Organization and operation of housing cooperatives modified; member violations addressed; disclosures and notice required; purchaser permitted to cancel; express and implied warranties established; and clarifying, technical, and conforming changes made.

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.

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:

new text begin

Subd. 4.

new text end

new text begin

Homestead exemption.

new text end

new text begin

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.

new text end

Sec. 2.

Minnesota Statutes 2024, section 308C.003, is amended by adding a subdivision

to read:

new text begin

Subd. 5.

new text end

new text begin

Taxation.

new text end

new text begin

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.

new text end

Sec. 3.

Minnesota Statutes 2024, section 308C.005, subdivision 4, is amended to read:

Subd. 4.

Articles.

"Articles" means the articles of
deleted text begin
organization
deleted text end
new text begin
incorporation
new text end
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:

new text begin

Subd. 4a.

new text end

new text begin

Assessment.

new text end

new text begin

"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

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.

new text end

Sec. 5.

Minnesota Statutes 2024, section 308C.005, subdivision 7, is amended to read:

Subd. 7.

Business entity.

"Business entity" means a
new text begin
corporation,
new text end
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
deleted text begin
a cooperative
deleted text end
new text begin
an association
new text end
organized

under this chapter
deleted text begin
providing
deleted text end
new text begin
to provide
new text end
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
deleted text begin
cooperative
deleted text end
new text begin

cooperative's project
new text end
other than a dwelling unit
new text begin
, a lot,
new text end
or a manufactured home
new text begin
that is occupied

as a residence
new text end
.

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
deleted text begin
dwelling
deleted text end
unit
new text begin
,
new text end
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
deleted text begin
real estate developer in the business of

building dwelling
deleted text end
new text begin
person who builds
new text end
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
new text begin
appreciation
new text end
cooperative.

"Limited equity
new text begin
appreciation
new text end

cooperative" means a cooperative
deleted text begin
governed by this chapter that 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. 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.
deleted text end
new text begin
whose bylaws or articles:
new text end

new text begin

(1) contain a transfer value formula that limits the appreciation, value, and price of a

membership for sales or transfer purposes;

new text end

new text begin

(2) limit the extent to which a member may transfer a membership interest; and

new text end

new text begin

(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.

new text end

Sec. 11.

Minnesota Statutes 2024, section 308C.005, subdivision 23, is amended to read:

Subd. 23.

Low income.

"Low income" means
deleted text begin
having
deleted text end
income that is less than or equal

to 80 percent of
new text begin
area
new text end
median income
deleted text begin
for the area
deleted text end
, adjusted for family size,
deleted text begin
in accordance

with federal standards generally accepted at the time of organization and comparable to

standards of
deleted text end
new text begin
as published annually by
new text end
the United States Department of Housing and Urban

Development
deleted text begin
existing on June 16, 1988
deleted text end
.

Sec. 12.

Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision

to read:

new text begin

Subd. 26a.

new text end

new text begin

Market rate cooperative.

new text end

new text begin

"Market rate cooperative" means a cooperative

whose bylaws or articles either:

new text end

new text begin

(1) impose no limitations on the valuation or sales price of a membership for sale or

transfer purposes; or

new text end

new text begin

(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.

new text end

new text begin

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.

new text end

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
deleted text begin
of organization
deleted text end
or bylaws and who is identified as

a member on the books and records of the cooperative and has been issued a membership

certificate.
deleted text begin
Membership certificates include owner members and nonoccupant members.
deleted text end

Sec. 14.

Minnesota Statutes 2024, section 308C.005, subdivision 29, is amended to read:

Subd. 29.

Membership interest.

"Membership interest" means
deleted text begin
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.
deleted text end
new text begin
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.
new text end

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
deleted text begin
the
deleted text end
new text begin
a
new text end
contract for purchase of a membership interest to which a particular
deleted text begin

dwelling
deleted text end
unit is appurtenant between
deleted text begin
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.
deleted text end
new text begin
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.
new text end

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
new text begin
area
new text end
median income
deleted text begin
for the area
deleted text end
, adjusted for family size,
deleted text begin
in accordance with federal

standards generally accepted at the time of organization and comparable to standards of
deleted text end
new text begin
as

published annually by
new text end
the United States Department of Housing and Urban Development
deleted text begin

existing on June 16, 1988
deleted text end
.

Sec. 17.

Minnesota Statutes 2024, section 308C.005, subdivision 41, is amended to read:

Subd. 41.

Proprietary lease.

"Proprietary lease" means an
new text begin
occupancy
new text end
agreement with

a cooperative governing a member's right to occupancy under which a member has an

exclusive possessory interest in a unit
deleted text begin
or lot
deleted text end
.

Sec. 18.

Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision

to read:

new text begin

Subd. 41a.

new text end

new text begin

Purchase agreement.

new text end

new text begin

"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.

new text end

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
new text begin
interest
new text end
and
deleted text begin
occupancy agreement
deleted text end
new text begin
appurtenant proprietary lease
new text end
.

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
deleted text begin
prospective member
deleted text end
new text begin
purchaser
new text end
and the cooperative of a membership

interest in the cooperative
new text begin
to which a particular unit is appurtenant
new text end
.

Sec. 21.

Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision

to read:

new text begin

Subd. 46a.

new text end

new text begin

Transfer.

new text end

new text begin

"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.

new text end

Sec. 22.

Minnesota Statutes 2024, section 308C.005, subdivision 47, is amended to read:

Subd. 47.

Transfer value.

"Transfer value" means
deleted text begin
the formula price at which the

cooperative may purchase the membership interest of a deceased or departing member in

a limited equity cooperative
deleted text end
new text begin
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
new text end
.

Sec. 23.

Minnesota Statutes 2024, section 308C.005, is amended by adding a subdivision

to read:

new text begin

Subd. 47a.

new text end

new text begin

Transfer value formula.

new text end

new text begin

"Transfer value formula" means the formula

contained in the bylaws or articles of a cooperative for establishing a membership's transfer

value.

new text end

Sec. 24.

Minnesota Statutes 2024, section 308C.005, subdivision 48, is amended to read:

Subd. 48.

Unit.

"Unit" means a portion of the cooperative
deleted text begin
property
deleted text end
new text begin
project
new text end
leased for

exclusive occupancy by a member under a proprietary lease
deleted text begin
or leased to a tenant by an

occupancy agreement
deleted text end
.
new text begin
Unit includes but is not limited to dwelling units and lots.
new text end

Sec. 25.

Minnesota Statutes 2024, section 308C.009, subdivision 1, is amended to read:

Subdivision 1.

Permissible uses.

deleted text begin
Businesses
deleted text end
new text begin
(a) Cooperatives
new text end
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
deleted text begin
business
deleted text end
new text begin
cooperative
new text end
organized under chapter

308A
deleted text begin
,
deleted text end
new text begin
or
new text end
308B
deleted text begin
, 317A, or 515B
deleted text end
from using the term "housing cooperative."

new text begin

(b)
new text end
A
deleted text begin
corporation or association
deleted text end
new text begin
cooperative
new text end
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
deleted text begin
corporation or association
deleted text end
new text begin
cooperative
new text end
has complied

with and is subject to this chapter or has
deleted text begin
incorporated under the laws of this state authorizing

incorporation of business on a cooperative plan
deleted text end
new text begin
organized under chapter 308A or 308B
new text end
.

Sec. 26.

Minnesota Statutes 2024, section 308C.201, is amended to read:

308C.201 ORGANIZATIONAL PURPOSE.

A cooperative may be formed and organized
deleted text begin
on a cooperative basis and plan
deleted text end
under this

chapter
deleted text begin
:
deleted text end

deleted text begin

(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;

deleted text end

deleted text begin

(2)
deleted text end
to provide
new text begin
residential housing
new text end
on a
new text begin
cooperative and
new text end
nonprofit
deleted text begin
and cooperative
deleted text end
basis
deleted text begin

residential housing either through ownership, leasing, or a combination of both and the

social, recreational, commercial, and communal facilities necessary to serve and improve

the residential housing;
deleted text end
or
new text begin
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.

new text end

deleted text begin

(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.

deleted text end

Sec. 27.

Minnesota Statutes 2024, section 308C.205, is amended to read:

308C.205
new text begin
INCORPORATORS OR
new text end
ORGANIZERS.

