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A09340 Summary:

BILL NOA09340
 
SAME ASSAME AS S08334
 
SPONSOREpstein
 
COSPNSRGottfried
 
MLTSPNSR
 
Add §352-eeeee, amd §§352-e & 352-eeee, Gen Bus L; amd §339-e, add §339-mm, RP L; add §80-b, St Fin L
 
Relates to the conversion to condominium ownership for the preservation of expiring affordable housing in the city of New York; provides expanded homeownership opportunities from the conversion of certain residential rental buildings to condominium status by property owners that commit to preserve the inventory of expiring affordable housing in the city of New York; establishes the housing protection unit fund.
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A09340 Actions:

BILL NOA09340
 
02/23/2022referred to housing
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A09340 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9340
 
                   IN ASSEMBLY
 
                                    February 23, 2022
                                       ___________
 
        Introduced  by M. of A. EPSTEIN -- read once and referred to the Commit-
          tee on Housing
 
        AN ACT to amend the general business law, the real property law, and the
          state finance law, in relation  to  providing  expanded  homeownership
          opportunities from the conversion of certain residential rental build-
          ings  to condominium status by property owners that commit to preserve
          the inventory of expiring affordable housing in the city of New York
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. The general business law is amended by adding a new section
     2  352-eeeee to read as follows:
     3    § 352-eeeee. Conversions to condominium ownership for the preservation
     4  of  expiring  affordable housing in the city of New York.  1. As used in
     5  this section, the following words and terms  shall  have  the  following
     6  meanings:
     7    (a) "Annual update amendment". An annual update amendment is an amend-
     8  ment  to  the  preservation plan that shall be submitted to the attorney
     9  general every year that a dwelling unit is unsold, with the  first  such
    10  annual update amendment due within forty-five days of the anniversary of
    11  the  acceptance  of the post-closing amendment to the preservation plan.
    12  An annual update amendment shall supply the evidence, data and  informa-
    13  tion  required in this section, and such other information as the attor-
    14  ney general's regulations shall require, so that the attorney general is
    15  satisfied that the preservation plan as amended discloses  the  informa-
    16  tion  necessary  for  a  reasonable investor to make his or her purchase
    17  decision and that the preservation plan is otherwise  complete,  current
    18  and accurate.
    19    (b)  "Bona  fide  purchaser".  A  bona  fide purchaser is either (i) a
    20  tenant in occupancy who enters into a purchase agreement for a  dwelling
    21  unit pursuant to his, her, or its exercise of one of the rights accorded
    22  to  tenants  in occupancy in subdivision five of this section, or (ii) a
    23  bona fide nontenant purchaser.
    24    (c) "Bona fide non-tenant purchaser". A bona fide non-tenant purchaser
    25  is a purchaser of a dwelling unit who has represented that he,  she,  or
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14678-01-2

        A. 9340                             2
 
     1  they or a member or members of his, her or their immediate family intend
     2  to occupy the dwelling unit when it becomes vacant.
     3    (d)  "Commercially  reasonable  good  faith  effort".  A  commercially
     4  reasonable good faith effort on the part of an offeror of a preservation
     5  plan shall, at minimum, include (i)  the  filing  of  an  annual  update
     6  amendment to the preservation plan; (ii) all of the condominium's dwell-
     7  ing  units  other  than  any income-restricted rental units as the units
     8  being offered for sale under the preservation plan, each at an  offering
     9  price  that  is  consistent with comparable dwelling units recently sold
    10  within the locality; and (iii) entering into a written agreement with  a
    11  licensed real estate broker or selling agent in connection with the sale
    12  of  dwelling units offered for sale under the preservation plan. For the
    13  avoidance of doubt, a commercially reasonable good  faith  effort  shall
    14  not  require  an offeror to sell dwelling units at a price substantially
    15  below the market-rate for comparable  units  recently  sold  within  the
    16  locality,  nor  shall  it  require an offeror to offer for sale dwelling
    17  units that are occupied by non-purchasing tenants.
    18    (e) "Condominium". A condominium shall also include a qualified lease-
    19  hold condominium as defined  in  subdivision  twelve  of  section  three
    20  hundred thirty-nine-e of the real property law.
    21    (f) "Consummation of the preservation plan". Consummation of the pres-
    22  ervation  plan  shall  refer  to  the  filing of the declaration for the
    23  condominium and the first transfer of title to at  least  one  purchaser
    24  under  the preservation plan following a declaration of effectiveness by
    25  the department of law declaring the preservation plan effective.
    26    (g) "Eligible disabled persons". Non-purchasing tenants  who  have  an
    27  impairment which results from anatomical, physiological or psychological
    28  conditions, other than addiction to alcohol, gambling, or any controlled
    29  substance,  which  are demonstrable by medically acceptable clinical and
    30  laboratory diagnostic techniques, and which are expected to be permanent
    31  and which prevent the tenant from engaging in  any  substantial  gainful
    32  employment on the date the preservation plan is submitted to the depart-
    33  ment of law or on the date the attorney general has accepted the preser-
    34  vation  plan  for  filing,  and  the spouses of any such tenants on such
    35  date, and who have elected, within sixty days of the date the  preserva-
    36  tion  plan  is  submitted  to  the  department of law or on the date the
    37  attorney general has accepted the preservation plan for filing, on forms
    38  promulgated by the attorney general and presented to such tenants by the
    39  offeror, to become non-purchasing tenants under the provisions  of  this
    40  section;  provided,  however,  that if the disability first occurs after
    41  acceptance of the preservation plan for filing, then such  election  may
    42  be  made within sixty days following the onset of such disability unless
    43  during the period subsequent to sixty days following the  acceptance  of
    44  the preservation plan for filing but prior to such election, the offeror
    45  accepts  a  written agreement to purchase the apartment from a bona fide
    46  purchaser; and provided further that such election  shall  not  preclude
    47  any  such tenant from subsequently purchasing the dwelling unit if it is
    48  not an income-restricted rental  unit  on  the  terms  then  offered  to
    49  tenants in occupancy.
    50    (h)  "Eligible senior citizens". Non-purchasing tenants who are sixty-
    51  two years of age or older on the date the preservation plan is submitted
    52  to the department of law  or  on  the  date  the  attorney  general  has
    53  accepted  the  plan  for  filing, and the spouses of any such tenants on
    54  such date, and who have elected, within sixty days of the date the pres-
    55  ervation plan is submitted to the department of law or on the  date  the
    56  attorney general has accepted the preservation plan for filing, on forms

