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A00934 Summary:

BILL NOA00934
 
SAME ASSAME AS S00538
 
SPONSORVanel
 
COSPNSR
 
MLTSPNSR
 
Amd §§157 & 352-e, Gen Bus L
 
Exempts certain timesharing plans involving ten or fewer purchasers from certain filing requirements relating to real estate investments; excludes New York City.
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A00934 Actions:

BILL NOA00934
 
01/11/2023referred to consumer affairs and protection
01/03/2024referred to consumer affairs and protection
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A00934 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A934
 
SPONSOR: Vanel
  TITLE OF BILL: An act to amend the general business law, in relation to certain real estate syndication offerings   PURPOSE: Relates to certain real estate syndication offerings   SUMMARY OF PROVISIONS: Section 1. Amends Subdivision 4 of Section 157 of the General Business Law, to revise the definition of "time share." Section 2. Amends Paragraph (a) of subdivision 1 of Section 352-e of the General Business Law. Section 3. Effective Date   JUSTIFICATION: New York's Truth in Travel Act (TITA) and Martin Act restrict New York- ers' ability to participate in co-ownership because they define any ownership arrangement involving three or more purchasers as a "time share." These laws inaccurately categorize common co-ownership arrange- ments as time shares and subject them to onerous regulatory requirements for which private co-owners could not reasonably comply. These laws also fail to reflect the prevalence of.co-ownership that already exists and leave thousands of New Yorkers at risk of technical violations. Today, 13% of all second homes in New York are owned in an LLC, trust or similar vehicle, which enable multiple owner arrangements. Modern co-ownership bears no resemblance to the vacation travel or timeshare schemes the Truth in Travel and Martin Acts were designed to prevent. In contrast, co-ownership involves the purchase of a whole home by multiple buyers, just like family and friends who co-own homes together today. Like whole homes, co-owned properties are listed on the MLS and sold through real estate brokerages. This update would maintain important consumer protection safeguards while creating housing opportu- nities for New Yorkers who wish to enrich their lives-or already do-through co-ownership.   LEGISLATIVE HISTORY: 3/28/2022 referred to consumer affairs and protection   FISCAL IMPLICATIONS: To be determined.   EFFECTIVE DATE: This act shall take effect on the 90th day after it shall have become a law. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date.
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A00934 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                           934
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 11, 2023
                                       ___________
 
        Introduced  by M. of A. VANEL -- read once and referred to the Committee
          on Consumer Affairs and Protection
 
        AN ACT to amend the general business law, in relation  to  certain  real
          estate syndication offerings
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Subdivision 4 of section 157 of the general  business  law,
     2  as  added  by  chapter  754  of  the laws of 1990, is amended to read as
     3  follows:
     4    4. "Time share" means an interest in any arrangement, plan, scheme, or
     5  similar device, whether by membership,  agreement,  tenancy  in  common,
     6  sale,  lease, deed, rental agreement, license, or right-to-use agreement
     7  or by any other means, whereby more than ten purchasers, or, in  a  city
     8  with  a  population of one million or more, three or more purchasers, in
     9  exchange for a consideration, receive ownership rights in or a right  to
    10  use the same accommodations or facilities in real property, or both, for
    11  different  intervals of less than a full year during any given year, but
    12  not necessarily for consecutive years, and which extend for a period  of
    13  more  than  three  years  or  which,  for  nominal consideration, may be
    14  renewed to continue for a period of more than three years.
    15    § 2. Paragraph (a) of subdivision 1 of section 352-e  of  the  general
    16  business law, as amended by chapter 1085 of the laws of 1968, is amended
    17  to read as follows:
    18    (a)  It  shall  be illegal and prohibited for any person, partnership,
    19  corporation, company, trust or association, or  any  agent  or  employee
    20  thereof,  to  make  or take part in a public offering or sale in or from
    21  the state of New York of securities constituted of participation  inter-
    22  ests  or  investments  in  real  estate,  mortgages or leases, including
    23  stocks, bonds, debentures, evidences of interest or indebtedness, limit-
    24  ed partnership interests or other security or securities as  defined  in
    25  section  three  hundred  fifty-two of this article, when such securities

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01895-01-3

        A. 934                              2
 
     1  consist primarily of participation interests or investments  in  one  or
     2  more  real  estate  ventures, including cooperative interests in realty,
     3  unless and until there shall have been filed with the department of law,
     4  prior  to  such offering, a written statement or statements, to be known
     5  as an "offering statement" or "prospectus" concerning  the  contemplated
     6  offering   which  shall  contain  the  information  and  representations
     7  required by paragraph (b) of this subdivision unless the security offer-
     8  ing is exempted hereunder or under  subdivision  two  of  section  three
     9  hundred  fifty-nine-f[,  subdivision  two,]  of  this article by rule or
    10  action of the attorney general.  Provided however, for purposes of  this
    11  section,  except  in  a  city  with a population of one million or more,
    12  timesharing plans involving ten or fewer purchasers  shall  be  exempted
    13  from  filing  requirements  under this section if such purchasers obtain
    14  use rights or ownership rights in a single property or  unit,  the  sale
    15  price  of which exceeds two times the median sales price for residential
    16  real property for the county in which such property or unit is  located,
    17  as  determined  by  the  commissioner  of taxation and finance. The term
    18  "real estate" as used in [the] this paragraph shall not include mineral,
    19  oil or timber leases or properties, or buildings,  structures,  land  or
    20  other  realty  housing or containing business offices or industry, owned
    21  or leased by the issuer, where the issuer is not  primarily  engaged  in
    22  the  business of buying and selling such building, except in a city with
    23  a population of one million or more, timesharing plans involving ten  or
    24  fewer  purchasers  if  such  purchasers  obtain  use rights or ownership
    25  rights in a single property or unit, the sale price of which exceeds two
    26  times the median sales price for residential real property for the coun-
    27  ty in which such property or unit  is  located,  as  determined  by  the
    28  commissioner  of  taxation  and  finance,  or  other realty or leases or
    29  interests therein. The circulation or dissemination of a non-firm  offer
    30  (including  circulation  or  dissemination  of  a preliminary prospectus
    31  pursuant to section ten (b) of the securities act  of  nineteen  hundred
    32  thirty-three,  and  the rules thereto appertaining) shall not constitute
    33  making or taking part in a public offering within the  meaning  of  this
    34  section.
    35    §  3.  This  act shall take effect on the ninetieth day after it shall
    36  have become a law.    Effective  immediately,  the  addition,  amendment
    37  and/or repeal of any rule or regulation necessary for the implementation
    38  of  this  act  on  its  effective  date  are  authorized  to be made and
    39  completed on or before such effective date.
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