A cooperative may be organized by one or more
new text begin
incorporators or
new text end
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
new text begin
and principal place of business
new text end
of the cooperative;

(2) the organizational purpose of the cooperative in accordance with this chapter;

(3) the name and address of each
deleted text begin
organizer
deleted text end
new text begin
initial director and incorporator
new text end
;

(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;
deleted text begin
and
deleted text end

(2) if the cooperative is to be organized as a limited equity
new text begin
appreciation
new text end
cooperative, the

requirements set forth in section
308C.312
deleted text begin
.
deleted text end
new text begin
; and
new text end

deleted text begin

(c) The articles may contain
deleted text end
new text begin
(3)
new text end
any other lawful provision.

deleted text begin

(d)
deleted text end
new text begin
(c)
new text end
The articles shall be signed by each
new text begin
incorporator or
new text end
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
deleted text begin
organization
deleted text end
new text begin
incorporation
new text end
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
deleted text begin
mail
deleted text end
new text begin
mailed
new text end
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
deleted text begin

vote
deleted text end
new text begin
ballot
new text end
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. 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
new text begin
with voting rights
new text end
.

Sec. 32.

Minnesota Statutes 2024, section 308C.221, subdivision 4, is amended to read:

Subd. 4.

Amendment by the
deleted text begin
organizer
deleted text end
new text begin
incorporator
new text end
.

The
deleted text begin
organizer
deleted text end
new text begin
incorporator
new text end
or

a majority of the
deleted text begin
organizers
deleted text end
new text begin
incorporators
new text end
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
deleted text begin
housing
deleted text end
cooperative organized under chapter 308A or

308B may convert and become exclusively subject to this chapter by amending the
deleted text begin
housing
deleted text end

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
deleted text begin
housing
deleted text end
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
deleted text begin
housing
deleted text end
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
deleted text begin
housing
deleted text end
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;
deleted text begin
and
deleted text end

(2) a certificate of amendment amending the
deleted text begin
housing
deleted text end
cooperative's articles to conform

with the requirements of this chapter
deleted text begin
.
deleted text end
new text begin
; and
new text end

new text begin

(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.

new text end

(b) The conversion is effective
new text begin
and any common interest community declaration is

terminated
new text end
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
deleted text begin
housing
deleted text end

cooperative organized
new text begin
and operating
new text end
under chapter 308A
deleted text begin
or
deleted text end
new text begin
,
new text end
308B
new text begin
, or 515B
new text end
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
deleted text begin
housing
deleted text end
cooperative organized
new text begin
and operating
new text end
under chapters 308A
deleted text begin
and
deleted text end
new text begin
,
new text end

308B
new text begin
, and 515B
new text end
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
deleted text begin

housing
deleted text end
cooperative under chapters 308A
deleted text begin
and
deleted text end
new text begin
,
new text end
308B
new text begin
, and 515B
new text end
are preserved unimpaired,

and debts, liabilities, and duties of the
deleted text begin
housing
deleted text end
cooperative under chapters 308A
deleted text begin
and
deleted text end
new text begin
,
new text end
308B
new text begin
,

and 515B
new text end
remain attached to the
deleted text begin
housing
deleted text end
cooperative as converted and governed by this

chapter and may be enforced against the
deleted text begin
housing
deleted text end
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
deleted text begin
and
deleted text end
new text begin
,
new text end
308B
new text begin
, and 515B
new text end
, 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. 36.

Minnesota Statutes 2024, section 308C.241, subdivision 1, is amended to read:

Subdivision 1.

Required.

A cooperative shall have bylaws
deleted text begin
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
deleted text end
.

Sec. 37.

Minnesota Statutes 2024, section 308C.241, is amended by adding a subdivision

to read:

new text begin

Subd. 1a.

new text end

new text begin

Adoption and amendment.

new text end

new text begin

(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:

new text end

new text begin

(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;

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

Sec. 38.

Minnesota Statutes 2024, section 308C.241, subdivision 2, is amended to read:

Subd. 2.

Contents.

deleted text begin
(a) If not stated in the articles, the bylaws must state
deleted text end
new text begin
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
new text end
:

(1) the purpose of the cooperative
new text begin
in accordance with this chapter
new text end
;

(2)
deleted text begin
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
deleted text end
new text begin
the qualifications for membership

in the cooperative and limitations on the number of memberships issuable
new text end
;

(3)
deleted text begin
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
deleted text end
new text begin
a statement that membership interests in the cooperative are personal property
new text end
;

(4)
deleted text begin
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
deleted text end
new text begin
the manner of admission,

withdrawal, suspension, and expulsion of members
new text end
;

(5)
deleted text begin
a statement that membership interests held by a member are transferable only with

the approval of the board or as provided in the bylaws
deleted text end
new text begin
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
new text end
;
deleted text begin
and
deleted text end

(6)
deleted text begin
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.
deleted text end
new text begin

property, voting, and other rights and privileges of members;
new text end

new text begin

(7) the number of members of the board of directors and their respective terms of tenure;

new text end

new text begin

(8) the manner of appointment or election of a president, vice-president, treasurer, and

secretary by the board of directors;

new text end

new text begin

(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;

new text end

new text begin

(10) the manner of appointment of committees and their authority;

new text end

new text begin

(11) the time, place, and manner of calling, conducting, and giving notice of member,

board, and committee meetings, or of conducting mail ballots;

new text end

new text begin

(12) the timeframe and manner for issuing reports and financial statements to members;

new text end

new text begin

(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;

new text end

new text begin

(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:

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(iv) a statement of the status of any pending litigation or judgments in which the

cooperative is a party;

new text end

new text begin

(v) a detailed description of the insurance coverage provided by the cooperative; and

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

deleted text begin

(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:

deleted text end

deleted text begin

(1) the number of directors and the qualifications, manner of election, powers, duties,

and compensation, if any, of directors;

deleted text end

deleted text begin

(2) the qualifications of members and any limitations on their number;

deleted text end

deleted text begin

(3) the manner of admission, withdrawal, suspensions, and expulsion of members;

deleted text end

deleted text begin

(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;

deleted text end

deleted text begin

(5)
deleted text end
new text begin
(16)
new text end
if the cooperative intends to
deleted text begin
operate as a limited equity cooperative,
deleted text end
new text begin
use a transfer

value formula, the circumstances in which the cooperative will use the transfer value formula,
new text end

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
deleted text begin

a right of first refusal or option to acquire
deleted text end
a member's interest
new text begin
or assign to a buyer approved

by the cooperative, the cooperative's right to purchase the membership of a deceased or

departing member,
new text end
and the conditions under which that power is exercised;

deleted text begin

(6)
deleted text end
new text begin
(17)
new text end
the basis for allocating common expenses, charges, outlays, and other

expenditures or payments of the cooperative among
deleted text begin
dwelling units
deleted text end
new text begin
memberships
new text end
. 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;

deleted text begin

(7)
deleted text end
new text begin
(18)
new text end
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;

deleted text begin

(8)
deleted text end
new text begin
(19)
new text end
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
deleted text begin
dwelling
deleted text end
units, and the

circumstances and processes under which the cooperative may
new text begin
levy fines, suspend member

voting rights, and
new text end
terminate the membership and occupancy rights of its members
new text begin
and

transfer or dispose of a terminated member's membership
new text end
;

deleted text begin

(9)
deleted text end
new text begin
(20)
new text end
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

deleted text begin

(10) any provisions required by the articles to be in
deleted text end
new text begin
(21) the method of amending
new text end
the

bylaws.

deleted text begin

(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.

deleted text end

Sec. 39.

Minnesota Statutes 2024, section 308C.245, is amended to read:

308C.245 COOPERATIVE RECORDS.

new text begin

Subdivision 1.

new text end

new text begin

Required records.

new text end

deleted text begin

(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.

deleted text end

deleted text begin

(b) A cooperative shall maintain appropriate account records.

deleted text end

deleted text begin

(c) A cooperative shall maintain its records in written form or in another form capable

of conversion into written form within a reasonable time.

deleted text end

deleted text begin

(d) A cooperative shall retain a copy of each of the following records at its principal

office:

deleted text end

deleted text begin

(1) articles and other governing instruments;

deleted text end

deleted text begin

(2) bylaws or other similar instruments;

deleted text end

deleted text begin

(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;

deleted text end

deleted text begin

(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;

deleted text end

deleted text begin

(5) all written communications within the prior three years to members as a group;

deleted text end

deleted text begin

(6) a list of the names and business addresses of its current board members and officers;

deleted text end

deleted text begin

(7) a copy of its most recent periodic registration delivered to the secretary of state under

section
308C.121
; and

deleted text end

deleted text begin

(8) all financial statements prepared for periods ending during the last fiscal year.

deleted text end

new text begin

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

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.

new text end

new text begin

Subd. 2.

new text end

new text begin

Examination of records.

new text end

new text begin

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.

new text end

new text begin

Subd. 3.

new text end

new text begin

Fees.

new text end

new text begin

The cooperative may require the member or the member's authorized

agent to pay a fee for copies that must not exceed:

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

new text begin

Subd. 4.

new text end

new text begin

Discretion; retention; disclosure.

new text end

deleted text begin
(e)
deleted text end
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.

deleted text begin
Generally
deleted text end
new text begin
Powers of the cooperative
new text end
.

