Bill Text: NY S01013 | 2009-2010 | General Assembly | Introduced
Bill Title: Provides that a non-eviction plan submitted for conversion of dwelling units to cooperative or condominium ownership shall not be declared effective until at least 25% of the tenants shall have executed and delivered written agreement to purchase under such plan; requires a sponsor of a conversion to cooperative or condominium ownership to provide a reserve fund of at least 5% of the total offering price to be used exclusively for capital repairs, replacements or improvements; requires building to be certified in writing by municipality that such building is free of building or housing code violations prior to approval or acceptance for filing of plan; defines "vacancies" to mean dwelling units not occupied on a date that is 110 days after the date the offering was first submitted to the attorney general; defines "excessive" to mean a vacancy rate in excess of 5% of the total number of dwelling units in the building; makes other related changes; requires that the board of directors or board of managers of a converted cooperative or condominium shall be comprised of a majority of members elected by shareholders or owners in occupancy; requires purchasers of occupied units to sign affidavit of rent regulatory compliance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-01-06 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S01013 Detail]
Download: New_York-2009-S01013-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 1013 2009-2010 Regular Sessions I N S E N A T E January 22, 2009 ___________ Introduced by Sen. KRUGER -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the general business law, in relation to the conversion of residential property to cooperative or condominium ownership THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Paragraph (b) of subdivision 1 of section 352-eee of the 2 general business law, as added by chapter 402 of the laws of 1983, is 3 amended to read as follows: 4 (b) "Non-eviction plan". A plan which may not be declared effective 5 until at least [fifteen] TWENTY-FIVE percent of those bona fide tenants 6 in occupancy of all dwelling units in the building or group of buildings 7 or development on the date the plan [is declared effective] WAS ACCEPTED 8 FOR FILING BY THE ATTORNEY GENERAL shall have executed and delivered 9 written agreements to purchase under the plan[. As to tenants who were 10 in occupancy on the date a letter was issued by the attorney general 11 accepting the plan for filing, the purchase agreement shall be executed 12 and delivered] pursuant to an offering made in good faith without fraud 13 and WITH NO discriminatory repurchase agreements or other discriminatory 14 inducements. 15 S 2. Subdivision 1 of section 352-eee of the general business law is 16 amended by adding two new paragraphs (h) and (i) to read as follows: 17 (H) "TOTAL PRICE". (I) WITH RESPECT TO COOPERATIVE CONVERSIONS, THE 18 NUMBER OF ALL SHARES IN THE OFFERING MULTIPLIED BY THE LAST PRICE PER 19 SHARE WHICH WAS OFFERED TO TENANTS IN OCCUPANCY PRIOR TO THE EFFECTIVE 20 DATE OF THE PLAN REGARDLESS OF NUMBER OF SALES MADE; 21 (II) WITH RESPECT TO CONDOMINIUM CONVERSIONS, THE SUM OF THE COST OF 22 ALL UNITS IN THE OFFERING AT THE LAST PRICE WHICH WAS OFFERED TO TENANTS 23 IN OCCUPANCY PRIOR TO THE EFFECTIVE DATE OF THE PLAN REGARDLESS OF 24 NUMBER OF SALES MADE. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06551-01-9 S. 1013 2 1 (I) "CAPITAL REPLACEMENT". A BUILDING-WIDE REPLACEMENT OF A MAJOR 2 COMPONENT OF ANY OF THE FOLLOWING SYSTEMS: 3 (I) ELEVATOR; 4 (II) HEATING, VENTILATION AND AIR CONDITIONING; 5 (III) PLUMBING; 6 (IV) WIRING; 7 (V) ROOF; 8 (VI) WINDOWS; 9 OR, A MAJOR STRUCTURAL REPLACEMENT TO THE BUILDING; PROVIDED, HOWEVER, 10 THAT REPLACEMENTS MADE TO CURE CODE VIOLATIONS OF RECORD SHALL NOT BE 11 INCLUDED. 12 S 3. Subparagraph (i) of paragraph (c) of subdivision 2 of section 13 352-eee of the general business law, as added by chapter 402 of the laws 14 of 1983, is amended to read as follows: 15 (i) The plan may not be declared effective until at least [fifteen] 16 TWENTY-FIVE percent of those bona fide tenants in occupancy of all 17 dwelling units in the building or group of buildings or development on 18 the date the plan [is declared effective] WAS ACCEPTED FOR FILING BY THE 19 ATTORNEY GENERAL shall have executed and delivered written agreements to 20 purchase under the plan[. As to tenants who were in occupancy on the 21 date a letter was issued by the attorney general accepting the plan for 22 filing, the purchase agreement shall be executed and delivered] pursuant 23 to an offering made in good faith without fraud and WITH NO discrimina- 24 tory repurchase agreements or other discriminatory inducements. 25 S 4. Paragraph (c) of subdivision 2 of section 352-eee of the general 26 business law is amended by adding two new subparagraphs (viii) and (ix) 27 to read as follows: 28 (VIII) THE TENANTS IN OCCUPANCY ON THE DATE THE ATTORNEY GENERAL 29 ACCEPTS THE PLAN FOR FILING SHALL HAVE THE EXCLUSIVE RIGHT TO PURCHASE 30 THEIR DWELLING UNITS OR THE SHARES ALLOCATED THERETO FOR NINETY DAYS 31 AFTER THE PLAN IS ACCEPTED FOR FILING BY THE ATTORNEY GENERAL AND 32 PRESENTED TO THE TENANTS, DURING WHICH TIME A TENANT'S DWELLING UNIT 33 SHALL NOT BE SHOWN TO A THIRD PARTY UNLESS HE HAS, IN WRITING, WAIVED 34 HIS RIGHT TO PURCHASE; SUBSEQUENT TO THE EXPIRATION OF SUCH NINETY DAY 35 PERIOD, A TENANT IN OCCUPANCY OF A DWELLING UNIT WHO HAS NOT PURCHASED 36 SHALL BE GIVEN THE EXCLUSIVE RIGHT FOR AN ADDITIONAL PERIOD OF ONE YEAR 37 FROM SAID EXPIRATION DATE TO PURCHASE SAID DWELLING UNIT OR THE SHARES 38 ALLOCATED THERETO ON THE SAME TERMS AND CONDITIONS AS ARE CONTAINED IN 39 AN EXECUTED CONTRACT TO PURCHASE, SUBJECT TO THE PROVISIONS OF THIS 40 PARAGRAPH, SAID DWELLING UNIT OR SHARES ENTERED INTO BY A BONA FIDE 41 PURCHASER, SUCH EXCLUSIVE RIGHT TO BE EXERCISABLE WITHIN FIFTEEN DAYS 42 FROM THE DATE OF MAILING BY REGISTERED MAIL OF NOTICE OF THE EXECUTION 43 OF A CONTRACT OF SALE TOGETHER WITH A COPY OF SAID EXECUTED CONTRACT TO 44 SAID TENANT. 45 (IX) THE PLAN INCLUDES A COPY OF THE AFFIDAVIT, IN A FORM TO BE ESTAB- 46 LISHED BY THE ATTORNEY GENERAL, WHICH SHALL BE SIGNED BY THE PURCHASER 47 OF ANY DWELLING UNIT OR THE SHARES ALLOCATED THERETO OCCUPIED BY A RESI- 48 DENTIAL TENANT. SUCH AFFIDAVIT SHALL SPECIFY THE RENT REGULATORY LAW, IF 49 ANY, TO WHICH THE UNIT IS SUBJECT AND SHALL CONTAIN AN ACKNOWLEDGMENT OF 50 SUCH RENT REGULATED STATUS OF THE UNIT AS WELL AS THE PURCHASER'S DUTY 51 TO ABIDE BY THE MAXIMUM LEGAL RENT STANDARDS, RENT REGISTRATION REQUIRE- 52 MENTS, MAINTENANCE OF SERVICES REQUIREMENTS AND ALL OTHER REQUIREMENTS 53 OF APPLICABLE HOUSING LAWS AND REGULATIONS. EACH