        A. 9340                             3
 
     1  promulgated by the attorney general and presented to such tenants by the
     2  offeror,  to  become non-purchasing tenants under the provisions of this
     3  section; provided that such election shall not preclude any such  tenant
     4  from subsequently purchasing the dwelling unit on the terms then offered
     5  to tenants in occupancy.
     6    (i) "Extended affordability term". The extended affordability term for
     7  the income-restricted rental units shall be in perpetuity for so long as
     8  the  building or group of buildings or development are in existence, and
     9  subject to any obligation to  rebuild  in  the  event  of  condemnation,
    10  damage  or destruction required by the new regulatory agreement with the
    11  relevant housing finance agency.
    12    (j) "Inclusionary housing unit". An inclusionary housing  unit  is  an
    13  income-restricted  rental  unit  that  is located within an inclusionary
    14  housing designated area or a mandatory inclusionary housing area.
    15    (k) "Inclusionary housing designated area".  An  inclusionary  housing
    16  designated  area  is  a specified area in which the inclusionary housing
    17  program (also known as the voluntary inclusionary  housing  program)  is
    18  applicable,  pursuant  to  the  regulations  set forth for such areas in
    19  section 23-90 of the zoning resolution. The  locations  of  inclusionary
    20  housing  designated  areas  are identified in either (i) appendix "F" of
    21  the zoning resolution or (ii) in a special purpose district as described
    22  in section 15-011 of the zoning resolution.
    23    (l) "Income-restricted rental unit". An income-restricted rental  unit
    24  shall  refer to a dwelling unit located in a building or group of build-
    25  ings or development that is the subject of a preservation plan submitted
    26  to the attorney general pursuant to  this  section,  and  such  dwelling
    27  unit:
    28    (i)  meets  the  definition  of  a  "low-income  unit" as such term is
    29  defined in section forty-two of the internal revenue code and is subject
    30  to a regulatory agreement with a relevant housing finance agency; or
    31    (ii) meets the definition of a  "low-income  unit"  as  such  term  is
    32  defined  in  subdivision  (d)  of  section  one hundred forty-two of the
    33  internal revenue code and is subject to a regulatory  agreement  with  a
    34  relevant housing finance agency; or
    35    (iii)  previously  met the definition of "low-income unit" pursuant to
    36  the preceding subparagraph (i) or (ii) of this paragraph,  and  notwith-
    37  standing  the expiration of a regulatory agreement with a relevant hous-
    38  ing finance agency, the owner of such dwelling unit affirms,  under  the
    39  penalty  of  perjury,  that  it has continuously operated and rented the
    40  dwelling unit (A) as if it remained an income-restricted rental unit and
    41  (B) as if all of the restrictions of the  expired  regulatory  agreement
    42  had continuously been extended or otherwise remained in effect; or
    43    (iv)  is  a dwelling unit located within a building or group of build-
    44  ings or development that, in accordance with provisions of section  four
    45  hundred  twenty-one-a  of  the  real property tax law, the local housing
    46  agency shall have required to be a unit affordable to  families  of  low
    47  and moderate income; or
    48    (v)  is  a  dwelling  unit  that is rented to persons of low income or
    49  families of low income as defined in subdivision nineteen of section two
    50  of the private housing finance law or as otherwise required by a  feder-
    51  al, state, or local law or mandate.
    52    (m)  "Mandatory  inclusionary  housing area". A mandatory inclusionary
    53  housing area is a specified  area  in  which  the  inclusionary  housing
    54  program  is  applicable,  pursuant to the regulations set forth for such
    55  areas in section 23-90 of the zoning resolution. The locations of manda-
    56  tory inclusionary housing areas are identified in  either  (i)  appendix

        A. 9340                             4
 
     1  "F"  of  the  zoning resolution or (ii) in a special purpose district as
     2  described in section 15-011 of the zoning resolution.
     3    (n)  "Non-purchasing tenant". A person who has not purchased under the
     4  preservation plan and who is a tenant entitled to possession at the time
     5  the preservation plan is declared effective or a person to whom a dwell-
     6  ing unit is rented subsequent  to  the  effective  date.  A  person  who
     7  sublets  a  dwelling  unit  from a purchaser under the preservation plan
     8  shall not be deemed  a  non-purchasing  tenant.  A  tenant  entitled  to
     9  possession of an income-restricted rental unit at the time the preserva-
    10  tion  plan  is  declared  effective is a non-purchasing tenant, notwith-
    11  standing that the income-restricted rental units  are  not  offered  for
    12  sale pursuant to such preservation plan.
    13    (o) "Post-closing amendment". A post-closing amendment is an amendment
    14  to  a  preservation plan filed with the attorney general confirming that
    15  the preservation plan has been consummated.
    16    (p) "Preservation plan". An offering statement or prospectus submitted
    17  to the department of law pursuant to this section for the conversion  of
    18  a  building  or  group of buildings or development from rental status to
    19  condominium ownership, wherein the offeror documents that it has  agreed
    20  to an extended affordability term for the income-restricted rental units
    21  with a relevant housing finance agency.
    22    (q)  "Purchaser  under  the  preservation plan". A purchaser under the
    23  preservation plan is a person who purchases a dwelling unit from offeror
    24  pursuant to the terms of a preservation plan that has been accepted  for
    25  filing  by the attorney general. A person or entity that acquires dwell-
    26  ing units and assumes  certain  obligations  of  offeror  shall  not  be
    27  considered a purchaser under the preservation plan.
    28    (r) "Relevant housing finance agency". Relevant housing finance agency
    29  shall  refer  to  a city or state agency with oversight over income-res-
    30  tricted rental units  due  to  the  receipt  of  substantial  government
    31  assistance  prior  to the date of submission of a preservation plan. For
    32  purposes of this section, a relevant housing finance agency  shall  also
    33  refer  to  the city or state agency that will continue to have oversight
    34  of income-restricted rental units after consummation of the preservation
    35  plan.
    36    (s) "Regulatory agreement". A regulatory agreement shall refer to  the
    37  written  agreement with a relevant housing finance agency that restricts
    38  the income and rents of income-restricted rental units that  is  either:
    39  (i) in effect prior to the date of submission of a preservation plan; or
    40  (ii) in effect after consummation of the preservation plan.
    41    (t)   "Substantial   government  assistance".  Substantial  government
    42  assistance shall refer to either (i)  low  income  housing  tax  credits
    43  under  section  forty-two  of  the  internal  revenue  code or (ii) bond
    44  financing under section one hundred forty-two of  the  internal  revenue
    45  code.
    46    (u)  "Zoning  resolution". Zoning resolution shall refer to the zoning
    47  resolution of the city of New York.
    48    2. The attorney general shall refuse to accept for submission a  pres-
    49  ervation  plan for the conversion of a building or group of buildings or
    50  development to condominium ownership under this section where the attor-
    51  ney general determines that any of the following is applicable:
    52    (a) The preservation plan is for a building or group of  buildings  or
    53  development  that  receives a partial property tax exemption pursuant to
    54  section four hundred-twenty-one-a of the real property tax law, and  the
    55  applicable  governing provisions of section four hundred-twenty-one-a of