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
deleted text begin
;
deleted text end
new text begin
, including but not limited to the

power to:
new text end

new text begin

(i) sue and be sued in the cooperative's corporate name;

new text end

new text begin

(ii) build and construct units;

new text end

new text begin

(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;

new text end

new text begin

(iv) sell, convey, mortgage, pledge, lease as lessor, and otherwise dispose of all or any

part of the cooperative's property and assets;

new text end

new text begin

(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;

new text end

new text begin

(vi) elect or appoint officers and agents of the cooperative and define the duties and fix

the compensation of the officers and agents;

new text end

new text begin

(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;

new text end

new text begin

(viii) dissolve and cease cooperative activities as provided in this chapter; and

new text end

new text begin

(ix) have and exercise all powers necessary or convenient to effect the purposes for

which the cooperative is organized;

new text end

(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.

deleted text begin
Legal capacity
deleted text end
new text begin
Powers of the board
new text end
.

deleted text begin

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.

deleted text end

new text begin

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:

new text end

new text begin

(1) adopt, amend, and revoke rules and regulations not inconsistent with the articles and

bylaws;

new text end

new text begin

(2) adopt and amend budgets for revenues, expenditures, reserves, and maintenance and

levy and collect assessments from members;

new text end

new text begin

(3) hire and discharge management agents and employees, agents, and independent

contractors;

new text end

new text begin

(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;

new text end

new text begin

(5) make contracts and incur liabilities;

new text end

new text begin

(6) regulate the use, maintenance, repair, replacement, and modification to the common

elements and the units;

new text end

new text begin

(7) cause improvements to be made to the common elements and the units;

new text end

new text begin

(8) acquire, hold, encumber, and convey in the cooperative's name, any right, title, or

interest to the personal property of the cooperative;

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(12) impose reasonable charges for the review and preparation of documents requested

by members, statements of unpaid assessments, or furnishing copies of cooperative records;

new text end

new text begin

(13) provide for the indemnification of the cooperative's officers and directors and

maintain directors' and officers' liability insurance;

new text end

new text begin

(14) provide for reasonable procedure for governing the conduct of meetings and election

of directors;

new text end

new text begin

(15) exercise powers in relations with members, cooperatives, or business entities from

which the cooperative is constituted; and

new text end

new text begin

(16) exercise all other powers necessary or convenient to effect the purposes for which

cooperatives are formed under this chapter.

new text end

Sec. 42.

Minnesota Statutes 2024, section 308C.311, is amended to read:

308C.311
deleted text begin
OCCUPANCY AGREEMENTS AND
deleted text end
PROPRIETARY LEASES.

Subdivision 1.

Authority.

A cooperative and its
deleted text begin
occupant
deleted text end
members may make and

execute
deleted text begin
an occupancy agreement,
deleted text end
new text begin
a
new text end
proprietary lease
deleted text begin
,
deleted text end
or other agreements that specify the

terms of the
deleted text begin
occupant
deleted text end
members' lease or occupancy of a unit
deleted text begin
or dwelling unit
deleted text end
.

Subd. 2.

Title to unit
deleted text begin
or dwelling unit
deleted text end
.

Title to cooperative property consisting of a
deleted text begin

dwelling
deleted text end
unit
deleted text begin
or units
deleted text end
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
deleted text begin
, an occupancy agreement,
deleted text end
or
new text begin
a
new text end

proprietary lease may include the requirement of the member to pay liquidated damages to

the cooperative for breach of any provision of
deleted text begin
an occupancy agreement,
deleted text end
new text begin
a
new text end
proprietary lease
deleted text begin
,
deleted text end

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
new text begin
APPRECIATION
new text end
COOPERATIVES.

A cooperative formed under this chapter may organize as a limited equity
new text begin
appreciation
new text end

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
new text begin

appreciation
new text end
cooperative shall meet the following requirements:

(1) the articles
new text begin
or bylaws
new text end
shall require that cooperative interests be sold at no more than

a transfer value determined by a limited equity formula contained in the articles
new text begin
or bylaws
new text end
.

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
new text begin
or bylaws
new text end
,

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
new text begin
appreciation
new text end
cooperative once organized under this chapter

may not reorganize as other than a limited equity
new text begin
appreciation
new text end
cooperative without first

dissolving;

(3) a limited equity
new text begin
appreciation
new text end
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
new text begin
or bylaws
new text end
shall require that the cooperative shall have
deleted text begin
the first right to

repurchase a member's cooperative interest
deleted text end
new text begin
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
new text end
;

(5) the articles
new text begin
or bylaws
new text end
shall require that the total distribution out of capital to a member

shall not exceed the transfer value; and

(6) the articles
new text begin
or bylaws
new text end
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
new text begin
appreciation
new text end
cooperative whose

formula for determining transfer value shall be no less restrictive than that of the cooperative

being dissolved.

Sec. 44.

new text begin

[308C.313] MARKET RATE COOPERATIVES.

new text end

new text begin

A cooperative formed under this chapter may organize as a market rate cooperative. A

market rate cooperative must meet the following requirements:

new text end

new text begin

(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;

new text end

new text begin

(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:

new text end

new text begin

(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

new text end

new text begin

(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;

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

Sec. 45.

Minnesota Statutes 2024, section 308C.401, is amended to read:

308C.401 BOARD GOVERNS COOPERATIVE.

new text begin

Subdivision 1.

new text end

new text begin

Board powers; generally.

new text end

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
new text begin
in the cooperative's articles or bylaws, under subdivision 2, or under

other provisions of this chapter
new text end
. 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.

new text begin

Subd. 2.

new text end

new text begin

Exceptions to board powers.

new text end

new text begin

The board must not, without vote or agreement

of the members:

new text end

new text begin

(1) amend the cooperative's articles or, except as set forth in section 308C.241,

subdivision 7, the cooperative's bylaws;

new text end

new text begin

(2) terminate or dissolve the cooperative;

new text end

new text begin

(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;

new text end

new text begin

(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

new text end

new text begin

(5) determine the qualifications, powers, duties, or terms of office of directors.

new text end

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.
new text begin
Except for the first board and filling

vacancies pursuant to section 308C.415,
new text end
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. 47.

Minnesota Statutes 2024, section 308C.411, subdivision 1, is amended to read:

Subdivision 1.

First board.

Unless appointed by a developer, the
deleted text begin
organizer or organizers
deleted text end
new text begin

incorporator or incorporators
new text end
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
deleted text begin
holding occupant membership interests
deleted text end
.

deleted text begin

(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.

deleted text end

deleted text begin

(d)
deleted text end
new text begin
(c)
new text end
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.

deleted text begin

(e)
deleted text end
new text begin
(d)
new text end
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.

deleted text begin

(f)
deleted text end
new text begin
(e)
new text end
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.

deleted text begin

(g) Directors may be divided into or designated and elected by class or other distinction

as provided in the articles or bylaws.

deleted text end

deleted text begin

(h)
deleted text end
new text begin
(f)
new text end
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.

deleted text begin
Occupant directors
deleted text end
new text begin
Vacancy
new text end
.

If
deleted text begin
an occupant member
deleted text end
new text begin
a
new text end
director's position

becomes vacant
deleted text begin
or a new director position is created for a director that was or is to be elected

by occupant members, the board, in consultation with the directors elected by occupant

members
deleted text end
,
new text begin
the directors
new text end
shall appoint
deleted text begin
an occupant
deleted text end
new text begin
a
new text end
member
deleted text begin
of the cooperative
deleted text end
to fill the

director's position until the next regular or special members' meeting.
deleted text begin
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.
deleted text end
new text begin
At the next regular

or special meeting, the members must elect a director to fill the unexpired term of the vacant

director's position.
new text end

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
deleted text begin
; 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
deleted text end
.

Sec. 51.

Minnesota Statutes 2024, section 308C.425, subdivision 2, is amended to read:

Subd. 2.

