senate Bill S3381

Establishes certain rights for shareholders in limited-profit housing companies

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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  • 01 / Feb / 2013
    • REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
  • 08 / Jan / 2014
    • REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT

Summary

Establishes certain rights for shareholders in limited-profit housing companies.

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Bill Details

Versions:
S3381
Legislative Cycle:
2013-2014
Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Private Housing Finance Law
Laws Affected:
Amd §12, add §13-c, Priv Hous Fin L
Versions Introduced in 2011-2012 Legislative Cycle:
S7076

Sponsor Memo

BILL NUMBER:S3381

TITLE OF BILL: An act to amend the private housing finance law, in
relation to establishing certain rights for shareholders in limited-pro-
fit housing companies

PURPOSE OR GENERAL IDEA OF BILL: This bill amends the private housing
finance law by establishing certain rights for shareholders in limited
profit housing companies. These rights include the right of a share-
holder to receive a copy of the initial bank statement reflecting the
amount of the subscription or down payment, including the projected per
annum interest rate; yearly bank statements reflecting the amount of
equity; a copy and synopsis of New York State real estate laws governing
the management and distribution of shareholder's equity and the accrued
equity value for cooperative apartment units; detailed information
outlining the process, policies and procedures for surrendering the
apartment unit, the shareholder's obligations when surrendering an
apartment unit; a punch list for satisfactory conditions of each room
being surrendered, allowances for normal wear and tear and matters
related to equity distribution; in the event of sickness or death the
right of a shareholder to appoint a designee to who shall assume respon-
sibility for surrendering the apartment, a table of carrying charges
after surrender; creation repair and restoration fund; notice of equity;
notice of deficient conditions outside inspectors.

JUSTIFICATION: Shareholders of "Mitchell Lama" cooperatives often are
not aware of their equity in their housing units. Additionally, when
they surrender their apartment units, many shareholders are not aware of
their responsibilities and liabilities over the condition of the apart-
ment . Furthermore, children of shareholders who die or fall gravely
ill, have no formal authority to manage their parents legal affairs.
Moreover, there is no formal procedure for reviewing financial
deductions necessary to repair or restore apartments which are surren-
dered. This bill will require cooperatives to provide annual notifica-
tion of equity accounts to shareholders. Additionally, the bill gives
the shareholder the right to appoint a designee to assume responsibility
for the surrender of the apartment unit. The bill establishes a table of
carry over charges when the unit is surrendered and creates a fund for
repairs and restoration when the apartment is surrendered.

LEGISLATIVE HISTORY: New law.

FISCAL IMPLICATIONS: None to the State of New York.

EFFECTIVE DATE: This act shall take effect on the one hundred twentieth
day after it shall become a law.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3381

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 1, 2013
                               ___________

Introduced  by  Sen. HASSELL-THOMPSON -- 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 private housing finance law, in relation to estab-
  lishing certain rights  for  shareholders  in  limited-profit  housing
  companies

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 12 of the private housing finance law is amended by
adding a new subdivision 17 to read as follows:
  17. "SHAREHOLDER." A TENANT ENTITLED TO  OCCUPANCY  IN  A  PROJECT  BY
REASON OF OWNERSHIP OF SHARES IN A COMPANY.
  S  2.  The  private  housing  finance  law  is amended by adding a new
section 13-c to read as follows:
  S 13-C. RIGHTS OF SHAREHOLDERS. 1. NEW AND EXISTING SHAREHOLDERS SHALL
RECEIVE THE FOLLOWING INFORMATION:
  (A) AN INITIAL BANK STATEMENT FROM THE COMPANY REFLECTING  THE  AMOUNT
OF  THE  SUBSCRIPTION  OR DOWN PAYMENT INCLUDING, BUT NOT LIMITED TO THE
NAME OF THE BANK, THE TYPE OF BANK ACCOUNT AND THE PROJECTED  PER  ANNUM
INTEREST RATE;
  (B) FOR EACH YEAR OF TENANCY, SHAREHOLDERS SHALL RECEIVE A BANK STATE-
MENT REFLECTING THE AMOUNT OF EQUITY IN THEIR BANK ACCOUNTS;
  (C) A COPY AND SYNOPSIS OF THE NEW YORK STATE REAL ESTATE LAWS GOVERN-
ING  THE  MANAGEMENT  AND  DISTRIBUTION  OF SHAREHOLDERS' EQUITY AND THE
ACCRUED EQUITY VALUE FOR COOPERATIVE APARTMENT UNITS.  SUCH  INFORMATION
SHALL BE PRESENTED IN STRAIGHTFORWARD, EASILY COMPREHENSIBLE LANGUAGE;
  (D)  DETAILED  INFORMATION  OUTLINING THE PROCESS, POLICIES AND PROCE-
DURES FOR SURRENDERING THE APARTMENT  UNIT  INCLUDING  TIME  FRAMES  FOR
NOTIFYING  MANAGEMENT,  SHAREHOLDERS'  OBLIGATIONS,  MANAGEMENT'S  OBLI-
GATIONS, A PUNCH LIST FOR  REQUIRED  SATISFACTORY  CONDITIONS  FOR  EACH