        A. 9340                             5
 
     1  the real property tax law prohibit the dwelling units being offered  for
     2  sale from being owned pursuant to condominium ownership; or
     3    (b)  The  preservation plan is for a building or group of buildings or
     4  development that the offeror or a predecessor-in-title to offeror volun-
     5  tarily renounced the receipt of a full or  partial  tax  exemption,  tax
     6  abatement  or  benefit  under  the  real property tax law or the private
     7  housing finance law, or satisfied the terms and conditions of a  regula-
     8  tory  agreement involving substantial government assistance prior to its
     9  expiration date, for purposes of complying with this section; or
    10    (c) The preservation plan is for a building or group of  buildings  or
    11  development  that  either:  (i)  receives  a partial tax exemption under
    12  section four hundred twenty-one-a of the real property tax law which has
    13  a remaining term of more than three years as of the date  of  submission
    14  of  the  preservation  plan; or (ii) includes income-restricted dwelling
    15  units with a regulatory agreement where the compliance period,  as  such
    16  term  is  defined by section forty-two of the internal revenue code, has
    17  not yet expired. Nothing in  this  paragraph  shall  be  interpreted  as
    18  prohibiting  the  attorney general from accepting for filing a preserva-
    19  tion plan that contains income-restricted rental  units  as  defined  in
    20  subparagraph  (iii) of paragraph (l) of subdivision one of this section;
    21  or
    22    (d) The preservation plan is for a building or group of  buildings  or
    23  development,  wherein  the  only  income-restricted  rental units of the
    24  building or group of buildings or development are  inclusionary  housing
    25  units  unless the owner of such building or group of buildings or devel-
    26  opment has agreed to set aside twenty percent of  the  total  number  of
    27  dwelling  units  that  are not inclusionary housing units as income-res-
    28  tricted rental units.
    29    3. At the time of submission of the  preservation  plan,  the  offeror
    30  shall  confirm  that it has reached an agreement with a relevant housing
    31  finance agency regarding the income-restricted rental units  during  the
    32  extended  affordability  term,  and  shall include the following disclo-
    33  sures:
    34    (a) A list of the proposed income-restricted rental units;
    35    (b) The proposed owner of the income-restricted rental units,  if  not
    36  the offeror;
    37    (c)  The operating expenses and revenues applicable to the income-res-
    38  tricted rentals units, which shall be reflected in the updated  Schedule
    39  A and Schedule B for the first year of operation of the condominium, the
    40  allocation of common interests, projected common charges, estimated real
    41  estate  taxes,  and  rents  to  be collected from each income-restricted
    42  rental unit, and the allocation of common expenses under  section  three
    43  hundred  thirty-nine-m  of  the  real  property  law,  applicable to the
    44  income-restricted rental units, which shall be  used  to  limit  certain
    45  condominium expenses allocable to the income-restricted rental units and
    46  to  cover  any  shortfall in the revenue from rent to cover the costs of
    47  operation of the income-restricted rental units;
    48    (d) A description of any financing encumbering  the  income-restricted
    49  rental  units,  and  whether a tax exemption or abatement is in place to
    50  reduce real estate taxes for the income-restricted rental units;
    51    (e) A description of any regulatory  agreement  or  agreements  to  be
    52  recorded against the income-restricted rental units and the term thereof
    53  and  the  relevant  housing  finance agency or agencies with supervisory
    54  oversight;
    55    (f) A description of the provisions of the declaration and by-laws for
    56  the condominium that provides  for  the  special  allocation  of  common

        A. 9340                             6
 
     1  expenses  in  accordance with section three hundred thirty-nine-m of the
     2  real property law, and any specific requirements set forth in a  regula-
     3  tory  agreement  requiring  unit  owners in the condominium to cover any
     4  shortfall  in  the  revenue from rent to cover the costs of operation of
     5  the income-restricted rental units;
     6    (g) A description of the contemplated structure of the board of manag-
     7  ers of the condominium, including specifically an explanation as to  how
     8  the  interests of the owner of the income-restricted rental units are to
     9  be adequately represented;
    10    (h) The name, address and contact details  for  the  relevant  housing
    11  finance agency or agencies with supervisory oversight of the income-res-
    12  tricted rental units and the occupants within;
    13    (i)  A  provision  that  once a vacancy occurs of an income-restricted
    14  rental unit, that income-restricted rental unit may only  be  leased  to
    15  low income households whose annual household income is at or below fifty
    16  percent of area median income at the time of the initial lease, and that
    17  the  initial  rent  shall  not exceed the rent set forth by the relevant
    18  housing finance agency for a household with an annual income at or below
    19  fifty percent of the area median income;
    20    (j) A representation by offeror that the regulatory agreement includes
    21  and accounts for (i)  all  of  the  existing  on-site  income-restricted
    22  rental  units  in an existing building or group of buildings or develop-
    23  ment, or (ii) all of the income-restricted rental units associated  with
    24  an  existing  building or group of buildings or development located on a
    25  zoning lot where one or more buildings  were  set  aside  as  affordable
    26  housing  for purposes of qualifying for a partial property tax exemption
    27  pursuant to section four hundred twenty-one-a of the real  property  tax
    28  law;
    29    (k)  The  income-restricted  rental units may not be removed from rent
    30  stabilization pursuant to the exemption for units owned as a condominium
    31  under sections 2520.11 and 2500.9 of  the  rent  stabilization  code  or
    32  section 26-504 of the administrative code of the city of New York; and
    33    (l)  The  recording of the condominium declaration and commencement of
    34  condominium operations does not modify  the  requirement  under  section
    35  four hundred twenty-one-a of the real property tax law that all residen-
    36  tial rental apartments are subject to rent stabilization laws.
    37    4.  Upon submission of the preservation plan to the department of law,
    38  each tenant in the building or group of buildings or  development  of  a
    39  dwelling  unit  being  offered for sale shall be provided with a written
    40  notice stating that such preservation plan has  been  submitted  to  the
    41  department  of  law.  Written  notice  to each tenant in occupancy shall
    42  contain or be accompanied by:
    43    (a) a copy of the preservation plan;
    44    (b) a statement that tenants of the dwelling units being  offered  for
    45  sale  pursuant  to  the  preservation  plan or their representatives may
    46  physically inspect the premises at any time subsequent to the submission
    47  of the preservation plan to the department of law, during  normal  busi-
    48  ness  hours,  upon written request made by them to the offeror, provided
    49  such representatives are registered architects or professional engineers
    50  licensed by the office of the professions of the education department of
    51  the state of New York; and
    52    (c) a statement that tenants of the income-restricted rental units are
    53  not being offered for sale the dwelling units  they  occupy,  but  their
    54  tenancies  shall continue undisturbed during and after the conversion of
    55  the property to condominium ownership. The statement shall also disclose
    56  that the income-restricted rental units shall remain subject to the rent

        A. 9340                             7
 
     1  stabilization code for the duration of the current tenant's occupancy of
     2  an income-restricted rental unit, and  for  all  future  tenants  of  an
     3  income-restricted  rental  unit,  throughout  the extended affordability
     4  term.
     5    5.  The  tenants in occupancy of dwelling units being offered for sale
     6  on the date the attorney  general  accepts  the  preservation  plan  for
     7  filing  shall  have the exclusive right to purchase their dwelling units
     8  for ninety days after the preservation plan has been accepted for filing
     9  by the attorney general, during which time the offering price  available
    10  to  the tenant in occupancy may not be increased and a tenant's dwelling
    11  unit shall not be shown to a third party unless he or she has, in  writ-
    12  ing,  waived  his or her right to purchase. Subsequent to the expiration
    13  of such ninety day period, a tenant in occupancy of a dwelling unit  who
    14  has  not  purchased shall be given the exclusive right for an additional
    15  six months from said expiration date to purchase said dwelling  unit  on
    16  the  same terms and conditions as are contained in any executed contract
    17  to purchase said dwelling unit entered into by  a  purchaser  under  the
    18  preservation plan, such exclusive right to be exercisable within fifteen
    19  days  from  the  date  of  mailing  by  registered mail of notice of the
    20  execution of a contract of sale together with a copy  of  said  executed
    21  purchase agreement to said tenant.
    22    6. The preservation plan shall also disclose that offeror shall:
    23    (a) market and sell all the dwelling units (other than the income-res-
    24  tricted  rental units) in the building or group of buildings or develop-
    25  ment, as each such dwelling unit becomes vacant, to  a  purchaser  under
    26  the  preservation  plan  through the use of commercially reasonable good
    27  faith efforts;
    28    (b) fund a reserve in the manner and amount  as  provided  in  section
    29  three hundred thirty-nine-mm of the real property law;
    30    (c)  file an annual update amendment every year which shall include an
    31  updated Schedule A of all dwelling units being offered  for  sale  under
    32  the preservation plan; and
    33    (d)  exercise  commercially  reasonable  good faith efforts to sell at
    34  least fifty-one percent of the total number of  dwelling  units  offered
    35  for  sale  under  the preservation plan (excluding any income-restricted
    36  rental units not offered for sale) within five years from  the  date  of
    37  the post-closing amendment.
    38    7.  After the issuance of the letter from the attorney general stating
    39  that the preservation plan has been accepted  for  filing,  the  offeror
    40  shall, on the thirtieth, sixtieth, eighty-eighth and ninetieth day after
    41  such  date  and  at  least once every thirty days until the preservation
    42  plan is declared effective or abandoned, as the case may be, and on  the
    43  second  day  before  the  expiration  of  any  exclusive purchase period
    44  provided in a substantial amendment to the preservation plan:
    45    (a) file with the attorney general  a  written  statement  under  oath
    46  setting  forth  the  percentage of bona fide tenants in occupancy of all
    47  dwelling units in the building or group of buildings or  development  on
    48  the  date  the preservation plan was accepted for filing by the attorney
    49  general who have executed and delivered written agreements  to  purchase
    50  under  the  preservation  plan  as of the date of such written statement
    51  under oath; and
    52    (b) before noon on the day such statement is filed post a copy of such
    53  written statement under oath in a  prominent  place  accessible  to  all
    54  tenants in each building covered by the preservation plan.
    55    8.  A  preservation  plan  may not be declared effective until written
    56  purchase agreements have  been  executed  and  delivered  for  at  least

