HARRY HUGHES, Governor                                       3237

(C)  IF THE DEVELOPER FAILS TO COMPLY WITH THE REQUIREMENTS
OF THIS SECTION, THE INITIAL PURCHASER BEFORE THE ISSUANCE OF A
MEMBERSHIP CERTIFICATE MAY RESCIND, IN WRITING, THE CONTRACT,
WITHOUT LIABILITY ON THE INITIAL PURCHASER'S PART AND SHALL
THEREUPON BE ENTITLED TO THE PROMPT RETURN OF ANY DEPOSITS MADE
ON ACCOUNT OF THE CONTRACT.

(D)  (1) ANY DEVELOPER WHO, IN DISCLOSING THE INFORMATION
REQUIRED UNDER SUBSECTIONS (A) AND (B) OF § 5-6B-02, MAKES AN
UNTRUE STATEMENT OF A MATERIAL FACT, OR OMITS TO STATE A MATERIAL
FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS MADE NOT
MISLEADING, IN THE LIGHT OF CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, SHALL BE LIABLE TO A PERSON PURCHASING A COOPERATIVE
INTEREST FROM THE DEVELOPER.

(2)  HOWEVER, AN ACTION MAY NOT BE MAINTAINED TO
ENFORCE ANY LIABILITY CREATED UNDER THIS SECTION UNLESS BROUGHT
WITHIN 1 YEAR AFTER THE FACTS CONSTITUTING THE CAUSE OF ACTION
ARE OR SHOULD HAVE BEEN DISCOVERED.

(3)  A DEVELOPER MAY NOT BE LIABLE UNDER PARAGRAPH (1)
OF THIS SUBSECTION IF THE DEVELOPER, AFTER REASONABLE
INVESTIGATION, HAD REASONABLE GROUNDS TO BELIEVE, AND DID
BELIEVE, AT THE TIME THE INFORMATION REQUIRED TO BE DISCLOSED
UNDER § 5-6B-02 OF THIS SUBTITLE, WAS PROVIDED TO THE PURCHASER,
THAT THE STATEMENTS WERE TRUE, AND THAT THERE WAS NO OMISSION TO
STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS NOT
MISLEADING.

(E)  THE RIGHTS OF INITIAL PURCHASERS UNDER THIS SECTION MAY
NOT BE WAIVED AND AN ATTEMPTED WAIVER IS VOID. IF A MEMBERSHIP
CERTIFICATE IS ISSUED AND DELIVERED, THE INITIAL PURCHASER'S
RIGHTS TO RESCIND UNDER THIS SECTION ARE TERMINATED.

(F)  THE REQUIREMENTS OF THIS SECTION DO NOT APPLY TO THE
SALE OF ANY UNIT WHICH IS TO BE USED AND OCCUPIED FOR
NONRESIDENTIAL PURPOSES.

5-6B-04.

(A) (1) THERE IS AN IMPLIED WARRANTY FROM THE DEVELOPER TO
THE COOPERATIVE HOUSING CORPORATION ON THE ROOF, FOUNDATION, AND
OTHER STRUCTURAL ELEMENTS, CEILINGS, FLOORS, WALLS, MECHANICAL,
ELECTRICAL, AND PLUMBING SYSTEMS.

(2)  THE WARRANTY SHALL PROVIDE THAT THE DEVELOPER IS
RESPONSIBLE FOR CORRECTING DEFECTS IN MATERIALS OR WORKMANSHIP,
AND THAT THE BUILDING ELEMENTS SPECIFIED IN THIS DESCRIPTION ARE
WITHIN ACCEPTABLE INDUSTRY STANDARDS IN EFFECT WHEN THE BUILDING
OR BUILDINGS WERE CONSTRUCTED.

(3)  THE WARRANTY BEGINS WITH THE FIRST TRANSFER OF A
COOPERATIVE INTEREST IN THE COOPERATIVE HOUSING CORPORATION TO
AN INITIAL PURCHASER. THE WARRANTY ON A PORTION OF THE
COOPERATIVE PROJECT NOT COMPLETED AT THE TIME OF THE TRANSFER