SUCH PURCHASER SHALL 54 AT THE TIME OF PURCHASE SIGN TWO COPIES OF THE AFFIDAVIT, ONE OF WHICH 55 SHALL BE DELIVERED BY THE OFFEROR TO THE TENANT IN OCCUPANCY AND THE 56 OTHER TO THE DIVISION OF HOUSING AND COMMUNITY RENEWAL. S. 1013 3 1 S 5. Paragraph (e) of subdivision 2 of section 352-eee of the general 2 business law, as added by chapter 402 of the laws of 1983, is amended to 3 read as follows: 4 (e) The attorney general finds that an excessive number of [long-term] 5 vacancies did not exist on the date THAT IS ONE HUNDRED TEN DAYS SUBSE- 6 QUENT TO THE DATE that the offering statement or prospectus was first 7 submitted to the department of law. ["Long-term vacancies"] "VACANCIES" 8 shall mean dwelling units not leased or occupied by bona fide tenants 9 [for more than five months prior to the date of such submission to the 10 department of law] ON SUCH ONE HUNDRED TENTH DAY. "Excessive" shall 11 mean a vacancy rate in excess of [the greater of (i) ten percent and 12 (ii) a percentage that is double the normal average vacancy rate for] 13 FIVE PERCENT OF THE TOTAL NUMBER OF DWELLING UNITS IN the building or 14 group of buildings or development [for two years prior to the January 15 preceding the date the offering statement or prospectus was first 16 submitted to the department of law] OFFERED UNDER THE PLAN, EXCEPT THAT 17 IN A BUILDING OR GROUP OF BUILDINGS OR DEVELOPMENT CONTAINING LESS THAN 18 TWENTY UNITS, "EXCESSIVE" SHALL MEAN MORE THAN ONE VACANT DWELLING UNIT. 19 S 6. Subparagraph (ix) of paragraph (d) of subdivision 2 of section 20 352-eee of the general business law, as added by chapter 402 of the laws 21 of 1983, is amended to read as follows: 22 (ix) The tenants in occupancy on the date the attorney general accepts 23 the plan for filing shall have the exclusive right to purchase their 24 dwelling units or the shares allocated thereto for ninety days after the 25 plan is accepted for filing by the attorney general AND PRESENTED TO THE 26 TENANTS, during which time a tenant's dwelling unit shall not be shown 27 to a third party unless he has, in writing, waived his OR HER right to 28 purchase; subsequent to the expiration of such ninety day period, a 29 tenant in occupancy of a dwelling unit who has not purchased shall be 30 given the exclusive right for an additional period of [six months] ONE 31 YEAR from said expiration date to purchase said dwelling unit or the 32 shares allocated thereto on the same terms and conditions as are 33 contained in an executed contract to purchase, SUBJECT TO THE PROVISIONS 34 OF THIS PARAGRAPH, said dwelling unit or shares entered into by a bona 35 fide purchaser, such exclusive right to be exercisable within fifteen 36 days from the date of mailing by registered mail of notice of the 37 execution of a contract of sale together with a copy of said executed 38 contract to said tenant. 39 S 7. Subdivision 2 of section 352-eee of the general business law is 40 amended by adding a new paragraph (g) to read as follows: 41 (G) THE ATTORNEY GENERAL FINDS THAT AT THE TIME WHEN THE PLAN WAS 42 SUBMITTED FOR FILING, THE AGENCY OF THE MUNICIPALITY WHICH IS CHARGED 43 WITH THE ENFORCEMENT OF BUILDING OR HOUSING CODES WAS NOTIFIED OF THE 44 SUBMISSION OF THE PLAN AND THE NECESSITY FOR A CODE COMPLIANCE 45 INSPECTION AND THAT PRIOR TO THE PLAN BEING DECLARED TO BE IN EFFECT, 46 THE BUILDING OR GROUP OF BUILDINGS SHALL BE CERTIFIED IN WRITING BY THE 47 MUNICIPALITY AS BEING FREE OF ANY BUILDING OR HOUSING CODE VIOLATIONS 48 AND THE PLAN PROVIDES FOR SUCH RECERTIFICATION WITHIN ONE MONTH PRIOR TO 49 THE PLAN BEING DECLARED EFFECTIVE. 