The Housing Cooperatives Act

Act of 6 June 2003 No. 39 relating to housing cooperatives (the Housing Cooperatives Act). Cf. the previous Act of 4 February 1960 No. 2 relating to housing cooperatives.

The english verson of the lawtext is not approved by the Storting (Parlament), and can not be considered as a formal lawtext.

Chapter 1. Introductory provisions

Section 1-1. Scope and extent. Definitions
(1) The Act applies to housing cooperatives. By housing cooperative is meant a cooperative society whose purpose is to give the shareholders (members) the right of use to their own dwellings in the society’s property (right of residence). Housing cooperatives may also conduct activities associated with the right of residence.

(2) A cooperative society whose primary purpose is to provide the members with the right of use to a secondary residence shall only be deemed a housing cooperative if the society was founded as a housing cooperative.

(3) The King may issue regulations regarding the application of the Act in Svalbard, and may lay down special provisions to apply according to local conditions.

Section 1-2. Limitation of liability
(1) The members may not be held personally liable to creditors for joint liabilities.

(2) The members shall not be obliged to make a deposit in the cooperative or in a bankrupt estate beyond the provisions of section 3-1 regarding shares, section 2-10 regarding housing cooperative deposits and section 5-19 regarding joint costs.

Section 1-3. Affiliated housing cooperatives
(1) Affiliated housing cooperatives are housing cooperatives where the bylaws provide that the members shall also be members of a specific house-building cooperative.

(2) If so agreed by all members and the house-building cooperative, it may be provided by the bylaws that the housing cooperative shall be an affiliated cooperative.

Section 1-4. Housing cooperative stock corporations
(1) A stock corporation or public company may not be founded for the same purposes as a housing cooperative.

(2) In the case of stock corporations founded prior to the entry into force of this Act, and which have the same purposes as housing cooperatives, sections 1-5, 4-2, chapter 5 and the conversion provisions of section 13-5 shall apply.

Section 1-5. Prohibition against discrimination
(1) The bylaws may not provide conditions for membership that pay regard to ethnicity, national origin, extraction, colour, language, religion or view of life. Such circumstances may not be deemed objective grounds for refusal of approval of a member or user or be taken into account in connection with the exercise of any right of pre-emption. In the event of such discrimination, the provisions of the Discrimination Act shall apply.

(2) Nor may the bylaws provide conditions for membership that pay regard to homosexual orientation. Such circumstances may not be deemed objective grounds for refusal of approval of a member or user or be taken into account in connection with the exercise of any right of pre-emption.

(3) If there are circumstances that give reason to believe that discrimination has taken place in contravention of the second paragraph, such discrimination shall be deemed to be proved unless the person who carried out the act proves on a balance of probabilities that no such discrimination has taken place.

(4) As regards liability for compensation for unlawful discrimination pursuant to the second paragraph, ordinary rules of compensation shall apply.

(5) The Equality and Anti-Discrimination Ombud and the Equality and Anti-Discrimination Tribunal shall monitor compliance with and help to implement the second paragraph, cf. the Equality and Anti-Discrimination Ombud Act.

Section 1-6. Use of electronic communications
(1) Unless otherwise provided by this Act, the housing cooperative may use electronic communications to provide reports, notifications, information, documents and the like to a member pursuant to the present Act, if so expressly accepted by the member.

(2) When a member shall provide notifications, etc. to the cooperative pursuant to the present Act, he or she may do so by means of electronic communication to an e-mail address or in the manner provided by the cooperative for this purpose.

Chapter 2. Foundation of housing cooperatives. Deposits. Agreements with developers, etc.

I Foundation

Section 2-1. Foundation documents
(1) Before a housing cooperative can be founded, the person or persons who are to subscribe to shares in the cooperative (the founders) shall draw up a foundation document. The foundation document shall contain the bylaws of the cooperative (section 2-2) and the information listed in section 2-3.

(2) The founders shall subscribe to all the shares of the cooperative. The number of shares may subsequently only be changed pursuant to the provisions of section 3-2. Prior agreement with the housing cooperative to subscribe to shares shall not be binding.

(3) It may be made a condition of subscription to shares that the member shall pay a deposit to the cooperative, cf. section 2-10.

Section 2-2. Minimum requirement regarding the bylaws. Corporate name
(1) The bylaws shall at least contain provisions regarding
1. the corporate name of the cooperative,
2. the municipality in the realm where the cooperative shall have its registered office,
3. the nominal value of the shares,
4. the lowest and highest number of board members,
5. matters to be included on the agenda of the ordinary general meeting.

(2) The name of the housing cooperative (corporate name) shall contain the word “burettslag” (housing cooperative) or the abbreviation BRL.

Section 2-3. Other minimum requirements regarding the foundation document
The foundation document shall otherwise indicate the name or corporate name, the addresses and personal identity numbers or organization numbers of the founders, the date of payment of the shares and the names of the members of the first board and the first auditor of the cooperative.

Section 2-4. Prohibition against special rights
The foundation document may include no conditions regarding
1. payment for shares other than with money,
2. any obligation of the cooperative to cover foundation costs,
3. any obligation of the cooperative to take over assets or be party to an agreement,
4. that any person shall hold special rights or advantages in the cooperative on the basis of the foundation.

Section 2-5. Opening balance sheet
(1) The founders shall draw up and date an opening balance sheet which shall be enclosed with the foundation document.

(2) The opening balance sheet shall be drawn up in accordance with the Accounting Act, and a registered or state authorized public accountant shall attest that the balance sheet has been drawn up in accordance with these provisions. The opening balance sheet with the accountant’s attestation shall be dated at the earliest four weeks prior to the foundation, cf. section 2-7.

Section 2-6. Building and financing plan
(1) A building and financing plan shall be enclosed with the foundation document.

(2) The plan shall contain drawings and descriptions of the cooperative’s buildings and dwellings, cost estimates, a financing plan and an operating budget.

(3) The plan shall indicate which dwelling is associated with each share and the distribution of joint costs.

(4) The plan may be altered by the board, if appropriate, with the consent of the general meeting pursuant to section 8-9. Change of the deposit may only take place pursuant to section 2-10, and change in the distribution of joint costs may only take place pursuant to section 5-19.

Section 2-7. Foundation of the cooperative
The founders shall date and sign the foundation document. When all of the founders have signed the foundation document, the shares are subscribed and the cooperative founded.

Section 2-8. Payment for the shares
(1) The shares shall be paid for at the nominal rate by the date stipulated in the foundation document. If payment is delayed, the member shall pay interest from the due date pursuant to the Act relating to interest on overdue payments, etc.

(2) If the share changes owner before it is paid for, the new and the previous owner shall be jointly and severally liable when the cooperative is notified of the change of ownership.

(3) If the share is not paid for within five days after the member has received a written reminder, the cooperative may give other persons the right to subscribe to the share or declare the share subscription invalid if this is not in contravention of section 3-1.

Section 2-9. Notification to the Register of Business Enterprises
(1) Notification of the cooperative shall be sent to the Register of Business Enterprises three months after signing of the foundation document at the latest. Before notification of the cooperative is sent to the Register of Business Enterprises, the cooperative share capital shall be fully paid up. Payment shall be attested by the auditor. If less has been paid than is stated and attested in the notification, the board members and the auditor shall be jointly and severally liable for the balance. This shall apply although no damage has been caused.

(2) If the notification of the cooperative is not sent to the Register of Business Enterprises within the time limit, the cooperative may not be registered. Obligations pursuant to the foundation document are then no longer binding. The same shall apply if registration is refused owing to errors that cannot be rectified.

(3) The cooperative may not acquire rights or incur obligations prior to its registration.

II Deposits

Section 2-10. Deposits
(1) If it is made a condition for subscription of shares that the member shall pay a deposit to the cooperative, the size of the deposit shall be stated in the building and financing plan.

(2) The deposit may only be changed with the consent of the member. If the member refuses to consent to an increase in the deposit that is necessary for implementation of the building and financing plan, without other changes than are required for technical reasons or at the request of the public authorities or another third party, the cooperative may order the member to sell the share within a time limit which may not be set at less than three months from the date such an order is received. The provisions of section 4-8 shall apply correspondingly.

(3) Repayment of the deposit may only be claimed if the cooperative is dissolved unless otherwise decided pursuant to section 3-3. The right to the deposit may not be separated from the share.

Section 2-11. Security and payment
(1) The total deposit shall be secured by mortgage in the real properties held by the cooperative, at a lower priority than jointly held loans referred to in the building and financing plan and at a lower priority than any loans raised by consent pursuant to section 8-9 (4). The lien shall be registered with the collective depositors as mortgagee. The board may act as mortgagee on behalf of the depositors.

(2) The cooperative may not accept deposits from persons other than members. The deposits may not be collected before the lien is registered at the correct priority. If the deposit or parts of the deposit are not paid within fourteen days after the member has received a claim dispatched on or after the due date, the cooperative may order the member to sell the share within a time limit which shall be set at not less than three months from the date such an order is received. The provisions of section 4-8 shall apply correspondingly.
III Agreements with house-building cooperatives or other developers, etc.

Section 2-12. Ownership of some or all of the shares
House-building cooperatives or other developers, including organizations and public undertakings that are to be responsible for acquisition or erection of dwellings for the housing cooperative may own some or all of the shares of the cooperative.

Section 2-13. Agreements between developers and consumers
(1) The Act relating to the erection of dwellings shall apply to agreements between developers as referred to in section 2-12 and consumers regarding the right to dwellings in the cooperative if work subject to the agreement is not completed within the agreed time, and the Act relating to disposal of real property, cf. section 1a of the Act relating to the erection of dwellings and section 1-1a of the Act relating to disposal of real property, shall otherwise apply.

(2) While a developer as referred to in the first paragraph owns all of the shares of the cooperative, the consumer may in accordance with the agreement hold right of residence pursuant to chapter 5 until the share is transferred or subscribed. Before the right of residence is taken over, the agreement regarding the right to a dwelling in the cooperative shall be registered in the real property register. From the date of registration, the provisions regarding right of disposal over and establishment of legal rights in relation to shares shall apply correspondingly. If the cooperative is dissolved before the share is transferred or subscribed, section 5-25 shall apply correspondingly. No other agreement with the consumer regarding the right of use to the dwelling shall be valid.

(3) If the right of residence is taken over pursuant to the second paragraph, the share shall be transferred or subscribed two years after the initial taking over of the right of disposal in the cooperative at the latest.

Chapter 3. Cooperative share capital

Section 3-1. Size of shares
(1) The shares shall be of equal size and have a nominal value of at least NOK 5 000, but not more than NOK 20 000.

(2) The cooperative shall hold at least two shares.

Section 3-2. Change in the number of shares
(1) A share shall be associated with each of the dwellings included in the building and financing plan apart from dwellings that are to be let out.

(2) The board may decide to increase the number of dwellings or associate shares with dwellings that have previously been let out or where letting out has been considered. Such a decision requires the consent of the general meeting with a two-thirds majority. The nominal value of the new shares and the value above or below par on payment shall be stated in the decision.

(3) The board may enter into an agreement with one or more members regarding redemption of shares. The redemption amount shall be stated in the agreement, which requires the consent of the general meeting with a two-thirds majority.

(4) The board may approve merger of shares in connection with merger of dwellings.

(5) The number of shares may not be reduced to a single share. If only one dwelling remains in the cooperative, the cooperative shall be deemed dissolved, and the member or members with the right to the dwelling shall have personal liability for debts.

Section 3-3. Satisfactory operation
(1) No new loans may be raised and no assets may be distributed to the members if, as a result of this, it is not possible to assume that joint liabilities can satisfactorily be covered by means of claims against the members to cover joint costs.

(2) With the exception of settlements following dissolution of the cooperative, distribution to the members may only take place in accordance with a decision by the general meeting with a two-thirds majority.

(3) Assets distributed in contravention of the first and second paragraph shall be repaid to the cooperative by the recipient. This shall nevertheless not apply if the recipient was neither aware nor should have been aware that the distribution was unlawful. The repayment claim may be reduced pursuant to section 5-2 of the Damages Act.

Chapter 4. Members, transfer of shares etc.

I The members

Section 4-1. The general rule regarding ownership of shares
Unless otherwise provided by this chapter, each member may only own a share, and only natural persons may be members. Section 5-2 provides rules for co-ownership of shares.