Open meetings.

new text begin
(a)
new text end
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
deleted text begin
to discuss
deleted text end
new text begin
for
new text end
the following
new text begin
purposes
new text end
:

(i)
new text begin
to discuss
new text end
personnel matters;

(ii)
new text begin
to discuss
new text end
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;

(iii)
new text begin
to discuss
new text end
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)
deleted text begin
meetings
deleted text end
new text begin
to meet
new text end
with
deleted text begin
legal counsel
deleted text end
new text begin
the cooperative's attorney
new text end
for counsel and advice

on any matter of concern to the board;
deleted text begin
and
deleted text end

(v)
new text begin
to
new text end
review
deleted text begin
of
deleted text end
financial and other lawful information required by the board of directors

of all applicants for membership in the cooperative;
deleted text begin
and
deleted text end

new text begin

(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

new text end

new text begin

(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

new text end

(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.

new text begin

(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.

new text end

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.
deleted text begin
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.
deleted text end

Sec. 53.

Minnesota Statutes 2024, section 308C.451, subdivision 1, is amended to read:

Subdivision 1.

Generally.

deleted text begin
If the bylaws so provide, the board may establish committees.
deleted text end

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

cooperative only to the extent provided in the resolution.
deleted text begin
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.
deleted text end
new text begin
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.
new text end

Sec. 54.

Minnesota Statutes 2024, section 308C.451, subdivision 2, is amended to read:

Subd. 2.

Membership.

Committee members must be
deleted text begin
natural persons
deleted text end
new text begin
members of the

cooperative
new text end
. Unless the articles or bylaws provide for a different
deleted text begin
membership or
deleted text end
manner of

appointment, a committee consists of one or more persons
deleted text begin
, who need not be directors or

members,
deleted text end
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
deleted text begin
within a given class
deleted text end
. 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;

(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
deleted text begin
one member
deleted text end
new text begin
two members
new text end
who
deleted text begin
is a director
deleted text end
new text begin
are directors
new text end
. 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
deleted text begin
or chief executive officer
deleted text end
;

(2) one or more vice presidents;

(3) a secretary; and

(4) a treasurer
deleted text begin
or chief financial officer
deleted text end
.

(b) The officers, other than the president
deleted text begin
or a general manager
deleted text end
, 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
deleted text begin
of the cooperative
deleted text end
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
deleted text begin
shall have one or more members
deleted text end
new text begin
under this

chapter shall be organized on a membership basis without capital stock
new text end
.

Sec. 60.

Minnesota Statutes 2024, section 308C.501, subdivision 2, is amended to read:

Subd. 2.

deleted text begin
Classes
deleted text end
new text begin
One class
new text end
of members.

A cooperative
deleted text begin
may
deleted text end
new text begin
must
new text end
have
new text begin
only
new text end
one class

of members, all of whom
deleted text begin
are occupant members or a cooperative may have more than one

class of members as long as one class of members are occupant members
deleted text end
new text begin
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
new text end
.

Sec. 61.

Minnesota Statutes 2024, section 308C.501, is amended by adding a subdivision

to read:

new text begin

Subd. 2a.

new text end

new text begin

Membership transfer rights.

new text end

new text begin

No member may transfer the member's

membership except as permitted in the articles or the bylaws.

new text end

Sec. 62.

new text begin

[308C.503] MEMBER VIOLATIONS; COOPERATIVE REMEDIES.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Good cause required.

new text end

new text begin

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

the cooperative that continues following reasonable notice and reasonable opportunity to

cure the alleged material violations.

new text end

new text begin

Subd. 2.

new text end

new text begin

Notice to member.

new text end

new text begin

(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:

new text end

new text begin

(1) in the case of a fine, states:

new text end

new text begin

(i) the amount and reason for the fine;

new text end

new text begin

(ii) the section of the articles, bylaws, proprietary lease, or rules, regulations, or policies

of the cooperative allegedly violated;

new text end

new text begin

(iii) the date of the proposed levy;

new text end

new text begin

(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

new text end

new text begin

(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;

new text end

new text begin

(2) in the case of a termination of the member's membership and appurtenant right of

occupancy, states:

new text end

new text begin

(i) the section of the articles, bylaws, proprietary lease, or rules, regulations, or policies

of the cooperative allegedly violated;

new text end

new text begin

(ii) the reason for termination;

new text end

new text begin

(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;

new text end

new text begin

(iv) the intended manner and anticipated timing for transfer and disposition of the

membership upon its termination; and

new text end

new text begin

(v) that upon termination of the member's appurtenant right of occupancy, the member

may be evicted; and

new text end

new text begin

(3) provides the member with the opportunity to request a hearing before the board on

the issue and that provides the member with:

new text end

new text begin

(i) the method the member must use to request the hearing;

new text end

new text begin

(ii) any deadlines associated with the hearing process;

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

Subd. 3.

new text end

new text begin

Loss of voting rights.

new text end

new text begin

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.

new text end

new text begin

Subd. 4.

new text end

new text begin

Transfer of membership posttermination.

new text end

new text begin

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:

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

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
deleted text begin
charges
deleted text end
new text begin

assessments
new text end
, 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
deleted text begin
more frequent meetings are
deleted text end
new text begin
otherwise
new text end
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.
new text begin
The report must contain, at a

minimum, the following:
new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(4) the status of any pending litigation or judgments naming the cooperative as a party;

new text end

new text begin

(5) a detailed description of the insurance coverage provided by the cooperative; and

new text end

new text begin

(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.

new text end

Sec. 66.

Minnesota Statutes 2024, section 308C.525, subdivision 1, is amended to read:

Subdivision 1.

Quorum.

deleted text begin
At any annual or special meeting of the members, unless other

increased by the
deleted text end
new text begin
Unless provided otherwise in the articles or
new text end
bylaws, a quorum necessary

for the transaction of business
new text begin
at any annual or special meeting of the members
new text end
shall be
deleted text begin
ten
deleted text end
new text begin

20
new text end
percent of the total number of
deleted text begin
members
deleted text end
new text begin
memberships and the subsequent departure of

members from the meeting at which a quorum was initially established shall not destroy a

quorum
new text end
.

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
new text begin
a
new text end
membership
deleted text begin
interests
deleted text end
new text begin
interest
new text end
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
deleted text begin
chief

executive officer
deleted text end
new text begin
president
new text end
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.

deleted text begin
(a)
deleted text end
new text begin
Unless otherwise provided

by this chapter,
new text end
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
new text begin
, except as provided

under subdivision 2
new text end
.

deleted text begin

(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.

deleted text end

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
deleted text begin
or

voting groups
deleted text end
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
deleted text begin
and voting groups
deleted text end
required to take action under the quorum and voting

requirements then in effect or proposed to be adopted
deleted text begin
, whichever is greater
deleted text end
.

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
deleted text begin
of incorporation
deleted text end
or bylaws, that

would be required to take the same action at a meeting of the members at which all members
deleted text begin

were
deleted text end
new text begin
are
new text end
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
deleted text begin

dwelling
deleted text end
unit
deleted text begin
or lot
deleted text end
in the project such that the resulting number of memberships outstanding

at all times is equal to the number of
deleted text begin
dwelling
deleted text end
units
deleted text begin
or lots
deleted text end
in the project. Each membership

shall have one vote in the affairs of the cooperative.
deleted text begin
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.
deleted text end

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.
new text begin
Except as provided in subdivisions 6 and 7, a member's vote must not be made

by proxy.
new text end

Sec. 74.

Minnesota Statutes 2024, section 308C.545, subdivision 5, is amended to read:

Subd. 5.

deleted text begin
Jointly owned membership interest
deleted text end
new text begin
Unit occupied by more than one

member
new text end
.

If
deleted text begin
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
deleted text end
new text begin
a unit is occupied by more than one member, only one person may cast the vote for

the membership
new text end
.
new text begin
If the members fail to agree and notify the cooperative as to who shall cast

the vote, the vote must not be cast.
new text end

Sec. 75.

Minnesota Statutes 2024, section 308C.545, is amended by adding a subdivision

to read:

new text begin

Subd. 6.

new text end

new text begin

Spouse may vote for member.

new text end

new text begin

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.

new text end

Sec. 76.

