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SB 927

Virginia Sports Tourism Grant Program; established, report.

2025 Regular Session Introduced by Chris Head

Authorizes Maryland nonstock corporations to convert qualifying rental housing into cooperative limited-equity housing, preserving affordability and protecting low-income tenants.

Acts of Assembly Chapter text (CHAP0216)
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Bill Summary · SB 927

Summary — SB 927: Cooperative Limited Equity Housing Corporations — Establishment

Status & procedural note
- Introduced: January 24, 2025. Committee hearings and reports occurred in spring 2025. Legislative history in the provided file shows the bill was enacted and transmitted to the governor; different documents show differing effective dates (a fiscal note states an effective date of October 1, 2026; another record shows signature and an effective date of September 1, 2025). Check the official enrolled act or state code for the final effective date in your jurisdiction.

Purpose
- Authorizes Maryland nonstock corporations to convert residential rental properties into cooperative limited equity housing corporations (CLEHCs) and establishes the legal framework, tenant protections, state oversight, and related fiscal provisions to support such conversions.

Key definitions (selected)
- CLEHC: a Maryland nonstock corporation with a single membership class where each member holds a cooperative interest (evidenced by a membership certificate or proprietary lease).
- Conversion: transitioning a residential rental facility (≥5 dwelling units) to property owned by a CLEHC for use by members.
- Low‑income household: income ≤ 80% of area median income for household size.
- Unit, proprietary lease, cooperative interest, moving expenses — all defined in statute.

Major provisions
- Conversion process
- A Maryland nonstock corporation that acquires a qualifying residential rental facility may vote to convert to a CLEHC.
- Conversion approval requires a supermajority (fiscal note specifies at least two‑thirds of total members) and must comply with the corporation’s governing documents.
- After an affirmative vote, the corporation must submit required documents to SDAT (State Dept. of Assessments & Taxation): articles of incorporation, member list, a detailed disclosure statement (ownership form, voting rights, fees/common charges, per‑unit ownership and debt allocation, copies of purchase contracts), annual operating budget, bylaws, and a share agreement.
- SDAT must accept the documents for record or deny them with reasons within 30 days; denials may be remedied and resubmitted.

  • Tenant protections & relocation

    • Each household must be offered membership; households that decline and must vacate must receive written notice.
    • Generally, households cannot be required to vacate earlier than 90 days after notice.
    • Special protection: if, on the notice date, a household includes a senior (≥62) or a disabled person who has been in the unit ≥12 months, and the household is low‑income, timely notifies intent to remain, and submits the notice within 30 days, the household cannot be required to vacate earlier than 12 months after notice.
    • Early eviction permitted for lease breaches or nonpayment.
    • Moving expense reimbursement for low‑income households required: reimbursement of actual reasonable expenses, at least $375 but less than $751 (per fiscal note).

  • Limits on resale/appreciation and transfer

    • Appreciation/resale price of a cooperative interest is limited: may not exceed the initial cost adjusted for inflation plus approved, member‑paid improvements.
    • Cooperative interests may only be sold/transferred to low‑income households.

State agency roles and authority
- DHCD (Dept. of Housing & Community Development) may:
- Adopt additional rights and requirements for CLEHCs using standardized methodologies (consistent with the bill).
- Establish a grant program to support Maryland nonstock corporations converting properties to CLEHCs.
- SDAT and DHCD must adopt implementing regulations.
- The bill bars counties/municipalities from imposing restrictions on CLEHCs (including restrictions on sale of residential rental facilities to a nonstock corporation that intends to convert).

Fiscal impact (from fiscal note)
- One‑time SDAT programming costs estimated at $278,400 in FY 2027 (no FY 2026 impact).
- Potential additional state expenditures for DHCD staff and grant awards depending on program implementation.
- Potential minimal increase in filing fee revenues.
- Local government fiscal/operational impacts are not expected to be material.

Who is affected
- Current tenants of qualifying residential rental facilities (notably low‑income, elderly, and disabled households)
- Maryland nonstock corporations and prospective sponsors/organizers
- DHCD and SDAT (administration, oversight, regulations)
- Local governments (restricted from imposing certain limits)
- Housing advocates and developers involved in limited‑equity affordable housing models

Practical effect
- Creates a statutory pathway to convert multiunit rental properties into limited‑equity cooperatives designed to preserve affordability by restricting resale gains and limiting transfers to low‑income households, while providing specific tenant protections and establishing state oversight and support mechanisms.

Compiled from official sources — confirm details with the bill’s official record.

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