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S09677 Summary:

BILL NOS09677
 
SAME ASSAME AS A01595
 
SPONSORBASKIN
 
COSPNSR
 
MLTSPNSR
 
 
Enacts the "city of Buffalo historic preservation receivership act"; provides the city of Buffalo specific procedures for the appointment of a receiver of rents in instances where the property at issue is neglected or abandoned.
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S09677 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9677
 
                    IN SENATE
 
                                      April 1, 2026
                                       ___________
 
        Introduced  by  Sen.  BASKIN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Housing, Construction  and
          Community Development
 
        AN  ACT  in relation to enacting the "city of Buffalo historic preserva-
          tion receivership act"
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Short  Title. This act shall be known and may be cited as
     2  the "city of Buffalo historic preservation receivership act".
     3    § 2. Legislative findings and purpose. The  legislature  hereby  finds
     4  and declares that:
     5    1.  the  city of Buffalo is home to many buildings of historic signif-
     6  icance, and such buildings contribute to the cultural  heritage  of  the
     7  state and are a testament to its rich history and diverse population;
     8    2.  many  such  historic  buildings  are abandoned and/or neglected by
     9  their owners of record, or no such owner may be found;
    10    3. such neglected and abandoned buildings are a blight on their commu-
    11  nities and on the state as a whole;
    12    4. the state of New York imbued the city of Buffalo housing court with
    13  jurisdiction over "proceedings for the  appointment  of  a  receiver  of
    14  rents,  issues  and  profits of buildings in order to remove or remedy a
    15  nuisance or to make repairs required  to  be  made  under  such  housing
    16  codes," under subdivision (f) of section 202 of article X of chapter 570
    17  of the laws of 1909; and
    18    5.  the  legislature  resolves to provide the city of Buffalo specific
    19  procedures for the appointment of a receiver of rents in instances where
    20  the property at issue is neglected or abandoned as defined in this act.
    21    § 3. Definitions. For the purposes of this act,  the  following  terms
    22  shall have the following meanings:
    23    1.  "abandoned property" means a property meeting the following condi-
    24  tions at the time a petition is filed pursuant to section four  of  this
    25  act:
    26    (a) the building has not been legally occupied for at least 12 months;
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02454-01-5

        S. 9677                             2
 
     1    (b)  the  owner  fails  to  present compelling evidence that they have
     2  actively marketed the property during the preceding  60-day  period  and
     3  made  a good faith effort to sell the property at a price which reflects
     4  the circumstances and market conditions;
     5    (c)  the property is not subject to a pending foreclosure action by an
     6  individual or nongovernmental entity;
     7    (d) the current owner fails to present sufficient evidence  that  they
     8  acquired  the  property  within  the preceding six months. Such evidence
     9  shall not include instances where the prior owner is  a  member  of  the
    10  current  owner,  unless  the transfer of title results from the death of
    11  the prior owner, or where the current or prior owner is  a  corporation,
    12  partnership,  or  other  entity  in  which either owner or the immediate
    13  family of either owner has an interest in excess of 5 percent; and
    14    (e) the court finds at least three of the following:
    15    (i) the building or physical structure is a public nuisance;
    16    (ii) the building is in need  of  substantial  rehabilitation  and  no
    17  rehabilitation has taken place during the previous 12 months;
    18    (iii) the building is unfit for human habitation, occupancy, or use;
    19    (iv) the condition and vacancy of the building materially increase the
    20  risk of fire to the building and to adjacent properties;
    21    (v) the building is subject to unauthorized entry leading to potential
    22  health and safety hazards and one of the following applies:
    23    (A)  the owner has failed to take reasonable and necessary measures to
    24  secure the building; or
    25    (B) the city of Buffalo has secured the building in order  to  prevent
    26  such hazards after the owner failed to do so;
    27    (vi)  the  property  is an attractive nuisance to children, including,
    28  but not limited to, the presence of abandoned wells, shafts,  basements,
    29  excavations and unsafe structures;
    30    (vii)  the  presence  of  vermin  or the accumulation of debris, uncut
    31  vegetation, or physical deterioration or the structure  or  grounds  has
    32  created  potential health and safety hazards and the owner has failed to
    33  take reasonable and necessary measures to remove the hazards;
    34    (viii) the dilapidated appearance or other condition of  the  building
    35  negatively  affects  the economic well-being of residents and businesses
    36  in close proximity to the  building,  including  decreases  in  property
    37  value  and loss of business, and the owner has failed to take reasonable
    38  and necessary measures to remedy appearance or the condition; or
    39    (ix) the property is an attractive nuisance for illicit purposes;
    40    2. "actively marketed" means a "for sale" sign has been placed on  the
    41  property  with  accurate  contact  information and the owner has done at
    42  least one of the following:
    43    (a) engaged the services of a licensee under the real property law, to
    44  place the property in a multiple listing service or otherwise market the
    45  property;
    46    (b) placed weekly or more frequent advertisements in  print  or  elec-
    47  tronic media; or
    48    (c) distributed printed advertisements;
    49    3.  "building" means a residential, commercial, or industrial building
    50  or structure and the land appurtenant thereto, including a vacant lot on
    51  which a building has been demolished;
    52    4. "code" means  a  building,  housing,  property  maintenance,  fire,
    53  health  or  other public safety law or ordinance enacted by the state of
    54  New York or the city of Buffalo;
    55    5. "competent entity" means a person or  entity  including  a  govern-
    56  mental  unit  with  experience  in  the  rehabilitation  of residential,