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02799-01-3

S. 3381                             2

ROOM,  ALLOWANCES  FOR  NORMAL WEAR AND TEAR, AND MATTERS RELATED TO THE
EQUITY DISTRIBUTION; AND
  (E)  THE NAMES OF STATE OFFICIALS OR DISTRICT MANAGEMENT EXECUTIVES TO
CONTACT IN THE EVENT OF ANY DISPUTE RELATED TO THE  SURRENDER  OF  THEIR
HOUSING.
  2.  SHAREHOLDERS  SHALL IDENTIFY A FAMILY MEMBER OR DESIGNATED CONTACT
PERSON WHO SHALL ASSUME RESPONSIBILITY FOR SURRENDER OF THEIR HOUSING IN
THE EVENT OF A MEDICAL EMERGENCY OR DEATH. THE REQUIRED  DOCUMENT  SHALL
BE  IN  SUCH  FORM AND MANNER AS THE COMMISSIONER MAY PRESCRIBE. A NOTA-
RIZED COPY OF THE DOCUMENT SHALL BE FILED IN THE MANAGEMENT OFFICE,  AND
THE  ORIGINAL AND COPIES MAINTAINED BY THE SHAREHOLDER, FAMILY MEMBER OR
DESIGNATED PERSON.
  3. (A) OUTGOING COOPERATIVE SHAREHOLDERS SHALL BE LIABLE  FOR  MAINTE-
NANCE OR CARRYING CHARGES AFTER SURRENDERING THEIR APARTMENT UNITS BASED
ON THE FOLLOWING SCALE:
  (I) 0-45 DAYS NOTIFICATION TO THE COOPERATIVE BOARD - THREE MONTHS.
  (II) 45-90 DAYS NOTIFICATION TO THE COOPERATIVE BOARD - TWO MONTHS.
  (III) OVER 90 DAYS NOTIFICATION TO THE COOPERATIVE BOARD - ONE MONTH.
  (B)  SHAREHOLDERS  SHALL  BE  CHARGED A MAXIMUM THREE MONTHS' CARRYING
CHARGES. IF HOUSING IS  SURRENDERED  INVOLUNTARILY  BECAUSE  OF  MEDICAL
REQUIREMENTS  OR  DEATH,  THE MAXIMUM CARRYING CHARGE TO THE SHAREHOLDER
SHALL BE ONE MONTH. OUTGOING SHAREHOLDERS SHALL HAVE THE OPTION FOR  THE
INCOMING  SHAREHOLDER TO PURCHASE OTHER PERSONAL PROPERTY INCLUDING, BUT
NOT LIMITED TO KITCHEN APPLIANCES AND CARPETING.
  4. (A) THE BOARD OF  DIRECTORS  OF  EACH  COMPANY  SHALL  APPORTION  A
PERCENTAGE  OF EACH MONTHLY MAINTENANCE OR CARRYING CHARGES IN A RESERVE
FUND FOR EACH SHAREHOLDER THAT SHALL BE USED EXCLUSIVELY FOR REPAIRS AND
RESTORATION COSTS TO HOUSING AT THE END OF THE SHAREHOLDERS' TENANCY.
  (B) SHAREHOLDERS SHALL RECEIVE A WRITTEN STATEMENT OF  THE  AMOUNT  OF
MONEY  AVAILABLE  IN THEIR RESERVE FUND FOR USE TO CURE DEFICIENT CONDI-
TIONS TO THEIR HOUSING. THE SHAREHOLDERS' ALLOTMENT  SHALL  BE  DEDUCTED
FROM  THE  FINAL  COST  AMOUNT. IF COSTS FOR REPAIRS AND RESTORATION ARE
LESS THAN THE AMOUNT IN THE RESERVE  FUND,  THE  REMAINING  MONEY  SHALL
REVERT TO AN ACCOUNT MAINTAINED BY COMPANY MANAGEMENT.
  5.  (A) WITHIN THIRTY DAYS AFTER NOTIFICATION TO SURRENDER THEIR HOUS-
ING, SHAREHOLDERS SHALL RECEIVE A BANK STATEMENT  INDICATING  THE  TOTAL
AMOUNT  OF  THEIR  EQUITY, AND IF APPLICABLE, THE ACCRUED VALUE OR ADDI-
TIONAL PERCENTAGE OF EQUITY.
  (B) WITHIN TWO WEEKS OF NOTIFICATION  TO  SURRENDER  HOUSING,  COMPANY
MANAGEMENT  SHALL  SCHEDULE  AN  INITIAL  INSPECTION.  MANAGEMENT  SHALL
PROVIDER SHAREHOLDERS WITH A PUNCH LIST OF DEFICIENT CONDITIONS ASSESSED
IN THE HOUSING. SHAREHOLDERS SHALL HAVE THE OPTION TO CURE THE  ASSESSED
DEFICIENT  CONDITIONS BY AN APPROVED INDEPENDENT CONTRACTOR PRIOR TO THE
FINAL INSPECTION OF THEIR HOUSING.
  6. IF SHAREHOLDERS DISPUTE ANY OUTSTANDING COSTS,  SHAREHOLDERS  SHALL
HAVE  AN  OPPORTUNITY  TO  CURE THE DEFICIENT CONDITIONS AFTER THE FINAL
INSPECTION. IF THE DISPUTE IS NOT RESOLVED, SHAREHOLDERS MAY CONFER WITH
EXECUTIVES AT THE DISTRICT MANAGEMENT OFFICE OR  FOLLOW  AN  ESTABLISHED
PROCEDURE FOR THE RESOLUTION OF SUCH MATTERS.
  7. SHAREHOLDERS SHALL RECEIVE THE TOTAL EQUITY DISTRIBUTION, INCLUDING
THE  EQUITY  AND  ACCRUED  EQUITY  VALUE,  WITHIN  NINETY DAYS FOLLOWING
SURRENDER OF THE HOUSING.
  8. IF SHAREHOLDERS INVOLUNTARILY SURRENDER THEIR  HOUSING  BECAUSE  OF
MEDICAL  CIRCUMSTANCES  OR  DEATH,  THE  EQUITY FOR THE HOUSING SHALL BE
TRANSFERRED  TO  THE  STATE  COMMENSURATE  WITH  STATE  REGULATIONS  FOR
UNCLAIMED FUNDS.

