§ 352-EEE — Conversions to cooperative or condominium ownership in certain cities, towns and villages located in the counties of Nassau, Westchester ...

New York § 352-EEE

• Jurisdiction: New York
• Law GBS: General Business
• Art. 23-A: Fraudulent Practices In Respect to Stocks, Bonds and Other Securities

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§ 352-eee. Conversions to cooperative or condominium ownership in\ncertain cities, towns and villages located in the counties of Nassau,\nWestchester and Rockland. 1. As used in this section, the following\nwords and terms shall have the following meanings:\n (a) "Plan". Every offering statement or prospectus submitted to the\ndepartment of law pursuant to section three hundred fifty-two-e of this\narticle for the conversion of a building or group of buildings or\ndevelopment from residential rental status to cooperative or condominium\nownership or other form of cooperative interest in realty, other than an\noffering statement or prospectus for such conversion pursuant to article\ntwo, eight or eleven of the private housing finance law.\n (b) "Non-eviction plan". A plan which may not be declared effective\nuntil at least fifteen percent of those bona fide tenants in occupancy\nof all dwelling units in the building or group of buildings or\ndevelopment on the date the plan is declared effective shall have\nexecuted and delivered written agreements to purchase under the plan. As\nto tenants who were in occupancy on the date a letter was issued by the\nattorney general accepting the plan for filing, the purchase agreement\nshall be executed and delivered pursuant to an offering made in good\nfaith without fraud and discriminatory repurchase agreements or other\ndiscriminatory inducements.\n (c) "Eviction plan". A plan which, pursuant to the provisions of this\nsection, can result in the eviction of a non-purchasing tenant by reason\nof the tenant failing to purchase pursuant thereto, and which may not be\ndeclared effective until written agreements to purchase under the plan\npursuant to an offering made in good faith without fraud and with no\ndiscriminatory repurchase agreements or other discriminatory inducements\nshall have been executed and delivered by: (i) at least fifty-one\npercent of the bona fide tenants in occupancy of all dwelling units in\nthe building or group of buildings or development on the date the\noffering statement or prospectus was accepted for filing by the attorney\ngeneral excluding, for the purposes of determining the number of bona\nfide tenants in occupancy on such date, eligible senior citizens and\neligible disabled persons; and (ii) at least thirty-five percent of the\nbona fide tenants in occupancy of all dwelling units in the building or\ngroup of buildings or development on the date the offering statement or\nprospectus was accepted for filing by the attorney general including,\nfor the purposes of determining the number of bona fide tenants in\noccupancy on such date eligible senior citizens and eligible disabled\npersons.\n (d) "Purchaser under the plan". A person who owns the shares allocated\nto a dwelling unit or who owns such dwelling unit itself.\n (e) "Non-purchasing tenant". A person who has not purchased under the\nplan and who is a tenant entitled to possession at the time the plan is\ndeclared effective or a person to whom a dwelling unit is rented\nsubsequent to the effective date. A person who sublets a dwelling unit\nfrom a purchaser under the plan shall not be deemed a non-purchasing\ntenant.\n (f) "Eligible senior citizens". Non-purchasing tenants who are\nsixty-two years of age or older on the date the plan is declared\neffective and the spouses of any such tenants on such date; provided\nthat such tenant shall not be precluded from subsequently purchasing the\ndwelling unit on the terms then offered to tenants in occupancy.\n (g) "Eligible disabled persons". Non-purchasing tenants who have an\nimpairment which results from anatomical, physiological or psychological\nconditions, other than addiction to alcohol, gambling, or any controlled\nsubstance, which are demonstrable by medically acceptable clinical and\nlaboratory diagnostic techniques, and which are expected to be permanent\nand which prevent the tenant from engaging in any substantial gainful\nemployment on the date the attorney general has accepted the plan for\nfiling, and the spouses of any such tenants on such date, and who have\nelected, within sixty days of the date the attorney general has accepted\nthe plan for filing, on forms promulgated by the attorney general and\npresented to such tenants by the offeror, to become non-purchasing\ntenants under the provisions of this section; provided, however, that if\nthe disability first occurs after acceptance of the plan for filing,\nthen such election may be made within sixty days following the onset of\nsuch disability unless during the period subsequent to sixty days\nfollowing the acceptance of the plan for filing but prior to such\nelection, the offeror accepts a written agreement to purchase the\napartment from a bona fide purchaser; and provided further that such\nelection shall not preclude any such tenant from subsequently purchasing\nthe dwelling unit or the shares allocated thereto on the terms then\noffered to tenants in occupancy.