50 S 8. Section 352-eee of the general business law is amended by adding 51 a new subdivision 4-a to read as follows: 52 4-A. (A) WITHIN THIRTY DAYS AFTER THE CLOSING OF A CONVERSION PURSUANT 53 TO AN OFFERING PLAN THE OFFEROR SHALL ESTABLISH AND TRANSFER TO THE 54 COOPERATIVE CORPORATION OR CONDOMINIUM BOARD OF MANAGERS, A RESERVE FUND 55 TO BE USED EXCLUSIVELY FOR MAKING CAPITAL REPLACEMENTS NECESSARY FOR THE 56 HEALTH AND SAFETY OF THE RESIDENTS OF SUCH BUILDINGS. SUCH RESERVE FUND S. 1013 4 1 SHALL BE EXCLUSIVE OF ANY OTHER FUNDS REQUIRED TO BE RESERVED UNDER THE 2 PLAN OR APPLICABLE LAW OR REGULATION OF THE STATE ATTORNEY GENERAL, 3 EXCEPT A FUND FOR CAPITAL REPLACEMENTS SUBSTANTIALLY SIMILAR IN PURPOSE 4 TO AND IN AN AMOUNT NOT LESS THAN THE RESERVE FUND MANDATED BY THIS 5 SUBDIVISION. SUCH RESERVE FUND ALSO SHALL BE EXCLUSIVE OF ANY WORKING 6 CAPITAL FUND AND SHALL NOT BE SUBJECT TO REDUCTION FOR CLOSING APPOR- 7 TIONMENTS. 8 (B) SUCH FUND SHALL BE ESTABLISHED IN AN AMOUNT EQUAL TO EITHER (I) 9 TEN PERCENT OF THE TOTAL PRICE OR, (II) (A) TEN PERCENT OF THE ACTUAL 10 SALES PRICE OF ALL COOPERATIVE SHARES OR CONDOMINIUM UNITS SOLD BY THE 11 OFFEROR AT THE TIME THE PLAN IS DECLARED EFFECTIVE, PROVIDED, HOWEVER, 12 THAT IF SUCH AMOUNT IS LESS THAN THREE PERCENT OF THE TOTAL PRICE, THEN 13 THE FUND SHALL BE ESTABLISHED AS A MINIMUM OF THREE PERCENT OF THE TOTAL 14 PRICE; PLUS (B) SUPPLEMENTAL CONTRIBUTIONS TO BE MADE BY THE OFFEROR AT 15 A RATE OF TEN PERCENT OF THE ACTUAL SALES PRICE OF COOPERATIVE SHARES OR 16 CONDOMINIUM UNITS FOR EACH UNIT OF ITS ALLOCABLE SHARES HELD BY THE 17 OFFEROR AND SOLD TO BONA FIDE PURCHASERS SUBSEQUENT TO THE EFFECTIVE 18 DATE OF THE PLAN AND WITHIN FIVE YEARS OF THE CLOSING OF THE CONVERSION 19 PURSUANT TO SUCH PLAN NOTWITHSTANDING THAT THE TOTAL AMOUNT CONTRIBUTED 20 MAY EXCEED TEN PERCENT OF THE TOTAL PRICE; AND PROVIDED, FURTHER, THAT 21 IF FIVE YEARS FROM THIRTY DAYS AFTER THE CLOSING OF THE CONVERSION 22 PURSUANT TO SUCH PLAN THE TOTAL CONTRIBUTIONS BY THE OFFEROR TO THE FUND 23 ARE LESS THAN TEN PERCENT OF THE TOTAL PRICE THE OFFEROR SHALL PAY THE 24 DIFFERENCE BETWEEN THE AMOUNT CONTRIBUTED AND TEN PERCENT OF THE TOTAL 25 PRICE. SUPPLEMENTAL CONTRIBUTIONS SHALL BE MADE WITHIN THIRTY DAYS OF 26 EACH SALE. 27 (C) THE CONTRIBUTIONS REQUIRED PURSUANT TO THIS SUBDIVISION MAY BE 28 MADE EARLIER OR IN AN AMOUNT GREATER THAN SO PROVIDED. AN OFFEROR MAY 29 CLAIM AND RECEIVE CREDIT AGAINST THE MANDATORY INITIAL CONTRIBUTION TO 30 THE RESERVE FUND FOR THE ACTUAL COST OF CAPITAL REPLACEMENTS WHICH HE 31 HAS BEGUN AFTER THE PLAN IS SUBMITTED FOR FILING TO THE ATTORNEY GENERAL 32 AND BEFORE THE PLAN IS DECLARED EFFECTIVE; PROVIDED, HOWEVER, THAT ANY 33 SUCH REPLACEMENTS MUST BE SET FORTH IN THE PLAN TOGETHER WITH THEIR 34 ACTUAL OR ESTIMATED COSTS AND FURTHER PROVIDED, THAT SUCH CREDIT SHALL 35 NOT EXCEED THE LESSER OF THE ACTUAL COST OF THE CAPITAL REPLACEMENTS OR 36 ONE PERCENT OF THE TOTAL PRICE. 37 (D) ANY BUILDING, CONSTRUCTION OF WHICH WAS COMPLETED WITHIN THREE 38 YEARS PRIOR TO THE CLOSING OF A CONVERSION PURSUANT TO AN OFFERING PLAN, 39 SHALL BE EXEMPT FROM THE REQUIREMENTS OF THIS SUBDIVISION. 