property;
    (3) if the parent is a constituent cooperative but is not the surviving cooperative in the merger,
a provision for the pro rata issuance of membership interests of the surviving cooperative to the
holders of membership interests of the parent on surrender of any certificates for shares of the
parent; and
    (4) if the surviving cooperative is a subsidiary, a statement of any amendments to the articles
of the surviving cooperative that will be part of the merger.
    (b) If the parent is a constituent cooperative and the surviving cooperative in the merger, it may
change its cooperative name, without a vote of its members, by the inclusion of a provision to that
effect in the resolution of merger setting forth the plan of merger that is approved by the affirmative
vote of a majority of the directors of the parent present. Upon the effective date of the merger, the
name of the parent shall be changed.
    (c) If the parent is a constituent cooperative but is not the surviving cooperative in the merger,
the resolution is not effective unless it is also approved by the affirmative vote of the holders of a
majority of the voting power of all membership interests of the parent entitled to vote at a regular
or special meeting if the parent is a cooperative, or in accordance with the laws under which it is
organized if the parent is a foreign business entity or cooperative.
    Subd. 2. Notice to members of subsidiary. Notice of the action, including a copy of the plan
of merger, shall be given to each member, other than the parent and any subsidiary of each subsidiary
that is a constituent cooperative in the merger before, or within ten days after, the effective date of
the merger.
   Subd. 3. Articles of merger; contents of articles. Articles of merger shall be prepared that
contain:
    (1) the plan of merger;
    (2) the number of outstanding membership interests of each series and class of each subsidiary
that is a constituent cooperative in the merger, other than the series or classes that, absent this
section, would otherwise not be entitled to vote on the merger, and the number of membership
interests of each series and class of the subsidiary or subsidiaries, other than series or classes that,
absent this section, would otherwise not be entitled to vote on the merger, owned by the parent
directly, or indirectly through related organizations; and
    (3) a statement that the plan of merger has been approved by the parent under this section.
   Subd. 4. Articles signed, filed. The articles of merger shall be signed on behalf of the parent
and filed with the secretary of state.
     Subd. 5. Certificate. The secretary of state shall issue a certificate of merger to the parent or
its legal representative or, if the parent is a constituent cooperative but is not the surviving cooperative
in the merger, to the surviving cooperative or its legal representative.
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  APPENDIX
  Repealed Minnesota Statutes: 26-07582
    Subd. 6. Nonexclusivity. A merger among a parent and one or more subsidiaries or among two
or more subsidiaries of a parent may be accomplished under section 308C.801 instead of this section,
in which case this section does not apply.
  17R

Housing cooperatives organization and operation modifications

Sponsors

Sen. David Dibble (D) sponsors SF 4944, and 4 members have co-sponsored it.

Committees

SF 4944 went before 1 committee: Judiciary and Public Safety.

Judiciary and Public Safety
Judiciary and Public Safety
Referred to · Apr 7, 2026

History

SF 4944 has taken 2 actions since Apr 7, 2026.

ChamberAction
Apr 7, 2026
Senate
Introduction and first reading
Apr 7, 2026
Senate
Referred to Judiciary and Public Safety

Votes

SF 4944 has not gone to a roll call.

Source: revisor.mn.gov · legiscan.com