\n 2. The attorney general shall refuse to issue a letter stating that\nthe offering statement or prospectus required in subdivision one of\nsection three hundred fifty-two-e of this chapter has been filed\nwhenever it appears that the offering statement or prospectus offers for\nsale residential cooperative apartments or condominium units pursuant to\na plan unless:\n (a) The plan provides that it will be deemed abandoned, void and of no\neffect if it does not become effective within twelve months from the\ndate of issue of the letter of the attorney general stating that the\noffering statement or prospectus has been accepted for filing and, in\nthe event of such abandonment, no new plan for the conversion of such\nbuilding or group of buildings or development shall be submitted to the\nattorney general for at least fifteen months after such abandonment.\n (b) The plan provides either that it is an eviction plan or that it is\na non-eviction plan.\n (c) The plan provides, if it is a non-eviction plan, as follows:\n (i) The plan may not be declared effective until at least fifteen\npercent of those bona fide tenants in occupancy of all dwelling units in\nthe building or group of buildings or development on the date the plan\nis declared effective shall have executed and delivered written\nagreements to purchase under the plan. As to tenants who were in\noccupancy on the date a letter was issued by the attorney general\naccepting the plan for filing, the purchase agreement shall be executed\nand delivered pursuant to an offering made in good faith without fraud\nand discriminatory repurchase agreements or other discriminatory\ninducements.\n (ii) No eviction proceedings will be commenced at any time against\nnon-purchasing tenants for failure to purchase or any other reason\napplicable to expiration of tenancy; provided that such proceedings may\nbe commenced for non-payment of rent, illegal use or occupancy of the\npremises, refusal of reasonable access to the owner or a similar breach\nby the non-purchasing tenant of his obligations to the owner of the\ndwelling unit or the shares allocated thereto; and provided further that\nan owner of a unit or of the shares allocated thereto may not commence\nan action to recover possession of a dwelling unit from a non-purchasing\ntenant on the grounds that he seeks the dwelling unit for the use and\noccupancy of himself or his family.\n (iii) Non-purchasing tenants who reside in dwelling units subject to\ngovernment regulation as to rentals and continued occupancy prior to the\nconversion of the building or group of buildings or development to\ncooperative or condominium ownership shall continue to be subject\nthereto.\n (iv) The rentals of non-purchasing tenants who reside in dwelling\nunits not subject to government regulation as to rentals and continued\noccupancy and non-purchasing tenants who reside in dwelling units with\nrespect to which government regulation as to rentals and continued\noccupancy is eliminated or becomes inapplicable after the plan has been\naccepted for filing by the attorney general shall not be subject to\nunconscionable increases beyond ordinary rentals for comparable\napartments during the period of their occupancy. In determining\ncomparability, consideration shall be given to such factors as building\nservices, level of maintenance and operating expenses.\n (v) The plan may not be amended at any time to provide that it shall\nbe an eviction plan.\n (vi) The rights granted under the plan to purchasers under the plan\nand to non-purchasing tenants may not be abrogated or reduced\nnotwithstanding any expiration of, or amendment to, this section.\n (vii) After the issuance of the letter from the attorney general\nstating that the offering statement or prospectus required in\nsubdivision one of section three hundred fifty-two-e of this article has\nbeen filed, the offeror shall, on the thirtieth, sixtieth, eighty-eighth\nand ninetieth day after such date and at least once every thirty days\nuntil the plan is declared effective or is abandoned, as the case may\nbe, and on the second day before the expiration of any exclusive\npurchase period provided in a substantial amendment to the plan, (1)\nfile with the attorney general a written statement, under oath, setting\nforth the percentage of bona fide tenants in occupancy of all dwelling\nunits in the building or group of buildings or development who have\nexecuted and delivered written agreements to purchase under the plan as\nof the date of such statement, (2) before noon on the day such statement\nis filed post a copy of such statement in a prominent place accessible\nto all tenants in each building covered by the plan.\n (d) The plan provides, if it is an eviction plan, as follows:\n (i) The plan may not be declared effective unless: (1) at least\nfifty-one percent of the bona fide tenants in occupancy of all dwelling\nunits in the building or group of buildings or development on the date\nthe offering statement or prospectus was accepted for filing by the\nattorney general excluding, for the purposes of determining the number\nof bona fide tenants in occupancy on such date, eligible senior citizens\nand eligible disabled persons; and (2) at least thirty-five percent of\nthe bona fide tenants in occupancy of all dwelling units in the building\nor group of buildings or development on the date the offering statement\nor prospectus was accepted for filing by the attorney general including,\nfor the purposes of determining the number of bona fide tenants in\noccupancy on such date eligible senior citizens and eligible disabled\npersons; shall have executed and delivered written agreements to\npurchase under the plan pursuant to an offering made in good faith\nwithout fraud and with no discriminatory repurchase agreements or other\ndiscriminatory inducements.