S T A T E O F N E W Y O R K
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4536
2009-2010 Regular Sessions
I N A S S E M B L Y
February 4, 2009
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Introduced by M. of A. MAYERSOHN, ESPAILLAT, SEMINERIO, GREENE, SCARBOR-
OUGH -- Multi-Sponsored by -- M. of A. COLTON, DIAZ, JACOBS, NOLAN,
PHEFFER, P. RIVERA, WEPRIN -- read once and referred to the Committee
on Housing
AN ACT to amend the general business law, in relation to the physical
condition of a building being converted to cooperative or condominium
ownership
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision 2 of section 352-eee of the general business
law is amended by adding a new paragraph (g) to read as follows:
(G) THE PLAN PROVIDES THAT THE SPONSOR SHALL CAUSE TO BE CURED: (I)
ALL SERIOUS VIOLATIONS OF RECORD OF LOCAL OR STATE LAW OR REGULATIONS
REGARDING CONDITIONS IN THE BUILDING OR GROUNDS OF THE REAL PROPERTY
WHICH IS THE SUBJECT OF THE OFFERING, EXISTING ON THE DATE OF EFFECTIVE-
NESS OF THE PLAN, EXCEPT THOSE WHICH, IF NOT CORRECTED, WOULD NOT LEAD
TO DANGEROUS OR HAZARDOUS CONDITIONS, AS CERTIFIED BY A REGISTERED
ARCHITECT OR PROFESSIONAL ENGINEER RETAINED BY THE SPONSOR; AND (II) ALL
DANGEROUS AND HAZARDOUS CONDITIONS IN SUCH REAL PROPERTY EXISTING ON THE
DATE OF EFFECTIVENESS OF THE PLAN WHICH A REGISTERED ARCHITECT OR
PROFESSIONAL ENGINEER RETAINED BY THE SPONSOR CERTIFIES ARE NOT IN
COMPLIANCE WITH APPLICABLE STATE OR LOCAL LAWS OR REGULATIONS. THE
OFFERING PLAN MUST FURTHER PROVIDE THAT IF ANY SUCH VIOLATIONS OF RECORD
REFERRED TO IN SUBPARAGRAPH (I) OF THIS PARAGRAPH OR DANGEROUS OR
HAZARDOUS CONDITIONS REFERRED TO IN SUBPARAGRAPH (II) OF THIS PARAGRAPH
ARE NOT CORRECTED BY THE CLOSING DATE, THE SPONSOR SHALL PLACE IN ESCROW
A SUM OF MONEY WHICH IS CERTIFIED BY A REGISTERED ARCHITECT OR PROFES-
SIONAL ENGINEER RETAINED BY THE SPONSOR AS SUFFICIENT TO COVER THE
REMAINING COST OF CORRECTION. THE SPONSOR MAY EXPEND THE ESCROW MONEY
TO CURE SUCH VIOLATIONS OR DANGEROUS OR HAZARDOUS CONDITIONS. IN THE
EVENT THAT THE CORRECTIVE WORK IS NOT COMPLETED WITHIN ONE YEAR OF THE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04498-01-9
A. 4536 2
CLOSING DATE, THE SUM IN ESCROW SHALL BE TURNED OVER TO THE COOPERATIVE
CORPORATION OR CONDOMINIUM BOARD OF MANAGERS AND USED TO COMPLETE THE
WORK. ANY ESCROW MONEY REMAINING AFTER ALL REQUIRED WORK IS COMPLETED
SHALL BE RETURNED TO THE SPONSOR. WHERE THE SPONSOR PLACES INTO A
RESERVE FUND AN AMOUNT IN EXCESS OF THAT REQUIRED BY STATE AND LOCAL LAW
WHICH IS SPECIFICALLY ALLOCATED AND ADEQUATE TO CURE SUCH PARTICULAR
VIOLATION OF RECORD OR DANGEROUS OR HAZARDOUS CONDITION, NO MONEY NEEDS
TO BE PLACED IN ESCROW FOR SUCH VIOLATION OR DANGEROUS OR HAZARDOUS
CONDITIONS. IF THE SUM IN ESCROW OR SPECIFICALLY ALLOCATED IN A RESERVE
FUND IS NOT SUFFICIENT TO CURE SUCH VIOLATIONS OF RECORD OR DANGEROUS OR
HAZARDOUS CONDITIONS, THE SPONSOR SHALL REMAIN LIABLE TO CURE SUCH
VIOLATIONS OR DANGEROUS OR HAZARDOUS CONDITIONS.
