1.10Cooperatives

“A housing cooperative is formed when people join with each other on a democratic basis to own or control the housing and/or related community facilities in which they live. Usually they do this by forming a not-for-profit cooperative corporation. . . . Cooperative members own a share in [the] corporation that owns or controls the building(s) and/or property in which they live. Each shareholder is entitled to occupy a specific unit and has a vote in the corporation.”¹

In Michigan, a consumer housing cooperative is a nonprofit corporation incorporated according to Michigan’s corporation laws and Chapter 5 of the State Housing Development Authority Act, MCL 125.1471—MCL 125.1475. MCL 125.1411(l). “A cooperative corporation is not a business corporation in the ordinary contemplation; rather, it is a vehicle for the common ownership of property, to enable the occupants, the stockholders of the cooperative, to own, manage, and operate residential apartments without anyone profiting therefrom.” Am Jur 2d, Condominiums and Cooperative Apartments, § 59.

Cooperative corporations in Michigan are largely governed by the provisions of the Michigan General Corporation Act, MCL 450.98 et seq. They are also governed by the Consumer Protection Act (CPA), MCL 445.901 et seq.,² and the Truth in Renting Act (TRA), MCL 554.631 et seq.³ However, they are not subject to the Michigan Landlord-Tenant Relationship Act (LTRA), MCL 554.601 et seq.,⁴ which governs security deposits. Penokie v Colonial Townhouses Coop, Inc, 140 Mich App 740, 741 (1985).

With respect to cooperative conversions, Congress adopted the Condominium and Cooperative Conversion Protection and Abuse Relief Act of 1980, 15 USC 3601 et seq., which requires state and local governments to provide existing tenants with adequate notice so that they have the first opportunity to purchase units in rental projects that are being converted. 15 USC 3605.