Corporations and Associations - Cooperative Limited Equity Housing Corporations - Establishment

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0085*

HOUSE BILL 85
C1, N1 6lr0877
(PRE–FILED) CF SB 511
By: Delegate Charkoudian
Requested: September 17, 2025
Introduced and read first time: January 14, 2026
Assigned to: Economic Matters
Committee Report: Favorable with amendments
House action: Adopted
Read second time: February 19, 2026

CHAPTER ______

AN ACT concerning 1

Corporations and Associations – Cooperative Limited Equity Housing 2
Corporations – Establishment 3

FOR the purpose of authorizing a Maryland nonstock corporation to convert to a 4
cooperative limited equity housing corporation and establishing certain procedures 5
and requirements for the conversion of a Maryland nonstock corporation to a 6
cooperative limited equity housing corporation; establishing the allocation of votes 7
in a cooperative limited equity housing corporation; requiring a cooperative limited 8
equity housing corporation to provide certain notice and an offer to certain 9
households under certain circumstances; requiring a cooperative limited equity 10
housing corporation to reimburse certain households for moving expenses; 11
restricting the appreciation and sale of a cooperative interest in a cooperative limited 12
equity housing corporatio n; requiring a certain membership composition for a 13
cooperative limited equity housing corporation; authorizing the Department of 14
Housing and Community Development to establish certain rights and requirements 15
for a cooperative limited equity housing corporation and its members and to provide 16
certain grants to promote the establishment of cooperative limited equity housing 17
corporations; prohibiting local governments from imposing certain restrictions on 18
cooperative limited equity housing corporations or the conversion of a Maryland 19
nonstock corporation to a cooperative limited equity housing corporation; and 20
generally relating to cooperative limited equity housing corporations and the 21
conversion of Maryland nonstock corporations. 22

BY repealing and reenacting, with amendments, 23
2 HOUSE BILL 85

Article – Corporations and Associations 1
Section 5–207(a) 2
Annotated Code of Maryland 3
(2025 Replacement Volume) 4

BY adding to 5
Article – Corporations and Associations 6
Section 5 –6D–01 through 5 –6D–09 to be under the new subtitle “Subtitle 6D. 7
Cooperative Limited Equity Housing Corporations” 8
Annotated Code of Maryland 9
(2025 Replacement Volume) 10

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
That the Laws of Maryland read as follows: 12

Article – Corporations and Associations 13

5–207. 14

(a) (1) A nonstock corporation may consolidate or merge only with: 15

(I) ANOTHER nonstock corporation; OR 16

(II) A COOPERATIVE LIMITED EQUITY HOUSING CORPORATION 17
UNDER SUBTITLE 6D OF THIS TITLE. 18

(2) A Maryland nonstock corporation may convert only into a foreign 19
corporation that does not have the authority to issue stock. 20

(3) A foreign corporation that does not have the authority to issue stock: 21

(i) May convert into a Maryland nonstock corporation; and 22

(ii) May not convert into [a]: 23

1. A Maryland corporation that has the authority to issue 24
stock; OR 25

2. A COOPERATIVE LIMITED EQUITY HOUSI NG 26
CORPORATION UNDER SUBTITLE 6D OF THIS TITLE. 27

SUBTITLE 6D. COOPERATIVE LIMITED EQUITY HOUSING CORPORATIONS. 28

5–6D–01. 29

HOUSE BILL 85 3

(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 1
INDICATED. 2

(B) “ARTICLES OF INCORPORA TION” MEANS THE CHARTER BY WHICH A 3
COOPERATIVE LIMITED EQUITY HOUSING CORPORATION BECOMES INCORPORATED 4
UNDER THIS ARTICLE. 5

(C) “BYLAWS” MEANS THE DOCUMENT T HAT DETAILS AND GOVE RNS THE 6
INTERNAL ORGANIZATION AND OPERATION OF THE COOPERATIVE LIMITED EQUITY 7
HOUSING CORPORATION. 8

(D) “CONVERSION” MEANS THE TRANSITION OF A PROPERTY FROM A 9
RESIDENTIAL REN TAL FACILITY TO A PR OPERTY OWNED BY A CO OPERATIVE 10
LIMITED EQUITY HOUSING CORPORATION FOR USE BY THE COOPERATIVE LIMITED 11
EQUITY HOUSING CORPO RATION, THE MEMBERS , AND THE HOUSEHOLDS O F THE 12
MEMBERS. 13

