§ 32 — Supervision and regulation

New York § 32

• Jurisdiction: New York
• Law PVH: Private Housing Finance
• Art. 2: Limited-profit Housing Companies

Text

§ 32. Supervision and regulation. The commissioner or the supervising\nagency as the case may be, may:\n 1. Examine a company and keep informed as to its general condition,\nits capitalization and the manner in which its property is constructed,\nacquired, rehabilitated, leased, operated or managed, and to its\ncompliance with all provisions of law and orders of the commissioner or\nthe supervising agency.\n 2. Require every company to file with him or it an annual report\nsetting forth such information as the commissioner or the supervising\nagency may require, verified by the oath of any officer, general manager\nor other person in control of the company. Such report shall be in a\nform, cover a period, and be filed at a time as prescribed by the\ncommissioner or the supervising agency.\n 3. From time to time make, amend and repeal supplementary rules and\nregulations for carrying into effect the provisions of this article\nprovided, however, that such supplementary rules and regulations shall\nbe strictly limited in their application to the means and methods of\ncompliance with the provisions of this article to which such power\nrelates.\n 4. Make such agreements with bondholders, mortgagees or creditors of a\ncompany to do or refrain from doing any act, not inconsistent with law,\nto protect the investment rights of the state of New York, the New York\nstate housing finance agency, the New York city housing development\ncorporation or of the municipality.\n 5 (a) Administer oaths, take affidavits, hear testimony and take proof\nunder oath at public or private hearings; (b) subpoena and require the\nattendance of witnesses and the production of books and papers\npertaining to any investigations and inquiries authorized by this\narticle and examine them in relation to any matter concerning which the\npower to investigate is granted; (c) issue commissions for the\nexamination of witnesses who are out of the state or unable to attend or\nare excused from attendance; (d) investigate into the affairs of a\ncompany and into the dealings, transactions or relationships of such\ncompany with third persons and into the affairs of any person, firm,\ncorporation or other entity having a financial interest, whether direct\nor indirect, in the design, construction, acquisition, reconstruction,\nrehabilitation, improvement, financing or operation of any project\nundertaken by a company; (e) intervene, as a matter of right, in any\naction or proceeding of which notice shall be given affecting the\nproject of a company; (f) take such steps in such action or proceeding\nas may be necessary to protect the public interest.\n With regard to duties and liabilities arising out of this article the\nstate, the commissioner or the supervising agency may be sued in the\nsame manner as a private person. No costs shall be awarded against the\ncommissioner, the state, or the supervising agency, as the case may be,\nin any such litigation.\n 6. In the event of a violation by a company of a provision of the\ncertificate of incorporation or of law or of the loan or mortgage\ncontract or of any rules and regulations duly promulgated pursuant to\nthe provisions of this article, the commissioner or the supervising\nagency, as the case may be, may remove any or all of the existing\ndirectors of the company and appoint such person or persons who the\ncommissioner or the supervising agency, as the case may be, in his or\nits sole discretion deems advisable, including officers or employees of\nthe division of housing and community renewal or the supervising agency,\nas new directors to serve in the places of those removed. Directors so\nappointed need not be shareholders or meet other qualifications which\nmay be prescribed by the certificate of incorporation or by-laws. In the\nabsence of fraud or bad faith, directors so appointed shall not be\npersonally liable for debts, obligations or liabilities of the\ncorporation. Directors so appointed shall serve only for a period\ncoexistent with the duration of such violation or until the commissioner\nor the supervising agency, as the case may be, is assured in a manner\nsatisfactory to him or it against violations of a similar nature.\nOfficers or employees of the division of housing and community renewal\nor of the supervising agency who are so appointed as directors shall\nserve in such capacity without compensation. No such removal may take\nplace without written notice and an opportunity for the affected\ndirectors to appear and be heard before the agency or commissioner with\nrespect to any alleged violation and the respective parties may be\nrepresented by counsel. Notwithstanding any inconsistent provision of\nany general, special or local law or any limitation contained in the\nprovisions of any city charter, the state or a municipality acting by\nand through the commissioner or the supervising agency, as the case may\nbe, shall save harmless and indemnify any officer or employee of the\ndivision of housing and community renewal or the supervising agency so\nappointed as a director, from financial loss arising out of any claim,\ndemand, suit or judgment by reason of alleged negligence or other act by\nsuch director, provided that such director was acting in the discharge\nof his duties and within the scope of his employment and that such loss\ndid not result from the willful and wrongful act or gross negligence of\nsuch director and provided further that this save harmless and\nindemnification provision shall not in any way impair, limit or modify\nthe rights and obligations of any insurer under any policy of insurance\nand shall inure only to directors so appointed and shall not enlarge or\ndiminish the rights of any other party. No action or special proceeding\nbased on or arising out of alleged negligence or other act by such\ndirector may be commenced against such director, municipality or the\nstate unless a notice of claim shall have first been served in a manner\nconsistent with service upon a municipality or the state, as the case\nmay be.\n 7. Whenever the commissioner, in the case of a company undertaking or\notherwise operating a state-aided project, or the supervising agency, in\nthe case of a company undertaking or otherwise operating a\nmunicipally-aided project, shall be of the opinion that such company is\nfailing or omitting, or is about to fail or omit to do anything required\nof it by law or by order of the commissioner or is doing or is about to\ndo anything, or permitting anything, or is about to permit anything to\nbe done, contrary to and in violation of law or of any order, regulation\nor directive of the commissioner or the supervising agency, as the case\nmay be, or which is improvident or prejudicial to the interest of the\npublic, the lienholders, the stockholders, or the tenants, the\ncommissioner or the supervising agency, as the case may be, may, in\naddition to such other remedies as may be available, commence an action\nor proceeding in the supreme court of the state of New York in the name\nof the commissioner or the supervising agency, as the case may be, for\nthe purpose of having such violations or threatened violations stopped\nand prevented, and in such action or proceeding the court may appoint a\ntemporary or permanent receiver or both. Such action or proceeding shall\nbe commenced by a petition to the supreme court, alleging the violation\ncomplained of and praying for appropriate relief. It shall thereupon be\nthe duty of the court to specify the time, not exceeding twenty days\nafter service of a copy of the petition, within which the company\ncomplained of must answer the petition. In case of any default or after\nanswer the court shall immediately inquire into the facts and\ncircumstances in such manner as the court shall direct without other or\nformal pleadings, and without respect to any technical requirements.\nSuch other persons or corporations as it shall seem to the court\nnecessary or proper to join as parties in order to make its order or\njudgment effective, may be joined as parties. The final judgment in any\nsuch action or proceeding shall either dismiss the action or proceeding\nor direct that an order or an injunction, or both, issue, or provide for\nthe appointment of a receiver as prayed for in the petition, and grant\nsuch other relief as the court may deem appropriate.\n 8. The commissioner or supervising agency may modify supervision of a\ncompany upon finding that duplicative supervisory functions may impose\nan undue regulatory burden or unnecessary expenditure of agency\nresources, by taking such actions as are deemed appropriate, including\nconsolidating supervisory functions associated with different programs,\nand entering into memoranda of understanding with other agencies for the\nallocation of supervisory functions.\n