        S. 9677                             3
 
     1  commercial, or industrial buildings and the ability to provide or obtain
     2  the necessary financing for such rehabilitation;
     3    6.  "costs  of  rehabilitation"  means  the  costs  and  expenses  for
     4  construction, stabilization, rehabilitation, maintenance, and  operation
     5  or  demolition,  including  reasonable non-construction costs associated
     6  with the project, including but not limited  to,  environmental  remedi-
     7  ation,  architectural,  engineering,  and legal fees and costs, permits,
     8  financing fees, and a receiver's or developer's fee;
     9    7. "court" means the city of Buffalo housing court;
    10    8. "historic property"  means  a  property  which  is  listed  on  the
    11  national  register of historic places or is a contributing property in a
    12  national register historic district or is located in a local  government
    13  ordinance historic district;
    14    9. "immediate family" means a parent, spouse, child, or sibling;
    15    10. "nonprofit corporation" means a nonprofit corporation that has, as
    16  one of its purposes, remediation of blight, community development activ-
    17  ities,  including  economic  development,  historic preservation, or the
    18  promotion or enhancement of affordable housing opportunities;
    19    11. "owner" means the holder or holders of a title to, or of  a  legal
    20  or  equitable  interest  in,  a  residential,  commercial, or industrial
    21  building.  The term shall include an heir, assignee, trustee,  benefici-
    22  ary,  and  lessee  provided  that  the ownership interest is a matter of
    23  public record;
    24    12. "party in interest" means a person or entity who  has  direct  and
    25  immediate interest in a residential, commercial, or industrial building,
    26  including:
    27    (a) the owner;
    28    (b) a lienholder or other secured creditor of the owner;
    29    (c) a resident or business owner within 2,000 feet of the building;
    30    (d)  a  nonprofit  corporation,  including a redevelopment corporation
    31  located in the city of Buffalo; or
    32    (e) the city of Buffalo;
    33    13. "public nuisance" means  a  property  that,  because  of  physical
    34  condition or use, has been declared by the appropriate official a public
    35  nuisance  in  accordance with the local housing, building, health, fire,
    36  or related code or is determined to be a public nuisance by the court;
    37    14. "substantial rehabilitation" means repairs to the building where:
    38    (a) the cost of repairs, replacements,  and  improvements  exceeds  15
    39  percent  of  the  property's  value  after  completion  of  all repairs,
    40  replacements, and improvements; or
    41    (b) more than one major building component is replaced. Major building
    42  components include:
    43    (i) roof structures;
    44    (ii) ceilings;
    45    (iii) wall or floor structures;
    46    (iv) plumbing systems;
    47    (v) heating and air conditioning systems; and
    48    (vi) electrical systems; and
    49    15. "receiver or developer's fee" means a fee equal to the greatest of
    50  the following:
    51    (a) an amount equal to $2,500, adjusted upward by 2 percent each year;
    52    (b) a 20 percent markup of the costs and  expenses  for  construction,
    53  stabilization,  rehabilitation, maintenance, and operation or demolition
    54  as described in the proposed receiver's plan approved by the court; or
    55    (c) 20 percent of the sale price of the property.