(E) “COOPERATIVE INTEREST ” MEANS THE OWNERSHIP INTEREST IN A 14
COOPERATIVE LIMITED EQUITY HOUSING CORPORATION THAT IS COUPLED WITH A 15
POSSESSORY INTEREST IN REAL OR PERSONAL PROPERTY OWNED BY TH E 16
COOPERATIVE LIMITED EQUITY HOUSI NG CORPORATION AND EVIDENCED BY A 17
MEMBERSHIP CERTIFICATE. 18

(F) “COOPERATIVE LIMITED E QUITY HOUSING CORPORATI ON” MEANS A 19
MARYLAND NONSTOCK CORPORATION QUALIFIED IN THE STATE, HAVING ONLY ONE 20
CLASS OF MEMBERSHIP , IN WHICH EACH MEMBER , BY VIRTUE OF THE MEM BER’S 21
MEMBERSHIP, HAS A COOPERATIVE INTEREST IN THE CORPORATION. 22

(G) “COOPERATIVE PROJECT” MEANS ALL THE REAL A ND PERSONAL 23
PROPERTY IN THE STATE THAT IS OWNED OR LEASED BY A COOPERATIVE LIMITED 24
EQUITY HOUSING CORPORATION FOR THE PRIMARY PURPOSE OF RESIDENTIAL USE. 25

(H) “DISABLED PERSON ” MEANS A PERSON WITH A MEASURABLE 26
LIMITATION OF MOBILITY DUE TO CONGENITAL DEFECT, DISEASE, OR TRAUMA. 27

(I) “LOW–INCOME HOUSEHOLD” MEANS A HOUSEHOLD WI TH AN INCOME 28
THAT DOES NOT EXCEED 80% OF THE AREA MEDIAN INCOME FOR A HOUSEHOLD OF 29
THE SAME SIZE. 30

(J) “MEMBER” MEANS AN INDIVIDUAL WHO OR A HOUSEHOLD THAT OWNS 31
A COOPERATIVE INTEREST ON BEHALF OF A HOUSEHOLD. 32

(K) “MEMBERSHIP CERTIFICATE” MEANS: 33

4 HOUSE BILL 85

(1) A DOCUMENT ISSUED BY A COOPERATIVE LIMITED EQUITY 1
HOUSING CORPORATION EVIDENCING OWNERSHIP OF A COOPERATIVE INT EREST; 2
OR 3

(2) IF THERE IS NO DOCUME NT THAT SATISFIES ITEM (1) OF THIS 4
SUBSECTION, AN OCCUPANCY AGREEMENT. 5

(L) “MODERATE–INCOME HOUSEHOLD ” MEANS A HOUSEHOLD WI TH AN 6
INCOME GREATER THAN 80% OF THE AREA MEDIAN INCOME FOR A HOUSEHOLD OF 7
THE SAME SIZE BUT TH AT DOES NOT EXCEED 120% OF THE AREA MED IAN INCOME 8
FOR A HOUSEHOLD OF THE SAME SIZE. 9

(M) “MOVING EXPENSES” MEANS COSTS INCURRED TO: 10

(1) HIRE CONTRACTORS, LABOR, TRUCKS, OR EQUIPMENT FOR THE 11
TRANSPORTATION OF PERSONAL PROPERTY; 12

(2) PACK AND UNPACK PERSONAL PROPERTY; 13

(3) DISCONNECT AND INSTALL PERSONAL PROPERTY; 14

(4) INSURE PERSONAL PROPERTY TO BE MOVED; AND 15

(5) DISCONNECT AND RECONN ECT UTILITIES SUCH A S TELEPHONE 16
SERVICE, GAS, WATER, AND ELECTRICITY. 17

(N) (1) “OCCUPANCY AGREEMENT ” MEANS AN AGREEMENT W ITH THE 18
COOPERATIVE LIMITED EQUITY HOUSING CORPORATION UNDER WHICH A MEMBER 19
AND THE HOUSEHOLD OF A MEMBER HAS AN EXCLUSIVE POSSESSORY INTEREST IN 20
A UNIT AND A POSSESS ORY INTEREST IN COMMON WITH OTHER MEMBERS IN THAT 21
PORTION OF A COOPERA TIVE PROJECT NOT CON STITUTING UNITS AND THAT 22
CREATES RESTRICTIONS AND OBLIGATIONS SIMILAR TO A LEGAL RELATIONSHIP OF 23
LANDLORD AND TENANT BETWEEN THE CORPORAT ION AND THE MEMBER , 24
RESPECTIVELY. 25