        A. 9340                             8
 
     1  fifteen  percent  of all dwelling units offered for sale in the building
     2  or group of buildings or development from either (a) bona  fide  tenants
     3  who  were  in  occupancy on the date a letter was issued by the attorney
     4  general  accepting  the  preservation  plan  for filing or (b) bona fide
     5  non-tenant purchasers. The purchase  agreement  shall  be  executed  and
     6  delivered  pursuant  to an offering made in good faith without fraud and
     7  discriminatory repurchase agreements  or  other  discriminatory  induce-
     8  ments.  A negotiated reduction from the original offering price extended
     9  shall not, by itself, be deemed a discriminatory inducement.
    10    9. Those written statements under oath that the offeror is required to
    11  file with the attorney general pursuant to  subdivision  seven  of  this
    12  section shall also include:
    13    (a) the total number of written agreements to purchase under the pres-
    14  ervation plan received from bona fide non-tenant purchasers;
    15    (b) the total number of written agreements to purchase under the pres-
    16  ervation plan received from all bona fide tenants in occupancy;
    17    (c)  the  percentage  of  dwelling units under contract, calculated by
    18  adding the number of written purchase agreements for a  unit  that  were
    19  received  from (i) all bona fide tenants in occupancy plus (ii) all bona
    20  fide nontenant purchasers and then dividing the sum of those two numbers
    21  by the total number of dwelling units offered for sale under the preser-
    22  vation plan;
    23    (d) whether or not offeror intends  to  claim  a  credit  against  the
    24  mandatory  initial contribution offeror is obligated to deposit into the
    25  condominium's reserve fund pursuant  to  subdivision  three  of  section
    26  three  hundred  thirty-nine-mm  of  the real property law for the actual
    27  cost of capital replacements which offeror has begun after the preserva-
    28  tion plan was submitted for filing to the department of law  but  before
    29  the  preservation plan is declared effective, together with their actual
    30  or estimated costs which credit shall not exceed the actual cost of  the
    31  credit;
    32    (e)  whether  or not offeror shall be making its reserve fund contrib-
    33  utions required pursuant to section three hundred thirty-nine-mm earlier
    34  or in an amount greater than required; and
    35    (f) a representation that no purchaser counted for purposes of declar-
    36  ing the preservation plan effective is the offeror, the selling agent or
    37  the managing agent, or is a principal of the offeror, the selling agent,
    38  or the managing agent or is related to any principal of the offeror, any
    39  principal of the selling agent or any principal of the managing agent by
    40  blood, marriage, or adoption, or is an affiliate, business associate, an
    41  employee, a shareholder, a member, a manager, a director, an  officer  a
    42  limited partner of offeror, selling agent or managing agent.
    43    10.  The  preservation plan shall provide that it will be deemed aban-
    44  doned, void and of no effect if it  does  not  become  effective  within
    45  fifteen  months  from  the  date  of issue of the letter of the attorney
    46  general stating that the preservation plan has been accepted for  filing
    47  and, in the event of such abandonment, no new plan for the conversion of
    48  such building or group of buildings or development shall be submitted to
    49  the attorney general for at least twelve months after such abandonment.
    50    11.  No  closings of title of a dwelling unit to a purchaser under the
    51  preservation plan shall take place until the attorney general shall have
    52  also accepted for filing an amendment  that  declares  the  preservation
    53  plan  effective. Within forty-five days of the first closing of title of
    54  a dwelling unit to a purchaser  under  the  preservation  plan,  offeror
    55  shall  submit  to the attorney general its post-closing amendment to the
    56  preservation plan. Thereafter, the preservation plan  shall  continually

        A. 9340                             9
 
     1  be  updated with the filing of an annual update amendment, no later than
     2  thirty days from the  anniversary  of  the  date  the  attorney  general
     3  accepted  the post-closing amendment for filing. An offeror or successor
     4  offeror  shall  only  be  relieved  of  its obligation to file an annual
     5  update amendment to the preservation plan after the last  dwelling  unit
     6  offered for sale is conveyed to a purchaser under the preservation plan.
     7    12. After the date of acceptance for filing of the post-closing amend-
     8  ment,  the  offeror  shall continue to make commercially reasonable good
     9  faith efforts to sell the dwelling units it owns.
    10    13. The attorney general shall refuse to accept for filing  an  annual
    11  update amendment to the preservation plan unless:
    12    (a)  The  annual  update amendment discloses, in addition to the other
    13  disclosures required elsewhere in this section or the regulations of the
    14  attorney general, the following data and information:
    15    (i) an accounting of the dwelling units sold and closed by the offeror
    16  in the preceding twelve months, with an indication if the dwelling  unit
    17  was  conveyed to a purchaser under the preservation plan or to a succes-
    18  sor offeror;
    19    (ii) an inventory of the offeror's unsold dwelling units at the end of
    20  the preceding twelve months, in form and substance as shall satisfy  the
    21  attorney general; and
    22    (iii)  all the information, data and literature presented by the board
    23  of managers in its semiannual reports on the status of the reserve  fund
    24  as required under subdivision five of section three hundred thirty-nine-
    25  mm of the real property law.
    26    (b)  The  annual update amendment shall be accompanied by an affidavit
    27  from a principal of the offeror attesting  to  the  following  data  and
    28  information with respect to all the dwelling units offeror then owns:
    29    (i) the dwelling units' identifying information and general location;
    30    (ii)  whether,  on  the date of submission of the annual update amend-
    31  ment, the unsold dwelling unit is subject to a fully  executed  purchase
    32  agreement,  and  if  so,  whether the purchaser is a purchaser under the
    33  preservation plan or otherwise;
    34    (iii) whether, on the date of submission of the annual  update  amend-
    35  ment, the dwelling unit is occupied or vacant, and if occupied, an indi-
    36  cation that occupancy is:
    37    (A) by a rent-regulated tenant;
    38    (B) by a market-rate tenant;
    39    (C) a month-to-month tenancy;
    40    (D) a tenancy at sufferance; or
    41    (E) other.
    42    (iv)  notwithstanding  the  occupancy status of a dwelling unit on the
    43  date of submission of the annual update amendment, an indication if  the
    44  dwelling  unit  was  vacant  for  more  than one of the twelve preceding
    45  months.  For  each  dwelling  unit  so  indicated,  offeror  shall  also
    46  disclose:
    47    (A) the date range of that the dwelling unit was vacant;
    48    (B)  the  date range for any period of time that the dwelling unit was
    49  marketed for sale;
    50    (C) date of sale;
    51    (D) the date the dwelling unit was leased by a tenant; and
    52    (E) the date the lease is set to expire (if applicable).
    53    14. No eviction proceedings shall be commenced  at  any  time  against
    54  non-purchasing  tenants  for failure to purchase or for any other reason
    55  applicable to expiration of tenancy; provided that such proceedings  may
    56  be  commenced  for  non-payment of rent, illegal use or occupancy of the