        S. 9677                             4
 
     1    § 4. Initiation of action. 1. Filing of petition. A petition  for  the
     2  appointment  of a receiver to take possession and to undertake rehabili-
     3  tation of a building may be filed by a party in interest in the city  of
     4  Buffalo  housing  court. The proceeding on the petition shall constitute
     5  an action in rem.
     6    2. Contents. The petition submitted to the court shall include a sworn
     7  statement  that, to the best of the petitioner's knowledge, the property
     8  is an abandoned building as defined in section three of this act, and to
     9  the extent available, after reasonable efforts to obtain  such  informa-
    10  tion:
    11    (a)  a copy of any citation charging the owner with being in violation
    12  of municipal code requirements or declaring the building to be a  public
    13  nuisance;
    14    (b)  a recommendation as to which person or entity should be appointed
    15  receiver;
    16    (c) a preliminary plan with initial cost estimates for  rehabilitation
    17  of the building to bring it into compliance with all municipal codes and
    18  duly  adopted  plans  for  the area in which the building is located and
    19  anticipated funding sources; and
    20    (d) a schedule of mortgages, liens,  and  other  encumbrances  on  the
    21  property.
    22    3.  Notice  of  lis pendens. The petitioner shall file a notice of lis
    23  pendens in the office of the recorder of deeds for Erie county.
    24    4. Notification of the owner, political subdivisions, and lienholders.
    25  (a) Upon filing the petition with the court, the petitioner shall notify
    26  the current owner of the property, all political subdivisions  in  which
    27  the  property  is  located,  all city authorities known to have provided
    28  services to the property, and all lienholders of the  filing  by  regis-
    29  tered or certified mail to the last known address of each and by posting
    30  a copy of the notice on the building.
    31    (b)  In  the  event  the registered or certified mail is returned with
    32  notation by the postal authorities that the recipient refused to  accept
    33  the  mail,  the  petitioner may mail a copy to the recipient at the same
    34  address by ordinary mail with  the  return  address  of  the  petitioner
    35  appearing thereon.
    36    (c) Service by ordinary mail shall be presumed complete if the mail is
    37  not returned to the petitioner within 30 days after mailing.
    38    (d)  In  the  event  that the registered or certified mail is returned
    39  with the notation by the postal authorities that it was  unclaimed,  the
    40  notice shall be personally served.
    41    (e)  In  the  event  that  the personal service is not able to be made
    42  after two such attempts, the petitioner shall mail the petition  to  the
    43  recipient  at  the same address by ordinary mail with the return address
    44  of the petitioner appearing thereon with service by ordinary mail deemed
    45  completed if the mail is not returned to the petitioner within  15  days
    46  after the mailing.
    47    (f)  The petitioner shall also notify the owner and each lienholder of
    48  the hearing date and provide notice that owner and lienholders may peti-
    49  tion to intervene in the action.
    50    5. Adjacent properties. The petition may include one or more  adjacent
    51  properties in a single action if:
    52    (a) the property that is the primary subject of the action is owned by
    53  the same owner as the adjacent property; and
    54    (b) the properties were used for a single or interrelated purpose.
    55    § 5. Appointment of the receiver. 1. General rule. The court shall act
    56  upon a petition submitted by holding a hearing within 60 days of receipt