\n (ii) No eviction proceedings will be commenced against a\nnon-purchasing tenant for failure to purchase or any other reason\napplicable to expiration of tenancy until the later to occur of (1) the\ndate which is the expiration date provided in such non-purchasing\ntenant's lease or rental agreement, and (2) the date which is three\nyears after the date on which the plan is declared effective.\nNon-purchasing tenants who reside in dwelling units subject to\ngovernment regulation as to rentals and continued occupancy prior to\nconversion shall continue to be subject thereto during the period of\noccupancy provided in this paragraph. Thereafter, if a tenant has not\npurchased, he may be removed by the owner of the dwelling unit or the\nshares allocated to such dwelling unit.\n (iii) No eviction proceedings will be commenced, except as hereinafter\nprovided, at any time against either eligible senior citizens or\neligible disabled persons. The rentals of eligible senior citizens and\neligible disabled persons who reside in dwelling units not subject to\ngovernment regulation as to rentals and continued occupancy and eligible\nsenior citizens and eligible disabled persons who reside in dwelling\nunits with respect to which government regulation as to rentals and\ncontinued occupancy is eliminated or becomes inapplicable after the plan\nhas been accepted for filing shall not be subject to unconscionable\nincreases beyond ordinary rentals for comparable apartments during the\nperiod of their occupancy considering, in determining comparability,\nsuch factors as building services, level of maintenance and operating\nexpenses; provided that such proceedings may be commenced against such\ntenants for non-payment of rent, illegal use or occupancy of the\npremises, refusal of reasonable access to the owner or a similar breach\nby the tenant of his obligations to the owner of the dwelling unit or\nthe shares allocated thereto; and provided further that an owner of a\nunit or of the shares allocated thereto may not commence an action to\nrecover possession of a dwelling unit from a non-purchasing tenant on\nthe grounds that he seeks the dwelling unit for the use and occupancy of\nhimself or his family.\n (iv) Eligible senior citizens and eligible disabled persons who reside\nin dwelling units subject to government regulation as to rentals and\ncontinued occupancy shall continue to be subject thereto.\n (v) The rights granted under the plan to eligible senior citizens and\neligible disabled persons may not be abrogated or reduced\nnotwithstanding any expiration of, or amendment to, this section.\n (vi) Any offeror who disputes the election by a person to be an\neligible senior citizen or an eligible disabled person must apply to the\nattorney general within thirty days of the receipt of the election forms\nfor a determination by the attorney general of such person's\neligibility. The attorney general shall, within thirty days thereafter,\nissue his determination of eligibility. The foregoing shall, in the\nabsence of fraud, be the sole method for determining a dispute as to\nwhether a person is an eligible senior citizen or an eligible disabled\nperson. The determination of the attorney general shall be reviewable\nonly through a proceeding under article seventy-eight of the civil\npractice law and rules, which proceeding must be commenced within thirty\ndays after such determination by the attorney general becomes final.\n (vii) After the issuance of the letter from the attorney general\nstating that the offering statement or prospectus required in\nsubdivision one of section three hundred fifty-two-e of this article has\nbeen accepted for filing, the offeror shall, on the thirtieth, sixtieth,\neighty-eighth and ninetieth days after such date and at least once every\nthirty days until the plan is declared effective or abandoned, as the\ncase may be, and on the second day before the expiration of any\nexclusive purchase period provided in a substantial amendment to the\nplan, (1) file with the attorney general a written statement, under\noath, setting forth the percentage of bona fide tenants in occupancy of\nall dwelling units in the building or group of buildings or development\non the date the offering statement or prospectus was accepted for filing\nby the attorney general who have executed and delivered written\nagreements to purchase under the plan as of the date of such statement,\nand (2) before noon on the day such statement is filed post a copy of\nsuch statement in a prominent place accessible to all tenants in each\nbuilding covered by the plan.\n (viii) If the plan is amended before it is declared effective to\nprovide that it shall be a non-eviction plan, any person who has agreed\nto purchase under the plan prior to such amendment shall have a period\nof thirty days after receiving written notice of such amendment to\nrevoke his agreement to purchase under the plan.