Minnesota Statutes 2024, section 308C.545, is amended by adding a subdivision

to read:

new text begin

Subd. 7.

new text end

new text begin

Members represented by delegates, conservator, or attorney-in-fact.

new text end

new text begin

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.

new text end

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

business,
deleted text begin
and grant a security interest in all or substantially all of the cooperatives property

and assets
deleted text end
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
new text begin
at which a quorum is present,
new text end

by the affirmative vote of
new text begin
two-thirds of
new text end
the
deleted text begin
owners of a majority of the voting power of the

interests entitled to vote
deleted text end
new text begin
entire membership of record
new text end
. Written notice of the meeting must

be given to all members
deleted text begin
whether or not they are entitled to vote at the meeting
deleted text end
. 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.

new text begin

[308C.572] GRANT OF A SECURITY INTEREST IN COOPERATIVE.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Generally.

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

Subd. 2.

new text end

new text begin

Confirmatory documents.

new text end

new text begin

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.

new text end

Sec. 79.

new text begin

[308C.580] INSURANCE.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Insurance required.

new text end

new text begin

Beginning no later than the initial commencement

of project occupancy by members, the cooperative shall maintain, to the extent reasonably

available:

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

new text begin

Subd. 2.

new text end

new text begin

Specific coverage; member requirements.

new text end

new text begin

(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:

new text end

new text begin

(1) ceiling or wall finishing materials;

new text end

new text begin

(2) finished flooring;

new text end

new text begin

(3) cabinetry;

new text end

new text begin

(4) finished millwork;

new text end

new text begin

(5) electrical, heating, ventilating, and air conditioning equipment, and plumbing fixtures

serving a single unit;

new text end

new text begin

(6) appliances; or

new text end

new text begin

(7) other improvements and betterments owned and installed by the cooperative,

regardless of when installed by the cooperative.

new text end

new text begin

(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:

new text end

new text begin

(1) pay the deductible amount as a common expense;

new text end

new text begin

(2) assess the deductible amount against one or more of the units affected in any

reasonable manner;

new text end

new text begin

(3) require the members of one or more of the units affected to pay the deductible amount

directly;

new text end

new text begin

(4) require the members to maintain insurance commonly known as gap insurance for

their respective units; and

new text end

new text begin

(5) direct members to report losses and pay deductibles before taking any other action

under this subdivision.

new text end

new text begin

Subd. 3.

new text end

new text begin

Notice to members; other insurance.

new text end

new text begin

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.

new text end

new text begin

Subd. 4.

new text end

new text begin

Insurance policy provisions.

new text end

new text begin

Insurance policies carried pursuant to subdivisions

1 and 2 must provide that:

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

new text begin

Subd. 5.

new text end

new text begin

Insurance proceeds; trust.

new text end

new text begin

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

surplus for use by the cooperative or distribute the surplus among the members on an

equitable basis as determined by the board.

new text end

new text begin

Subd. 6.

new text end

new text begin

Member's gap insurance.

new text end

new text begin

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.

new text end

new text begin

Subd. 7.

new text end

new text begin

Certificates.

new text end

new text begin

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.

new text end

new text begin

Subd. 8.

new text end

new text begin

Repairs.

new text end

new text begin

(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:

new text end

new text begin

(1) the cooperative is dissolved;

new text end

new text begin

(2) repair or replacement would be illegal under any state or local health or safety statute

or ordinance; or

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

(c) If less than the entire project is repaired or replaced:

new text end

new text begin

(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;

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

new text begin

Subd. 9.

new text end

new text begin

Effect of dissolution.

new text end

new text begin

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.

new text end

Sec. 80.

new text begin

[308C.582] UPKEEP OF COOPERATIVE.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Division of responsibility.

new text end

new text begin

Except to the extent provided by the bylaws,

proprietary lease, subdivision 2, or section 308C.580:

new text end

new text begin

(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

new text end

new text begin

(2) each member is responsible for:

new text end

new text begin

(i) the maintenance, repair, and replacement of the member's personal property and

household goods in the member's unit; and

new text end

new text begin

(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.

new text end

new text begin

Subd. 2.

new text end

new text begin

Damage by member, guest, or subtenant.

new text end

new text begin

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.

new text end

new text begin

Subd. 3.

new text end

new text begin

Maintenance plan; modifications; copies.

new text end

new text begin

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.

new text end

new text begin

Subd. 4.

new text end

new text begin

Access to units.

new text end

new text begin

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.

new text end

Sec. 81.

Minnesota Statutes 2024, section 308C.601, is amended by adding a subdivision

to read:

new text begin

Subd. 1a.

new text end

new text begin

Generally.

new text end

new text begin

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.

new text end

Sec. 82.

Minnesota Statutes 2024, section 308C.601, is amended by adding a subdivision

to read:

new text begin

Subd. 1b.

new text end

new text begin

Number of membership interests.

new text end

new text begin

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.

new text end

Sec. 83.

Minnesota Statutes 2024, section 308C.601, subdivision 2, is amended to read:

Subd. 2.

Issuance of membership interests
new text begin
; certificated
new text end
.

new text begin
(a)
new text end
Authorized membership

interests may be issued on terms and conditions prescribed in the articles
deleted text begin
,
deleted text end
new text begin
or
new text end
bylaws
deleted text begin
, 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
deleted text end
.

new text begin

(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

real and personal property not constituting units. The proprietary lease creates a legal

relationship of landlord and tenant between the cooperative and member.

new text end

new text begin

(c) Membership certificates shall be issued upon certification of full payment by the

cooperative's secretary.

new text end

Sec. 84.

Minnesota Statutes 2024, section 308C.601, is amended by adding a subdivision

to read:

new text begin

Subd. 2a.

new text end

new text begin

Signature; prima facie evidence.

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

Sec. 85.

Minnesota Statutes 2024, section 308C.601, is amended by adding a subdivision

to read:

new text begin

Subd. 2b.

new text end

new text begin

Form of certificate.

new text end

new text begin

A certificate representing a membership interest of a

cooperative shall contain on its face:

new text end

new text begin

(1) the name of the cooperative;

new text end

new text begin

(2) a statement that the cooperative is organized under the laws of the state and this

chapter;

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(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

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;

new text end

new text begin

(6) a statement of any other restrictions on transfer, including approval of the board;

new text end

new text begin

(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

new text end

new text begin

(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.

new text end

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
deleted text begin
or the occupant members, individually or

collectively, have the
deleted text end
new text begin
has an option or
new text end
first privilege of purchasing the membership interests
deleted text begin

of any class of membership interests offered for sale
deleted text end
new text begin
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
new text end
. The
new text begin
cooperative's option or
new text end
first privilege to purchase membership interests

may be
deleted text begin
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
deleted text end
new text begin
exercised under the circumstances, conditions,

or limitations enumerated in the cooperative's bylaws or articles
new text end
.

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
deleted text begin
natural person who satisfies the member restrictions set forth in this chapter
deleted text end
new text begin
member

individually
new text end
;

new text begin

(2) members through joint tenancy or tenancy in the entirety or, to the extent not

prohibited by the articles or bylaws, tenancy in common;

new text end

new text begin

(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;

new text end

deleted text begin

(2)
deleted text end
new text begin
(4)
new text end
a natural person
deleted text begin
who does not satisfy the restrictions set forth in this chapter but
deleted text end

who purchases a membership interest for a
deleted text begin
natural person who satisfies the restrictions set

forth in this chapter and who is a
deleted text end
member
deleted text begin
of the cooperative and shall, for purposes of this

section, be referred to as a "third-party purchaser"
deleted text end
new text begin
, except as prohibited, limited, or otherwise

provided by the cooperative
new text end
;

deleted text begin

(3)
deleted text end
new text begin
(5)
new text end
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,
deleted text begin
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
deleted text end
new text begin
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
new text end
;
new text begin
and
new text end

deleted text begin

(4)
deleted text end
new text begin
(6)
new text end
an adult natural person remainderman, subject to a life estate retained by a
deleted text begin
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;
deleted text end
new text begin
member, except as prohibited, limited, or

otherwise provided by the cooperative.
new text end

deleted text begin

(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

deleted text end

deleted text begin

(6) with respect to nonoccupant membership interest, any person as defined by this

chapter.

deleted text end

(b) In each instance in which title to a membership interest is held by a trustee,

remainderman, or third-party purchaser
deleted text begin
who purchases a membership interest for a member

who will occupy the cooperative
deleted text end
, the trustee, remainderman, or third-party purchaser shall

agree to abide by the cooperative's articles, bylaws,
deleted text begin
occupancy agreement or
deleted text end
proprietary

lease
deleted text begin
of
deleted text end
new text begin
with
new text end
the member,
deleted text begin
and
deleted text end
rules, policies, and regulations
deleted text begin
of the cooperative,
deleted text end
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.

new text begin

(c) The cooperative may, through the cooperative's bylaws or articles:

new text end

new text begin

(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

new text end

new text begin

(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:

new text end

new text begin

(i) the remainderman, third-party purchaser, or transfer on death beneficiary satisfies

the restrictions under this chapter and the membership eligibility criteria; and

new text end

new text begin

(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.

new text end

new text begin

(d) For purposes of this section, "third-party purchaser" means a natural person under

paragraph (a), clause (4).

new text end

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
deleted text begin
60
deleted text end
new text begin

90
new text end
days after the date of the certificate of occupancy issued for the project by the municipality

in which the project is situated
deleted text begin
and
deleted text end
new text begin
,
new text end
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
deleted text begin
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
deleted text end
new text begin
pay all assessments allocated to the unsold membership interests

and units appurtenant to the interests until the earlier of:
new text end

new text begin

(1) five years from the date of the cooperative's first annual meeting under section

308C.603; or

new text end

new text begin

(2) the date the last of the memberships remaining unsold on the date of the first annual

meeting are sold to the initial purchasers
new text end
.