        S. 9677                             5
 
     1  of  petition  and  by  rendering  a decision no later than 30 days after
     2  completion of the hearing.
     3    2.  Intervention.  A party in interest may intervene in the proceeding
     4  and be heard with respect to the petition, the requested relief  or  any
     5  other  matter  which  may  come  before the court in connection with the
     6  proceeding.
     7    3. Hearing. At the hearing, any party in interest shall  be  permitted
     8  to  present  evidence to support or contest the petition, including, but
     9  not limited to, the schedule of encumbrances.
    10    4. Conditions for receivership. If a  petition  is  filed  under  this
    11  section,  the  court  may appoint a receiver if the building at issue is
    12  found to be an abandoned building as defined in section  three  of  this
    13  act.
    14    5.  Appointment.  (a) If the court determines after a hearing that the
    15  property has met the conditions outlined in the definition of  abandoned
    16  building in section three of this act, the court may appoint a receiver,
    17  certify  the  schedule of encumbrances, and grant other relief as may be
    18  just and appropriate. The certification shall be binding with respect to
    19  all mortgages, liens, and encumbrances, including municipal liens, aris-
    20  ing or attaching to the property prior to the date of the petition.
    21    (b) The court  shall  give  first  consideration  for  appointment  as
    22  receiver to the most senior nongovernmental lienholder on the property.
    23    (c)  In the event that the senior lienholder is found to be not compe-
    24  tent or declines the appointment, the  court  may  appoint  a  nonprofit
    25  corporation  or  other  competent  entity. In appointing a receiver, the
    26  court shall:
    27    (i) consider any recommendations contained in the petition  or  other-
    28  wise presented by a party in interest; and
    29    (ii)  give preference to the appointment of a nonprofit corporation or
    30  governmental unit over an individual.
    31    6. Conditional relief. (a) If the court finds after a hearing that the
    32  conditions for receivership set forth in section three of this act  have
    33  been   established,  but  the  owner  represents  that  the  conditions,
    34  violations or nuisance, or emergency  condition  will  be  abated  in  a
    35  reasonable  period,  the  court may allow the owner to proceed to remedy
    36  the conditions.
    37    (b) If the conditions set forth in paragraph (a) of  this  subdivision
    38  have  been  satisfied, the court shall enter an order providing that, in
    39  the event that the violations or nuisance or  emergency  conditions  are
    40  not abated by the owner by a specific date or that other specified reme-
    41  dial  activities have not occurred by a specific date or dates, an order
    42  granting the relief specified in in the petition shall be entered.
    43    (c) The court shall also require the owner  to  post  a  bond  in  the
    44  amount  of  the repair costs estimated in the petition as a condition of
    45  retaining possession of the building.
    46    (d) Upon a finding that:
    47    (i) the petition states conditions for receivership; or
    48    (ii) the owner elects to either:
    49    (A) remedy all violations and nuisance or emergency conditions; or
    50    (B) sell the property subject to the  receivership,  the  owner  shall
    51  reimburse  the  petitioner  for  all costs incurred by the petitioner in
    52  preparing and filing the petition in accordance with the requirements of
    53  section four of this act and the receiver or developer's fee.
    54    7. Receiver's lien. The receiver may file a lien against the  property
    55  in  an  amount  equal  to  the  costs  incurred during the receivership,