40 (E) THE COOPERATIVE CORPORATION OR CONDOMINIUM BOARD OF MANAGERS SHALL 41 REPORT TO SHAREHOLDERS AND UNIT OWNERS ON A SEMI-ANNUAL BASIS WITH 42 RESPECT TO ALL DEPOSITS INTO AND WITHDRAWALS FROM THE RESERVE FUND 43 MANDATED BY THIS SUBDIVISION. 44 S 9. Paragraph (b) of subdivision 1 of section 352-eeee of the gener- 45 al business law, as added by chapter 555 of the laws of 1982, is amended 46 to read as follows: 47 (b) "Non-eviction plan". A plan which may not be declared effective 48 until [written purchase agreements have been executed and delivered for] 49 at least [fifteen] TWENTY-FIVE percent of THE BONA FIDE TENANTS IN OCCU- 50 PANCY OF all dwelling units in the building or group of buildings or 51 development [by bona fide tenants in occupancy or bona fide purchasers 52 who represent that they intend that they or one or more members of their 53 immediate family intend to occupy the unit when it becomes vacant. As to 54 tenants who were in occupancy on the date a letter was issued by the 55 attorney general accepting the plan for filing, the purchase agreement 56 shall be executed and delivered] ON THE DATE THE OFFERING STATEMENT OR S. 1013 5 1 PROSPECTUS WAS ACCEPTED FOR FILING BY THE ATTORNEY GENERAL SHALL HAVE 2 EXECUTED AND DELIVERED WRITTEN AGREEMENTS TO PURCHASE UNDER THE PLAN 3 pursuant to an offering made in good faith without fraud and discrimina- 4 tory repurchase agreements or other discriminatory inducements. 5 S 10. Subdivision 1 of section 352-eeee of the general business law is 6 amended by adding two new paragraphs (h) and (i) to read as follows: 7 (H) "TOTAL PRICE". (I) WITH RESPECT TO COOPERATIVE CONVERSIONS, THE 8 NUMBER OF ALL SHARES IN THE OFFERING MULTIPLIED BY THE LAST PRICE PER 9 SHARE WHICH WAS OFFERED TO TENANTS IN OCCUPANCY PRIOR TO THE EFFECTIVE 10 DATE OF THE PLAN REGARDLESS OF NUMBER OF SALES MADE; 11 (II) WITH RESPECT TO CONDOMINIUM CONVERSIONS, THE SUM OF THE COST OF 12 ALL UNITS IN THE OFFERING AT THE LAST PRICE WHICH WAS OFFERED TO TENANTS 13 IN OCCUPANCY PRIOR TO THE EFFECTIVE DATE OF THE PLAN REGARDLESS OF 14 NUMBER OF SALES MADE. 15 (I) "CAPITAL REPLACEMENT". A BUILDING-WIDE REPLACEMENT OF A MAJOR 16 COMPONENT OF ANY OF THE FOLLOWING SYSTEMS: 17 (I) ELEVATOR; 18 (II) HEATING, VENTILATION AND AIR CONDITIONING; 19 (III) PLUMBING; 20 (IV) WIRING; 21 (V) ROOF; 22 (VI) WINDOWS; 23 OR, A MAJOR STRUCTURAL REPLACEMENT TO THE BUILDING; PROVIDED, HOWEVER, 24 THAT REPLACEMENTS MADE TO CURE CODE VIOLATIONS OF RECORD SHALL NOT BE 25 INCLUDED. 26 S 11. Subparagraph (i) of paragraph (c) of subdivision 2 of section 27 352-eeee of the general business law, as added by chapter 555 of the 28 laws of 1982, is amended to read as follows: 29 (i) The plan may not be declared effective until [written purchase 30 agreements have been executed and delivered for] at least [fifteen] 31 TWENTY-FIVE percent of THE BONA FIDE TENANTS IN OCCUPANCY OF all dwell- 32 ing units in the building or group of buildings or development 33 [subscribed for by bona fide tenants in occupancy or bona fide purchas- 34 ers who represent that they intend that they or one or more members of 35 their immediate family occupy the dwelling unit when it becomes vacant. 