(2) “OCCUPANCY AGREEMENT ” INCLUDES, IF THERE IS NO OTHER 26
DOCUMENT THAT SATISFIES PARAGRAPH (1) OF THIS SUBSECTION, A MEMBERSHIP 27
CERTIFICATE. 28

(O) “RESIDENTIAL RENTAL FA CILITY” MEANS PROPERTY CONTA INING AT 29
LEAST FIVE DWELLING UNITS LEASED FOR RESIDENTIAL PURPOSES. 30

(P) “SENIOR CITIZEN” MEANS A PERSON WHO IS AT LEAST 62 YEARS OLD. 31

HOUSE BILL 85 5

(Q) “SUBSCRIPTION AGREEMEN T” MEANS A WRITTEN AGRE EMENT IN 1
WHICH A PROSPECTIVE MEMBER SUBSCRIBES TO ACQUIRE A COOPERATIVE 2
INTEREST. 3

(Q) (R) “UNIT” MEANS A PORTION OF T HE COOPERATIVE PROJE CT 4
AVAILABLE FOR EXCLUSIVE OCCUPANCY BY A MEMBER AND THE HOUSEHOLD OF A 5
MEMBER UNDER AN OCCU PANCY AGREEMENT OR TO ANY PERSON THE MEMBER 6
RENTS THE PORTION TO. 7

5–6D–02. 8

A MARYLAND NONSTOCK COR PORATION MAY BE ORGANIZED FOR THE 9
PURPOSE OF CONVERTIN G TO A COOPERATIVE LIMITED EQUITY HOUSI NG 10
CORPORATION AFTER ACQUIRING OWNE RSHIP OF A RESIDENTI AL RENTAL 11
FACILITY. 12

5–6D–03. 13

(A) ON ACQUIRING A RESIDE NTIAL RENTAL FACILIT Y, A MARYLAND 14
NONSTOCK CORPORATION ORGANIZED FO R THE PURPOSE OF CON VERTING TO A 15
COOPERATIVE LIMITED EQUITY HOUSING CORPO RATION SHALL HOLD A VOTE TO 16
CONVERT TO A COOPERATIVE LIMITED EQUITY HOUSING CORPORATION NOT LATER 17
THAN 60 DAYS AFTER DELIVERING NOTICE THAT: 18

(1) INFORMS THE MEMBERS OF THE DATE OF THE VOTE; AND 19

(2) PROVIDES THE MEMBERS WITH A COPY OF THE D OCUMENTS TO 20
BE SUBMITTED TO THE DEPARTMENT. 21

(B) (1) A VOTE TO CONVERT SHALL: 22

(I) CONSIST OF A QUORUM O F THE MAJORITY OF TH E TOTAL 23
MEMBERSHIP; AND 24

(II) REQUIRE AN AFFIRMATIV E VOTE BY A MAJORITY OF THE 25
MEMBERS PRESENT. 26

(2) A VOTE UNDER THIS SUBS ECTION SHALL BE COND UCTED IN 27
ACCORDANCE WITH THE GOVERNING DOCUMENTS OF THE MARYLAND NONSTOCK 28
CORPORATION. 29

(C) (1) IF A MAJORITY OF THE MEMBERS OF THE MARYLAND NONSTOCK 30
CORPORATION PRESENT FOR THE VOTE ELECT TO CO NVERT TO A COOPERATI VE 31
LIMITED EQUITY HOUSI NG CORPORATION , THE MARYLAND NONSTOCK 32
6 HOUSE BILL 85