        S. 9677                             6
 
     1  including, but not limited to, costs of rehabilitation,  attorney  fees,
     2  and court costs. The lien amount may be adjusted from time to time.
     3    8.  Immediate  possession. The receiver shall promptly take possession
     4  of the building and other property subject to the receivership and shall
     5  immediately be authorized to exercise all powers of this act.
     6    9. Removal by the court. A receiver may be removed by the court at any
     7  time upon the request of the receiver or upon a showing by  a  party  to
     8  the  action  that  the receiver is not carrying out its responsibilities
     9  under this act.
    10    § 6. Powers and duties of the receiver. 1. Full powers and duties. The
    11  receiver shall have all powers and duties necessary or desirable for the
    12  efficient operation, management, and  improvement  of  the  building  in
    13  order  to bring it into compliance with all municipal building and hous-
    14  ing code requirements and to  fulfill  the  receiver's  responsibilities
    15  under this act. Such powers and duties shall include, but not be limited
    16  to, the power to:
    17    (a)  take possession and control of the building, appurtenant land and
    18  any personal property of the owner used with respect  to  the  building,
    19  including any bank or operating account for the building;
    20    (b) collect outstanding accounts receivable;
    21    (c) pursue all claims or causes of action of the owner with respect to
    22  the building and all other property subject to the receivership;
    23    (d)  contract  for  the  repair  and  maintenance of the building. The
    24  contracts shall be appropriately documented and included in the  reports
    25  and  accounting  which  the receiver is required to submit or file under
    26  the provisions of this act. The receiver shall make a reasonable  effort
    27  to  solicit  three bids for contracts valued at more than $25,000 except
    28  when the receiver or developer provides or  obtains  financing  for  the
    29  receivership;
    30    (e)  borrow money and incur credit in accordance with section eight of
    31  this act;
    32    (f) contract and pay for the maintenance and restoration of  utilities
    33  to the building;
    34    (g)  purchase materials, goods, and supplies to accomplish repairs and
    35  operate the building;
    36    (h) with the court's approval, enter into  new  rental  contracts  and
    37  leases for a period not to exceed one year;
    38    (i)  affirm,  renew,  or  enter into contracts providing for insurance
    39  coverage on the building;
    40    (j) engage and pay legal,  accounting,  appraisal  and  other  profes-
    41  sionals to aid the receiver in the conduct of the receivership;
    42    (k) when the building has been designated a historic property, consult
    43  with  the  preservation board of the city of Buffalo for recommendations
    44  on preserving the property's historic character;
    45    (l) apply for and receive public grants or loans;
    46    (m) sell the building in accordance with section nine of this act; and
    47    (n) exercise all authority that an owner of the building would have to
    48  improve, maintain, and otherwise  manage  the  building,  including  the
    49  extent  to  which rehabilitation will satisfy the goals of the receiver-
    50  ship.
    51    2. Affirmative duty. While in possession of the building, the receiver
    52  shall:
    53    (a) maintain, safeguard and insure the building;
    54    (b) apply all revenue generated from the building consistent with  the
    55  provisions of this act;

        S. 9677                             7
 
     1    (c)  develop a final plan for abatement of the conditions which caused
     2  the petition to be granted or, if no such feasible  final  plan  can  be
     3  developed,  to  develop alternatives, including the closing, sealing, or
     4  demolition of all or part of the building;
     5    (d)  when  the  building  has  been designated as a historic property,
     6  rehabilitate architectural features that define the property's  historic
     7  character;
     8    (e) when demolition of a property in a historic district is necessary,
     9  design  any replacement construction on the site to comply with applica-
    10  ble standards under current law;
    11    (f) implement the final plan referred to  in  paragraph  (c)  of  this
    12  subdivision upon approval by the court;
    13    (g)  submit  a  status  report  to the court and parties to the action
    14  annually or more frequently as  the  court  may  deem  appropriate.  The
    15  status report shall include:
    16    (i)  a copy of any contract entered into by the receiver regarding the
    17  improvement of the building;
    18    (ii) an account of the disposition of all revenue generated  from  the
    19  building;
    20    (iii) an account of all expenses and improvements;
    21    (iv) the status of developing and implementing the final plan pursuant
    22  to this subdivision; and
    23    (v)  a description of any proposed actions to be taken in the next six
    24  months to improve the building.
    25    3. Hearing on receiver's final plan for abatement. (a) At the time the
    26  court appoints a receiver, the receiver may present and  the  court  may
    27  approve  the  final  plan for abatement. If no plan is presented at that
    28  hearing, a hearing date on the receiver's final plan for abatement shall
    29  be set within 120 days of the appointment.
    30    (b) 30 days prior to the date  of  the  hearing,  the  receiver  shall
    31  submit the plan to the court, and to all parties to the action.
    32    (c)  The  plan  shall  include  a cost estimate, a financing plan, and
    33  either a description of the work to be done for  the  rehabilitation  of
    34  the  building,  or if rehabilitation is not feasible, a proposal for the
    35  closing, sealing, or demolition of the building.
    36    (d) The plan shall conform with all  existing  municipal  codes,  duly
    37  adopted plans for the area, and historic preservation requirements.
    38    (e)  At  the  time  of  the  hearing,  all parties shall be allowed to
    39  comment on the plan, and the court shall take all comments into  consid-
    40  eration  when  assessing  the  feasibility  of the plan and the proposed
    41  financing.  In making its assessment, the court  shall  give  reasonable
    42  regard  to  the  receiver's  determination of the scope and necessity of
    43  work to be done for the rehabilitation or demolition of the building  in
    44  approving  the final plan and in approving the costs of receivership and
    45  sale of the property.
    46    (f) Within 15 days of the hearing, the court shall  issue  a  decision
    47  approving the plan or requiring that the plan be amended.
    48    (g) If the court decision requires that the plan be amended, a hearing
    49  date shall be set within 60 days from the date of the decision.
    50    4.  Accounting.  Upon the implementation of the final plan approved by
    51  the court, the receiver shall file with the court a full  accounting  of
    52  all income and expenditures during the period of time it took to approve
    53  the final plan.
    54    §  7.  Ownership of property. 1. Ownership interest of the receiver. A
    55  receiver appointed under section five of this act  shall  be  deemed  to
    56  have  an ownership interest in and legal control of the property for the