\n (ix) The tenants in occupancy on the date the attorney general accepts\nthe plan for filing shall have the exclusive right to purchase their\ndwelling units or the shares allocated thereto for ninety days after the\nplan is accepted for filing by the attorney general, during which time a\ntenant's dwelling unit shall not be shown to a third party unless he\nhas, in writing, waived his right to purchase; subsequent to the\nexpiration of such ninety day period, a tenant in occupancy of a\ndwelling unit who has not purchased shall be given the exclusive right\nfor an additional period of six months from said expiration date to\npurchase said dwelling unit or the shares allocated thereto on the same\nterms and conditions as are contained in an executed contract to\npurchase said dwelling unit or shares entered into by a bona fide\npurchaser, such exclusive right to be exercisable within fifteen days\nfrom the date of mailing by registered mail of notice of the execution\nof a contract of sale together with a copy of said executed contract to\nsaid tenant.\n (e) The attorney general finds that an excessive number of long-term\nvacancies did not exist on the date that the offering statement or\nprospectus was first submitted to the department of law. "Long-term\nvacancies" shall mean dwelling units not leased or occupied by bona fide\ntenants for more than five months prior to the date of such submission\nto the department of law. "Excessive" shall mean a vacancy rate in\nexcess of the greater of (i) ten percent and (ii) a percentage that is\ndouble the normal average vacancy rate for the building or group of\nbuildings or development for two years prior to the January preceding\nthe date the offering statement or prospectus was first submitted to the\ndepartment of law.\n (f) The attorney general finds that, following the submission of the\noffering statement or prospectus to the department of law, each tenant\nin the building or group of buildings or development was provided with a\nwritten notice stating that such offering statement or prospectus has\nbeen submitted to the department of law for filing. Such notice shall be\naccompanied by a copy of the offering statement or prospectus and a\nstatement that the statements submitted pursuant to subparagraph (vii)\nof paragraph (c) or subparagraph (vii) of paragraph (d) of this\nsubdivision, whichever is applicable, will be available for inspection\nand copying at the office of the department of law where the submission\nwas made and at the office of the offeror or a selling agent of the\nofferor. Such notice shall also be accompanied by a statement that\ntenants or their representatives may physically inspect the premises at\nany time subsequent to the submission of the plan to the department of\nlaw, during normal business hours, upon written request made by them to\nthe offeror, provided such representatives are registered architects or\nprofessional engineers licensed to practice in the state of New York.\nSuch notice shall be sent to each tenant in occupancy on the date the\nplan is first submitted to the department of law and to the clerk of the\nmunicipality wherein such building or group of buildings or development\nis located.\n 3. All dwelling units occupied by non-purchasing tenants shall be\nmanaged by the same managing agent who manages all other dwelling units\nin the building or group of buildings or development. Such managing\nagent shall provide to non-purchasing tenants all services and\nfacilities required by law on a non-discriminatory basis. The offeror\nshall guarantee the obligation of the managing agent to provide all such\nservices and facilities until such time as the offeror surrenders\ncontrol to the board of directors or board of managers, at which time\nthe cooperative corporation or the condominium association shall assume\nresponsibility for the provision of all services and facilities required\nby law on a non-discriminatory basis.\n 4. It shall be unlawful for any person to engage in any course of\nconduct, including, but not limited to, interruption or discontinuance\nof essential services, which substantially interferes with or disturbs\nthe comfort, repose, peace or quiet of any tenant in his use or\noccupancy of his dwelling unit or the facilities related thereto. The\nattorney general may apply to a court of competent jurisdiction for an\norder restraining such conduct and, if he deems it appropriate, an order\nrestraining the owner from selling the shares allocated to the dwelling\nunit or the dwelling unit itself or from proceeding with the plan of\nconversion; provided that nothing contained herein shall be deemed to\npreclude the tenant from applying on his own behalf for similar relief.\n 5. Any local legislative body may adopt local laws and any agency,\nofficer or public body may prescribe rules and regulations with respect\nto the continued occupancy by tenants of dwelling units which are\nsubject to regulation as to rentals and continued occupancy pursuant to\nlaw, provided that in the event that any such local law, rule or\nregulation shall be inconsistent with the provisions of this section,\nthe provisions of this section shall control.\n 6. Any provision of a lease or other rental agreement which purports\nto waive a tenant's rights under this section or rules and regulations\npromulgated pursuant hereto shall be void as contrary to public policy.\n 7. The provisions of this section shall only be applicable in the\ncities, towns and villages located in the counties of Nassau,\nWestchester and Rockland which by resolution adopted by the respective\nlocal legislative body of such city, town or village, elect that the\nprovisions hereof shall be applicable therein. A certified copy of such\nresolution shall be filed in the office of the attorney general at\nAlbany and shall become effective on the date of such filing.\n