CORPORATION SHALL PREPARE AND SUBMIT TO THE DEPARTMENT THE REQUIRED 1
DOCUMENTS AND INFORM ATION IN ACCORDANCE WITH § 5–6D–04 OF THIS 2
SUBTITLE. 3

(2) IF A V OTE TO CONVERT TO A COOPERATIVE LIMITED EQUITY 4
HOUSING CORPORATION UNDER SUBSECTION (B) OF THIS SECTION FAIL S, THE 5
MARYLAND NONSTOCK COR PORATION MAY NOT ATT EMPT TO CONVERT TO A 6
COOPERATIVE LIMITED EQUITY HOUSING CORPORATION FOR AT LEAST 12 MONTHS 7
AFTER THE DATE OF THE FAILED VOTE. 8

5–6D–04. 9

(A) FOLLOWING AN AFFIRMAT IVE VOTE TO CONVERT TO A COOPERATIVE 10
LIMITED EQUITY HOUSING CORPORATION, A MARYLAND NONSTOCK CORPORATION 11
SHALL: 12

(1) PREPARE AND SUBMIT TO THE DEPARTMENT THE FOLLOW ING 13
DOCUMENTS AND INFORMATION FOR THE ESTABLISHMENT OF A C OOPERATIVE 14
LIMITED EQUITY HOUSING CORPORATION: 15

(I) ARTICLES OF INCORPORATION, INCLUDING: 16

1. THE NAME AND LOCATION OF THE COOPERATIVE 17
LIMITED EQUITY HOUSING CORPORATION; AND 18

2. A STATEMENT OF THE PURPOSES OF THE 19
COOPERATIVE LIMITED EQUITY HOUSING CORPORATION; AND 20

(II) ANY OTHER DOCUMENTS O R INFORMATION REQUIR ED BY 21
THE DEPARTMENT; AND 22

(2) MAINTAIN: 23

(I) THE NAME AND ADDRESS OF EACH MEMBER OF TH E 24
MARYLAND NONSTOCK CORPORATION; 25

(II) A DISCLOSURE STATEMENT, INCLUDING: 26

1. THE DATE ON WHICH THE AFFIRMATIVE VOTE TO 27
CONVERT TO A COOPERATIVE LIM ITED EQUITY HOUSING CORPORATION TOOK 28
PLACE; 29

HOUSE BILL 85 7

2. A STATEMENT OF THE FOR M OF OWNERSHIP OF AL L 1
REAL AND PERSONAL PR OPERTY THAT IS INTEN DED TO BE OWNED OR LEASED BY 2
THE COOPERATIVE LIMITED EQUITY HOUSING CORPORATION; 3

3. A STATEMENT OF THE PRO JECTED COMPLETION 4
DATES FOR ANY PROPOSED IMPROVEMENTS; 5

4. A STATEMENT OF THE PRO JECTED DATE OF 6
FORMATION FOR THE COOPERATIVE LIMITED EQUITY HOUSING CORPORATION; 7

5. A DESCRIPTION OF THE V OTING AND OTHER RIGH TS 8
IN THE COOPERATIVE LIMITED EQUITY HOUSING CORPORATION; 9

6. A STATEMENT OF ANY FEE S REQUIRED BY THE 10
COOPERATIVE LIMITED EQUITY HOUSING CORPORATION IN CONNECTION WITH THE 11
TRANSFER OF MEMBERSHIP OR ISSUANCE OF AN OCCUPANCY AGREEMENT; 12

7. A STATEMENT OF THE KNO WN OR ANTICIPATED 13
COMMON CHARGES THAT MAY BE IMPOSED ON MEMBERS; 14

8. A STATEMENT OF THE OWN ERSHIP INTEREST 15
ASSOCIATED WITH EACH UNIT AND THE UNDERLY ING DEBT RESPONSIBIL ITY 16
ASSOCIATED WITH EACH UNIT ON A PRO RATA BASIS, IF APPLICABLE; 17

9. A STATEMENT AS TO WHET HER THE COOPERATIVE 18
LIMITED EQUITY HOUSI NG CORPORATION HAS OR WILL OBTAIN I NSURANCE 19
COVERAGE FOR CASUALT Y, PROPERTY DAMAGE , AND PUBLIC LIABILITY AND IN 20
WHAT AMOUNTS; 21