        S. 9677                             8
 
     1  purposes of filing plans with public agencies and  boards,  seeking  and
     2  obtaining construction permits and other approvals and submitting appli-
     3  cations for financing or other assistance to public or private entities.
     4    2.  Liability  of owner. Notwithstanding the appointment of a receiver
     5  under section five of this act, nothing in this act shall  be  construed
     6  to  relieve the owner of any civil or criminal liability or of any obli-
     7  gation to pay taxes, municipal liens  and  charges,  mortgages,  private
     8  liens  or  other  fees  or charges, whether incurred before or after the
     9  appointment of the receiver and no such liability shall  be  transferred
    10  to the receiver.
    11    3.  Limitation of the receiver's environmental liability. (a) Notwith-
    12  standing any law to the contrary, the receiver shall not be held  liable
    13  for  any  environmental damage to the building or the real property upon
    14  which the building is located that existed prior to the  appointment  by
    15  the court of the receiver.
    16    (b)  Paragraph (a) of this subdivision shall not apply to the owner or
    17  any other person or entity regarding the building and its real  property
    18  that is subject to an appointed receiver under this act.
    19    §  8.  Incurring  indebtedness.  1.  Borrowing.  From  time to time, a
    20  receiver may borrow money or incur indebtedness in order  to  cover  the
    21  costs  of rehabilitation or otherwise fulfill the receiver's obligations
    22  under this act.
    23    2. Liens. In order to facilitate the borrowing of funds for the  costs
    24  of  rehabilitation,  the court may grant priority status to a lien given
    25  to secure payment on a debt incurred for purposes authorized under  this
    26  act, provided that:
    27    (a)  the  receiver  sought  to obtain the necessary financing from the
    28  senior, nongovernmental  lienholder,  but  the  lienholder  declined  to
    29  provide financing for reasonable improvements or other costs of rehabil-
    30  itation on reasonable terms; and
    31    (b)  lien  priority  is necessary in order to induce another lender to
    32  provide financing on reasonable terms.
    33    3. Lien status of rehabilitation expenses. Should the senior lienhold-
    34  er agree to provide financing for the costs of rehabilitation, any funds
    35  lent to cover the costs shall be  deemed  to  be  added  to  the  senior
    36  lienholder's preexisting first lien.
    37    4.  Approval  of  financing.  The  court may approve financing for the
    38  costs of rehabilitation, the terms of which may include deferred  repay-
    39  ment  and  use  restrictions. The terms of the financing may remain with
    40  the property after the receivership has ended and be assumed by  any  of
    41  the following:
    42    (a)  the  owner, if the owner regains possession of the property under
    43  section ten of this act; or
    44    (b) the buyer who takes title under section nine of this act.
    45    § 9. Sale of property. 1. Sale by owner or lienholder. If  a  property
    46  subject  to  receivership  is  sold by the owner or foreclosed upon by a
    47  lienholder or if any interest therein is transferred, such  sale,  fore-
    48  closure, or transfer shall be subject to the receivership.
    49    2.  Sale  by receiver. Upon application of the receiver, the court may
    50  order the sale of the property if the court finds that:
    51    (a) notice and an opportunity to provide  comment  to  the  court  was
    52  given to each record owner of the property and each lienholder;
    53    (b)  the  receiver  has  been in control of the building for more than
    54  three months and the owner has not successfully petitioned to  terminate
    55  the receivership under section ten of this act; and