        A. 9340                            10
 
     1  premises, refusal of reasonable access to the owner or a similar  breach
     2  by  the  non-purchasing  tenant  of his, her or their obligations to the
     3  owner of the dwelling unit; and provided further that an owner of a unit
     4  may not commence an action to recover possession of a dwelling unit from
     5  a  non-purchasing  tenant  on  the grounds that he, she or they seek the
     6  dwelling unit for the use and occupancy of himself or  herself  or  his,
     7  her or their family's use and occupancy.
     8    15.  No eviction proceedings shall be commenced, except as provided in
     9  this subdivision, at any time against either eligible senior citizens or
    10  eligible disabled persons. The rentals of eligible senior  citizens  and
    11  eligible  disabled  persons  who reside in dwelling units not subject to
    12  government regulation as to rentals and continued occupancy and eligible
    13  senior citizens and eligible disabled persons  who  reside  in  dwelling
    14  units  with  respect  to  which  government regulation as to rentals and
    15  continued occupancy is eliminated  or  becomes  inapplicable  after  the
    16  preservation  plan  has been accepted for filing shall not be subject to
    17  unconscionable increases beyond ordinary rentals for  comparable  apart-
    18  ments  during  the period of their occupancy considering, in determining
    19  comparability, such factors as building services, level  of  maintenance
    20  and  operating expenses; provided that such proceedings may be commenced
    21  against such tenants for non-payment of rent, illegal use  or  occupancy
    22  of  the premises, refusal of reasonable access to the owner or a similar
    23  breach by the tenant of his, her or their obligations to  the  owner  of
    24  the dwelling unit.
    25    16.  Eligible senior citizens and eligible disabled persons who reside
    26  in dwelling units subject to government regulation  as  to  rentals  and
    27  continued occupancy shall continue to be subject thereto.
    28    17.  The rights granted under the preservation plan to eligible senior
    29  citizens and eligible disabled persons may not be abrogated  or  reduced
    30  notwithstanding any expiration of, or amendment to, this section.
    31    18.  Any offeror who disputes the election by a person to be an eligi-
    32  ble senior citizen or an eligible disabled person  shall  apply  to  the
    33  attorney general within thirty days of the receipt of the election forms
    34  for  a  determination by the attorney general of such person's eligibil-
    35  ity. The attorney general shall, within thirty days thereafter, issue  a
    36  determination  of  eligibility.  The  foregoing shall, in the absence of
    37  fraud, be the sole method for determining a  dispute  as  to  whether  a
    38  person is an eligible senior citizen or an eligible disabled person. The
    39  determination of the attorney general shall be reviewable only through a
    40  proceeding  under  article  seventy-eight  of the civil practice law and
    41  rules, which proceeding shall be commenced within thirty days after such
    42  determination by the attorney general becomes final.
    43    19. Non-purchasing tenants who reside in  dwelling  units  subject  to
    44  government regulation as to rentals and continued occupancy prior to the
    45  conversion  of  the  building  or  group  of buildings or development to
    46  condominium ownership shall continue to be subject thereto.
    47    20. The rentals of non-purchasing tenants who reside in dwelling units
    48  not subject to government regulation as to rentals and  continued  occu-
    49  pancy  and  non-purchasing  tenants  who  reside  in dwelling units with
    50  respect to which government regulation as to rentals and continued occu-
    51  pancy is eliminated or becomes inapplicable after the preservation  plan
    52  has  been  accepted  for  filing  by  the  attorney general shall not be
    53  subject to unconscionable increases beyond ordinary rentals for compara-
    54  ble apartments during the period  of  their  occupancy.  In  determining
    55  comparability,  consideration shall be given to such factors as building
    56  services, level of maintenance and operating expenses.

        A. 9340                            11
 
     1    21. The rights granted under the preservation plan to purchasers under
     2  the preservation plan and to non-purchasing tenants may not be abrogated
     3  or reduced notwithstanding any expiration  of,  or  amendment  to,  this
     4  section.
     5    22.  Any  local  legislative body may adopt local laws and any agency,
     6  officer or public body may prescribe rules and regulations with  respect
     7  to  the  continued  occupancy  by  tenants  of  dwelling units which are
     8  subject to regulation as to rentals and continued occupancy pursuant  to
     9  law,  provided  that in the event that any such local law, rule or regu-
    10  lation shall be inconsistent with the provisions of  this  section,  the
    11  provisions of this section shall control.
    12    23. The attorney general shall refuse to accept for filing a preserva-
    13  tion  plan when the attorney general determines: (a) that one or more of
    14  the income-restricted rental units within the building, group of  build-
    15  ings  or development was vacant on the date of submission; or (b) of the
    16  dwelling units that are not income-restricted rental units, an excessive
    17  number of long-term vacancies did not exist on the date that the preser-
    18  vation plan was first submitted to the department of law.  For  purposes
    19  of this subdivision, "long-term vacancies" shall mean dwelling units not
    20  leased  or occupied by bona fide tenants for more than five months prior
    21  to the date of such submission to the department of law; and "excessive"
    22  shall mean a vacancy rate in excess of the greater of  (i)  ten  percent
    23  and (ii) a percentage that is double the normal average vacancy rate for
    24  the building or group of buildings or development for two years prior to
    25  the January preceding the date the preservation plan was first submitted
    26  to the department of law.
    27    24.  All  dwelling  units  occupied by non-purchasing tenants shall be
    28  managed by the same managing agent who manages all other dwelling  units
    29  in  the  building  or  group  of buildings or development. Such managing
    30  agent shall provide to non-purchasing tenants all services  and  facili-
    31  ties  required  by law on a non-discriminatory basis.  The offeror shall
    32  guarantee the obligation of the  managing  agent  to  provide  all  such
    33  services  and  facilities  until  such  time  as  the offeror surrenders
    34  control of the board of managers, at which time the board of managers of
    35  the condominium shall assume responsibility for  the  provision  of  all
    36  services and facilities required by law on a non-discriminatory basis.
    37    25.  It  shall  be  unlawful for any person to engage in any course of
    38  conduct, including, but not limited to, interruption  or  discontinuance
    39  of  essential  services, which substantially interferes with or disturbs
    40  the comfort, repose, peace or quiet of any tenant in his, her  or  their
    41  use  or  occupancy  of his, her or their dwelling unit or the facilities
    42  related thereto. The attorney general may apply to a court of  competent
    43  jurisdiction  for  an order restraining such conduct and, if he deems it
    44  appropriate, an order restraining the owner from  selling  the  dwelling
    45  unit  itself  or  from  proceeding with the plan of conversion; provided
    46  that nothing contained herein shall be deemed  to  preclude  the  tenant
    47  from applying on his, her or their own behalf for similar relief.
    48    26.  Any provision of a lease or other rental agreement which purports
    49  to waive a tenant's rights under this section or rules  and  regulations
    50  promulgated pursuant hereto shall be void as contrary to public policy.
    51    27.  Notwithstanding  the  requirements  of this section regarding the
    52  preservation of income-restricted rental units as rental housing, and to
    53  the extent permitted under existing law as it relates to the income-res-
    54  tricted rental units, the income-restricted rental units in  a  building
    55  or  group of buildings or development that is the subject of a preserva-
    56  tion plan may be offered for sale to existing tenants  in  occupancy  or