Section 4-2. Legal persons, etc. who may own shares regardless of the bylaws
(1) The following types of legal person may own one or more shares giving the right to at least one dwelling and a maximum of ten per cent of the dwellings in cooperatives with five or more shares:
1. the state,
2. county authorities,
3. municipalities,
4. companies whose purpose is to procure dwellings which are let and controlled by the state, county authorities or municipalities,
5. foundations whose purpose is to procure dwellings and which are established by the state, county authorities or municipalities,
6. companies, foundations or other bodies that have entered into a collaboration agreement with the state, county authorities or municipalities regarding procurement of dwellings for disadvantaged persons.

(2) Notwithstanding the first paragraph and section 4-1, a creditor may own one or more shares for a maximum of two years in order to recover claims secured by mortgage in the share or shares. The same shall apply when someone takes over one or more shares which could not otherwise be sold for a long time.

(3) As regards the right to own shares for developers who are to be responsible for acquisition or erection of dwellings for the housing cooperative, section 2-12 shall apply.

Section 4-3. Legal persons, etc. who may own shares in accordance with the bylaws
It may be provided in the bylaws that the state, county authorities, municipalities, house-building cooperatives, institutions or associations with socially beneficial aims as well as employers who plan to let dwellings to their employees, may own a maximum of 20 per cent of the shares in addition to shares that may be owned pursuant to section 4-2, first paragraph.

II Change of ownership and conditions for change of ownership

Section 4-4. Change of ownership and conditions
A share may change owner without other conditions than that which follows from section 4-1 or other statutory provisions or from provisions of the bylaws that have been accepted by the owners of the shares concerned. Conditions for change of ownership may not be established in the bylaws unless there are objective grounds for so doing. Provisions laid down in the bylaws or agreement that prevent ownership, as referred to in section 4-2, are not valid.

Section 4-5. Approval of new member
(1) If it is stipulated that new members shall be approved by the cooperative, approval may not be refused without objective grounds. If notification of refusal of approval is not received by the buyer at the latest 20 days after the application for approval is received by the cooperative, approval shall be deemed to have been given.

(2) If it is stipulated that new members shall be approved by the cooperative, the buyer shall not have the right to use the dwelling until such approval is granted or until it is legally decided that the buyer has a right to acquire the share. If legal proceedings are instituted in response to a refusal to approve a new member or objections are raised against a sale order pursuant to section 4-8, the district court may order that the buyer may on provision of security use the dwelling until the question of approval has been legally decided. The conciliation board may not decide such right of use.

(3) If it is stipulated that new members shall be approved by the cooperative, the previous member shall be jointly and severally liable with one or more buyers for payment of joint costs until approval of a new member is granted or until it is legally decided that a new member has the right to acquire the share.

Section 4-6. Fees, etc.
For work involved in change of ownership and any approval, the cooperative may claim a fee from the transferor of the share corresponding to a maximum of four times the basic court fee.

Section 4-7. Prohibition against time-limitation, etc.
Provisions of the bylaws stipulating that a person who has legally acquired a share shall be obliged to transfer the share shall not be valid except in cases of serious breach of contract (cf. section 5-22), cases where disposal is stipulated as a condition for acquisition of a new share and cases where a member of an affiliated housing cooperative discontinues his membership of the house-building cooperative.

III Sale orders. Enforced sale

Section 4-8. Sale orders
(1) If a share is acquired in contravention of section 4-1 or provisions of the bylaws pursuant to section 4-4, the cooperative may order the acquirer to sell the share. The order shall be given in writing and shall inform that enforced sale of the share may be ordered if the order is not complied with within a time limit, which shall not be less than three months.

(2) If the order is not complied with within the time limit, enforced sale of the share may, where appropriate, be ordered by the district court pursuant to the provisions regarding enforced sale. Sections 4-18 and 4-19 of the Enforcement Act shall apply correspondingly. If within the time limit, pursuant to section 11-7, first paragraph, of the Enforcement Act, objections that are not clearly groundless are raised against the enforced sale, the demand for enforced sale shall not be upheld without being heard according to the rules of civil procedure. The provisions of section 11-20 of the Enforcement Act regarding the lowest acceptable bid shall not apply in connection with enforced sale pursuant to the present section.

(3) The provisions of the first and second paragraph shall apply correspondingly where a member no longer holds the right to own the share pursuant to section 4-2, second paragraph, or owing to circumstances as referred to in section 4-7.

Section 4-9. Acquisition of shares in connection with enforced sale
(1) In connection with an enforced sale, the cooperative may purchase the share.

(2) If the cooperative purchases the share after an enforced sale pursuant to section 4-8, cf. sections 5-21 and 5-22, the cooperative may claim compensation pursuant to sections 5-13 and 5-14 for any damage to the dwelling or neglected maintenance.

(3) A share that the cooperative has purchased pursuant to the present section and which cannot be resold within three months shall be cancelled, and the dwelling may then be let out. A new share may be associated with the dwelling pursuant to the provisions of section 3-2, second paragraph. In connection with voting at the general meeting, shares owned by the cooperative shall be disregarded.

IV Share redemption

Section 4-10. Redemption
(1) The district court may order the cooperative to redeem a member’s share if weighty grounds so indicate in cases where
1. the cooperative is guilty of a serious breach of contract in relation to the member, or
2. the board, general meeting or a representative of the cooperative has acted in contravention of section 7-13 or 8-15, or
3. a serious and permanent clash of interests has arisen between the member and other members with regard to the operation of the cooperative.

(2) A claim for redemption may not be upheld if redemption would have an unreasonable effect on the cooperative. Cases involving claims for redemption must be raised within a reasonable time.

(3) The redemption amount shall be set at the value of the share immediately before grounds for redemption are raised.

(4) Following redemption, the share shall be cancelled if it cannot be sold within three months, and the dwelling may then be let out. A new share may be associated with the dwelling pursuant to the provisions of section 3-2, second paragraph.

V Right of pre-emption

Section 4-11. Provisions regarding right of pre-emption
The provisions of sections 4-12 to 4-21 shall apply if the bylaws provide that members or other persons hold a right of pre-emption when a share changes owner. The provisions may be departed from in the bylaws unless otherwise stated.

Section 4-12. Transfer of rights to close relatives
(1) Right of pre-emption may not be claimed when the share is transferred to a member’s spouse, to a relative of the member or the member’s spouse in a direct line of ascent or descent, to a fosterchild with the same actual status as an heir of the body, to siblings or to any other persons who, during the previous two years have belonged to the same household as the previous owner. Nor may right of pre-emption be claimed when the share is transferred following distribution of an estate, separation or divorce, or when a member of a household takes over the share pursuant to the provisions of section 3 of the Act of 4 July 1991 relating to the right to the joint residence and household goods when a household community ceases to exist.

(2) The provisions of the present section may not be departed from.

Section 4-13. Exercise of right of pre-emption
(1) Disposal of the share results in the exercise of the right of pre-emption from the date of a binding agreement that the share shall be transferred to a new owner.

(2) Enforced sale results in the exercise of the right of pre-emption from the date of a legally enforceable order pursuant to sections 11-30 and 11-51, cf. section 11-23 of the Enforcement Act.

(3) Inheritance results in the exercise of the right of pre-emption from the date of transfer of property to the beneficiaries. If the right may only be claimed against certain of the beneficiaries, a binding decision as to who shall take over the share cannot be made until the estate is divided.

Section 4-14. Enforcement of the right of pre-emption
Only the cooperative may enforce the right of pre-emption on behalf of the rightholders.

Section 4-15. The time-limit for enforcement of the right of pre-emption
(1) The time-limit for enforcement of the right of pre-emption shall be 20 days from the date that the cooperative receives written notification that the share has changed owner, giving information of the price and other conditions. The time-limit shall be five working days if the cooperative has received advance written notification that the share may change owner and the notification is received by the cooperative at least 15 days but not more than three months prior to the notification that the share has changed owner.

(2) By “working days” is meant all days other than Sundays and other public holidays, Saturdays, 1 May and 17 May.

(3) The provisions of the present section may not be departed from.

Section 4-16. The claim to take over a share in accordance with a pre-emption right
(1) A claim to take over a share shall be submitted in writing to the transferor and the acquirer of the share. If the pre-emption right is exercised in connection with an enforced sale, it is sufficient that the claim is submitted to the purchaser.

(2) If the pre-emption right is exercised in connection with inheritance, the claim shall be submitted to the district court unless the estate has been distributed automatically. In such case, the claim shall be submitted to the beneficiaries or their representative or to the person who has taken over the share.

Section 4-17. Rights and obligations
(1) If a share changes owner as the result of a sale, the holder of right of pre-emption takes over the rights and obligations of the acquirer pursuant to the agreement.

(2) On payment of the redemption amount, the holder of right of pre-emption may claim the right to take over the dwelling on the date that follows from the agreement with the acquirer and at any rate when the member or a new owner has been given a reasonable opportunity to consider the matter.

(3) In return for the right to take over the dwelling, the holder of right of pre-emption shall pay the redemption amount at the latest fourteen days after the claim to take over the share is submitted and the redemption amount is finally established.

(4) The cooperative shall be liable for payment of the redemption amount. Claims against the cooperative may only be submitted if the holder of right of pre-emption fails to pay within fourteen days after submission of a claim on or after the due date.

(5) The holder of right of pre-emption has a right to income from the dwelling from the date the property is taken over, and is liable for costs from the same date.

(6) The provisions of the third and fourth paragraph may not be departed from.

Section 4-18. The redemption amount
(1) The redemption amount shall be set at the price the share was sold at but, if the share has clearly been sold at a loss or if the share changes owner as a result of exchange, gift or inheritance, the redemption amount shall be set at the ordinary price. The holder of right of pre-emption shall not be obliged to take over encumbrances on the share.

(2) Disputes regarding the redemption amount shall be settled by official appraisal. In rural police districts, such appraisal shall be conducted by the district police officer (lensmann).

Section 4-19. Cancellation period
If the dwelling has not been available for viewing prior to expiry of the time-limit for exercising the right of pre-emption, the holder of right of pre-emption may declare himself not bound by the claim to take over the share during a period of two weeks after taking over the dwelling. If the holder of right of pre-emption declares himself not bound by the claim to take over the share pursuant to the first sentence, the cooperative’s liability for payment of the redemption amount shall lapse. The provisions of the present section may not be departed from.

Section 4-20. Reversal
An agreement exercising the right of pre-emption may be reversed by the transferor with effect for the holder of right of pre-emption until the cooperative has received notification that the share has changed owner.

Section 4-21. The relationship between the cooperative and the holders of right of pre-emption
(1) When the cooperative has received notification or advance notification of change of ownership, cf. section 4-15, the cooperative shall invite all persons who wish to be able to exercise the right of pre-emption to report to the cooperative within a specified time-limit. The invitation shall be announced in at least one newspaper that is normally read locally or in another manner stated in the bylaws. The time-limit for such reporting shall be at least five working days (cf. section 4-15, second paragraph) from the date of the announcement. A person who fails to report within the time limit may not exercise the right of pre-emption in connection with this change of ownership.

(2) Breaches of the provisions of the first paragraph shall not result in changes in the time-limits laid down in section 4-15.

(3) The cooperative may make it a condition for exercising the right of pre-emption that the holder of right of pre-emption has paid the redemption amount to the cooperative or has provided an absolute guarantee from a finance institution that is licensed to provide such services in Norway.

(4) The provisions of the first and second paragraph may not be departed from.

Section 4-22. Fees
(1) The housing cooperative may claim a fee corresponding maximally to five times the basic court fee for accepting an advance notification as referred to in section 4-15, first paragraph, second sentence. If the right of pre-emption is exercised, the fee shall be repaid.

(2) The housing cooperative may make it a condition for exercising the right of pre-emption that the holder of right of pre-emption pay a fee corresponding maximally to five times the basic court fee.

(3) The provisions of the present section may not be departed from.

Chapter 5. The dwellings

  

I The right of residence

Section 5-1. The general rule regarding the right of residence
Each share conveys an exclusive right to use a dwelling in the cooperative and a right to use common areas for purposes for which they are intended or normally used and for other purposes that are in keeping with the time and the circumstances.

Section 5-2. Co-ownership of shares
(1) In respect of the cooperative, only the person who resides or is to reside in a dwelling may acquire a co-ownership part of a share otherwise than by inheritance.

(2) If two or more persons own a share in common, use of the dwelling shall be deemed to have been transferred if none of the co-owners reside in the dwelling.