10. A STATEMENT OF ALL WAR RANTIES AND 22
DISCLAIMERS MADE DUR ING THE PURCHASE OF THE RESIDENTIAL RENT AL 23
FACILITY BY THE MARYLAND NONSTOCK CORPORATION; AND 24

11. COPIES OF THE PROPOSED OR FINAL: 25

A. CONTRACT OF SALE FOR THE RESIDENTIAL RENT AL 26
FACILITY THAT IS THE SUBJECT OF THE REAL PROPERTY OF THE COOP ERATIVE 27
LIMITED EQUITY HOUSING CORPORATION; 28

B. MEMBERSHIP CERTIFICATE; 29

C. OCCUPANCY AGREEMENT; 30

D. RULES, IF ANY; 31
8 HOUSE BILL 85

E. LEASE, OTHER THAN THE OCCUP ANCY AGREEMENT, 1
TO A THIRD PARTY OF REAL OR PERSONAL PROPERTY TO WHICH THE COOPERATIVE 2
LIMITED EQUITY HOUSING CORPORATION IS A PARTY; AND 3

F. IF APPLICABLE , WRITTEN NOTICE TO AF FECTED 4
HOUSEHOLDS THAT MAY BE REQUIRED UNDER § 5–6D–05 OF THIS SUBTITLE; 5

(III) AN ANNUAL OPERATING B UDGET, INCLUDING INSURANCE, 6
MAINTENANCE, RESERVES, AND GENERAL EXPENSES; 7

(IV) BYLAWS; AND 8

(V) A SUBSCRIPTION AGREEMENT. 9

(B) STATEMENTS REQUIRED UNDER THIS SECTION MAY BE SUMMARIZED OR 10
PRODUCED IN A COLLEC TION OF DOCUMENTS TH AT EFFECTIVELY CONVE YS THE 11
REQUIRED INFORMATION. 12

(C) WITHIN 30 DAYS AFTER RECEIPT O F DOCUMENTS AND INFO RMATION 13
PROVIDED BY A MARYLAND NONSTOCK CORPORATION IN ACCORDANCE WITH THIS 14
SECTION, THE DEPARTMENT SHALL: 15

(1) ACCEPT THE DOCUMENTS FOR RECORD; OR 16

(2) IF THE DOCUMENTS AND INFORMATION DO NOT M EET THE 17
REQUIREMENTS OF THIS SECTION AND ANY ADDI TIONAL REQUIREMENTS 18
ESTABLISHED BY THE DEPARTMENT, DENY THE DOCUMENTS F OR RECORD AND 19
NOTIFY THE MARYLAND NONSTOCK CORPORATION OF THE BASIS FOR THE DENIAL. 20

(D) (1) (I) ON ACCEPTANCE OF THE DOCUMENTS FOR RECORD BY THE 21
DEPARTMENT UNDER SUBS ECTION (C)(1) OF THIS SECTION , THE MARYLAND 22
NONSTOCK CORPORATION SHALL BE CONVERTED T O A COOPERATIVE LIMITED 23
EQUITY HOUSING CORPORATION. 24

(II) ONCE A MARYLAND NONSTOCK COR PORATION IS 25
CONVERTED TO A COOPE RATIVE LIMITED EQUITY HOUSING CORPORATION, VOTES 26
SHALL BE ASSIGNED SO THAT EACH UNIT OCCUPIED BY A MEMBER HAS ONE VOTE. 27

(2) ON RECEIPT OF A DENIA L UNDER SUBSECTION (C)(2) OF THIS 28
SECTION, THE MARYLAND NONSTOCK COR PORATION MA Y RESUBMIT THE 29
DOCUMENTS AND INFORMATION IN ORDER TO ME ET THE REQUIREMENTS OF THIS 30
SECTION. 31

HOUSE BILL 85 9

5–6D–05. 1

(A) (1) AFTER A MARYLAND NONSTOCK COR PORATION IS CONVERTE D 2
TO A COOPERATIVE LIMITED EQUITY HOUSI NG CORPORATION, THE COOPERATIVE 3
LIMITED EQUITY HOUSING CORPORATION SHALL: 4