        A. 9340                            12
 
     1  other  qualified  low-income purchasers, if the relevant housing finance
     2  agency provides a letter of ownership support to the department  of  law
     3  prior to the preservation plan being accepted for filing confirming that
     4  the proposed offering of such income-restricted ownership units meet the
     5  following criteria: (a) the offering prices are affordable to the exist-
     6  ing  tenants  and/or  the  qualified  low-income purchasers who meet the
     7  definition of persons of low income or families of low income as defined
     8  by subdivision nineteen of section two of the  private  housing  finance
     9  law;  (b) adequate provisions exist in a regulatory agreement, condomin-
    10  ium declaration and by-laws to ensure that  once  conveyed,  income-res-
    11  tricted  ownership units shall remain affordable to qualified low-income
    12  owners and subsequent purchasers and owners for so long as the condomin-
    13  ium is in existence; (c) the regulatory agreement, condominium  declara-
    14  tion  and  by-laws allow for adequate oversight of the income-restricted
    15  ownership units by the relevant housing finance agency  to  ensure  such
    16  dwelling  units are occupied by qualified low-income purchasers; and (d)
    17  that the relevant housing finance agency is legally authorized and capa-
    18  ble of enforcing these  provisions  and  covenants  to  do  so.  If  the
    19  income-restricted  rental  units  to be sold are subject to a regulatory
    20  agreement or agreements with more  than  one  relevant  housing  finance
    21  agency,  each such relevant housing finance agency must provide a letter
    22  of ownership support.
    23    28. It shall be unlawful for an offeror, its designees and/or  succes-
    24  sors  to  have  or exercise voting control of the condominium's board of
    25  managers for more than ninety days from the fifth  anniversary  date  of
    26  the  first  closing  of title to a dwelling unit, or whenever the unsold
    27  dwelling units constitute less than fifty percent of the  common  inter-
    28  ests appurtenant to all dwelling units, whichever is sooner.
    29    29. The attorney general may, in her discretion, waive the requirement
    30  in paragraph (d) of subdivision six of this section that an offeror sell
    31  at  least fifty-one percent of the dwelling units offered for sale under
    32  the preservation plan when the offeror provides  proof  satisfactory  to
    33  the  attorney  general  that  five years of commercially reasonable good
    34  faith efforts did not result in the sale of  fifty-one  percent  of  the
    35  dwelling units. If such waiver is granted, the offeror shall be required
    36  to  disclose  the  new  date  by  which  it will sell at least fifty-one
    37  percent of the dwelling units offered for sale  under  the  preservation
    38  plan in its subsequent annual update amendment. Any waiver granted here-
    39  under shall not alleviate an offeror, its designees and/or successors of
    40  the obligation set forth in subdivision twenty-eight of this section.
    41    30.  Within  ninety  days  of  the effective date of this section, the
    42  attorney general shall submit a notice of proposed rulemaking for publi-
    43  cation in the state register which  shall  contain  the  suitable  rules
    44  necessary to carry out the provisions of this section.  The authority of
    45  the  attorney  general  to  promulgate,  adopt, publish, notify, review,
    46  amend, modify, reconsider, or rescind any rule or regulation as  may  be
    47  conferred  anywhere  within  this  section  shall  comply with the state
    48  administrative procedure act in all respects.
    49    31. For any offering statement or prospectus (including, without limi-
    50  tation, a preservation plan and any amended filings thereto),  submitted
    51  to  the  department of law pursuant to this section, the filing fees set
    52  forth in paragraph (a) of subdivision seven  of  section  three  hundred
    53  fifty-two-e  of  this article shall not apply. Instead, an offeror shall
    54  tender the following filing fee with and for its submission:
    55    (a) seven hundred fifty dollars for every offering not  in  excess  of
    56  two hundred fifty thousand dollars;

        A. 9340                            13
 
     1    (b)  for  every  offering  in  excess  of  two  hundred fifty thousand
     2  dollars, four-tenths of one percent of the total amount of the  offering
     3  but  not  in excess of sixty thousand dollars, of which one-half of said
     4  amount shall be a nonrefundable deposit paid at the time  of  submitting
     5  the  preservation  plan  to  the  department  of  law for review and the
     6  balance payable upon the attorney general's  issuance  of  a  letter  of
     7  acceptance of the preservation plan for filing;
     8    (c) two hundred twenty-five dollars for each price change amendment to
     9  a preservation plan;
    10    (d) seven hundred fifty dollars for any other amendment to a preserva-
    11  tion plan; and
    12    (e)  seven  hundred  fifty  dollars  for each such application, and an
    13  additional seven hundred fifty dollars  for  each  and  every  amendment
    14  submitted  in furtherance of such an application to permit an offeror to
    15  solicit public interest prior to the filing of a  preservation  plan  to
    16  the department of law.
    17    §  2.  Section 339-e of the real property law is amended by adding six
    18  new subdivisions 1-a, 6-a, 8-a, 10-a, 11-a and 13-a to read as follows:
    19    1-a. "Capital replacement" means  a  building-wide  replacement  of  a
    20  major component of any of the following systems:
    21    (a) elevator;
    22    (b) heating, ventilation and air conditioning;
    23    (c) plumbing;
    24    (d) wiring;
    25    (e) window; or
    26    (f) a major structural replacement to the building; provided, however,
    27  that  replacements  made  to cure code violations of record shall not be
    28  included.
    29    6-a. "Consummation of the preservation plan" means, in the context  of
    30  a preservation plan for the conversion of residential rental property to
    31  condominium  ownership  that has been accepted for filing by the depart-
    32  ment of law pursuant to section three  hundred  fifty-two-eeeee  of  the
    33  general  business  law  and  subsequently  amended to disclose that said
    34  preservation plan has been declared effective, (i) the recording of  the
    35  declaration  for  the  condominium  and  (ii)  the closing of title to a
    36  dwelling unit with a purchaser under the preservation plan.
    37    8-a. "Offeror," as used in section  three  hundred  thirty-nine-mm  of
    38  this  article, means the offeror of a preservation plan to convert resi-
    39  dential rental property to condominium  ownership  pursuant  to  section
    40  three hundred fifty-two-eeeee of the general business law, together with
    41  his, her or its nominees, assignees and successors in interest.
    42    10-a.  "Preservation  plan,"  as used in section three hundred thirty-
    43  nine-mm of this article,  means  an  offering  statement  or  prospectus
    44  submitted  to  the  department  of law pursuant to section three hundred
    45  fifty-two-eeeee of the general business law  for  the  conversion  of  a
    46  building  or  group  of  buildings  or development from rental status to
    47  condominium ownership, wherein the offeror documents that it has  agreed
    48  to an extended affordability term for the income-restricted rental units
    49  with a relevant housing finance agency.
    50    11-a.  "Purchaser  under  the preservation plan," when used in section
    51  three hundred thirty-nine-mm of this  article,  a  purchaser  under  the
    52  preservation  plan shall refer to a person who purchases a dwelling unit
    53  from the offeror pursuant to the terms of a preservation plan  that  has
    54  been  accepted  for  filing  by the attorney general. A person or entity
    55  that acquires dwelling units and  assumes  certain  obligations  of  the
    56  offeror shall not be considered a purchaser under the preservation plan.