Sec. 90.

Minnesota Statutes 2024, section 308C.603, is amended by adding a subdivision

to read:

new text begin

Subd. 5.

new text end

new text begin

Developer's obligation to complete and restore.

new text end

new text begin

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.

new text end

Sec. 91.

Minnesota Statutes 2024, section 308C.612, subdivision 1, is amended to read:

Subdivision 1.

Generally.

deleted text begin
The senior housing
deleted text end
new text begin
(a) A
new text end
cooperative organized under this

chapter shall provide to each
deleted text begin
subscriber for
deleted text end
new text begin
prospective purchaser of
new text end
a membership in the

cooperative:

(1)
deleted text begin
an occupancy agreement or
deleted text end
new text begin
a purchase agreement;
new text end

new text begin

(2) a
new text end
proprietary lease;

deleted text begin

(2)
deleted text end

new text begin
(3)
new text end
the articles
new text begin
, bylaws, rules, regulations, and policies of the cooperative
new text end
;

deleted text begin

(3) the bylaws;

deleted text end

deleted text begin

(4) an annualized budget for the current fiscal period; and

deleted text end

deleted text begin

(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

deleted text end

deleted text begin

(ii)
deleted text end
new text begin
(4)
new text end
for
deleted text begin
any purchase of
deleted text end
new text begin
the sale of any membership to the first purchaser and member,

an information bulletin; and
new text end

new text begin

(5) for the resale of
new text end
a membership interest after
deleted text begin
its
deleted text end
new text begin
the
new text end
initial purchase, a resale disclosure
deleted text begin

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
deleted text end
new text begin
certificate
new text end
.

new text begin

(b) A cooperative is not required to prepare or deliver an information bulletin or resale

disclosure certificate in the case of:

new text end

new text begin

(1) a gratuitous transfer;

new text end

new text begin

(2) a transfer pursuant to a court order;

new text end

new text begin

(3) a transfer to a government agency;

new text end

new text begin

(4) a transfer to a secured party by foreclosure or deed in lieu of foreclosure; or

new text end

new text begin

(5) an option to purchase a membership, until exercised.

new text end

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
deleted text begin
to older persons
deleted text end
, each
deleted text begin
subscriber for
deleted text end
new text begin
prospective purchaser

of a
new text end
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
deleted text begin
dwelling
deleted text end
units in the project;

(3) a general description of the project, including, at a minimum:

(i) the number of buildings;

(ii) the number of
deleted text begin
dwellings
deleted text end
new text begin
units
new text end
per building
new text begin
or per lot
new text end
;

(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
new text begin
pay and
new text end
be financially liable for all
deleted text begin
of the

common expenses and costs
deleted text end
new text begin
assessments
new text end
allocated to the
deleted text begin
unsold
deleted text end
membership interests
new text begin

remaining unsold on the date of the cooperative's first annual meeting,
new text end
and
deleted text begin
dwelling
deleted text end
new text begin
the
new text end

units appurtenant thereto
new text begin
,
new text end
until
deleted text begin
such membership interests are sold
deleted text end
new text begin
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
new text end
to the initial purchasers thereof;

new text begin

(4) the names of the cooperative's initial board members;

new text end

deleted text begin

(4)
deleted text end
new text begin
(5)
new text end
the cooperative's
new text begin
anticipated
new text end
schedule of commencement and completion of

construction of any buildings and other improvements that the cooperative
new text begin
or developer
new text end
is

obligated to build;

new text begin

(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

executed membership certificates and, if not substantially completed, the person responsible

to complete and pay for the construction of the units;

new text end

new text begin

(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;

new text end

new text begin

(8) a statement that:

new text end

new text begin

(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:

new text end

new text begin

(A) execution of a proprietary lease;

new text end

new text begin

(B) acceptance of a membership certificate evidencing ownership of a membership in

the cooperative; or

new text end

new text begin

(C) waiver of the right to cancel in the manner provided under this section;

new text end

new text begin

(ii) if a purchaser receives a disclosure statement more than ten days before signing a

purchase agreement, the purchaser cannot cancel the purchase agreement;

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

new text begin

(v) any action brought by a purchaser under this section shall be commenced within the

time period specified in section 308C.633; and

new text end

new text begin

(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;

new text end

new text begin

(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;

new text end

deleted text begin

(5)
deleted text end
new text begin
(10)
new text end
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;

new text begin

(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;

new text end

deleted text begin

(6)
deleted text end
new text begin
(12)
new text end
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;

deleted text begin

(7)
deleted text end
new text begin
(13)
new text end
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
deleted text begin
dwelling
deleted text end
unit appurtenant to a membership being purchased;

deleted text begin

(8)
deleted text end
new text begin
(14)
new text end
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;

deleted text begin

(9)
deleted text end
new text begin
(15)
new text end
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)
deleted text begin
a statement as to
deleted text end
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
deleted text begin
cooperative
deleted text end
new text begin

cooperative's project
new text end
;
deleted text begin
and
deleted text end

(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
deleted text begin
cooperative property
deleted text end
new text begin

cooperative's project
new text end
;
new text begin
and
new text end

new text begin

(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;

new text end

deleted text begin

(10)
deleted text end
new text begin
(16)
new text end
a statement:

(i) that real estate taxes for the
deleted text begin
dwelling
deleted text end
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
deleted text begin
dwelling
deleted text end

units, including the amount of any special assessments certified for payment with the real

estate taxes, due and payable with respect to the
deleted text begin
dwelling
deleted text end
unit in the year in which the

information bulletin is given
new text begin
if real estate taxes were separately assessed against the unit
new text end
;

deleted text begin

(11)
deleted text end
new text begin
(17)
new text end
any recorded covenants, conditions restrictions, and reservations affecting the

project; a statement that the
deleted text begin
occupancy agreement
deleted text end
new text begin
proprietary lease
new text end
must be signed at the

closing; and a statement that members are required to abide by the bylaws, the articles
deleted text begin
of

incorporation
deleted text end
, and the rules, regulations, and policies of the cooperative, including

amendments from time to time;

deleted text begin

(12)
deleted text end
new text begin
(18)
new text end
a brief
deleted text begin
narrative
deleted text end
description of any material agreements entered into between

the cooperative and a governmental entity that affect the project;

deleted text begin

(13) a budget prepared by the developer; and

deleted text end

deleted text begin

(14)
deleted text end
new text begin
(19)
new text end
a statement that purchase and sales of memberships and rights under
deleted text begin
occupancy

agreements
deleted text end
new text begin
proprietary leases
new text end
are not for speculative purposes and that investments in the

cooperative by members are for the sole purpose of securing and acquiring a
deleted text begin
dwelling
deleted text end
unit

for their residential use and benefit
deleted text begin
.
deleted text end
new text begin
;
new text end

new text begin

(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

new text end

new text begin

(21) copies of the following documents:

new text end

new text begin

(i) articles, bylaws, rules and regulations, and policies of the cooperative;

new text end

new text begin

(ii) any recorded covenants, conditions, restrictions, or reservations affecting the

cooperative's project land;

new text end

new text begin

(iii) any agreement excluding or modifying any implied warranties;

new text end

new text begin

(iv) any agreement reducing the statute of limitations for enforcing warranties;

new text end

new text begin

(v) the subscription agreement for the purchase of a membership from the cooperative;

new text end

new text begin

(vi) the proprietary lease for occupancy of the member's unit;

new text end

new text begin

(vii) a projected budget for the first year of the cooperative's operation;

new text end

new text begin

(viii) a balance sheet, if developed at the time the information bulletin is issued, as

required under section 308C.582; and

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

deleted text begin

(b)
deleted text end
new text begin
(c)
new text end
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
deleted text begin
by either the departing member or by the cooperative
deleted text end
, the departing member
deleted text begin
or
deleted text end
new text begin
,

with the assistance of
new text end
the cooperative
deleted text begin
, as applicable
deleted text end
, shall furnish to the purchaser before

the execution of any purchase
deleted text begin
and sale
deleted text end
agreement
deleted text begin
for the applicable membership interest
deleted text end

the following documents relating to the cooperative:

(1) copies of the articles
deleted text begin
and
deleted text end
new text begin
,
new text end
bylaws,
deleted text begin
any
deleted text end
rules
deleted text begin
and
deleted text end
new text begin
,
new text end
regulations,
new text begin
policies,
new text end
and any

amendments thereto; and

(2) a resale disclosure certificate
new text begin
that is dated not more than 90 days before the date of

the membership purchase and sale agreement or subscription agreement,
new text end
containing the

information set forth in paragraph (b).