        S. 9677                             9
 
     1    (c)  the  terms and conditions of the sale are acceptable to the court
     2  and the buyer has a reasonable likelihood of maintaining the property.
     3    3.  Sale  free  and clear. (a) The court may authorize the receiver to
     4  sell the building free and clear of all liens, claims, and encumbrances,
     5  provided that the proceeds of  the  sale  are  distributed  pursuant  to
     6  subdivision four of this section at settlement.
     7    (b) In the event that the proceeds of the sale are insufficient to pay
     8  all  existing  liens,  claims,  and  encumbrances, the proceeds shall be
     9  distributed according to the priorities set forth in subdivision four of
    10  this section and all unpaid liens, claims, or  encumbrances  which  have
    11  not  been  assumed  under  subdivision four of section eight of this act
    12  shall be extinguished.
    13    4. Distribution. The proceeds of the sale shall be applied in  accord-
    14  ance with the following priorities to:
    15    (a) all court costs;
    16    (b)  liens  of the state, liens for unpaid property taxes and properly
    17  recorded municipal liens;
    18    (c) costs and expenses of sale;
    19    (d) principal and interest on any borrowing or incurrence  of  indebt-
    20  edness granted priority over existing liens and security interests under
    21  subdivision two of section eight of this act;
    22    (e) costs incurred by the petitioner in preparing and filing the peti-
    23  tion in accordance with the requirements of section four of this act;
    24    (f)  costs of rehabilitation and any fees and expenses incurred by the
    25  receiver in connection with the sale or the safeguarding of the property
    26  for which the lien authorized under subdivision seven of section five of
    27  this act was filed;
    28    (g) valid liens and security interests in accordance with their prior-
    29  ity;
    30    (h) any unpaid obligations of the receiver; and
    31    (i) the owner.
    32    5. Owner's proceeds as unclaimed property.  In  the  event  the  owner
    33  cannot  be located, any proceeds from the sale which belong to the owner
    34  shall be presumed to be abandoned and unclaimed and shall be subject  to
    35  the  custody  and  control of the New York state comptroller's office of
    36  unclaimed funds pursuant to the abandoned property law.
    37    § 10. Termination of the receivership. Upon  request  of  a  party  in
    38  interest  or  the  receiver,  the court may order the termination of the
    39  receivership if it determines:
    40    1. The conditions that were the grounds for the petition and all other
    41  code violations have been abated  or  corrected,  and  the  obligations,
    42  expenses,  and  improvements of the receivership, including all fees and
    43  expenses of the receiver, have been fully paid or provided for  and  the
    44  purposes of the receivership have been fulfilled;
    45    2.  The owner, mortgagee, or lienholder has requested that the receiv-
    46  ership be terminated and has provided adequate assurances to  the  court
    47  that  the  conditions  that constituted grounds for the petition will be
    48  promptly abated, all obligations,  expenses,  and  improvements  of  the
    49  receivership  including all fees and expenses of the receiver, have been
    50  fully paid or provided for and the purposes  of  the  receivership  have
    51  been fulfilled;
    52    3.  The  building  has  been  sold  by  the  receiver and the proceeds
    53  distributed in accordance with subdivision four of section nine of  this
    54  act; or
    55    4.  The  receiver has been unable, after diligent effort, to present a
    56  plan that could be approved under paragraph (c) of  subdivision  two  of

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     1  section  six  of this act or to implement a previously approved plan, or
     2  for any reason, the purpose of the receivership cannot be fulfilled.
     3    §  11.  Applicability.  1. General inapplicability. This act shall not
     4  apply to commercial and residential buildings, structures, or land owned
     5  by or held in trust for the federal government and regulated  under  the
     6  United  States Housing Act of 1937 (42 U.S.C. § 1437 et. seq.) and regu-
     7  lations promulgated under such act.
     8    2. Inapplicability to service members. This act shall not apply if the
     9  property owner has vacated the property in  order  to  perform  military
    10  service  in  time  of  war,  armed  conflict, or in order to assist with
    11  relief efforts during a declared federal or state emergency as a  member
    12  of the United States armed forces or its reserve component.
    13    §  12.  This act shall take effect on the ninetieth day after it shall
    14  have become a law.
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