(3) If a sale order pursuant to section 5-22 is issued owing to transfer of use as referred to in the second paragraph, the order shall be deemed to be complied with if one or more co-owners who reside in the dwelling take over the share. The same shall apply if one or more co-owners who reside in the dwelling submit a claim regarding the right of use to the dwelling or the right to take over the co-ownership part pursuant to the Marriage Act or the Act of 4 July 1991 relating to the right to the joint residence and household goods when a household community ceases to exist. If the claim does not succeed within a reasonable time, a new sale order may be issued and the provisions of the second sentence shall not apply to this order.

(4) If it has been made a condition that the member shall be a member of a house-building cooperative to which the housing cooperative is affiliated, all of the co-owners must fulfil this condition.

II Transfer of use to other persons

Section 5-3. Transfer of use
The member may not without the consent of the board transfer the use of the dwelling to other persons beyond the provisions of sections 5-4 to 5-6.

Section 5-4. Transfer of use when the member himself resides in the dwelling
A member who himself resides in the dwelling may transfer the use of parts of the dwelling to other persons.

Section 5-5. Transfer of use for a maximum of three years
With the approval of the board, the member may transfer the use of the whole dwelling to other persons for a maximum of three years if the member himself or a person as referred to in section 5-6, first paragraph (3), has resided in the dwelling for at least one of the last two years. Approval may only be refused if the user’s circumstances provide objective grounds for so doing. Approval may be refused if the user could not have become a member.

Section 5-6. Transfer of use for special reasons
(1) The member may otherwise with the approval of the board transfer the use of the whole dwelling if
1. the member is a legal person or
2. the member shall temporarily reside elsewhere owing to work, education, military service, sickness or other weighty grounds, or
3. a member of the user household is the member’s spouse or relative in a direct line of ascent or descent or fosterchild of the member or spouse, or
4. someone holds the right of use pursuant to section 68 of the Marriage Act or section 3, second paragraph, of the Act of 4 July 1991 relating to the right to the joint residence and household goods when a household community ceases to exist.

(2) Approval may only be refused if the user’s circumstances provide objective grounds for so doing. In cases as referred to in the first paragraph, approval may be refused if the user could not have become a member, cf. section 4-4.

Section 5-7. Application for approval
If the cooperative has not replied to a written application for approval of a user within a month after the application is received by the cooperative, the user shall be deemed to be approved.

Section 5-8. The member’s liability
(1) Transfer of use does not reduce the member’s obligations in relation to the cooperative.

(2) A member who is a legal person shall appoint a representative who can receive reports from the cooperative regarding the use of the dwelling. The representative shall be a natural person. The cooperative may demand a written reply within ten days if it has sent a written enquiry to the appointed person regarding questions concerning breach of obligations in relation to the cooperative.

(3) During a period when a physical member has transferred the use of the dwelling to other persons, he shall keep the board informed of where he can be reached.

Section 5-9. Order to move
(1) If the use is transferred in contravention of the provisions of the present section or if the conditions for transfer of use no longer exist, the cooperative may order the user to move and, if appropriate, demand eviction pursuant to chapter 13 of the Enforcement Act.

(2) If the user behaves in such a manner that there is a risk of destruction or considerable degradation of the property or if his behaviour constitutes a serious nuisance or inconvenience to other users of the property, the cooperative may demand eviction from the dwelling pursuant to chapter 13 of the Enforcement Act. Demands for eviction shall be submitted to the district court. If objections are raised against the eviction that are not clearly groundless within the time limit pursuant to section 13-6 of the Enforcement Act, the demand for eviction shall not be upheld without being heard according to the rules of civil procedure.

Section 5-10. Cessation of rights of use
(1) All rights of use to the dwelling shall cease when the share changes owner.

(2) In the case of right of use pursuant to section 68 of the Marriage Act or section 3, second paragraph, of the Act of 4 July 1991 relating to the right to the joint residence and household goods when a household community ceases to exist, ordinary provisions regarding cessation of encumbrances shall nevertheless apply. Such right of use is protected without registration against the member’s creditors and subsequent voluntary establishment of legal right to the share. A right of pre-emption laid down in the bylaws is not realized until the right of use has ceased.

(3) If the right of use ceases owing to change of ownership, the user may claim compensation from the member if the member is unable to show that the cessation resulted from an obstacle that was beyond the member’s control and it was not reasonable to expect that the member could have anticipated the obstacle on conclusion of the agreement or that the member should have avoided or overcome the consequences of the obstacle.

III The member’s use, maintenance, etc.

Section 5-11. The use of the dwelling and the property
(1) The member shall take proper care of the dwelling and common areas. The use of the dwelling and common areas must not in an unreasonable or unnecessary manner result in damage or nuisance for other members.

(2) A member may with the approval of the board implement measures on the property that are needed owing to disability of a user of the dwelling. Approval may not be refused without objective grounds.

(3) The member may not without the consent of the board use the dwelling for other than residential purposes.

(4) The board may issue ordinary house rules for the property. Even if the keeping of animals is prohibited, the user of the dwelling may keep animals if there are sound reasons for doing so and the keeping of animals is not an inconvenience to other users of the property.

Section 5-12. Maintenance, etc. by the member
(1) The member shall keep the dwelling in good condition.

(2) The member shall maintain such elements as windows, pipes, wiring, furniture and fittings, equipment, apparatuses and internal surfaces in the dwelling.

(3) Such maintenance shall also include necessary repairs or replacement of elements such as pipes, wiring, furniture and fittings, equipment, apparatuses, wallpaper, flooring, wallboards, floorboards and ceiling boards, partition walls, skirting boards and moulding, cupboards, benches and internal doors with frames, but not replacement of windows and outer doors to the dwelling or repairs or replacement of roofs, joists, supporting walls or pipes or wiring integrated into supporting constructions.

(4) The maintenance obligation also applies to repair of accidental damage.

(5) The maintenance obligation stipulated in the bylaws may differ from that laid down in the present section. A member may also agree with the cooperative on a different specification of this obligation.

Section 5-13. The member’s liability for compensation in relation to the cooperative
(1) The cooperative may claim compensation for loss owing to a failure of the member to fulfil his obligations pursuant to section 5-12. This shall nevertheless not apply in so far as the member proves that such failure resulted from an obstacle beyond the member’s control and it is not reasonable to expect that the member should have anticipated the obstacle on conclusion of the agreement or that the member should have avoided or overcome the consequences of the obstacle.

(2) If the cause of the failure lies with a third party whom the member has wholly or partly entrusted with the task of fulfilling the obligations, the member shall only be free of liability if the third party would also be free of liability pursuant to the provisions of the first paragraph.

(3) In the case of a loss owing to interruption of the use of the property or parts of the property, the cooperative may only claim compensation if the failure results from errors or neglect on the part of the member.

(4) The member shall only be liable for loss that may reasonably be expected to result from the failure. If the cooperative neglects to limit the loss by of means of reasonable measures, the cooperative shall itself bear a corresponding part of the loss.

(5) Liability may be reduced if it would unreasonably affect the member. When assessing this, regard shall be paid to the size of the loss compared with the loss that generally arises in similar cases and other circumstances.

Section 5-14. Claims against previous contracting parties
The cooperative may bring a claim for failure against a previous contracting party who entered into an agreement in connection with economic activity, just as claims for failure may be brought by the member or another contracting party.

Section 5-15. Liability for compensation in relation to other members
(1) If other members suffer loss owing to a failure of the member to fulfil his obligations pursuant to section 5-12, they may claim compensation from the member pursuant to section 5-13, first paragraph, unless the loss is subject to claim for compensation by the cooperative.

(2) In the case of indirect loss, the other members may only claim compensation if the failure results from errors or neglect on the part of the member. The following are deemed to be indirect loss:
1. commercial loss,
2. loss owing to interruption of the use of the property or parts of the property, not including costs associated with necessary accommodation for the member or other user of the dwelling,
3. loss owing to damage other than to the dwelling and normal appurtenances to the dwelling.

(3) The provisions of section 5-13, second, fourth and fifth paragraph, and section 5-14 shall apply correspondingly.

Section 5-16. Liability on change of ownership
(1) A new owner of the share is obliged to carry out maintenance, including repairs and replacement pursuant to section 5-12, even if it should have been carried out by the previous owner of the share.

(2) A new owner of the share is liable in relation to the cooperative or in relation to other members only if provided by sections 5-13 and 5-15.

IV The cooperative’s maintenance obligation, etc.

Section 5-17. Maintenance, etc. by the cooperative
(1) The cooperative shall keep buildings and the property otherwise in good condition in so far as the obligation for this does not lie with the members. Damage to dwellings or furniture and fittings that belong to the cooperative shall be repaired by the cooperative if such damage results from failure by another member.

(2) Common piping, wiring, conduits and other common installations that pass through the dwelling shall be maintained by the cooperative. The cooperative shall be entitled to lead new installations of this kind through the dwelling unless this gives rise to major inconvenience for the member.

(3) The member shall allow access to the dwelling for performance of work as referred to in the first and second paragraph and for inspection in relation to maintenance, repair or replacement of such installations. Inspection and performance of work shall be carried out in such a manner that it does not result in undue inconvenience for the member or other users of the dwelling.

(4) The maintenance obligation stipulated in the bylaws may differ from that laid down in the present section.

Section 5-18. Liability for compensation of the cooperative and previous contracting parties
(1) The member may claim compensation for loss owing to a failure of the cooperative to fulfil its obligations pursuant to section 5-17. The provisions of section 5-13, first, second, fourth and fifth paragraph, and section 5-14 shall apply correspondingly.

(2) In the case of indirect loss, the member may only claim compensation if the failure results from errors or neglect on the part of the society. The following are deemed to be indirect loss:
1. commercial loss,
2. loss owing to interruption of the use of the property or parts of the property, not including costs associated with necessary accommodation for the member or other user of the dwelling,
3. loss owing to damage other than to the dwelling and normal appurtenances to the dwelling.

V Settlement of joint costs

Section 5-19. Distribution of joint costs
(1) Joint costs in the cooperative shall be divided between the members according to the relative differences between the values of the dwellings or according to other guidelines stated in the building and financing plan. The distribution shall be adjusted if alterations to the dwellings or the property otherwise result in major changes in relative values. When special grounds so indicate, certain costs shall be divided according to the benefit to the individual dwelling or according to consumption.

(2) If so agreed by the members concerned, a different distribution of costs may be decided than that referred to in the first paragraph.

(3) The board shall decide how much each member shall pay each month towards settlement of joint costs.

Section 5-20. Liens for joint costs
(1) In respect of claims for settlement of joint costs and other claims deriving from matters relating to the cooperative, the cooperative holds a lien in the share superseding all other liens, charges and encumbrances. The secured claim may not be greater than an amount equivalent to twice the national insurance basic amount on the date that enforced sale is decided.

(2) A lien pursuant to the first paragraph is protected without registration and may not be registered. The provisions of section 1-4 of the Mortgage Act shall not apply.

(3) The lien expires at the latest two years after the secured claim should have been paid unless a demand for enforced settlement is received by the district court or unless the claim is settled without undue delay.

(4) If so agreed by the members concerned, a more extensive lien in relation to the members than that laid down in the first paragraph may be established in the bylaws. Such a lien is protected pursuant to general provisions.

(5) The cooperative may not establish a lien in the share by means of an agreement beyond the provisions of the present section.

This section is not in force, cf. section 14-1.

VI Cessation of the right of use

Section 5-21. Termination by member
(1) A member may give notice of termination of his right of residence on provision of a minimum of six months’ notice. The member shall be liable for joint costs during the period until cessation of the right of residence unless a new member takes over the liability prior to this date.

(2) If the member has not given up the right of residence on expiry of the notice period and the share has not been transferred, the termination shall lapse.

(3) If the notice of termination still stands and the share has not been transferred within the notice period, the cooperative may demand that the share be sold pursuant to section 4-8, second paragraph. Notification pursuant to section 4-18 of the Enforcement Act is not required.

(4) Claims for settlement of joint costs accruing to the share are subject to the lien pursuant to section 5-20 regardless of whether the member is liable for the claim.