(b) The resale disclosure certificate must provide the following information:

(1) the name
new text begin
and address
new text end
of the cooperative;

(2) the number of the
deleted text begin
dwelling
deleted text end
unit appurtenant to the subject membership interest
new text begin
,

including the principal unit and any auxiliary units, such as garage stalls or storage lockers
new text end
;

(3) the amount of the monthly
deleted text begin
common expense
deleted text end
assessments payable under the
deleted text begin
occupancy

agreement
deleted text end
new text begin
proprietary lease
new text end
applicable to the subject
deleted text begin
dwelling
deleted text end
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
new text begin
the

current annualized budget, maintenance plan,
new text end
balance sheet
new text begin
,
new text end
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
deleted text begin

except as specifically disclosed
deleted text end
new text begin
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
new text end
;

new text begin

(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;

new text end

new text begin

(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;

new text end

deleted text begin

(10)
deleted text end
new text begin
(12)
new text end
a radon disclosure pursuant to the requirements of section
144.496
;
deleted text begin
and
deleted text end

new text begin

(13) a description of any restrictions on the transfer of the membership interest, including

but not limited to:

new text end

new text begin

(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

new text end

new text begin

(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;

new text end

new text begin

(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

new text end

deleted text begin

(11)
deleted text end
new text begin
(15)
new text end
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:

new text begin

Subd. 7.

new text end

new text begin

Purchaser's right to cancel a purchase agreement after receipt of an

information bulletin.

new text end

new text begin

(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.

new text end

new text begin

(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

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.

new text end

new text begin

(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:

new text end

new text begin

(1) upon hand delivery;

new text end

new text begin

(2) upon mailing if properly addressed with postage prepaid and deposited in the United

States mail; or

new text end

new text begin

(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.

new text end

new text begin

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.

new text end

new text begin

(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.

new text end

Sec. 95.

Minnesota Statutes 2024, section 308C.612, is amended by adding a subdivision

to read:

new text begin

Subd. 8.

new text end

new text begin

Purchaser's right to cancel a purchase agreement after receipt of a resale

disclosure certificate.

new text end

new text begin

(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.

new text end

new text begin

(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:

new text end

new text begin

(1) upon hand delivery;

new text end

new text begin

(2) upon mailing if properly addressed with postage prepaid and deposited in the United

States mail; or

new text end

new text begin

(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.

new text end

new text begin

Cancellation is without penalty and all payments made by the purchaser shall be refunded

promptly.

new text end

Sec. 96.

Minnesota Statutes 2024, section 308C.612, is amended by adding a subdivision

to read:

new text begin

Subd. 9.

new text end

new text begin

Required disclosure language to be incorporated into purchase

agreements.

new text end

new text begin

All purchase agreements must contain a provision which substantially conforms

with the following notices:

new text end

new text begin

(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

new text end

new text begin

(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."

new text end

Sec. 97.

new text begin

[308C.6121] EARNEST MONEY; ESCROW ACCOUNT.

new text end

new text begin

Subdivision 1.

new text end

new text begin

Escrow account required.

new text end

new text begin

(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:

new text end

new text begin

(1) a licensed title insurer or the title insurer's agent;

new text end

new text begin

(2) an attorney representing either the cooperative or the cooperative's managing agent;

new text end

new text begin

(3) a licensed real estate broker;

new text end

new text begin

(4) an independent bonded escrow company; or

new text end

new text begin

(5) a government agency or instrumentality.

new text end

new text begin

(b) The escrow account must be in an institution whose deposits are insured by a

government agency or instrumentality.

new text end

new text begin

Subd. 2.

new text end

new text begin

Delivery of money.

new text end

new text begin

The money or deposits must be held in the escrow account

until:

new text end

new text begin

(1) delivered to the cooperative or the cooperative's management agent at closing;

new text end

new text begin

(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;

new text end

new text begin

(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

new text end

new text begin

(4) delivered for payment of construction costs pursuant to a written agreement between

the cooperative and the purchaser.

new text end

Sec. 98.

Minnesota Statutes 2024, section 308C.613, subdivision 1, is amended to read:

Subdivision 1.

Requirements.

The annual budget of a
deleted text begin
senior housing
deleted text end
cooperative formed

under this chapter shall include, without limitation:

(1) the amount included in the budget as a reserve for
deleted text begin
replacement
deleted text end
new text begin
replacements
new text end
;

(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
deleted text begin
dwelling
deleted text end
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
deleted text begin
budgets
deleted text end
new text begin

budget
new text end
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
deleted text begin
the cooperative's master mortgage
deleted text end
new text begin
any blanket mortgage on

the cooperative's project
new text end
;

(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

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
deleted text begin
senior housing
deleted text end
cooperative formed under this chapter has a lien on a membership

interest, the appurtenant
deleted text begin
occupancy agreement
deleted text end
new text begin
proprietary lease
new text end
, 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.
deleted text begin
Other cooperatives

formed under this chapter may authorize a lien on a membership interest, occupancy

agreement, or a proprietary lease in the bylaws.
deleted text end

(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
deleted text begin
occupancy agreement
deleted text end
new text begin
proprietary lease
new text end
or other conveyance documents agreed upon

by the parties in lieu of foreclosure.

(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
deleted text begin
OR TO ACQUIRE OCCUPANCY RIGHTS

FOLLOWING MEMBERSHIP TERMINATION IN A SENIOR HOUSING

COOPERATIVE
deleted text end
.

(a) A
deleted text begin
senior housing
deleted text end
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;

new text begin

(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;

new text end

deleted text begin

(2)
deleted text end
new text begin
(3)
new text end
the cooperative shall be entitled to its reasonable costs and attorney fees not

exceeding the amount provided by section
582.01, subdivision 1a
;

deleted text begin

(3)
deleted text end
new text begin
(4)
new text end
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

deleted text begin

(4)
deleted text end
new text begin
(5)
new text end
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
deleted text begin
DWELLING
deleted text end
UNIT APPURTENANT THERETO

WILL TERMINATE 90 DAYS AFTER SERVICE OF THIS NOTICE ON YOU UNLESS

BEFORE THEN:

(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
deleted text begin
DWELLING
deleted text end
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
deleted text begin
DWELLING
deleted text end
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
deleted text begin
DWELLING
deleted text end
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
deleted text begin
dwelling
deleted text end
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. 102.

Minnesota Statutes 2024, section 308C.625, subdivision 1, is amended to read:

Subdivision 1.

How imposed.

A restriction on the transfer or registration
deleted text begin
of transfer
deleted text end
of

membership interests of a cooperative
deleted text begin
may
deleted text end
new text begin
shall
new text end
be imposed in the articles
deleted text begin
, in the
deleted text end
new text begin
or
new text end
bylaws
deleted text begin
,

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
deleted text end
.

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
deleted text begin
of

transfer
deleted text end
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
deleted text begin
, or included in information sent to the holders of uncertificated

membership interests,
deleted text end
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.

new text begin

[308C.630] EXPRESS WARRANTIES.