S. 3381                             3

  9.  THE  BOARD  OF  DIRECTORS  OF  ANY COMPANY AND MANAGEMENT SHALL BE
PROHIBITED FROM APPLYING ANY COSTS FOR RESTORATION OF THE  HOUSING  FROM
SHAREHOLDERS'  EQUITY  DISTRIBUTION UNTIL, AND UNLESS, IT IS DETERMINED,
THE RESERVE FUND AND APPLICABLE CARRYING CHARGES  ARE  NOT  ADEQUATE  TO
COVER  COSTS.  SHAREHOLDERS,  THEIR  FAMILY  MEMBERS, OR HEIRS, HAVE THE
OPTION TO HIRE AN OUTSIDE INSPECTOR TO ASSESS THE COSTS AND PAY FOR  THE
COSTS  THEMSELVES.  IF  THESE  OPTIONS  ARE  NOT EXERCISED, THE BOARD OF
DIRECTORS AND MANAGEMENT SHALL COMPLETE AN AFFIDAVIT OR  OTHER  DOCUMENT
DETAILING  THE  LIST  OF  REPAIRS,  DEFICIENT  CONDITIONS OF THE HOUSING
INCLUDING PHOTOGRAPHS, THE AMOUNT OF THE SHAREHOLDER'S RESERVE FUND, AND
THE ADDITIONAL PROPOSED COSTS TO BE DEDUCTED FROM THE EQUITY.
  S 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law. Effective immediately, the addition,  amend-
ment and/or repeal of any rule or regulation necessary for the implanta-
tion  of  this  act on its effective date is authorized to be made on or
before such date.

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