§ 1601. Offering of cooperative interests; subscription agreement; disclosures required
(a) In conjunction with the offering of cooperative interests to prospective members, a cooperative housing corporation, or other persons or entities seeking to establish a cooperative housing corporation, or the owner of a cooperative interest seeking to sell that interest, shall provide to all prospective purchasers a copy of the proposed or adopted articles of association and bylaws of the cooperative housing corporation, a subscription agreement or sales agreement, a proposed proprietary lease, and the most current corporate financial statements, if any exist.
(b) The subscription agreement or sales agreement shall contain provisions detailing the cost of acquisition of a cooperative interest, the rights and privileges of membership in the cooperative housing corporation, and terms and conditions of occupancy of a unit in the cooperative housing corporation; provisions, if any, under which the subscription agreement or sales agreement is subordinated to other agreements or otherwise encumbered; provisions for cancellation of the agreement by either party; and a legally sufficient description of the property.
(c) The subscription agreement or sales agreement shall contain provisions detailing the risks of acquisition of a cooperative interest including risks resulting from failure of all units to be occupied.
(d) The subscriber or purchaser shall have a right to cancel the subscription agreement or sales agreement without penalty, upon provision of written notice to the offeror within 10 days of the date of signing the agreement. In the event of such cancellation, all monies paid by the subscriber or purchaser to the offeror shall be returned to the subscriber or purchaser within 14 days of receipt of the notice of cancellation by the offeror. The offeror shall inform the subscriber or purchaser in writing of their right of cancellation. (Added 1987, No. 254 (Adj. Sess.), § 1, eff. June 16, 1988.)
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