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

(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.

new text end

new text begin

(f) A conveyance of a membership to which a unit is appurtenant transfers all express

warranties to the purchaser.

new text end

Sec. 105.

new text begin

[308C.631] IMPLIED WARRANTIES.

new text end

new text begin

(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.

new text end

new text begin

(b) A developer warrants to a purchaser that:

new text end

new text begin

(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

new text end

new text begin

(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:

new text end

new text begin

(i) free from defective materials; and

new text end

new text begin

(ii) constructed in accordance with applicable law, according to sound engineering and

construction standards, and in a workmanlike manner.

new text end

new text begin

(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.

new text end

new text begin

(d) Warranties imposed by this section may be excluded or modified only as specified

in section 308C.632.

new text end

new text begin

(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.

new text end

new text begin

(f) A conveyance of a membership to which a unit is appurtenant transfers all implied

warranties to the purchaser.

new text end

new text begin

(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.

new text end

Sec. 106.

new text begin

[308C.632] EXCLUSION OR CHANGE OF IMPLIED WARRANTIES.

new text end

new text begin

(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.

new text end

new text begin

(b) With respect to a unit restricted to nonresidential use, implied warranties:

new text end

new text begin

(1) may be excluded or modified by agreement of the parties; and

new text end

new text begin

(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.

new text end

Sec. 107.

new text begin

[308C.633] STATUTE OF LIMITATIONS; BREACH; WARRANTIES.

new text end

new text begin

(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.

new text end

new text begin

(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.

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.

new text end

new text begin

(c) A cause of action under section 308C.630 or 308C.631, regardless of the purchaser's

lack of knowledge of the breach, accrues:

new text end

new text begin

(1) as to the unit, at the earlier of:

new text end

new text begin

(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

new text end

new text begin

(ii) the time a purchaser enters into possession of the unit; and

new text end

new text begin

(2) as to each common element, the latest of:

new text end

new text begin

(i) the time the common element is completed; or

new text end

new text begin

(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.

new text end

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
deleted text begin
the laws of this state, including cooperatives organized under
deleted text end
this chapter
deleted text begin
or chapter

308A or 308B,
deleted text end
may merge or consolidate with each other
deleted text begin
, 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
deleted text end
.

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
deleted text begin
constituent domestic
deleted text end
cooperatives
deleted text begin
, the name of any Minnesota

limited liability company
deleted text end
that
deleted text begin
is
deleted text end
new text begin
are
new text end
a party to the merger
deleted text begin
, to the extent authorized under

sections
322C.1001
to
322C.1005
and
322C.1015
, and any foreign business entities
deleted text end
;

(2) the name of the surviving or new
deleted text begin
domestic
deleted text end
cooperative
deleted text begin
, Minnesota limited liability

company as required by section
322C.1002
, or other foreign business entity
deleted text end
;

(3) the manner and basis of converting membership
deleted text begin
or ownership
deleted text end
interests of the

constituent
deleted text begin
domestic
deleted text end
cooperatives
deleted text begin
, the surviving Minnesota limited liability company as

provided in section
322C.1002
, or foreign business entities
deleted text end
into membership
deleted text begin
or ownership
deleted text end

interests in the surviving or new
deleted text begin
domestic
deleted text end
cooperative
deleted text begin
, the surviving Minnesota limited

liability company as authorized in section
322C.1002
, or foreign business entity
deleted text end
;

(4) the terms of the merger or consolidation;

(5) the proposed effect of the consolidation or merger on the
deleted text begin
members and occupant
deleted text end

members of each constituent
deleted text begin
domestic
deleted text end
cooperative; and

(6) for a consolidation, the plan shall contain the articles of
deleted text begin
the entity or organizational

documents to be filed with the state in which the entity is organized or, if
deleted text end
the surviving
deleted text begin

organization is a Minnesota limited liability company, the articles of organization
deleted text end
new text begin
entity
new text end
.

Subd. 3.

Notice.

deleted text begin

The following shall apply to notice:

deleted text end

deleted text begin

(1)
deleted text end
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
deleted text begin
; and
deleted text end
new text begin
.
new text end

deleted text begin

(2) a cooperative with more than 200 members
deleted text end
new text begin
The board
new text end
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
deleted text begin
domestic
deleted text end
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
deleted text begin
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,
deleted text end
new text begin
two-thirds

of all outstanding memberships of record,
new text end
or for a
deleted text begin
domestic
deleted text end
cooperative with articles or

bylaws requiring
deleted text begin
more than a majority
deleted text end
new text begin
a greater proportion
new text end
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.

(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
deleted text begin
chair,

vice chair, records officer, or documents officer
deleted text end
new text begin
president and secretary
new text end
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
deleted text begin
domestic
deleted text end
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
deleted text begin

or the appropriate office of another jurisdiction
deleted text end
.

(g) The secretary of state shall issue a certificate of organization of the merged or

consolidated cooperative.

Subd. 5.

Effect of merger.

deleted text begin

For a merger that does not involve a Minnesota limited

liability company, the following shall apply to the effect of a merger:

deleted text end

deleted text begin

(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.

deleted text end

deleted text begin

(b)
deleted text end
The surviving or new
deleted text begin
domestic
deleted text end
cooperative
deleted text begin
, Minnesota limited liability company,

or foreign business entity
deleted text end
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
deleted text begin
domestic
deleted text end
cooperative
deleted text begin
or foreign business
deleted text end
entity is vested in

the surviving or new
deleted text begin
domestic
deleted text end
cooperative
deleted text begin
, Minnesota limited liability company, or foreign

business entity
deleted text end
without reversion or impairment of the title caused by the merger or

consolidation.

deleted text begin

(c) If a merger involves a Minnesota limited liability company, this subdivision is subject

to the provisions of section
322C.1002
.

deleted text end

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
deleted text begin
entitled to vote on the approval of the plan
deleted text end
and

before the effective date of the plan, the plan may be abandoned by the same vote that

approved the plan.

Subd. 2.

deleted text begin
Generally
deleted text end
new text begin
Abandonment after plan of merger filed but before plan of

merger effective date
new text end
.

deleted text begin

(a) A merger may be abandoned:

deleted text end

deleted text begin

(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;

deleted text end

deleted text begin

(2) if the plan itself provides for abandonment and all conditions for abandonment set

forth in the plan are met; or

deleted text end

deleted text begin

(3) under paragraph (b).

deleted text end

deleted text begin

(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.

deleted text end

deleted text begin

(c)
deleted text end
If articles of merger have been filed with the secretary of state, but have not yet

become effective, the constituent
deleted text begin
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),
deleted text end
new text begin
cooperatives
new text end
shall file with the secretary of state articles of abandonment

that contain:

(1) the names of the constituent
deleted text begin
organizations
deleted text end
new text begin
cooperatives
new text end
;
new text begin
and
new text end

deleted text begin

(2) the provisions of this section under which the plan is abandoned; and

deleted text end

deleted text begin

(3) if the plan is abandoned under paragraph (b),
deleted text end
new text begin
(2)
new text end
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
deleted text begin
the
deleted text end
new text begin
a
new text end

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.

new text begin

[308C.9031] BUSINESS AFTER DISSOLUTION BEGINS.

new text end

new text begin

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.

new text end

Sec. 112.

new text begin

[308C.9032] REMEDIES CONTINUED.

new text end

new text begin

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.

new text end

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
deleted text begin
subscriptions for shares
deleted text end
new text begin
assessments or unpaid downpayments

for the purchase of a membership interest
new text end
; 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
new text begin

as provided in section 308C.935
new text end
.

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
deleted text begin
subscribers on account of an unpaid portion of the consideration for the issuance of

shares.
deleted text end
new text begin
:
new text end

new text begin

(1) third parties;

new text end

new text begin

(2) members, including but not limited to unpaid assessments; and

new text end

new text begin

(3) subscribers or purchasers on account of unpaid portions of the consideration for the

issuance of a membership interest.

new text end

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. 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.
new text begin

The court appointing the receiver has exclusive jurisdiction over the cooperative, the receiver,

and all receivership property under section 576.23.
new text end

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

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

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

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.1-106
and 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

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.

new text begin

(k) This chapter does not apply to cooperatives organized under chapter 308C.

new text end

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
deleted text begin
308A
,
deleted text end

308B
deleted text begin
, or 308C
deleted text end
. 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
,
deleted text begin
308C.455
,
deleted text end
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

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

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,

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.
new text begin
REPEALER.
new text end

new text begin

(a)

new text end

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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,

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are repealed.

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(b)

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Minnesota Statutes 2025 Supplement, sections 308C.301, subdivisions 8, 9, and 13;

and 308C.721, subdivision 2,

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are repealed.

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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.

(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.

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.

(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.

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 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 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 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;

(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;

(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 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. 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 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.

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.

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 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.

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.