36 As to tenants who were in occupancy on the date a letter was issued by 37 the attorney general accepting the plan for filing, the purchase agree- 38 ment shall be executed and delivered] ON THE DATE THE OFFERING STATEMENT 39 OR PROSPECTUS WAS ACCEPTED FOR FILING BY THE ATTORNEY GENERAL SHALL HAVE 40 EXECUTED AND DELIVERED WRITTEN AGREEMENTS TO PURCHASE UNDER THE PLAN 41 pursuant to an offering made IN GOOD FAITH without FRAUD AND discrimina- 42 tory repurchase agreements or other discriminatory inducements. 43 S 12. Paragraph (c) of subdivision 2 of section 352-eeee of the 44 general business law is amended by adding two new subparagraphs (viii) 45 and (ix) to read as follows: 46 (VIII) THE TENANTS IN OCCUPANCY ON THE DATE THE ATTORNEY GENERAL 47 ACCEPTS THE PLAN FOR FILING SHALL HAVE THE EXCLUSIVE RIGHT TO PURCHASE 48 THEIR DWELLING UNITS OR THE SHARES ALLOCATED THERETO FOR NINETY DAYS 49 AFTER THE PLAN IS ACCEPTED FOR FILING BY THE ATTORNEY GENERAL AND 50 PRESENTED TO THE TENANTS, DURING WHICH TIME A TENANT'S DWELLING UNIT 51 SHALL NOT BE SHOWN TO A THIRD PARTY UNLESS HE OR SHE HAS, IN WRITING, 52 WAIVED HIS OR HER RIGHT TO PURCHASE; SUBSEQUENT TO THE EXPIRATION OF 53 SUCH NINETY DAY PERIOD, A TENANT IN OCCUPANCY OF A DWELLING UNIT WHO HAS 54 NOT PURCHASED SHALL BE GIVEN THE EXCLUSIVE RIGHT FOR AN ADDITIONAL PERI- 55 OD OF ONE YEAR FROM SAID EXPIRATION DATE TO PURCHASE SAID DWELLING UNIT 56 OR THE SHARES ALLOCATED THERETO ON THE SAME TERMS AND CONDITIONS AS ARE S. 1013 6 1 CONTAINED IN AN EXECUTED CONTRACT TO PURCHASE, SUBJECT TO THE PROVISIONS 2 OF THIS PARAGRAPH, SAID DWELLING UNIT OR SHARES ENTERED INTO BY A BONA 3 FIDE PURCHASER, SUCH EXCLUSIVE RIGHT TO BE EXERCISABLE WITHIN FIFTEEN 4 DAYS FROM THE DATE OF MAILING BY REGISTERED MAIL OF NOTICE OF THE 5 EXECUTION OF A CONTRACT OF SALE TOGETHER WITH A COPY OF SAID EXECUTED 6 CONTRACT TO SAID TENANT. 7 (IX) THE PLAN INCLUDES A COPY OF THE AFFIDAVIT, IN A FORM TO BE ESTAB- 8 LISHED BY THE ATTORNEY GENERAL, WHICH SHALL BE SIGNED BY THE PURCHASER 9 OF ANY DWELLING UNIT OF THE SHARES ALLOCATED THERETO OCCUPIED BY A RESI- 10 DENTIAL TENANT. SUCH AFFIDAVIT SHALL SPECIFY THE RENT REGULATORY LAW, IF 11 ANY, TO WHICH THE UNIT IS SUBJECT AND SHALL CONTAIN AN ACKNOWLEDGMENT OF 12 SUCH RENT REGULATED STATUS OF THE UNIT AS WELL AS THE PURCHASER'S DUTY 13 TO ABIDE BY THE MAXIMUM LEGAL RENT STANDARDS, RENT REGISTRATION REQUIRE- 14 MENTS, MAINTENANCE OF SERVICES REQUIREMENTS AND ALL OTHER REQUIREMENTS 15 OF APPLICABLE HOUSING LAWS AND REGULATIONS. EACH SUCH PURCHASER SHALL 16 AT THE TIME OF PURCHASE SIGN TWO COPIES OF THE AFFIDAVIT, ONE OF WHICH 17 SHALL BE DELIVERED BY THE OFFEROR TO THE TENANT IN OCCUPANCY AND THE 18 OTHER TO THE DIVISION OF HOUSING AND COMMUNITY RENEWAL. 19 S 13. Subparagraph (ix) of paragraph (d) of subdivision 2 of section 20 352-eeee of the general business law, as added by chapter 555 of the 21 laws of 1982, is amended to read as follows: 22 (ix) The tenants in occupancy on the date the attorney general accepts 23 the plan for filing shall have the exclusive right to purchase their 24 dwelling units or the shares allocated thereto for ninety days after the 25 plan is accepted for filing by the attorney general AND PRESENTED TO THE 26 TENANTS, during which time a tenant's dwelling unit shall not be shown 27 to a third party unless he OR SHE has, in writing, waived his right to 28 purchase; subsequent to the expiration of such ninety day period, a 29 tenant in occupancy of a dwelling unit who has not purchased shall be 30 given the exclusive right for an additional period