        A. 9340                            14
 
     1    13-a. "Total price," when used in section three hundred thirty-nine-mm
     2  of  this article, means the sum of the cost of all units in the offering
     3  (including any income-restricted ownership units  offered  for  sale  to
     4  qualified  low  income  purchasers,  but excluding any income-restricted
     5  rental  units  whether  such income-restricted rental units are retained
     6  and operated by the offeror or sold to another entity that shall own and
     7  operate the income-restricted rental units to persons of low income)  at
     8  the  last  price  which was offered to tenants in occupancy prior to the
     9  effective date of the preservation plan regardless of  number  of  sales
    10  made.
    11    §  3.  The real property law is amended by adding a new section 339-mm
    12  to read as follows:
    13    § 339-mm. Establishment of reserve fund for  buildings  converting  to
    14  condominium ownership under section three hundred fifty-two-eeeee of the
    15  general business law.  1. Within thirty days after the consummation of a
    16  preservation plan, the offeror thereof (and/or its designee or designees
    17  and/or  successor  or  successors)  shall  establish and transfer to the
    18  condominium board of managers a reserve fund to be used exclusively  for
    19  making  capital repairs, replacements and improvements necessary for the
    20  health and safety of the residents of such building.  Such reserve  fund
    21  shall  be exclusive of any other funds required to be reserved under the
    22  preservation plan or applicable law or regulation of the attorney gener-
    23  al, except a fund for capital  repairs,  replacements  and  improvements
    24  substantially  similar  in purpose to and in an amount not less than the
    25  reserve fund mandated by this section. Such reserve fund shall  also  be
    26  exclusive  of  any  working  capital  fund  and  shall not be subject to
    27  reduction for closing apportionments.
    28    2. Such fund shall be established in an amount  equal  to  either  (a)
    29  three  per  cent  of  the  total price or, (b) (i) three per cent of the
    30  actual sales price of all condominium units sold by the offeror  at  the
    31  time  the  preservation  plan  is declared effective, provided, however,
    32  that if such amount is less than one per cent of the total  price,  then
    33  the  fund shall be established as a minimum of one per cent of the total
    34  price; plus (ii) supplemental contributions to be made by the offeror at
    35  a rate of three per cent of the actual sales price of condominium  units
    36  for  each  unit  held  by  the  offeror and sold to bona fide purchasers
    37  subsequent to the effective date of the  preservation  plan  and  within
    38  five years of the consummation of the preservation plan, notwithstanding
    39  that the total amount contributed may exceed three per cent of the total
    40  price;  and provided, further, that if five years from thirty days after
    41  the consummation of the preservation plan the total contributions by the
    42  offeror to the fund are less than three per cent of the total price  the
    43  offeror  shall  pay  the  difference  between the amount contributed and
    44  three per cent of the total price.  Supplemental contributions shall  be
    45  made within thirty days of each sale.
    46    3.  The  contributions  required  pursuant to this section may be made
    47  earlier or in an amount greater than so provided. An offeror  may  claim
    48  and  receive  credit  against  the mandatory initial contribution to the
    49  reserve fund for the actual cost of capital replacements which he or she
    50  has begun after the preservation plan is submitted  for  filing  to  the
    51  department  of  law  and before the preservation plan is declared effec-
    52  tive; provided, however, that any such replacements shall be  set  forth
    53  in  the  preservation plan together with their actual or estimated costs
    54  and further provided, that such credit shall not exceed  the  lesser  of
    55  the actual cost of the capital replacements or one per cent of the total
    56  price.

        A. 9340                            15

     1    4.  Any  building,  construction  of  which was completed within three
     2  years prior to the consummation  of  the  preservation  plan,  shall  be
     3  exempt from the requirements of this section.
     4    5.  The condominium board of managers shall report to unit owners on a
     5  semi-annual basis with respect to all deposits into and withdrawals from
     6  the reserve fund mandated by subdivision two of this section.
     7    6. The offeror, not later than the thirtieth day following the accept-
     8  ance of a preservation plan for filing by the department of law pursuant
     9  to section three hundred fifty-two-eeeee of the general business law and
    10  until the consummation of the preservation plan, shall post and maintain
    11  in a prominent place, accessible to all tenants in each building covered
    12  by the plan, a listing of all violations of record against  such  build-
    13  ings  as  determined  by  the department of buildings of the city of New
    14  York and the department of housing preservation and development  of  the
    15  city  of  New  York.  All newly issued violations shall be posted within
    16  forty-eight hours of their issuance and maintained as described in  this
    17  subdivision. The offeror may satisfy the requirements of this section by
    18  designating  an  agent  on  the premises with whom such listing shall be
    19  made available for inspection by the tenants.
    20    7. Any provision purporting to waive the provisions of this section in
    21  any contract to purchase or agreement between  an  offeror  and  a  unit
    22  purchaser  or  an  offeror and the condominium board of managers created
    23  under a preservation plan shall be void as against public policy.
    24    8. (a) Except as otherwise provided in paragraph (b) of this  subdivi-
    25  sion,  any  person who knowingly violates or assists in the violation of
    26  any provision of this section shall be subject to a civil penalty of one
    27  hundred dollars per day per unit for each day that a building is not  in
    28  compliance  with the provisions of such section; provided, however, that
    29  such civil penalty shall not exceed one thousand dollars per unit.
    30    (b) Any person who violates or assists in the violation of subdivision
    31  two of this section shall also be subject to  a  civil  penalty  of  one
    32  thousand  dollars per day for each day that the reserve fund required by
    33  subdivision two of this section is not established;  provided,  however,
    34  that  such  civil  penalty  shall  not  exceed the amount required to be
    35  reserved pursuant to subdivision two of this section.
    36    (c) Any other action or proceeding in any court of competent jurisdic-
    37  tion that may be appropriate or necessary for  the  enforcement  of  the
    38  provisions  of  this section may be brought in the name of the people of
    39  the state of New York by the  attorney  general,  including  actions  to
    40  secure  permanent  injunctions  enjoining  any  acts  or practices which
    41  constitute a violation of  any  provision  of  this  section,  mandating
    42  compliance  with the provisions of this section or for such other relief
    43  as may be appropriate. In any such action or  proceeding,  the  attorney
    44  general  may apply to any court of competent jurisdiction, or to a judge
    45  or justice thereof, for a temporary  restraining  order  or  preliminary
    46  injunction  enjoining  and  restraining  all  persons from violating any
    47  provision of this section, mandating compliance with the  provisions  of
    48  this  section, or for such other relief as may be appropriate, until the
    49  hearing and determination of such action or proceeding and the entry  of
    50  final judgment or order therein. The court, or judge or justice thereof,
    51  to  whom  such  application is made, is hereby authorized to make any or
    52  all of the orders specified in this paragraph, as  may  be  required  in
    53  such  application,  with  or  without  notice, and to make such other or
    54  further orders or directions as may be  necessary  to  render  the  same
    55  effectual. No undertaking shall be required as a condition of the grant-
    56  ing or issuing of such order, or by reason thereof.