Section 5-22. Sale order issued by the cooperative
(1) If, despite a warning, a member seriously breaches his obligations, the cooperative may order the member to sell the share. The requirement regarding a warning shall not apply in cases where eviction may be demanded pursuant to section 5-23, first paragraph. The warning shall be issued in writing and shall inform that a serious breach of contract entitles the cooperative to demand the sale of the share. A sale order shall be issued in writing and shall inform that enforced sale of the share may be demanded if the order is not complied with within a time limit that shall be set at no less than three months from the date such an order is received.

(2) If the order is not complied with within the time limit, the cooperative may demand that the share be sold pursuant to section 4-8 second paragraph.

Section 5-23. Eviction
(1) If the member behaves in such a manner that there is a risk of destruction or considerable degradation of the property or such behaviour constitutes a serious nuisance or inconvenience to other users of the property, the cooperative may demand eviction from the dwelling pursuant to chapter 13 of the Enforcement Act. Demands for eviction may at the earliest be submitted at the same time as a sale order is issued pursuant to section 5-22. The demand shall be submitted to the district court. If within the time limit pursuant to section 13-6 of the Enforcement Act objections are raised against the eviction that are not clearly groundless, the demand for eviction shall not be upheld without being heard according to the rules of civil procedure.

(2) Claims for settlement of joint costs accruing to the share are subject to the lien pursuant to section 5-20 regardless of whether the member is liable for the claim.

Section 5-24. Destruction by fire, etc.
(1) If more than half of the dwellings in the cooperative are destroyed by fire or other accident, the general meeting may with a two-thirds majority decide that the dwellings shall not be repaired. Members whose dwellings have been destroyed shall in such case be compensated with an amount equivalent to net assets in the cooperative following the destruction distributed according to the relative values prior to the destruction.

(2) Destruction involving fewer dwellings and other damage to property or buildings shall be repaired by the cooperative unless otherwise agreed with the affected members. If repair is impossible, the cooperative shall instead compensate the affected members pursuant to the provisions of the first paragraph, second sentence. The same shall apply if the costs are clearly disproportionate to what can be achieved by repair and the general meeting decides with a two-thirds majority that repairs shall not be carried out.

Section 5-25. Bankruptcy. Enforced sale and other change of ownership of the property
(1) If the cooperative is declared bankrupt, the right of residence is deemed a right according to a tenancy agreement valid for an unspecified period. Unless otherwise agreed, the rent shall be fixed at the current level of rents, cf. section 4-3 of the Tenancy Act, with effect from the commencement of bankruptcy proceedings. Rights and obligations otherwise follow the mandatory and non-mandatory provisions of the Tenancy Act.

(2) The provisions of the first paragraph shall apply correspondingly from the date of the taking over if property with dwellings associated with shares changes owner in connection with an enforced sale or in another manner.

 

Chapter 6. Registration of rights

 

This chapter is not in force, cf. section 14-1.

Section 6-1. Registration in the real property register
(1) The shares in the housing cooperative shall be registered in the real property register.

(2) The provisions of the Judicial Registration Act shall apply to the registration unless otherwise provided by this chapter.

(3) The King may issue further regulations regarding registration, and may in this connection issue provisions that depart from the Judicial Registration Act and regulations pursuant to the Act.

This section is not in force, cf. section 14-1.

Section 6-2. Registration of rights
(1) Acquisition of rights associated with a share in a housing cooperative may be registered in the real property register. Other details may be registered if so provided by statute.

(2) The summons or an excerpt of the summons in a civil action regarding rights as referred to in the first paragraph may be registered if the court so orders.
This section is not in force, cf. section 14-1.

Section 6-3. Conditions for registration
(1) Acquisition of rights on the basis of a voluntary disposition may only be registered if the disposition was made by or with the consent of a person who, according to the real property register, holds the right of disposition.

(2) The acquisition of a right that requires the consent of the spouse or the permission of the district court pursuant to the Marriage Act may only be registered when such consent or final permission has been issued.

(3) The King may lay down further conditions for registration, including conditions regarding the use of approved forms and regarding confirmation of signatures.

This section is not in force, cf. section 14-1.

Section 6-4. Registration date
(1) Acquisition of a right shall be registered on the same day as the request for registration is received. The registration shall nevertheless be carried out on the following day if the request is received later than a time to be specified in regulations.

(2) Until it is decided that the conditions for registration have been fulfilled, it shall be stated that the registration is not final.

This section is not in force, cf. section 14-1.

Section 6-5. General provisions regarding priority
(1) A registered acquisition of a right takes precedence over an acquisition of a right that has not been registered.

(2) In the event of conflict between two or more registered acquisitions of rights, the order of priority between them shall be decided according to the registration date. Acquisitions of rights registered on the same date shall have equal priority, nevertheless so that execution and attachment take precedence over other establishment of legal rights. If two or more executions are registered on the same date, the first registered shall take precedence.

This section is not in force, cf. section 14-1.

Section 6-6. Exceptions from the priority provisions, etc.
(1) Regardless of the provisions of section 6-5, an earlier acquisition of a right shall take precedence over a later acquisition if
1. the earlier acquisition is based on an agreement or other basis which has a similar status for the acquirer, and the acquirer knew of or should have known of the earlier acquisition on the registration date, or
2. the earlier acquisition occurred through inheritance.

(2) In the case of statutory rights, registration is not relevant unless otherwise provided by statute.

(3) In the case of rights ensuing from matters relating to the cooperative and stated in provisions of the bylaws registered in the Register of Business Enterprises, registration in the real property register has no relevance. This provision shall not apply to liens other than the lien pursuant to section 5-20, first paragraph, of the Housing Cooperatives Act.

(4) On disposal or other transfer of right of ownership, a right that is derived from the previous owner and that is registered at the latest on the same day as the transfer of the right of ownership shall take precedence over a right derived from the new owner. Regarding the priority of a lien securing a loan for acquisition by means of enforced sale, section 11-33 second paragraph, second sentence, and section 11-51, fourth paragraph, third sentence, of the Enforcement Act shall apply.

This section is not in force, cf. section 14-1.

Section 6-7. Special provisions regarding liens
The provisions of section 6-5 shall not apply to disposal of liens as property or security or to execution liens.

This section is not in force, cf. section 14-1.

Section 6-8. Changes of priority
(1) The priority of a registered right may be changed by a rightholder yielding to a rightholder with equal or lower priority if consent is given by the registered owner of the share and holders of registered rights with intermediate priority.

(2) The consent of holders of registered rights with intermediate priority is not however needed when a lien yields to another lien whose value is no greater than that of the yielding lien.

(3) A person who yields to a right is assigned priority after any rights with intermediate priority unless the rightholders consent to yield priority.

(4) Consent as referred to in the first paragraph is not a condition for registration of a reduction in priority.

This section is not in force, cf. section 14-1.

Section 6-9. Right of advancement
Unless otherwise agreed or ensuing from the foundation on which the rights were established or from section 6-10, rights with lower priority will advance without any change in the inherent priority between rights when a higher priority encumbrance expires owing to satisfaction.

This section is not in force, cf. section 14-1.

Section 6-10. Increased or fresh borrowing against liens and conversion of liens
(1) A registered lien may by agreement with the registered owner of the share provide security for increased or fresh borrowing within the nominal value or the maximum registered for the lien. Such increased or fresh borrowing may not however take place after registration of executions of which the mortgagee has been notified or has received knowledge in another manner, and the mortgagee may terminate the credit arrangement without risk of suffering unreasonable loss.

(2) When a lien is cancelled and, at the same time at the latest, a new lien is registered (conversion), the new right will have the same priority as that which was cancelled provided that the issuer has made a declaration to this end and the new lien does not have a greater nominal or maximum value than that which was cancelled.

This section is not in force, cf. section 14-1.

Section 6-11. Legal protection in connection with bankruptcy and debt settlement
(1) In order that a right based on a voluntary disposition shall have legal protection in connection with bankruptcy, this right must be registered on the day before the commencement of bankruptcy proceedings at the latest. Acquisitions of rights as referred to in sections 6-6, third and fourth paragraph, and section 6-7 are nevertheless legally protected in bankruptcy regardless of whether and, if so, when the acquisition was registered.

(2) If compulsory debt settlement proceedings were instituted during debt settlement proceedings immediately prior to bankruptcy proceedings, cf. section 1-4, sixth paragraph, of the Security of Creditors Act, the right must be registered on the day before institution of compulsory debt settlement proceedings at the latest. However, when the right was established with the consent of the debt settlement committee, legal protection in relation to the bankrupt estate is not dependent on registration.

(3) In order for a voluntarily established right to legal protection in connection with compulsory debt settlement, the right must be registered on the day before institution of the compulsory debt settlement at the latest.

This section is not in force, cf. section 14-1.

Section 6-12. Priority in the event of registration errors, etc.
(1) If the acquisition of a right is entered incorrectly into the real property register, it may nevertheless apply in relation to a subsequently registered acquisition of a right.

(2) It may be decided by a court ruling that a subsequently registered acquisition based on an agreement or other basis of a similar status for the acquirer shall take precedence over the acquisition that was incorrectly registered earlier. The conditions for this are
1. that the acquirer of the subsequently registered right acted in good faith when the right was registered,
2. that the acquirer would suffer an involuntary loss by relying on the register if an incorrectly registered right should be given precedence, and
3. that the loss sustained by the acquirer of the subsequently registered right would be considerably greater than for the other party if the right should have to yield, or that it would result in material disruption of subsequently registered rights if the incorrectly registered right should take precedence.

This section is not in force, cf. section 14-1.

Section 6-13. Deficiencies in the co-contractor’s title to a right, etc.
(1) With regard to the acquisition of a right based on an agreement with a person who, according to the real property register, held the right of disposition, it may not be claimed that the registered rightholder nevertheless lacked the right of disposition. This is dependent on the condition that the acquisition of the right was registered and that the acquirer acted in good faith in connection with the registration. Conflict between several parties who derive their rights from the registered rightholder is regulated by sections 6-5 to 6-11.

(2) The provisions of the first paragraph shall not apply when a party is registered as the rightholder on the basis of a document that is invalid owing to forgery, falsification, force as referred to in section 28 of the Contract Act or because the issuer was a minor.

(3) The first and second paragraph shall apply correspondingly when someone has in good faith paid rent or addressed notice of termination or the like to a person who, according to the real property register, is the rightful recipient.

(4) The present section shall not amend the provisions of section 32, cf. section 35, of the Marriage Act.

This section is not in force, cf. section 14-1.

Section 6-14. Expiry of the period of limitation of legal protection
(1) If a registered right attaches to the share during a clearly delimited period or until a clearly specified date, the effect of the registration shall lapse five years thereafter. Precedence of principal and instalments over a registered lien is not a sufficient ground for application of this paragraph.

(2) In the case of a right that shall apply during a person’s lifetime, the effect of the registration shall lapse one year after the death of the person.

(3) In the case of execution, the effect of the registration shall lapse five years after the registration. In the case of attachment or other provisional security during legal enforcement, the time-limit shall be two years.

(4) If a right shall not permanently attach to the share without application of the provisions of the first, second and third paragraph, the effect of the registration shall lapse thirty years after the right is registered but not before five years after expiry of the minimum period if such a minimum period is registered.

(5) The effect of the registration shall not lapse if a new registration is undertaken before expiry of the time-limit. A new time-limit of the same length as the original shall commence from the date of a new registration.

This section is not in force, cf. section 14-1.

Section 6-15. Appeals
Unless otherwise provided by this chapter, the provisions of the Judicial Registration Act shall apply to appeals against the decisions of the registration authority.

This section is not in force, cf. section 14-1.

Section 6-16. Fees
(1) A fee shall be paid for registration pursuant to this Act. In the case of specific registrations, the Ministry may nevertheless make exceptions from the obligation to pay fees. The Ministry shall issue regulations concerning the size of the fee. The Ministry may also issue regulations concerning how information on registered rights shall be made available, and may decide that a fee shall be paid for such services.

(2) The fee shall be paid by the person who has requested the service. A person who has requested a specific service must also pay for other services subject to fees that are necessarily associated with the requested service.

(3) If a service is requested by a person or authority on behalf of another, both shall be liable for the fee. On registration of documents associated with the sale of a housing cooperative share, an estate agency that assists the contracting parties with responsibilities as referred to in section 3-9, first paragraph, (1), (2) or (4), of the Estate Agency Act will also be liable for the fee regardless of whether the estate agency requested the service. If the state requested a service on behalf of a third party, the state may claim reimbursement of this unless otherwise provided by statute.