(I) PROMPTLY PROVIDE ALL HOUSEHOLDS IN THE 5
RESIDENTIAL RENTAL FACILITY WITH WRITTEN NOTICE OF THE CONVER SION AND 6
THE REQUIREMENTS TO VACATE UNDER THIS SECTION; AND 7

(II) OFFER THE OPPORTUNITY TO ACQUIRE A COOPERA TIVE 8
INTEREST AND BECOME A MEMBER OF T HE COOPERATIVE LIMIT ED EQUITY 9
HOUSING CORPORATION TO EACH HOUSEHOLD TH AT HAS LAWFULLY RESI DED IN 10
THE RESIDENTIAL RENTAL FACILITY: 11

1. ON THE DATE OF THE CONVERSION; AND 12

2. FOR AT LEAST 180 DAYS PRIOR TO THE DATE OF THE 13
CONVERSION. 14

(2) IF AN ELIGIBLE HOUSEHOLD FAILS TO ACCEPT THE OFFER UNDER 15
PARAGRAPH (1)(II) OF THIS SUBSECTION WITHIN 89 DAYS OF RECEIPT, THE OFFER 16
SHALL BE DEEMED TO HAVE BEEN REJECTED. 17

(B) EXCEPT AS PROVIDED IN SUBSECTIONS (C) AND (D) OF THIS SECTION, A 18
COOPERATIVE LIMITED EQUITY HOUSI NG CORPORATION MAY REQUIRE A 19
HOUSEHOLD TO VACATE A UNIT AS FOLLOWS: 20

(1) FOR HOUSEHOLDS THAT A RE NOT ELIGIBLE TO R ECEIVE AN 21
OFFER TO ACQUIRE A COOPERATIVE INTEREST IN ACCORDANCE WITH SUBSECTION 22
(A)(1)(II) OF THIS SECTION , NOT EARLIER THAN 90 DAYS AFTER RECEIPT O F A 23
WRITTEN NOTICE TO VACATE; OR 24

(2) FOR ELIGIBLE HOUSEHOL DS THAT RECEIVE AND REJECT AN 25
OFFER TO ACQUIRE A COOPERATIVE INTEREST IN ACCORDANCE WITH SUBSECTION 26
(A)(1)(II) OF THIS SECTION , NOT EARLIER THAN 90 DAYS AFTER RECEIPT O F THE 27
OFFER AND A WRITTEN NOTICE TO VACATE. 28

(C) EXCEPT AS PROVIDED IN SUBSECTION (D) OF THIS SECTION , A 29
HOUSEHOLD MAY NOT BE REQUIRED TO VACATE A UNIT EARLIER THAN 12 MONTHS 30
FOLLOWING THE RECEIPT OF A WRITTEN NOTICE TO VACATE IF, ON THE DATE THAT 31
THE NOTICE IS GIVEN: 32

10 HOUSE BILL 85

(1) A MEMBER OF THE HOUSEH OLD IS A DISABLED PE RSON OR A 1
SENIOR CITIZEN WHO H AS BEEN A MEMBER OF THE HOUSEHOLD FOR AT LEAST 12 2
MONTHS IMMEDIATELY PRECEDING RECEIPT OF THE NOTICE TO VACATE; AND 3

(2) THE HOUSEHOLD: 4

(I) IS A LOW–INCOME HOUSEHOLD; 5

(II) NOTIFIES THE COOPERAT IVE LIMITED EQUITY HOUSI NG 6
CORPORATION OF THE INTENT TO REM AIN IN THE UNIT FOR A PERIOD OF MORE 7
THAN 90 DAYS; AND 8

(III) SUBMITS THE NOTICE UN DER ITEM (II) OF THIS ITEM TO 9
THE COOPERATIVE LIMITED EQUITY HOUSI NG CORPORATION WITHIN 30 DAYS 10
AFTER RECEIVING THE NOTICE TO VACATE. 11

(D) A HOUSEHOLD MAY BE REQ UIRED TO VACATE THE PREMISES BEFORE 12
THE EXPIRATION OF AN Y MINIMUM TIME PERIO D UNDER THIS SECTION IF THE 13
HOUSEHOLD: 14

