(a) General rule.--Any two or more cooperatives, by agreement of the proprietary lessees as provided in subsection (b), may be merged or consolidated into a single cooperative. In the event of a merger or consolidation, unless the agreement otherwise provides, the resultant cooperative is, for all purposes, the legal successor of all of the preexisting cooperatives, and the operations and activities of all associations of the preexisting cooperatives shall be merged or consolidated into a single association which shall hold all powers, rights, obligations, assets and liabilities of all preexisting associations. The resultant cooperative shall, in addition, be subject in all respects to the provisions and requirements of this subpart regardless of whether or not any of the preexisting cooperatives have been established under this subpart.

(b) Execution and recording of agreement.--The merger or consolidation of two or more cooperatives pursuant to subsection (a) must be evidenced by a recorded agreement duly executed by the president of the association of each of the preexisting cooperatives following approval by proprietary lessees of cooperative interests to which are allocated the percentage of votes in each cooperative required to terminate that cooperative. Any such agreement must be recorded in every county in which a portion of the cooperative is located and is not effective until so recorded.

(c) Reallocation of allocated interests.--Every merger or consolidation agreement must provide for the reallocation of the allocated interests in the new association among the cooperative interests of the resultant cooperative either:

(1) by stating the reallocations or the formulas upon which they are based; or

(2) by stating the percentage of overall allocated interests of the new cooperative which are allocated to all of the cooperative interests comprising each of the preexisting cooperatives and providing that the portion of the percentages allocated to each cooperative interest formerly comprising a part of the preexisting cooperative must be equal to the percentages of allocated interests allocated to that cooperative interest by the declaration of the preexisting cooperative.

(d) Execution of agreement by declarant who retained rights.--Notwithstanding the provisions of subsections (a) and (b), if a declarant expressly retained the special declarant right to merge or consolidate a cooperative pursuant to section 4205(a)(8) (relating to contents of declaration) and if the declarant exercised such right within the time period allowed for such exercise by giving written notice to that effect to all proprietary lessees accompanied by a copy of the agreement evidencing such merger or consolidation, then such agreement may be executed by the declarant rather than by the president of the association of that cooperative and without the necessity for approval or consent by proprietary lessees or their mortgagees provided the agreement is recorded within the time period allowed for the exercise of this special declarant right.

Cross References. Section 4220 is referred to in sections 4102, 4103 of this title.