of [six months] ONE 31 YEAR from said expiration date to purchase said dwelling unit or the 32 shares allocated thereto on the same terms and conditions as are 33 contained in an executed contract to purchase, SUBJECT TO THE PROVISIONS 34 OF THIS PARAGRAPH, said dwelling unit or shares entered into by a bona 35 fide purchaser, such exclusive right to be exercisable within fifteen 36 days from the date of mailing by registered mail of notice of the 37 execution of a contract of sale together with a copy of said executed 38 contract to said tenant. 39 S 14. Paragraph (e) of subdivision 2 of section 352-eeee of the 40 general business law, as added by chapter 555 of the laws of 1982, is 41 amended to read as follows: 42 (e) The attorney general finds that an excessive number of [long-term] 43 vacancies did not exist on the date THAT IS ONE HUNDRED TEN DAYS AFTER 44 THE DATE that the offering statement or prospectus was first submitted 45 to the department of law. ["Long-term vacancies"] "VACANCIES" shall 46 mean dwelling units not leased or occupied by bona fide tenants [for 47 more than five months prior to the date of such submission to the 48 department of law] ON SUCH ONE HUNDRED TENTH DAY. "Excessive" shall 49 mean a vacancy rate in excess of [the greater of (i) ten percent and 50 (ii) a percentage that is double the normal average vacancy rate for] 51 FIVE PERCENT OF THE TOTAL NUMBER OF DWELLING UNITS IN the building or 52 group of buildings or development [for two years prior to the January 53 preceding the date the offering statement or prospectus was first 54 submitted to the department of law] OFFERED UNDER THE PLAN, EXCEPT THAT 55 IN A BUILDING OR GROUP OF BUILDINGS OR DEVELOPMENT CONTAINING LESS THAN 56 TWENTY UNITS, "EXCESSIVE" SHALL MEAN MORE THAN ONE VACANT DWELLING UNIT. S. 1013 7 1 S 15. Subdivision 2 of section 352-eeee of the general business law is 2 amended by adding a new paragraph (g) to read as follows: 3 (G) THE ATTORNEY GENERAL FINDS THAT AT THE TIME WHEN THE PLAN WAS 4 SUBMITTED FOR FILING, THE AGENCY OF THE MUNICIPALITY WHICH IS CHARGED 5 WITH THE ENFORCEMENT OF BUILDING OR HOUSING CODES WAS NOTIFIED OF THE 6 SUBMISSION OF THE PLAN AND THE NECESSITY FOR A CODE COMPLIANCE 7 INSPECTION AND THAT PRIOR TO THE PLAN BEING DECLARED TO BE IN EFFECT, 8 THE BUILDING OR GROUP OF BUILDINGS SHALL BE CERTIFIED IN WRITING BY THE 9 MUNICIPALITY AS BEING FREE OF ANY BUILDING OR HOUSING CODE VIOLATIONS 10 AND THE PLAN PROVIDES FOR SUCH RECERTIFICATION WITHIN ONE MONTH PRIOR TO 11 THE PLAN BEING DECLARED EFFECTIVE. 12 S 16. Section 352-eeee of the general business law is amended by 13 adding a new subdivision 4-a to read as follows: 14 4-A. (A) WITHIN THIRTY DAYS AFTER THE CLOSING OF A CONVERSION PURSUANT 15 TO AN OFFERING PLAN THE OFFEROR SHALL ESTABLISH AND TRANSFER TO THE 16 COOPERATIVE CORPORATION OR CONDOMINIUM BOARD OF MANAGERS, A RESERVE FUND 17 TO BE USED EXCLUSIVELY FOR MAKING CAPITAL REPLACEMENTS NECESSARY FOR THE 18 HEALTH AND SAFETY OF THE RESIDENTS OF SUCH BUILDINGS. SUCH RESERVE FUND 19 SHALL BE EXCLUSIVE OF ANY OTHER FUNDS REQUIRED TO BE RESERVED UNDER THE 20 PLAN OR APPLICABLE LAW OR REGULATION OF THE STATE ATTORNEY GENERAL, 21 EXCEPT A FUND FOR CAPITAL REPLACEMENTS SUBSTANTIALLY SIMILAR IN PURPOSE 22 TO AND IN AN AMOUNT NOT LESS THAN THE RESERVE FUND MANDATED BY THIS 23 SUBDIVISION. SUCH RESERVE FUND ALSO SHALL BE EXCLUSIVE OF ANY WORKING 24 CAPITAL FUND AND SHALL NOT BE SUBJECT TO REDUCTION FOR CLOSING APPOR- 25 TIONMENTS. 