Bill Text: NY S07765 | 2023-2024 | General Assembly | Introduced


Bill Title: Enacts the "city of Buffalo historic preservation receivership act"; provides the city of Buffalo specific procedures for the appointment of a receiver of rents in instances where the property at issue is neglected or abandoned.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-01-03 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S07765 Detail]

Download: New_York-2023-S07765-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          7765

                               2023-2024 Regular Sessions

                    IN SENATE

                                    November 22, 2023
                                       ___________

        Introduced  by  Sen.  RYAN  --  read twice and ordered printed, and when
          printed to be committed to the Committee on Rules

        AN ACT in relation to enacting the "city of Buffalo  historic  preserva-
          tion receivership act"

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Short Title. This act shall be known and may  be  cited  as
     2  the "city of Buffalo historic preservation receivership act".
     3    §  2.  Legislative  findings and purpose. The legislature hereby finds
     4  and declares that:
     5    1. the city of Buffalo is home to many buildings of  historic  signif-
     6  icance,  and  such  buildings contribute to the cultural heritage of the
     7  state and are a testament to its rich history and diverse population;
     8    2. many such historic buildings  are  abandoned  and/or  neglected  by
     9  their owners of record, or no such owner may be found;
    10    3. such neglected and abandoned buildings are a blight on their commu-
    11  nities and on the state as a whole;
    12    4. the state of New York imbued the city of Buffalo housing court with
    13  jurisdiction  over  "proceedings  for  the  appointment of a receiver of
    14  rents, issues and profits of buildings in order to remove  or  remedy  a
    15  nuisance  or  to  make  repairs  required  to be made under such housing
    16  codes," under subdivision (f) of section 202 of article X of chapter 570
    17  of the laws of 1909; and
    18    5. the legislature resolves to provide the city  of  Buffalo  specific
    19  procedures for the appointment of a receiver of rents in instances where
    20  the property at issue is neglected or abandoned as defined in this act.
    21    §  3.  Definitions.  For the purposes of this act, the following terms
    22  shall have the following meanings:
    23    1. "abandoned property" means a property meeting the following  condi-
    24  tions  at  the time a petition is filed pursuant to section four of this
    25  act:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13644-01-3

        S. 7765                             2

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

        S. 7765                             3

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

        S. 7765                             4

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

        S. 7765                             5

     1    § 5. Appointment of the receiver. 1. General rule. The court shall act
     2  upon a petition submitted by holding a hearing within 60 days of receipt
     3  of  petition  and  by  rendering  a decision no later than 30 days after
     4  completion of the hearing.
     5    2.  Intervention.  A party in interest may intervene in the proceeding
     6  and be heard with respect to the petition, the requested relief  or  any
     7  other  matter  which  may  come  before the court in connection with the
     8  proceeding.
     9    3. Hearing. At the hearing, any party in interest shall  be  permitted
    10  to  present  evidence to support or contest the petition, including, but
    11  not limited to, the schedule of encumbrances.
    12    4. Conditions for receivership. If a  petition  is  filed  under  this
    13  section,  the  court  may appoint a receiver if the building at issue is
    14  found to be an abandoned building as defined in section  three  of  this
    15  act.
    16    5.  Appointment.  (a) If the court determines after a hearing that the
    17  property has met the conditions outlined in the definition of  abandoned
    18  building in section three of this act, the court may appoint a receiver,
    19  certify  the  schedule of encumbrances, and grant other relief as may be
    20  just and appropriate. The certification shall be binding with respect to
    21  all mortgages, liens, and encumbrances, including municipal liens, aris-
    22  ing or attaching to the property prior to the date of the petition.
    23    (b) The court  shall  give  first  consideration  for  appointment  as
    24  receiver to the most senior nongovernmental lienholder on the property.
    25    (c)  In the event that the senior lienholder is found to be not compe-
    26  tent or declines the appointment, the  court  may  appoint  a  nonprofit
    27  corporation  or  other  competent  entity. In appointing a receiver, the
    28  court shall:
    29    (i) consider any recommendations contained in the petition  or  other-
    30  wise presented by a party in interest; and
    31    (ii)  give preference to the appointment of a nonprofit corporation or
    32  governmental unit over an individual.
    33    6. Conditional relief. (a) If the court finds after a hearing that the
    34  conditions for receivership set forth in section three of this act  have
    35  been   established,  but  the  owner  represents  that  the  conditions,
    36  violations or nuisance, or emergency  condition  will  be  abated  in  a
    37  reasonable  period,  the  court may allow the owner to proceed to remedy
    38  the conditions.
    39    (b) If the conditions set forth in paragraph (a) of  this  subdivision
    40  have  been  satisfied, the court shall enter an order providing that, in
    41  the event that the violations or nuisance or  emergency  conditions  are
    42  not abated by the owner by a specific date or that other specified reme-
    43  dial  activities have not occurred by a specific date or dates, an order
    44  granting the relief specified in in the petition shall be entered.
    45    (c) The court shall also require the owner  to  post  a  bond  in  the
    46  amount  of  the repair costs estimated in the petition as a condition of
    47  retaining possession of the building.
    48    (d) Upon a finding that:
    49    (i) the petition states conditions for receivership; or
    50    (ii) the owner elects to either:
    51    (A) remedy all violations and nuisance or emergency conditions; or
    52    (B) sell the property subject to the  receivership,  the  owner  shall
    53  reimburse  the  petitioner  for  all costs incurred by the petitioner in
    54  preparing and filing the petition in accordance with the requirements of
    55  section four of this act and the receiver or developer's fee.

        S. 7765                             6

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

        S. 7765                             7

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

        S. 7765                             8

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

        S. 7765                             9

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

        S. 7765                            10

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