(1) BREACHES A COVENANT I N THE LEASE OCCURRIN G BEFORE OR 15
AFTER THE NOTICE TO VACATE IS GIVEN; OR 16

(2) FAILS TO PAY RENT BEF ORE OR AFTER THE NOT ICE TO VACATE 17
HAS BEEN GIVEN. 18

(E) A LOW–INCOME HOUSEHOLD THA T IS REQUIRED TO VAC ATE A UNIT 19
UNDER THIS SECTION S HALL RECEIVE REIMBURSEMENT FROM THE COOP ERATIVE 20
LIMITED EQUITY HOUSING CORPORATION FOR MOVING EXPENSES THAT: 21

(1) ARE ACTUALLY AND REASONABLY INCURRED; AND 22

(2) ARE AT LEAST $375 BUT LESS THAN $751. 23

5–6D–06. 24

(A) THE APPRECIATION AND RES ALE OF A COOPERATIVE INTEREST MAY 25
NOT EXCEED THE COST PAID BY THE MEMBER F OR THE INITIAL COOPE RATIVE 26
INTEREST, ADJUSTED FOR INFLATION PLUS THE COST OF IMPROVEMENTS TO THE 27
COOPERATIVE INTEREST MADE BY THE MEMBER T HAT WERE APPROVED IN 28
ADVANCE BY THE COOPERATIVE LIMITED EQUITY HOUSING CORPORATION. 29

(B) A COOPERATIVE INTEREST MAY BE SOLD ONLY TO AN INDIVIDUAL OR 30
INDIVIDUALS WHO ARE IN: 31
HOUSE BILL 85 11

(1) A LOW–INCOME HOUSEHOLD; 1

(2) A MODERATE–INCOME HOUSEHOLD; OR 2

(3) AN ELIGIBLE HOUSEHOLD THAT RECEIVES AND ACCEPTS AN 3
OFFER TO ACQUIRE A C OOPERATIVE INTEREST IN ACCORDANCE WITH § 4
5–6D–05(A)(1)(II) OF THIS SUBTITLE. 5

(C) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , A 6
COOPERATIVE LIMITED EQUITY HOUSING CORPO RATION SHALL HAVE TH E 7
FOLLOWING MEMBERSHIP COMPOSITION: 8

(I) AT LEAST 75% OF THE MEMBERS SHALL BE IN A 9
LOW–INCOME HOUSEHOLD; AND 10

(II) ALL OTHER MEMBERS WHO ARE NOT IN A LOW –INCOME 11
HOUSEHOLD SHALL BE IN A MEDIUM–INCOME MODERATE–INCOME HOUSEHOLD. 12

(2) THE MEMBERSHIP COMPOSITION REQUIRED UNDER PARAGRAPH 13
(1) OF THIS SUBSECTION D OES NOT INCLUDE HOUS EHOLDS THAT ACQUIRE A 14
COOPERATIVE INTEREST FOLLOWING AN OFFER UNDER § 5–6D–05(A)(1)(II) OF THIS 15
SUBTITLE. 16

5–6D–07. 17

(A) THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT MAY: 18

(1) TO THE EXTENT APPLICA BLE TO AND NOT INCON SISTENT WITH 19
THIS SUBTITLE, USING A STANDARDIZED METHODOLOGY, ESTABLISH ADDITIONAL 20
RIGHTS AND REQUIREME NTS FOR A COOPERATIV E LIMITED EQUITY HOUSI NG 21
CORPORATION AND ITS MEMBERS BASE D ON AN INDIVIDUALIZ ED ASSESSMENT OF 22
THE COOPERATIVE; 23

(2) BASE A DETERMINATION UNDER ITEM (1) OF THIS SUBSECTION 24
ON THE RIGHTS AND REQUIREMENTS FOR COOPERATIVE HOUSING CORPORATIONS 25
AND THEIR MEMBERS UNDER SUBTITLE 6B OF THIS TITLE; AND 26

(3) ESTABLISH A PROGRAM T O PROVIDE GRANTS TO MARYLAND 27
NONSTOCK CORPORATIONS TO PROMOTE THE EST ABLISHMENT OF COOPER ATIVE 28
LIMITED EQUITY HOUSING CORPORATIONS. 29