(4) Claims for payment pursuant to the present provisions by others than the state, county authorities or municipalities shall be grounds for enforcement by execution. When the State Agency for the Recovery of Fines, Damages and Costs is ordered to claim a fee for the Norwegian Mapping Authority, the claim may be recovered by means of deductions in pay and other similar benefits pursuant to the provisions of section 2-7 of the Creditors’ Security Act. The State Agency for the Recovery of Fines, Damages and Costs may also recover claims by creating an execution lien for the claim if the lien can acquire legal protection by entry in a register or by notification to a third party, cf. chapter 5 of the Mortgage Act, and the execution proceedings may be held at the offices of the State Agency for the Recovery of Fines, Damages and Costs pursuant to section 7-9, first paragraph, of the Enforcement Act.

This section is not in force, cf. section 14-1.

Section 6-17. Liability for compensation
(1) The state shall remedy involuntary loss suffered owing to registration errors as a result of any of the following:
1. reliance upon a certificate of registration or cancellation or upon a certified register printout,
2. that acquisition of a right is not registered or is registered or finally registered too late,
3. that acquisition of a right must yield to an acquisition that is registered later pursuant to section 6-12, or
4. that registration has been carried out on the basis of a document as referred to in section 6-13, second paragraph, and someone has in good faith acquired registration of a right based on an agreement through reliance upon the validity of the registered document.

(2) It shall be deemed a registration error pursuant to the first paragraph (1) that an encumbrance has not been inserted in the certificate for the security document, and this subsequently proves to reduce the possibility of covering the lien.

This section is not in force, cf. section 14-1.

Chapter 7. The general meeting

 

 

I General provisions
 

Section 7-1. Authority
The general meeting has the highest authority in the cooperative.

Section 7-2. Right to attend meetings
(1) All members have a right to attend the general meeting with a right to submit proposals, to speak and to vote. The member’s spouse, cohabitant or another member of the member’s household has the right to attend and to speak.

(2) The board members, business manager and tenants of dwellings in the cooperative have a right to attend the general meeting and to speak. The chairman of the board and business manager are obliged to attend unless it is clearly unnecessary or they have valid grounds for absence.

Section 7-3. Representative. Adviser
(1) A member may be represented by a proxy. No-one may act as a proxy for more than one member but, when two or more persons jointly own a share, they may share a proxy. A proxy may be withdrawn at any time.

(2) Each member may be accompanied by an adviser at the general meeting. The adviser may only speak if so permitted by the general meeting.

II The general meeting

Section 7-4. Ordinary general meetings
(1) The cooperative shall hold an ordinary general meeting before the end of June each year. The board shall in advance notify all members whose addresses are known of the date of the meeting and of the last date for submission of matters for inclusion in the agenda.

(2) The question of approval of the annual accounts and annual report shall always be raised and decided at the ordinary general meeting.

(3) The annual accounts, annual report and auditor’s report shall, at the latest eight days before the general meeting, be sent to all members whose addresses are known.

Section 7-5. Extraordinary general meetings
An extraordinary general meeting shall be held when the board finds necessary or when so demanded by the auditor or at least two members who jointly hold at least one-tenth of the votes who shall at the same time state what matters they wish to raise.

III Notice of general meetings

Section 7-6. Notice of general meetings
(1) The general meeting shall be convened by the board. Notice shall be sent at least eight and at the most 20 days before the meeting is to be held. An extraordinary general meeting may if necessary be convened at shorter notice, which shall nevertheless be at least three days.

(2) If the board does not convene a general meeting that is mandatory pursuant to statute, the bylaws or previous decisions of the general meeting, the district court shall as soon as possible and at the cost of the cooperative convene a meeting if so demanded by a board member, business manager, auditor or member.

(3) All members whose addresses are known shall receive written notice. It may be laid down in the bylaws that notice shall instead or in addition be given in another manner. Members who do not reside in the cooperative shall in all cases receive written notice.

Section 7-7. Matters to be included in the notice
(1) The matters to be dealt with at the meeting shall be clearly stated in the notice. If a proposal must be adopted by at least a two-thirds majority pursuant to statute or to the bylaws, the main content must be included in the notice.

(2) Matters that a member wishes to raise at the ordinary general meeting shall be stated in the notice when a request to this effect is received by the board before the final date for submission of matters pursuant to section 7-4, first paragraph.

Section 7-8. Matters the general meeting shall and may deal with
The general meeting may not decide on matters other than those stated in the notice unless so consented by all of the members of the cooperative, unless otherwise stipulated by special provisions. Non-inclusion of the matter in the notice shall not however prevent
1. the ordinary general meeting from deciding matters which, pursuant to statute or to the bylaws, shall be raised at every ordinary general meeting,
2. the ordinary general meeting from deciding demands for investigations as referred to in section 7-14,
3. the election of board members when any are due for election,
4. the decision to convene a new general meeting to decide proposals submitted in the meeting.

IV Meeting procedure

Section 7-9. Chairing of meetings. Minutes
(1) The general meeting shall be chaired by the chairman of the board unless the general meeting elects another chairman, who need not be a member.

(2) The chairman of the meeting shall ensure that minutes are kept of all matters dealt with at the general meeting and all decisions made there. The minutes shall be signed by the chairman of the meeting and at least one member who shall be elected by the general meeting from the members attending. The minutes shall be kept available for the members.

Section 7-10. Right to vote. Competence
(1) Each member has one vote at the general meeting regardless of whether the member holds two or more shares. A member may also vote on behalf of another member. A share jointly held by two or more members shall only give the right to a single vote.

(2) No-one may himself or by proxy or as a proxy for another member vote at the general meeting on an agreement with himself or close relatives or concerning his liability or that of close relatives in relation to the cooperative. The same applies to voting on a sale order or demand for eviction pursuant to sections 5-22 and 5-23.

V Majorities

Section 7-11. Requirements regarding majorities
(1) Decisions at the general meeting require a majority of the votes cast unless otherwise provided by statute. As regards elections, the general meeting may decide in advance that the person who receives most votes shall be elected. Other requirements regarding majorities may be laid down in the bylaws.

(2) When votes are tied, matters shall be decided by drawing lots unless otherwise provided by the bylaws.

(3) Amendment of the bylaws requires two-thirds of the votes cast. More stringent requirements regarding majorities may be laid down in the bylaws.

Section 7-12. Approval of amendments to the bylaws
If so agreed by all members, it may be provided by the bylaws that a third party shall approve amendment of the following provisions of the bylaws in order that such amendments shall be valid
1. provisions regarding conditions for membership of the cooperative,
2. provisions regarding right of pre-emption to shares in the cooperative,
3. provisions regarding the price on transfer of shares,
4. provisions pursuant to this paragraph regarding approval of amendments to the bylaws.

Section 7-13. Abuse of authority
The general meeting may not make any decision which would serve to provide certain members or other persons with an unreasonable advantage to the detriment of other members or of the cooperative.

VI Investigations

Section 7-14. Proposals regarding investigations
(1) A member may propose an investigation of the foundation or management of the cooperative or specific circumstances regarding the management or the accounts. The proposal may be submitted at an ordinary general meeting or at a general meeting where it is stated in the notice of the meeting that a matter concerning such investigations will be raised.

(2) If the proposal receives the support of at least one-tenth of the members attending the general meeting, any member may within a month following the general meeting demand that an investigation be ordered by the district court.

Section 7-15. Decisions of the district court
(1) The district court shall allow a demand pursuant to section 7-14, second paragraph, if the court finds there to be reasonable grounds for so doing.

(2) Before deciding a matter, the court shall give the cooperative and any other party otherwise involved in the investigation the opportunity to express its views.

(3) The court shall appoint one or more investigators. The provisions concerning auditors laid down in sections 4-1 to 4-7 and section 5-2, third paragraph, of the Auditors Act shall apply correspondingly to the investigators. The investigators shall be subject to the duty of secrecy pursuant to the same provisions as the auditor.

(4) The court shall decide the remuneration of the investigators. The costs of the investigation shall be borne by the cooperative. The court may decide that the cooperative shall deposit an appropriate amount in advance.

Section 7-16. Report of the investigation
(1) The investigators shall submit a written report of the investigation to the district court.
(2) The court shall convene a general meeting to deal with the report of the investigation. The report shall be sent to all members whose addresses are known so that the report is normally received one week before the meeting at the latest.

 

Chapter 8. The board and the business manager

  

I The board. The work of the board

Section 8-1. The board
The cooperative shall have a board. The board shall have at least three members. Only persons of full age and legal capacity may be board members.

Section 8-2. Election of board members
(1) The general meeting shall elect the board members. The chairman of the board shall be elected separately. It may be provided in the bylaws that a house-building cooperative to which the housing cooperative is affiliated shall elect one of the board members, but a majority of board members shall always be elected by the general meeting of the housing cooperative.

(2) The general meeting may elect deputy board members. Further provisions regarding this may be laid down in the bylaws.

Section 8-3. Term of office. Removal from office
(1) The board members shall serve a term of two years unless otherwise decided by the general meeting.

(2) A board member shall have the right to retire before his term of office expires if there is a special reason for doing so. The board and the body that elected the board member shall receive reasonable advance notification.

(3) A board member may be removed from office by the body that elected the board member.

Section 8-4. Remuneration
Any remuneration of the board members shall be fixed by the general meeting.

Section 8-5. Board meetings
The chairman of the board shall ensure that the board holds meetings as often as necessary. A board member or the business manager may demand that the board be convened.

Section 8-6. Decisions
(1) The board has a quorum when more than half of all board members are present.

(2) Decisions may be made when more than half of the votes are cast. When votes are tied, the chairman of the meeting shall have the casting vote. Decisions involving amendments nevertheless require that at least one-third of all of the board members vote in favour.

Section 8-7. Chairing of meetings. Minutes
(1) The chairman of the board shall chair the board meeting. If the chairman of the board is not present and no vice-chairman has been elected, the board shall elect a chairman of the meeting.

(2) The board shall keep minutes of matters dealt with by the board. The minutes shall be signed by the board members attending.

Section 8-8. Responsibilities of the board
The board shall conduct the affairs of the cooperative in accordance with statutes, bylaws and decisions of the general meeting. The board may make all decisions not assigned by statute or bylaws to other bodies.

Section 8-9. Decisions that require the consent of the general meeting
Unless the general meeting has given its consent with at least a two-thirds majority, the board may not make decisions concerning
1. rebuilding, extension or other alterations to buildings or land that under the circumstances in the cooperative fall outside normal management and maintenance,
2. increase in the number of shares or association of shares with dwellings previously intended for letting, cf. section 3-2, second paragraph,
3. sale or purchase of real property,
4. raising of loans to be secured by mortgages at a higher priority than the deposits,
5. other legal dispositions of real property that fall outside normal management,
6. other measures that fall outside normal management when the measure results in financial liability or outlays for the cooperative of more than five per cent of the annual joint costs.

II The business manager

Section 8-10. Business conduct
(1) The cooperative shall have a business manager unless otherwise provided by the bylaws. The business manager may be a legal person.

(2) An agreement concerning business conduct may be concluded by the board. The agreement may be terminated by the cooperative with six months’ notice unless shorter notice is agreed upon. With a two-thirds majority, the general meeting may give consent to making the agreement concerning business management non-terminable for a maximum period of five years.

Section 8-11. Business conduct of affiliated housing cooperatives
An agreement concerning the business conduct of house-building cooperatives to which the housing cooperative is affiliated may be non-terminable or have a longer time-limit for notice of termination than six months for a maximum of ten years after the housing cooperative is founded. Such an agreement may stipulate that termination shall only take place if the general meeting of the housing cooperative so consents with a two-thirds majority, and the house-building cooperative has been given the opportunity to express its views in writing concerning the matter to all members of the housing cooperative at the latest at the same time as notice of the general meeting is sent.

Section 8-12. Reduction of remuneration. Termination of agreement
(1) If an agreement concerning business conduct was concluded when a house-building cooperative or other developer owned all of the shares in the housing cooperative, the housing cooperative may demand reduction of the remuneration if it is considerably higher than is usual for corresponding services.

(2) Regardless of the provisions of sections 8-10 and 8-11, the housing cooperative may terminate an agreement concerning business conduct in the event of a material breach of the agreement.

III Management of funds

Section 8-13. Management of funds
(1) Funds that belong to the cooperative shall be properly managed and kept separate from funds that belong to other persons.

