---
kind: "section"
citation: "15 U.S.C. § 3607"
title: "15"
title_heading: "Commerce and Trade"
number: "3607"
heading: "Termination of self-dealing contracts"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/3607"
units:
  - "Chapter 62 — Condominium and Cooperative Conversion Protection and Abuse Relief"
---

# §3607. Termination of self-dealing contracts

- (a) **Operation, maintenance, and management contracts; penalty—** Any contract or portion thereof which is entered into after October 8, 1980, and which—
  - (1) provides for operation, maintenance, or management of a condominium or [cooperative association](/usc/15/3603.md?p=9) in a [conversion project](/usc/15/3603.md?p=7), or of property serving the condominium or [cooperative unit owners](/usc/15/3603.md?p=13) in such project;
  - (2) is between such unit owners or such association and the [developer](/usc/15/3603.md?p=14) or an affiliate of the [developer](/usc/15/3603.md?p=14);
  - (3) was entered into while such association was controlled by the [developer](/usc/15/3603.md?p=14) through [special developer control](/usc/15/3603.md?p=22) or because the [developer](/usc/15/3603.md?p=14) held a majority of the votes in such association; and
  - (4) is for a period of more than three years, including any automatic renewal provisions which are exercisable at the sole option of the [developer](/usc/15/3603.md?p=14) or an affiliate of the [developer](/usc/15/3603.md?p=14),

  may be terminated without penalty by such unit owners or such association.

- (b) **Time of termination—** Any termination under this section may occur only during the two-year period beginning on the date on which—
  - (1) [special developer control](/usc/15/3603.md?p=22) over the association is terminated; or
  - (2) the [developer](/usc/15/3603.md?p=14) owns 25 per centum or less of the units in the [conversion project](/usc/15/3603.md?p=7),

  whichever occurs first.

- (c) **Vote of owners of units—** A termination under this section shall be by a vote of owners of not less than two-thirds of the units other than the units owned by the [developer](/usc/15/3603.md?p=14) or an affiliate of the [developer](/usc/15/3603.md?p=14).
- (d) **Effective date of termination—** Following the unit owners’ vote, the termination shall be effective ninety days after hand delivering notice or mailing notice by prepaid United States mail to the parties to the contract.

## Source credit

(Pub. L. 96–399, title VI, § 608, Oct. 8, 1980, 94 Stat. 1676.)

## Notes

### Editorial Notes

### Codification

In subsec. (a), “October 8, 1980” was substituted for “the effective date of this title”. See Effective Date note set out under section 3601 of this title.