(B) THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT 30
SHALL ADOPT REGULATIONS TO CARRY OUT THIS SECTION. 31
12 HOUSE BILL 85

5–6D–08. 1

(A) A COUNTY OR MUNICIP ALITY MAY NOT IMPOSE RESTRICTIONS ON A 2
COOPERATIVE LIMITED EQUITY HOUSING CORPORATION OR THE CONVERSION OF A 3
MARYLAND NONSTOCK COR PORATION TO A COOPER ATIVE LIMITED EQUITY 4
HOUSING CORPORATION. 5

(A) (1) ALL LAWS , ORDINANCES, AND REGULATIONS CONC ERNING 6
BUILDING CODES OR ZONING SHALL: 7

(I) HAVE FULL FORCE AND EFFECT TO THE EXTENT THAT THEY 8
APPLY TO PROPERTY TH AT IS SUBJECT TO A COOPERATIVE L IMITED EQUITY 9
HOUSING CORPORATION REGIME; AND 10

(II) BE CONSTRUED AND APPL IED WITH REFERENCE T O THE 11
OVERALL NATURE AND USE OF THE PROPERTY WITHOUT REGARD TO THE FORM OF 12
OWNERSHIP. 13

(2) A LAW, AN ORDINANCE , OR A REGULATION CONC ERNING 14
BUILDING CODES OR ZO NING MAY NOT ESTABLI SH ANY REQUIREMENT O R 15
STANDARD GOVERNING T HE USE, LOCATION, PLACEMENT, OR CONSTRUCTION OF 16
ANY LAND AND IMPROVEM ENTS THAT ARE SUBJEC T TO THE PROVISIONS OF THIS 17
TITLE, UNLESS THE REQUIREME NT OR STANDARD IS UN IFORMLY APPLICABLE T O 18
ALL LAND AND IMPROVE MENTS OF THE SAME KI ND OR CHARACTER NOT SUBJECT 19
TO THE PROVISIONS OF THIS TITLE. 20

(B) (1) EXCEPT AS OTHERWISE P ROVIDED IN THIS TITL E, A COUNTY , 21
CITY, OR OTHER JURISDICTIO N MAY NOT ENACT ANY LAW, ORDINANCE, OR 22
REGULATION THAT WOULD IMPOSE A BURDEN OR RESTRICTION ON A COOPERATIVE 23
LIMITED EQUITY HOUSING CORPORATION THAT IS N OT IMPOSED ON ALL OT HER 24
PROPERTY OF SIMILAR CHARACTER THAT IS NO T SUBJECTED TO A COOPERATIVE 25
LIMITED EQUITY HOUSING CORPORATION REGIME. 26

(2) A LAW, AN ORDINANCE , OR A REGULATION DESC RIBED UNDER 27
PARAGRAPH (1) OF THIS SUBSECTION IS VOID AND UNENFORCEABLE. 28

(3) (I) EXCEPT AS OTHERWISE E XPRESSLY PROVIDED IN THIS 29
TITLE, THE PROVISIONS OF THIS TITLE APPLY TO THE ENTIRE STATE. 30

(II) ANY LAW , ORDINANCE, OR REGULATION ENACTE D BY A 31
COUNTY, CITY, OR OTHER JURISDICTION THAT IS INCONSISTENT WITH THIS TITLE IS 32
PREEMPTED BY THIS TITLE. 33

HOUSE BILL 85 13

(B) (C) THE PROHIBITION IN SU BSECTION (A) OF THIS SECTION 1
INCLUDES REQUIREMENTS THROUGH LOCAL LAW OR ORDINANCE THAT RE STRICT 2
THE SALE OF RESIDENT IAL RENTAL FACILITIE S TO A MARYLAND NONSTOCK 3
CORPORATION THAT PLA NS TO CONVERT TO A C OOPERATIVE LIMITED EQUITY 4
HOUSING CORPORATION. 5

5–6D–09. 6

THE DEPARTMENT SHALL ADOP T REGULATIONS TO CAR RY OUT THIS 7
SUBTITLE AND ENSURE THE EFFECTIVE FUNCTI ONING OF COOPERATIVE LIMITED 8
EQUITY HOUSING CORPORATIONS. 9

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 10
October 1, 2027 2026. 11

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.