(2) Money shall be placed in a Norwegian bank or in another finance institution that has the right to offer such services in Norway and that has security arrangements corresponding to those of Norwegian banks. The funds may be lent or be managed in another manner than mentioned here if secured by a guarantee from a bank or other finance institution as referred to in the previous sentence. An agreement concerning such lending or management may be terminated by the cooperative with six months’ notice unless shorter notice is agreed.

(3) The King may issue further regulations concerning management of the funds.

IV Legal incapacity. Abuse of position, etc.

Section 8-14. Legal incapacity
A board member must not be involved in dealing with or deciding any matters in which the member himself or a close relative has a clear personal or particular financial interest. The same applies to the business manager.

Section 8-15. Abuse of position in the cooperative, etc.
(1) The board and business manager must not do anything that would serve to provide certain members or other persons with an unreasonable advantage to the detriment of other members or the cooperative.

(2) The board or the business manager shall not comply with a decision of the general meeting if the decision conflicts with statutes or bylaws.

V Representation and authority

Section 8-16. Representation and authority
(1) The board represents the cooperative externally and may sign the corporate name. The board may grant board members or the business manager the right to sign the corporate name. Such authorization may at any time be withdrawn.

(2) The business manager represents the cooperative externally in matters regarding day-to-day management.

(3) If anyone who represents the cooperative externally pursuant to the first and second paragraph by disposition on behalf of the cooperative exceeds his authority, the disposition shall not be binding for the cooperative if the cooperative proves that the co-contractor understood or should have understood that his authority was exceeded and that it would be a breach of honour and good faith to uphold the disposition.

(4) After registration of the election of a board member or agreement concerning business conduct in the Register of Business Enterprises, deficiencies in the election or the agreement may not be claimed in relation to a third party unless the cooperative proves that the third party had knowledge of the deficiency.

(5) In matters between the cooperative and the board or individual board members, the general meeting shall elect one or more persons to represent the cooperative in the matter. If this is not done, notification may be made to any member of the cooperative.

 

Chapter 9. Audit

  

Section 9-1. Auditor
A housing cooperative shall have one or more state-authorized or registered auditors.

Section 9-2. Appointment of auditors
The general meeting shall appoint one or more auditors, and may appoint one or more deputy auditors.

Section 9-3. Termination of the contract
(1) An auditor shall serve until another auditor is appointed.

(2) If the auditor’s contract lapses before expiry of the term of service, the board shall without delay ensure that a new auditor is appointed. The same shall apply if the auditor no longer satisfies the conditions for appointment as auditor to the cooperative.

Section 9-4. Appointment of a new auditor
(1) The general meeting may only appoint a new auditor when it is stated in the notice of the meeting that appointment of a new auditor will be proposed. The auditor has the right to state his views concerning the proposal to the general meeting.

(2) If the general meeting rejects a proposal for appointment of a new auditor within a month after the general meeting, one-tenth of all the members may demand that the district court order the appointment of an auditor in addition to other auditors employed by the cooperative. The demand shall be allowed if there are reasonable grounds for so doing.

(3) The district court shall fix the term of service and remuneration for an auditor appointed by the court. If the auditor wishes to terminate his contract before expiry of the term of service, the court shall be given a reasonable period of advance notice.

Section 9-5. Auditor’s report
The auditor shall submit the auditor’s report to the general meeting for each financial year. The auditor’s report shall be received by the board two weeks before the ordinary general meeting at the latest.

Section 9-6. The auditor’s attendance of the general meeting
The auditor shall attend the general meeting when the matters to be dealt with make this necessary. Beyond this, the auditor has a right to attend the general meeting.

Chapter 10. Merger and division of housing cooperatives

  

Section 10-1. Merger of housing cooperatives
(1) A housing cooperative may transfer assets and debts by consolidated proceedings to another housing cooperative on condition that the members become members of the acquiring cooperative. If distribution can take place pursuant to section 3-3 and this is necessary out of regard for the relative values, it may be decided that members shall have remuneration in money or other values.

(2) In the case of cooperatives where a third party pursuant to agreement or to the bylaws may oppose amendment of provisions of the bylaws as referred to in section 7-12, a decision concerning transfer shall not be valid without the approval of the third party. Approval may not be refused if corresponding conditions or right of pre-emption are included in the bylaws for the acquiring cooperative.

Section 10-2. Plan for the merger and approval of such a plan
(1) The boards of the cooperatives shall draw up a plan which shall at least state the names of the cooperatives, the proposal for amendments to the bylaws of the acquiring cooperative, the date of the merger and any remuneration to members. The last annual accounts, annual report and auditor’s report for each of the cooperatives shall be enclosed with the plan.

(2) The plan shall be approved by the general meetings if so agreed by at least two-thirds of all the members of each cooperative. The amendments to the bylaws of the acquiring cooperative must be decided with such a majority as is provided by statute or bylaws.

Section 10-3. Notification to the Register of Business Enterprises and notice to creditors
(1) At the latest one month after the merger is approved by the cooperatives and the decision concerning the merger is valid for the transferring cooperative, the Register of Business Enterprises shall pursuant to section 10-2 be notified of the decision and the plan by the board of each cooperative. If the time-limit is exceeded, the decisions shall lapse.

(2) The Register of Business Enterprises shall announce the decisions concerning merger and notify the creditors of the cooperatives that the cooperative must be notified of any objections to the merger within two months from the last announcement.

(3) The announcement shall be inserted in the electronic announcement publication of Brønnøysund Register Centre and twice with an interval of at least one week in a newspaper that is normally read locally at the place of business of the cooperative. The newspaper announcement may be inserted in abbreviated form with reference to the electronic announcement.

Section 10-4. Objections from creditors
(1) If a creditor with claims undisputed and fallen due objects within the time limit pursuant to section 10-3, the merger may not be conducted before the claim has been paid.

(2) A creditor with disputed claims or claims that have not fallen due may claim adequate security for the claim if it has not already been secured in this way. The district court shall decide disputes regarding existence of the claim and regarding whether the security is adequate.

(3) The court may reject a claim for security pursuant to the second paragraph when it is clear that the claim does not exist, or that the prospects of cover are not reduced by the merger.

(4) A demand for a decision by the court must be submitted within two weeks after a creditor claims payment or provision of security.

Section 10-5. Conduct of the merger
(1) When the time-limit for objections pursuant to section 10-3 has expired and the circumstances of creditors who have objected have been clarified, the acquiring cooperative shall notify the Register of Business Enterprises that the merger will be conducted. When the merger has been registered, the merger is conducted, the transferring cooperative is dissolved and claims for any remuneration to members fall due for payment.

(2) Even if the circumstances of creditors who have objected have not been clarified, the district court may, following a demand from the cooperative the claim concerns, decide that the merger may be conducted and notified to the Register of Business Enterprises.

(3) The acquiring cooperative shall retain accounting material of the transferring cooperative in accordance with section 2-7 of the Accounting Act for at least ten years after the final dissolution. The same shall apply to the ledgers of the cooperative. Reproduction of registered accounting information shall be possible pursuant to section 2-2 of the Accounting Act at least ten years after the final dissolution.

Section 10-6. Division of housing cooperatives
(1) A housing cooperative may transfer some of the dwellings and other assets and any debts to a new cooperative consisting of the members who have a right to the dwellings concerned. It may be decided that members shall be remunerated in money or other values if distribution can take place pursuant to section 3-3 and this is necessary out of regard for the relative values.

(2) If a third party pursuant to agreement or bylaws opposes amendment of provisions of the bylaws of the transferring cooperative as referred to in section 7-12, the provisions of the bylaws shall be included in the bylaws of the new cooperative without a special decision unless the third party agrees otherwise.

Section 10-7. Plan for the division and approval of the plan
(1) The board shall draw up a plan, which shall at least state
1. the proposed amendments to the bylaws of the transferring cooperative,
2. the bylaws, opening balance sheet and building and financing plan for the new cooperative, cf. sections 2-2 and 2-5,
3. the date of the merger,
4. the distribution of assets, rights and debts between the cooperatives participating in the division, and
5. any remuneration to members.

(2) The last annual accounts, annual report and auditor’s report shall be enclosed with the plan.

(3) The plan shall be approved by the general meeting if so agreed by at least two-thirds of all persons due to become members of the new cooperative and at least two-thirds of all the members who shall remain in the transferring cooperative.

Section 10-8. Notification to the Register of Business Enterprises, notice to creditors and objections
The provisions of sections 10-3 and 10-4 shall apply correspondingly.

Section 10-9. Conduct of the division
(1) When the time-limit for objections pursuant to section 10-8, cf. section 10-4, has expired and the circumstances of creditors who have objected have been clarified, the acquiring cooperative shall notify the Register of Business Enterprises that the division shall be conducted. When the division is registered, the division is conducted, the new cooperative is founded, and claims for any remuneration to members fall due for payment.

(2) The provisions of section 10-5, second paragraph, shall apply correspondingly.

 

Chapter 11. Dissolution of housing cooperatives

 

Section 11-1. Decisions concerning dissolution
(1) Dissolution of the cooperative requires a decision by two successive general meetings, with an interval of at least four weeks. At each general meeting, at least two-thirds of all the members must vote in favour of the decision. One of the general meetings shall be the ordinary general meeting.

(2) In the case of cooperatives where a third party pursuant to agreement or bylaws may oppose amendment of provisions of the bylaws as referred to in section 7-12, a decision to dissolve shall not be valid without the approval of the third party. Approval may not be refused if corresponding conditions or right of pre-emption are included in co-ownership bylaws or encumbrances on property units or other real property. In such cases it may be provided in the co-ownership bylaws that they cannot be amended without the approval of the third party, and right of pre-emption may be held for longer than 25 years notwithstanding section 6 of the Act relating to right of pre-emption.

(3) The provision of the previous paragraph shall apply correspondingly in connection with the sale of dwellings from the cooperative.

Section 11-2. Liquidation committee and general meeting
(1) When a decision concerning dissolution is valid, the general meeting shall elect a liquidation committee which takes the place of the board and the business manager. The election applies for an indefinite period with three months notice for the members.

(2) The provisions concerning the board in chapter 8 shall apply correspondingly to the liquidation committee.

(3) The provisions regarding the general meeting shall apply where appropriate during the liquidation.

(4) At the request of at least one-fifth of the members, the district court may when special grounds so indicate decide that the court shall replace the general meeting. The court shall give the board the opportunity to express its views before making this decision.

Section 11-3. Notification to the Register of Business Enterprises
The Register of Business Enterprises shall be notified of a decision to dissolve the cooperative as soon as the decision is valid and a liquidation committee has been elected. The notification shall contain information concerning the members of the liquidation committee.

Section 11-4. Notice to creditors
(1) On registration of the notification of dissolution, the Register of Business Enterprises shall announce the decision to dissolve the cooperative. In the announcement, the creditors of the cooperative shall be informed that they must notify their claims to the liquidation committee within two months from the last announcement. The name and address of the chairman of the liquidation committee shall be stated in the announcement.

(2) The announcement shall be inserted in the electronic announcement publication of the Brønnøysund Register Centre and twice with an interval of at least one week in a newspaper that is normally read locally at the place of business of the cooperative. The newspaper announcement may be inserted in an abbreviated form with reference to the electronic announcement.

(3) All creditors whose addresses are known shall as far as possible be notified individually by the cooperative.

Section 11-5. The status of the cooperative during the liquidation
(1) When a decision concerning dissolution is valid, the cooperative shall add the words “under avvikling” (“under liquidation”) to the corporate name in letters, announcements and other documents.

(2) The activities of the cooperative may continue in so far as is appropriate for the purposes of the liquidation.

(3) During the liquidation, the annual accounts shall be submitted, audited and sent to the Register of Annual Company Accounts according to the same provisions as apply otherwise.

Section 11-6. Liquidation balance sheet, etc.
(1) The liquidation committee shall make an inventory of the assets, rights and debts of the cooperative, and draw up a balance sheet with a view to liquidation.

(2) The audited inventory and balance sheet shall be made available at the cooperative’s office for inspection by the members. A copy of the balance sheet and auditor’s report shall be sent to all members whose addresses are known.

Section 11-7. Settlement of debts
(1) The liquidation committee shall ensure that the debts of the cooperative are settled to the extent that creditors have not waived their claims or consented to accept another debtor instead.

(2) If a creditor cannot be found or refuses to receive the amount due, the amount shall be deposited in Norges Bank (the Norwegian Central Bank) pursuant to the provisions of the Act of 17 February 1939 relating to deposits in connection with debt.

