(a) In this section, “fidelity insurance” includes a fidelity bond.
(b) This section does not apply to a cooperative housing corporation:
(1) That has four or fewer members; and
(2) For which 3 months’ worth of gross common charges is less than $2,500.
(c) (1) The board of directors or other governing body of a cooperative housing corporation shall purchase fidelity insurance not later than the time of the first sale of a cooperative interest with respect to a unit to a person other than the developer and shall keep fidelity insurance in place for each year thereafter.
(2) The fidelity insurance required under paragraph (1) of this subsection shall provide for the indemnification of the cooperative housing corporation against loss resulting from acts or omissions arising from fraud, dishonesty, or criminal acts by:
(i) Any officer, director, managing agent, or other agent or employee charged with the operation or maintenance of the cooperative housing corporation who controls or disburses funds; and
(ii) Any management company employing a management agent or other employee charged with the operation or maintenance of the cooperative housing corporation who controls or disburses funds.
(d) A copy of the fidelity insurance policy or fidelity bond shall be included in the books and records kept and made available by or on behalf of the cooperative housing corporation under § 5–6B–26 of this subtitle.
(e) (1) The amount of the fidelity insurance required under subsection (c) of this section shall equal at least the lesser of:
(i) 3 months’ worth of gross common charges and the total amount held in all investment accounts at the time the fidelity insurance is issued; or
(ii) $3,000,000.
(2) The total liability of the insurance to all insured persons under the fidelity insurance may not exceed the sum of the fidelity insurance.
(f) If a member believes that the board of directors or other governing body of a cooperative housing corporation has failed to comply with the requirements of this section, the aggrieved member may submit the dispute to the Division of Consumer Protection of the Office of the Attorney General under § 5–6B–12 of this subtitle.
Structure Maryland Statutes
Title 5 - Special Types of Corporations
Subtitle 6B - Maryland Cooperative Housing Corporation Act
Section 5-6B-02 - Contract for Initial Sale of Cooperative Interest; Public Offering Statements
Section 5-6B-05 - Notice of Conversion to Tenants
Section 5-6B-06 - Option to Purchase
Section 5-6B-07 - Lease Extension for Designated Households
Section 5-6B-08 - Right of Local Governments to First Right of Purchase
Section 5-6B-09 - Authority of Local Governments to Require First Right of Purchase at Same Terms
Section 5-6B-11 - Deposits Made on Sale of Cooperative Interests Held in Escrow
Section 5-6B-12 - Consumer Protection Standards and Enforcement
Section 5-6B-13 - Cooperative Interests Not Security or Investment Security
Section 5-6B-14 - Restraints of Trade
Section 5-6B-15 - Applicability of General Corporation Law
Section 5-6B-16 - Cooperative Interest Deemed Personal Property
Section 5-6B-17 - Perfection of Security Interests and Cooperative Interests
Section 5-6B-18 - Assignment of Votes
Section 5-6B-19 - Meetings of Cooperative Housing Corporation, Governing Body, or Committee
Section 5-6B-20 - Distribution of Written Information
Section 5-6B-21 - Location of Meetings
Section 5-6B-22 - No-Impact Home-Based Businesses
Section 5-6B-23 - Election Related Candidate Signs or Signs Advertising Questions or Propositions
Section 5-6B-24 - Electronic Transmission of Notice
Section 5-6B-25 - Electronic Transmission of Votes or Proxies
Section 5-6B-26 - Examination and Copying of Books and Records of Cooperative Housing Corporations
Section 5-6B-26.1 - Reserve Study of Cooperative Housing Corporation -- Criteria
Section 5-6B-27 - Fidelity Insurance
Section 5-6B-28 - Books and Records
Section 5-6B-29 - Late Charges
Section 5-6B-30 - Dispute Settlements
Section 5-6B-31 - Eviction of Member