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

   1. (1) Sixty-seven per cent of the condominium unit lessees means the lessees of units to which sixty-seven per cent of the common interests are appurtenant; and
   2. (2) Sixty-seven per cent of the cooperative unit lessees means shareholders having at least sixty-seven per cent of the shares in the cooperative housing corporation.

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

   1. (1) To purchase or otherwise acquire, own, improve, use, and otherwise deal in and with the leased fee interest to the land or any or all undivided interests therein;
   2. (2) To incur liabilities, borrow money, and secure any of its obligations by mortgage or pledge of all or any portion of its property, assessments, and funds;
   3. (3) To assess, in a fair and equitable manner, the condominium unit lessees or cooperative unit lessees for the expenses incurred in acquiring the leased fee interest to the land, or to service any debt associated therewith; and
   4. (4) To sell the leased fee interest appurtenant to a condominium apartment or unit to any condominium apartment or unit lessee or subsequent purchaser of such unit.
3. (c) No conveyance of the leased fee interest to or by an association of owners or cooperative housing corporation, and no borrowing, mortgage, or pledge by an association of owners or cooperative housing corporation shall be invalid because it was without capacity or power to do such an act or to make or receive such conveyance, transfer, or loan.
4. (d) No condominium unit lessee shall be compelled to participate in the purchase of the leased fee interest of the property, but may instead pay lease rent to the association of owners.

[L 1988, c 298, pt of §1; am L 2006, c 273, §30; am L 2008, c 28, §35; am L 2017, c 181, §31]

Case Notes

Subsection (a) requires lessees of condominium units to which 75 per cent of the common interests are appurtenant to approve of a leased fee purchase; because subsection (a) is silent on the method of calculating the votes of multi-owner units, the bylaws of an association of apartment owners may govern on how the votes are to be calculated so long as not violative of any law; if any defects affected the approval process, the 75 per cent requirement was satisfied by the lessees' subsequent ratification of the previous vote when they executed deeds necessary for conversion. 108 H. 2, 116 P.3d 644 (2005).

Under subsection (a)(3), an association of apartment owners may assess a "conversion" surcharge in "a fair and equitable manner" against lessees who oppose a fee purchase. 108 H. 2, 116 P.3d 644 (2005).