Home > For Everyone > Real Estate > Condominiums > 15 USC 3606 - Federal Housing Administration mortgage or loan insurance; expedition of application process and decision
(a) Operation, maintenance, and management contracts; penalty
Any contract or portion thereof which is entered into after
October 8, 1980, and which -
(1) provides for operation, maintenance, or management of a
condominium or cooperative association in a conversion project,
or of property serving the condominium or cooperative unit owners
in such project;
(2) is between such unit owners or such association and the
developer or an affiliate of the developer;
(3) was entered into while such association was controlled by
the developer through special developer control or because the
developer held a majority of the votes in such association; and
(4) is for a period of more than three years, including any
automatic renewal provisions which are exercisable at the sole
option of the developer or an affiliate of the developer,
may be terminated without penalty by such unit owners or such
association.
(b) Time of termination
Any termination under this section may occur only during the two-
year period beginning on the date on which -
(1) special developer control over the association is
terminated; or
(2) the developer owns 25 per centum or less of the units in
the conversion project,
whichever occurs first.
(c) Vote of owners of units
A termination under this section shall be by a vote of owners of
not less than two-thirds of the units other than the units owned by
the developer or an affiliate of the developer.
(d) Effective date of termination
Following the unit owners' vote, the termination shall be
effective ninety days after hand delivering notice or mailing
notice by prepaid United States mail to the parties to the
contract.
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