(3) Payment of the housing cooperative deposits may not be claimed if the dwellings are to be distributed without being converted into cash, cf. section 11-8.

Section 11-8. Conversion of assets to cash
(1) The assets of the cooperative shall be converted to cash as far as necessary in order to settle the debts of the cooperative. Otherwise, the assets shall be converted to cash if so required by at least one-third of the members.

(2) If the assets are to be converted to cash, each member shall hold right of pre-emption to the dwelling with which the share is associated. The provisions of the Act relating to right of pre-emption shall apply to the right of pre-emption where appropriate.

Section 11-9. Distribution or payment
(1) The assets may not be distributed or payment made to the members before joint debts are settled and at least two months have elapsed since the last notice to creditors pursuant to section 11-4.

(2) Distribution of the assets or payment of surplus shall be carried out on the basis of the relative values of the dwellings.

(3) Distribution may nevertheless take place when only uncertain or disputed debts remain, and a sufficient amount is reserved for settling these. Unless otherwise agreed, this amount shall be deposited on an account held jointly by the cooperative and the creditor concerned so that withdrawals cannot be made without the written consent of both parties or a final court ruling.

Section 11-10. Final dissolution
(1) Following completion of the distribution of assets or payment of surplus, the audited settlement shall be submitted to the general meeting. When the settlement has been approved, the Register of Business Enterprises shall be notified that the cooperative is finally dissolved.

(2) The provisions of sections 12-3 to 12-5 shall also apply after final dissolution.

(3) The liquidation committee shall ensure that accounting material is retained in accordance with section 2-7 of the Accounting Act for at least ten years after the final dissolution. The same shall apply to the ledgers of the cooperative. It shall be possible to reproduce registered accounting information in accordance with section 2-2 of the Accounting Act for at least ten years after the final dissolution.

Section 11-11. Retroactive distribution
Whatever may accrue to the cooperative of amounts reserved pursuant to section 11-9, second paragraph, amounts distributed to members but not drawn and whatever may otherwise prove to belong to the dissolved cooperative shall be distributed retroactively. If the amount is so small that it is disproportionate to the inconvenience or cost of a retroactive distribution, the liquidation committee may instead use it for welfare purposes, for humanitarian purposes or for the good of the environment.

Section 11-12. Liability for unsettled debts
(1) In relation to creditors who have not received settlements pursuant to section 11-7 nor have been adequately secured by reserves pursuant to section 11-9, third paragraph, the members shall be jointly and severally liable up to the value of what each has received pursuant to section 11-9 less deposits. Moreover, in relation to such creditors, the members of the liquidation committee shall be jointly and severally liable without restriction unless it is proved that they have acted with due care.

(2) In the recourse proceedings, distribution shall take place between the members in relation to what each member has received. Section 2, third paragraph, of the Promissory Notes Act shall apply correspondingly.

(3) Creditors’ claims pursuant to the first paragraph are time-barred three years after the final dissolution is registered in the Register of Business Enterprises.

Section 11-13. Reversal of a decision to dissolve
(1) A decision to dissolve the cooperative may be reversed by the general meeting if at least half of the members of the cooperative so vote.

(2) Reversal may not be decided if distribution has been carried out or payment has been made to the members.

(3) The members of the new board of the cooperative shall immediately notify the Register of Business Enterprises of the reversal of a decision to dissolve the cooperative.

 

Chapter 12. Compensation

Section 12-1. Liability for compensation
Anyone who in the capacity of board member, business manager, investigator or member wilfully or negligently causes loss to the cooperative, members or other persons while carrying out his responsibilities shall be obliged to remedy such loss. The same applies to members of other bodies established pursuant to the bylaws.

Section 12-2. Reduction of liability
Liability for compensation pursuant to section 12-1 may be reduced pursuant to section 5-2 of the Damages Act.

Section 12-3. Decision to submit the cooperative’s claims
(1) The general meeting shall decide whether the cooperative shall submit claims for compensation pursuant to section 12-1. If debt settlement or bankruptcy proceedings have been instituted, the provisions of the Bankruptcy Act shall apply.

(2) The first paragraph shall apply correspondingly for entry into a prior agreement between the cooperative and any person as referred to in section 12-1, regulating or limiting their liability for compensation.

Section 12-4. Claims on behalf of the cooperative
(1) If the general meeting has granted discharge from liability or rejected a proposal to claim compensation pursuant to section 12-1, one-tenth, but at least two, of the members may claim liability for compensation on behalf of and in the name of the cooperative. If civil action for compensation has been instituted, it may continue even if some of the members withdraw or the share is transferred to other persons.

(2) The civil action for compensation must be instituted by a joint representative within three months after the decision is made by the general meeting. If an investigation is demanded pursuant to sections 7-14 to 7-16, the time-limit shall begin to run from the date the claim is finally rejected or in the event that the investigation is terminated.

(3) The costs of the civil action for compensation are not the concern of the cooperative. Settlement of such costs may nevertheless be claimed from the cooperative up to the amount received by the cooperative as a result of the civil action.

(4) The present section shall not apply when the decision as referred to in the first paragraph is made with a majority as for amendments to the bylaws. The same shall apply on conclusion of a settlement.

Section 12-5. Discharge from liability
If the general meeting has decided on a discharge from liability or that liability shall not be claimed, the cooperative may nevertheless submit claims on the basis of circumstances concerning which the general meeting did not on essential points receive correct and complete information when the decision was made.

Section 12-6. Competing claims
Members, creditors or other persons who have suffered loss owing to losses inflicted on the cooperative are bound by claims settlements with the cooperative, and their claims shall rank behind the cooperative’s claims.

Section 12-7. Other claims on behalf of the cooperative
(1) The provisions of sections 12-3, 12-4 and 12-5 shall apply correspondingly to the authority to demand public prosecution and to institute private prosecution.

(2) The provisions of sections 12-4 and 12-5 shall apply correspondingly to the cooperative’s claims for repayment pursuant to section 3-3, third paragraph.
Chapter 13. Miscellaneous provisions

Section 13-1. The duty of secrecy
(1) The employees’ representatives, business manager and employees of a housing cooperative shall prevent unauthorized persons from gaining access to information concerning personal matters that they have received in the course of their activities in the cooperative. The duty of secrecy shall not apply when no legitimately acquired interest indicates that the information shall be kept secret.

(2) Wilful breaches of the duty of secrecy shall be liable to fines.

Section 13-2. The proceedings of the district court, etc.
(1) When the district court deals with matters pursuant to this Act, the provisions of sections 22-25 of the Probate Act shall apply unless otherwise provided by this Act.

(2) Court orders and other decisions of the court pursuant to this Act may be appealed against pursuant to the provisions of chapter 26 of the Civil Procedure Act.

(3) An appeal may not be based on the ground that the order or decision is inappropriate or inexpedient. This shall not apply to orders issued pursuant to sections 7-14 to 7-16.

Section 13-3. Calculation of time-limits
(1) In the case of time-limits to be calculated in terms of days, the day that the time limit begins to run shall not be included, but the day of a meeting or the day on which the action to which the time-limit applies may at the earliest or must at the latest be carried out shall be included.

(2) Time-limits to be calculated in weeks, months or years shall expire on the day of the final week or month that in name or date corresponds to the day that the time-limit begins to run. If the month concerned ends prior to such a date, the time-limit shall expire on the last day of the month.

(3) If the time-limit for an action ends on a Saturday, Sunday or public holiday, the time-limit shall be extended until the next working day.

Section 13-4. Disputes
An agreement that a dispute between a member and the cooperative shall be decided by arbitration or otherwise finally resolved by a body outside the courts shall only be valid if concluded after the dispute arose.

Section 13-5. Conversion of housing cooperative stock corporations
(1) A stock corporation whose purpose is to provide its stockholders with a lease or other right of use to a dwelling may be converted to a housing cooperative pursuant to the present section.

(2) The proposal for conversion shall be prepared by the board and shall contain the necessary amendments to the bylaws, the opening balance sheet for the housing cooperative and information indicating which dwelling is associated with which share, any deposits and the distribution of joint costs.

(3) Conversion must be decided at a general meeting and requires the support of all the stockholders of the corporation.

(4) The board shall obtain authorities to cancel any registered leases associated with the stocks, and shall obtain any mortgage deeds that secure deposits associated with the stocks as well as authorities to cancel the mortgage deeds.

(5) Conversion requires the written consent of all persons holding liens in stocks of which the corporation has been notified or of which the board otherwise has knowledge.

(6) When conversion is decided and the board has obtained authorities and mortgage deeds as referred to in the fourth paragraph, the Register of Business Enterprises shall be notified of the decision. Certified copies of the consent of mortgagees as referred to in the fifth paragraph and a declaration by the board that the consent of all known mortgagees has been obtained shall be enclosed with the notification. The association is a housing cooperative from the date the conversion decision is registered.

(7) Creditors of the corporation and co-contractors may not oppose conversion if the equity after conversion is at least as great as the stock capital.

(8) The housing cooperative shares shall as soon as possible be registered in the real property register. Security in stocks shall be registered as security in the corresponding housing cooperative share.

(9) As soon as possible after the registration in the real property register, the board shall cancel registered leases and mortgage deeds as referred to in the fourth paragraph and, at the same time at the latest, register a lien as referred to in section 2-11, first paragraph, at the highest available priority. The board shall request that the change of name be recorded in the real property register on the basis of the certificate of registration.

 

This section is not in force, cf. section 14-1.

 

Chapter 14. Entry into force. Transitional provisions

I Entry into force

 

Section 14-1. Entry into force
(1) The Act shall enter into force from such date as the King decides. The King may bring individual provisions into force on different dates.

(2) The King shall decide when the Act of 4 February 1960 No. 2 relating to housing cooperatives shall be repealed.

II Transitional provisions

Section 14-2. Affiliated cooperatives
In the case of housing cooperatives that, pursuant to earlier provisions, are affiliated to a house-building cooperative, the following special provisions shall apply:
1. It shall be a condition for membership that the person concerned is a member of the house-building cooperative, and the cooperative shall be deemed an affiliated cooperative pursuant to section 1-3, unless otherwise provided by the bylaws with the consent of the house-building cooperative.
2. Older provisions of the bylaws stipulating that amendment of the bylaws shall not be valid without the consent of the house-building cooperative shall only apply to amendment of provisions of the bylaws as referred to in section 7-12 if such an amendment is adopted after the entry into force of this Act.
3. A business management agreement between a house-building cooperative and an affiliated housing cooperative that was concluded before the Act entered into force, and which according to its contents is non-terminable for more than five years or may only be terminated on certain conditions, may be terminated by the housing cooperative with six months’ notice when five years has elapsed since the entry into force of this Act and at least ten years has elapsed since the foundation of the housing cooperative. Termination may only take place if the general meeting of the housing cooperative so consents with a two-thirds majority and the house-building cooperative has been given the opportunity to express its views in writing concerning the matter to each member of the housing cooperative at the same time at the latest as notice of the general meeting is given.
4. The district court may set aside a termination pursuant to (3) if termination would have an unreasonable effect, and if the house-building cooperative institutes civil action within 30 days after written termination is received by the cooperative.
Section 14-3. Foundation
Housing cooperatives founded prior to the entry into force of this Act may be registered in the Register of Business Enterprises although the foundation was not carried out pursuant to sections 2-1 to 2-8. In such case, registration must take place six months after a constitutive general meeting at the latest.

Section 14-4. Agreements regarding the right to shares, etc.
(1) If, prior to the entry into force of this Act, one or more agreements have been concluded with a house-building cooperative regarding the right to take over or subscribe to shares in a housing cooperative, cf. section 8 of the Act of 4 February 1960 No. 2 relating to housing cooperatives, the provisions of the present Act, section 1-1a of the Act relating to disposal of real property and section 1a of the Act relating to the erection of dwellings shall not apply to such agreements or to corresponding agreements in the same housing cooperative. The Act shall not otherwise apply to the housing cooperative until all of the shares have been taken over or subscribed.

(2) If, in cases other than those referred to in the first paragraph, one or more agreements have been concluded with a housing cooperative concerning renting of dwellings and housing cooperative deposits, cf. section 26 of the Act of 4 February 1960 No. 2 relating to housing cooperatives, the provisions of the present Act, section 1-1a of the Act relating to disposal of real property and section 1a of the Act relating to the erection of dwellings shall not apply to these agreements or to corresponding agreements in the same housing cooperative. The Act shall not otherwise apply to the housing cooperative until all of the dwellings have been taken over.