        A. 9340                            16
 
     1    (d)  Nothing  contained in this section shall impair any rights, reme-
     2  dies or causes of action accrued or accruing to purchasers of  condomin-
     3  ium  units  with  regard  to  the  funding  of a reserve fund under this
     4  section.
     5    (e)  The  attorney  general  is empowered to enforce the provisions of
     6  this section.
     7    § 4. Subdivision 2, subparagraph (i) of paragraph (a)  of  subdivision
     8  2-a, and paragraphs (a) and (c) of subdivision 7 of section 352-e of the
     9  general  business  law,  subdivision 2 as amended by chapter 1042 of the
    10  laws of 1981, subparagraph (i) of paragraph (a) of  subdivision  2-a  as
    11  added by chapter 771 of the laws of 1983, paragraph (a) of subdivision 7
    12  as amended by section 1 of part BBB-1 of chapter 57 of the laws of 2008,
    13  and paragraph (c) of subdivision 7 as amended by chapter 637 of the laws
    14  of 1989, are amended as follows:
    15    2.  Unless  otherwise  provided  by  regulation issued by the attorney
    16  general, the offering statement or statements or prospectus required  in
    17  subdivision  one  of  this section shall be filed with the department of
    18  law at its office in the city of New York, prior to the public  offering
    19  of  the security involved. No offer, advertisement or sale of such secu-
    20  rities shall be made in or from the state of New York until the attorney
    21  general has issued to the issuer or other offerer a letter stating  that
    22  the offering has been filed. The attorney general, not later than thirty
    23  days  after the submission of such filing, shall issue such a letter or,
    24  in the alternative, a notification in writing indicating deficiencies in
    25  the offering statement, statements  or  prospectus;  provided,  however,
    26  that  in the case of a building or group of buildings to be converted to
    27  cooperative or condominium ownership which is occupied in  whole  or  in
    28  part  for residential purposes and which is not the subject of a preser-
    29  vation plan submitted pursuant to section three hundred  fifty-two-eeeee
    30  of  this  article,  such  letter  or notification shall be issued in not
    31  sooner than four months and not later than six months from the  date  of
    32  submission of such filing. The attorney general may also refuse to issue
    33  a letter stating that the offering statement or statements or prospectus
    34  has been filed whenever it appears that the offering statement or state-
    35  ments  or prospectus does not clearly set forth the specific property or
    36  properties to be  purchased,  leased,  mortgaged,  or  otherwise  to  be
    37  acquired, financed or the subject of specific investment with a substan-
    38  tial portion of the offering proceeds.
    39    (i)  "Plan".  Every  offering statement or prospectus submitted to the
    40  department of law for the conversion of a building or group of buildings
    41  or development from residential rental status to cooperative  or  condo-
    42  minium ownership, other than a plan governed by the provisions of either
    43  section  three  hundred fifty-two-eee [or], three hundred fifty-two-eeee
    44  or section three hundred fifty-two-eeeee of this [chapter] article, or a
    45  plan for such conversion pursuant to article two, eight or eleven of the
    46  private housing finance law.
    47    (a) The department of law shall collect the  following  fees  for  the
    48  filing of each offering statement or prospectus as described in subdivi-
    49  sion one of this section: seven hundred fifty dollars for every offering
    50  not  in excess of two hundred fifty thousand dollars; for every offering
    51  in excess of two hundred fifty  thousand  dollars,  four-tenths  of  one
    52  percent  of the total amount of the offering but not in excess of [thir-
    53  ty] sixty thousand dollars of which one-half of said amount shall  be  a
    54  nonrefundable deposit paid at the time of submitting the offering state-
    55  ment  to  the  department of law for review and the balance payable upon
    56  the issuance of a letter of acceptance for filing said  offering  state-

        A. 9340                            17
 
     1  ment.  The  department  of  law shall, in addition, collect a fee of two
     2  hundred twenty-five dollars for each price change amendment to an offer-
     3  ing statement and seven hundred fifty dollars for any other amendment to
     4  an offering statement. For each application granted by the department of
     5  law,  which  permits  the applicant to solicit public interest or public
     6  funds preliminary to the filing of an  offering  statement  or  for  the
     7  issuance of a "no-filing required" letter and any amendment thereto, the
     8  department  of  law  shall collect a fee of [two] seven hundred [twenty-
     9  five] fifty dollars. [In the  event  the  sponsor  thereafter  files  an
    10  offering  statement,  the fee paid for the preliminary application shall
    11  be credited against the balance of the fee due and payable  on  filing.]
    12  For  each  application  granted pursuant to section three hundred fifty-
    13  two-g of this article, the department of law  shall  collect  a  fee  of
    14  two-tenths  of  one percent of the amount of the offering of securities;
    15  however, the minimum fee shall be seven hundred fifty dollars,  and  the
    16  maximum  fee  shall be [thirty] sixty thousand dollars. All revenue from
    17  that portion of any  fee  imposed  pursuant  to  this  paragraph,  which
    18  exceeds  twenty  thousand  dollars  for  offering  statements,  and five
    19  hundred twenty-five dollars for all other filings, shall be paid by  the
    20  department  of law to the state comptroller to be deposited in and cred-
    21  ited to the real estate finance bureau  fund,  established  pursuant  to
    22  section eighty of the state finance law.
    23    (c)  Notwithstanding  the provisions of paragraph (a) of this subdivi-
    24  sion, the department of law shall not collect any fees for the filing of
    25  an offering statement or prospectus or any amended  filings  thereto  as
    26  described  in subdivision one of this section whenever: (i) a conversion
    27  of a mobile home park, building or group  of  buildings  or  development
    28  from  residential  rental status to cooperative or condominium ownership
    29  is being made pursuant to article eleven, eighteen, nineteen  or  twenty
    30  of  the  private  housing finance law; or (ii) the offering statement or
    31  prospectus or amendment thereto is submitted to the  department  of  law
    32  pursuant  to section three hundred fifty-two-eeeee of this article.  For
    33  submissions made pursuant to section three  hundred  fifty-two-eeeee  of
    34  this  article,  the department of law shall instead collect the fees set
    35  forth in subdivision thirty-one of such section. All revenue  from  that
    36  portion of any fee imposed pursuant to subdivision thirty-one of section
    37  three  hundred  fifty-two-eeeee  of  this  article  shall be paid by the
    38  department of law to the state comptroller to be deposited in and  cred-
    39  ited  to  the  housing  unit  protection  fund,  established pursuant to
    40  section eighty-b of the state finance law.
    41    § 5. Paragraph (a) of subdivision 1 of section 352-eeee of the general
    42  business law, as amended by section 1 of part N of  chapter  36  of  the
    43  laws of 2019, is amended to read as follows:
    44    (a)  "Plan".  Every  offering statement or prospectus submitted to the
    45  department of law pursuant to section three hundred fifty-two-e of  this
    46  article for the conversion of a building or group of buildings or devel-
    47  opment  from  residential  rental  status  to cooperative or condominium
    48  ownership or other form of cooperative interest in realty, other than an
    49  offering statement or prospectus for such conversion pursuant to section
    50  three hundred fifty-two-eeeee of this article or article two,  eight  or
    51  eleven of the private housing finance law.
    52    §  6. The state finance law is amended by adding a new section 80-b to
    53  read as follows:
    54    § 80-b. Housing protection unit fund.  1. There is hereby  established
    55  in  the  custody  of the state comptroller a special fund to be known as
    56  the "housing protection unit fund".

        A. 9340                            18
 
     1    2. The housing protection unit fund shall consist of moneys  appropri-
     2  ated  thereto,  funds  transferred  from  any other fund or sources, and
     3  moneys deposited therein pursuant to the fees imposed by  section  three
     4  hundred fifty-two-eeeee of the general business law.
     5    3.  The moneys in the housing protection unit fund shall be kept sepa-
     6  rate from and shall not be commingled  with  any  other  moneys  in  the
     7  custody  of  the state comptroller. All moneys in the housing protection
     8  unit fund shall be distributed each state fiscal year  and  such  moneys
     9  shall  be  allocated to and expended by the department of law solely for
    10  the operation and administration of its housing protection unit.
    11    § 7. This act shall take effect on the one hundred eightieth day after
    12  it shall have become a law.
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