26 (B) SUCH FUND SHALL BE ESTABLISHED IN AN AMOUNT EQUAL TO EITHER (I) 27 TEN PERCENT OF THE TOTAL PRICE OR, (II) (A) TEN PERCENT OF THE ACTUAL 28 SALES PRICE OF ALL COOPERATIVE SHARES OR CONDOMINIUM UNITS SOLD BY THE 29 OFFEROR AT THE TIME THE PLAN IS DECLARED EFFECTIVE, PROVIDED, HOWEVER, 30 THAT IF SUCH AMOUNT IS LESS THAN THREE PERCENT OF THE TOTAL PRICE, THEN 31 THE FUND SHALL BE ESTABLISHED AS A MINIMUM OF THREE PERCENT OF THE TOTAL 32 PRICE; PLUS (B) SUPPLEMENTAL CONTRIBUTIONS TO BE MADE BY THE OFFEROR AT 33 A RATE OF TEN PERCENT OF THE ACTUAL SALES PRICE OF COOPERATIVE SHARES OR 34 CONDOMINIUM UNITS FOR EACH UNIT OF ITS ALLOCABLE SHARES HELD BY THE 35 OFFEROR AND SOLD TO BONA FIDE PURCHASERS SUBSEQUENT TO THE EFFECTIVE 36 DATE OF THE PLAN AND WITHIN FIVE YEARS OF THE CLOSING OF THE CONVERSION 37 PURSUANT TO SUCH PLAN NOTWITHSTANDING THAT THE TOTAL AMOUNT CONTRIBUTED 38 MAY EXCEED TEN PERCENT OF THE TOTAL PRICE; AND PROVIDED, FURTHER, THAT 39 IF FIVE YEARS FROM THIRTY DAYS AFTER THE CLOSING OF THE CONVERSION 40 PURSUANT TO SUCH PLAN THE TOTAL CONTRIBUTIONS BY THE OFFEROR TO THE FUND 41 ARE LESS THAN TEN PERCENT OF THE TOTAL PRICE THE OFFEROR SHALL PAY THE 42 DIFFERENCE BETWEEN THE AMOUNT CONTRIBUTED AND TEN PERCENT OF THE TOTAL 43 PRICE. SUPPLEMENTAL CONTRIBUTIONS SHALL BE MADE WITHIN THIRTY DAYS OF 44 EACH SALE. 45 (C) THE CONTRIBUTIONS REQUIRED PURSUANT TO THIS SUBDIVISION MAY BE 46 MADE EARLIER OR IN AN AMOUNT GREATER THAN SO PROVIDED. AN OFFEROR MAY 47 CLAIM AND RECEIVE CREDIT AGAINST THE MANDATORY INITIAL CONTRIBUTION TO 48 THE RESERVE FUND FOR THE ACTUAL COST OF CAPITAL REPLACEMENTS WHICH HE 49 HAS BEGUN AFTER THE PLAN IS SUBMITTED FOR FILING WITH THE ATTORNEY 50 GENERAL AND BEFORE THE PLAN IS DECLARED EFFECTIVE; PROVIDED, HOWEVER, 51 THAT ANY SUCH REPLACEMENTS MUST BE SET FORTH IN THE PLAN TOGETHER WITH 52 THEIR ACTUAL OR ESTIMATED COSTS AND FURTHER PROVIDED, THAT SUCH CREDIT 53 SHALL NOT EXCEED THE LESSER OF THE ACTUAL COST OF THE CAPITAL REPLACE- 54 MENTS OR ONE PERCENT OF THE TOTAL PRICE. S. 1013 8 1 (D) ANY BUILDING, CONSTRUCTION OF WHICH WAS COMPLETED WITHIN THREE 2 YEARS PRIOR TO THE CLOSING OF A CONVERSION PURSUANT TO AN OFFERING PLAN, 3 SHALL BE EXEMPT FROM THE REQUIREMENTS OF THIS SUBDIVISION. 4 (E) THE COOPERATIVE CORPORATION OR CONDOMINIUM BOARD OF MANAGERS SHALL 5 REPORT TO SHAREHOLDERS AND UNIT OWNERS ON A SEMI-ANNUAL BASIS WITH 6 RESPECT TO ALL DEPOSITS INTO AND WITHDRAWALS FROM THE RESERVE FUND 7 MANDATED BY THIS SUBDIVISION. 8 S 17. Severability. If any clause, sentence, paragraph, section or 9 part of this act shall be adjudged by any court of competent jurisdic- 10 tion to be invalid, such judgment shall not affect, impair or invalidate 11 the remainder thereof, but shall be confined in its operation to the 12 clause, sentence, paragraph, section, or part thereof directly involved 13 in the controversy in which such judgment shall have been rendered. 14 S 18. This act shall take effect immediately and shall apply to 15 conversion plans accepted for filing by the attorney general on or after 16 the date it shall have become a law; provided that the amendments to 17 sections 352-eee and 352-eeee of the general business law made by this 18 act shall not affect the expiration of such sections and shall expire 19 therewith.