Section 14-5. Deposits
(1) In housing cooperatives founded prior to the entry into force of this Act, the provisions of section 2-10 and 2-11 shall apply to existing liens that secure housing cooperative deposits. It is not necessary to change the priority of existing liens that had lower priority than referred to in section 2-11, first paragraph, when the Act entered into force.

(2) Legal effects associated with share certificates or loan certificates for deposits shall lapse when the share is registered in the real property register.
The second paragraph is not in force, cf. section 14-1.

Section 14-6. Shares
(1) The provisions of section 3-1 concerning the size of the shares shall not apply to cooperatives founded prior to the entry into force of this Act.

(2) Legal effects associated with share certificates shall lapse when the share is registered in the real property register. Section 14-9, third paragraph, shall apply to legal protection of security.

The second paragraph is not in force, cf. section 14-1.

Section 14-7. Members and right of pre-emption
(1) Old provisions of the bylaws granting legal persons, etc. the right to own more shares than provided by section 4-3 shall apply notwithstanding that section.

(2) In the case of cooperatives founded prior to the entry into force of this Act, it shall be regarded as a condition that a new member shall be approved by the cooperative, cf. section 4-5, unless otherwise provided by the bylaws.

(3) The provisions of sections 4-11 to 4-21 shall not apply where the right of pre-emption is exercised prior to the entry into force of this Act.

Section 14-8. The dwellings
(1) Right of residence pursuant to chapter 5 shall take the place of a lease pursuant to section 33, cf. section 34 of the Act of 4 February 1960 No. 2 relating to housing cooperatives.

(2) Co-ownership of a share established prior to the entry into force of this Act may continue notwithstanding section 5-2.

(3) If the use has been transferred to persons other than the member prior to the entry into force of this Act, the use may continue notwithstanding the provisions of sections 5-3 to 5-6.

(4) Distribution of maintenance obligations, etc. as a departure from sections 5-12 and 5-17 and stated in older bylaws or tenancy agreements that are in general use in the cooperative shall apply until otherwise provided by the bylaws. Deviating distribution subject to special agreements between the cooperative and individual members may only be changed in accordance with the agreement.

(5) Earlier distribution of rents shall apply correspondingly to joint costs notwithstanding section 5-19 until otherwise decided in accordance with the conditions in that section regarding changes in the distribution.

(6) A lien pursuant to section 5-20, first paragraph, shall take the place of a previously agreed lien held by the cooperative for claims pursuant to the tenancy agreement, and shall otherwise have a lower priority than liens that had received legal protection against the member’s creditors prior to the entry into force of this Act unless otherwise provided by general rules of priority.

(7) If the cooperative has terminated the lease or demanded forcible eviction prior to the entry into force of this Act, earlier provisions regarding time-limits, civil action, sale order and legal enforcement shall apply. The same shall apply if the member has terminated the lease.

The sixth paragraph is not in force, cf. section 14-1.

Section 14-9. Registration in the real property register
(1) At the latest six months after entry into force of chapter 6 of this Act, the board shall notify the registration authority for registration of shares in housing cooperatives of registration of the shares. The notification shall at least contain:
1. A list of the shares in the cooperative including information of which dwelling is associated with which share and the names, addresses and personal identity numbers or organization numbers of the members.
2. A list of unredeemed liens the cooperative has received notification of for each share, with the name and address of the mortgagee and information concerning the holder of the share certificate.

(2) The securities stated in the notification from the board shall be registered for the share, and the registration authority shall notify the mortgagee concerning the registration.

(3) Legal protection of liens pursuant to previous provisions shall lapse if the lien is not notified for registration six months after the share is registered in the real property register at the latest.

(4) The provisions of section 1-4 of the Mortgage Act shall not apply to liens that have legal protection pursuant to previous provisions, and which are registered within the time limit pursuant to the third paragraph.

(5) The King shall issue regulations concerning registration in cases of dispute regarding the priority between two or more liens that had received legal protection against the member’s creditors before the shares were registered.

(6) Until the shares are registered, the previous provisions regarding legal protection of acquisitions of rights and enforced sale shall apply. Legal protection may nevertheless not be established for agreed liens in housing cooperative shares in any other manner than by registration in the Housing Cooperatives Register when one year has elapsed since entry into force of this Act.

(7) Prohibition against seizure of a share in a housing cooperative and restrictions on the right of disposal of such shares pursuant to section 3-2 of the Creditors’ Security Act have legal protection without registration in the real property register if such legal protection was secured before the entry into force of chapter 6 of this Act.

(8) If, pursuant to section 14-17, an agreement is made restricting voting rights pursuant to section 7-10, such restrictions may be upheld in so far as follows from the previous provisions.

This section is not in force, cf. section 14-1.

Section 14-10. Management of funds
Old agreements concerning management of funds that are in contravention of section 8-13 shall apply for six months after entry into force of this Act unless a shorter time is stipulated by the agreement itself or a new agreement.

Section 14-11. Bylaws and agreements
Provisions of the bylaws and agreements in contravention of this Act shall lapse one year after the entry into force of the statutory provisions at the latest.

III Amendments to other Acts

Section 14-12. Amendments to other Acts
From the entry into force of this Act, the following Acts shall be amended as follows:

– – –

3. Section 4-3, second paragraph, of the Mortgage Act of 8 February 1980 No. 2

shall read as follows:

(2) A document representing a dwelling lease associated with a transferable claim against the lessor or a corporate share certificate shall be regarded as a title document with the exception of housing cooperative shares registered in the real property register.

A new section 4-3a shall read as follows:

Section 4-3a. Housing cooperative shares registered in the real property register
(1) Housing cooperative shares registered in the real property register may be mortgaged.

(2) The lien acquires legal protection by registration in the real property register.

(3) The provisions of section 2-2, first paragraph (c), shall apply correspondingly.

A new section 5-8a shall read as follows:

Section 5-8a. Execution against a housing cooperative share registered in the real property register
(1) An execution lien in a housing cooperative share registered in the real property register acquires legal protection on registration in the real property register.

(2) The provisions of section 2-2, first paragraph (c) shall apply correspondingly.

– – –

8. The Act of 26 June 1992 No. 86 relating to enforcement and provisional security

Section 1-8, fourth paragraph, shall read as follows:

By title document to a dwelling lease is meant a document representing a lease on a dwelling associated with a transferable claim against the lessor or a corporate share certificate, with the exception of housing cooperative shares registered in the real property register.

Section 6-1, second paragraph, fourth sentence, shall read as follows:

In matters concerning enforced sale of real property, housing cooperative shares or title documents to a dwelling lease, the court may in special cases decide to postpone enforcement pursuant to section 5-12 although the defendant fails to pay one-fifth of the plaintiff’s total claims if the enforced sale would result in the defendant’s loss of the right to a necessary dwelling for himself and his family.

Section 11-1, new fourth paragraph, shall read as follows:

A housing cooperative share may not be enforceably transferred to the mortgagee.
Section 11-2, first paragraph (c), shall read as follows:

c) statutory liens for state or municipal taxes, for the co-ownership’s claims according to the relative holdings in multi-unit co-ownerships and for the housing cooperative’s claims according to relative cooperative holdings in housing cooperatives, and

Section 11-3, first paragraph, new second sentence shall read as follows:

A request for enforced sale of housing cooperative shares registered in the real property register shall be submitted in the legal district where the dwelling is located.

Section 11-7 second paragraph shall read as follows:

If enforced sale of real property or of housing cooperative shares registered in the real property register may result in the defendant’s loss of the right to a necessary dwelling for himself and his family, the defendant shall be made aware of the provisions of section 2-10 of the Security of Creditors Act and that an application for a replacement dwelling must be submitted within the time-limit pursuant to the first paragraph.

Section 11-8, second paragraph, shall read as follows:

In connection with enforced sale of real property or of a housing cooperative share registered in the real property register that serves as a dwelling for the defendant’s spouse, notification shall be given to the spouse with contents as referred to in section 11-7 if the application is not served on the person concerned pursuant to the first paragraph. The same applies to other persons of full age and legal capacity in the defendant’s household of whom the court is aware.

Section 11-9 second paragraph shall read as follows:

If in connection with enforced sale of real property or of housing cooperative shares registered in the real property register a replacement dwelling is applied for pursuant to section 2-10 of the Security of Creditors Act, the court shall decide whether the plaintiff shall be ordered to procure a replacement dwelling. In connection with enforced sale, offers must not be confirmed until either a replacement dwelling has been procured and approved by the court or it has been legally established that the plaintiff is not obliged to procure a replacement dwelling. In connection with enforced transfer of real property to the mortgagee, departure may not be demanded until the conditions pursuant to the second sentence are met.

Section 11-12, new third paragraph, shall read as follows:

In connection with the sale by an appointed agent of a registered share in a housing cooperative affiliated to a house-building cooperative, the house-building cooperative may be appointed as agent.

Section 11-14 new fourth paragraph shall read as follows:

The provisions of the present section shall apply correspondingly in connection with enforced sale of housing cooperative shares registered in the real property register.

– – –

IV Amendments to the Housing Cooperatives Act resulting from amendments to other Acts

Section 14-13.
From the date of entry into force of the Act of 5 September 2003 No. 91 concerning amendments to the Act relating to the exclusive right to corporate names and other commercial symbols, etc, the following provisions of the Housing Cooperatives Act shall read as follows: – – –

V Temporary provisions

Section 14-13. Duration
When chapter 6 of this Act enters into force, the provisions of chapter 14, subsection V, shall be repealed.

Section 14-14. Share certificates
(1) For each housing cooperative share, a share certificate shall be issued. Share certificates may not be issued until the cooperative is registered in the Register of Business Enterprises.

(2) The share certificate shall contain the name of the cooperative, the registration date, the share number and nominal value, the name of the member and the identity of the dwelling associated with the share.

(3) If a deposit is associated with the share, this shall be entered in the share certificate with the information that the share may not be validly acquired or mortgaged except with the deposit.

(4) If restricted voting rights have been agreed pursuant to section 14-17, the restriction shall be entered in the share certificate specifying the date the member shall have a right to vote.

(5) the share certificate shall be dated and signed by at least two board members.

Section 14-15. Debentures
(1) If a deposit is associated with the share pursuant to section 2-10, a debenture shall be issued to each member. The debentures may not be issued until the lien for the collective deposits has been registered pursuant to section 2-11.

(2) The debenture shall have an entry specifying the association between the deposit and the share.

Section 14-16. Share ledger
All shares shall be entered in a share ledger giving the names and addresses of the owners. The share ledger may also take the form of a loose-leaf or card index system. Entries may also be kept by means of electronic data processing.

Section 14-17. Agreement between developer and consumer
(1) The Act relating to the erection of dwellings shall apply to agreements between developers as referred to in section 2-12 and consumers regarding the right to dwellings in the cooperative if work subject to the agreement is not completed within the agreed time, and otherwise the Act relating to disposal of real property, cf. section 1a of the Act relating to the erection of dwellings and section 1-1a of the Act relating to disposal of real property shall apply.

(2) While a developer as referred to in the first paragraph erects dwellings for the housing cooperative, the developer and the consumer may agree that the share shall be transferred or subscribed unless the consumer receives the right to vote pursuant to section 7-10. No restrictions in members rights of disposition may be validly agreed other than those that follow from this Act.

(3) If restrictions are agreed pursuant to the second paragraph, the member shall receive the right to vote pursuant to section 7-10 two years after taking over shares in the cooperative at the latest.

Section 14-18. Liens for joint costs
The cooperative may not establish liens in its own shares by agreement except for the securing of claims for settlement of joint costs and other claims deriving from matters relating to the cooperative.

Section 14-19. Right of residence
Right of residence pursuant to chapter 5 of the Housing Cooperatives Act shall be deemed equivalent to a lease in sections 4-3 and 5-8 of the Mortgage Act and sections 1-8, 6-1 and 12-1 of the Enforcement Act.

Section 14-20. Transfer of title
Transfer of shares pursuant to section 1-1a of the Act relating to disposal of real property and section 1a of the Act relating to the erection of dwellings shall take place on delivery of share certificates and any debenture and notification to the housing cooperative.

Section 14-21. Regulations
The King may in regulations issue further temporary provisions until the entry into force of chapter 6 of this Act.