S 2. Subdivision 2 of section 352-eeee of the general business law is
amended by adding a new paragraph (g) to read as follows:
(G) THE PLAN PROVIDES THAT THE SPONSOR SHALL CAUSE TO BE CURED: (I)
ALL SERIOUS VIOLATIONS OF RECORD OF LOCAL OR STATE LAW OR REGULATIONS
REGARDING CONDITIONS IN THE BUILDING OR GROUNDS OF THE REAL PROPERTY
WHICH IS THE SUBJECT OF THE OFFERING, EXISTING ON THE DATE OF EFFEC-
TIVENESS OF THE PLAN, EXCEPT THOSE WHICH, IF NOT CORRECTED, WOULD NOT
LEAD TO DANGEROUS OR HAZARDOUS CONDITIONS, AS CERTIFIED BY A REGISTERED
ARCHITECT OR PROFESSIONAL ENGINEER RETAINED BY THE SPONSOR; AND (II) ALL
DANGEROUS AND HAZARDOUS CONDITIONS IN SUCH REAL PROPERTY EXISTING ON THE
DATE OF EFFECTIVENESS OF THE PLAN WHICH A REGISTERED ARCHITECT OR
PROFESSIONAL ENGINEER RETAINED BY THE SPONSOR CERTIFIES ARE NOT IN
COMPLIANCE WITH APPLICABLE STATE OR LOCAL LAWS OR REGULATIONS. THE
OFFERING PLAN MUST FURTHER PROVIDE THAT IF ANY SUCH VIOLATIONS OF RECORD
REFERRED TO IN SUBPARAGRAPH (I) OF THIS PARAGRAPH OR DANGEROUS OR
HAZARDOUS CONDITIONS REFERRED TO IN SUBPARAGRAPH (II) OF THIS PARAGRAPH
ARE NOT CORRECTED BY THE CLOSING DATE, THE SPONSOR SHALL PLACE IN ESCROW
A SUM OF MONEY WHICH IS CERTIFIED BY A REGISTERED ARCHITECT OR PROFES-
SIONAL ENGINEER RETAINED BY THE SPONSOR AS SUFFICIENT TO COVER THE
REMAINING COST OF CORRECTION. THE SPONSOR MAY EXPEND THE ESCROW MONEY TO
CURE SUCH VIOLATIONS OR DANGEROUS OR HAZARDOUS CONDITIONS. IN THE EVENT
THAT THE CORRECTIVE WORK IS NOT COMPLETED WITHIN ONE YEAR OF THE CLOSING
DATE, THE SUM IN ESCROW SHALL BE TURNED OVER TO THE COOPERATIVE CORPO-
RATION OR CONDOMINIUM BOARD OF MANAGERS AND USED TO COMPLETE THE WORK.
ANY ESCROW MONEY REMAINING AFTER ALL REQUIRED WORK IS COMPLETED SHALL BE
RETURNED TO THE SPONSOR. WHERE THE SPONSOR PLACES INTO A RESERVE FUND AN
AMOUNT IN EXCESS OF THAT REQUIRED BY STATE AND LOCAL LAW WHICH IS
SPECIFICALLY ALLOCATED AND ADEQUATE TO CURE SUCH PARTICULAR VIOLATION OF
RECORD OR DANGEROUS OR HAZARDOUS CONDITION, NO MONEY NEEDS TO BE PLACED
IN ESCROW FOR SUCH VIOLATION OR DANGEROUS OR HAZARDOUS CONDITIONS. IF
THE SUM IN ESCROW OR SPECIFICALLY ALLOCATED IN A RESERVE FUND IS NOT
SUFFICIENT TO CURE SUCH VIOLATIONS OF RECORD OR DANGEROUS OR HAZARDOUS
CONDITIONS, THE SPONSOR SHALL REMAIN LIABLE TO CURE SUCH VIOLATIONS OR
DANGEROUS OR HAZARDOUS CONDITIONS. FOR THE PURPOSES OF THIS PARAGRAPH,
THE TERM "SERIOUS VIOLATIONS" SHALL MEAN ANY VIOLATIONS WHICH HAVE BEEN
CLASSIFIED BY THE NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND
DEVELOPMENT AS "HAZARDOUS" OR "IMMEDIATELY HAZARDOUS" PURSUANT TO
SECTION 27-2115 OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK, AND
SHALL NOT INCLUDE ANY VIOLATIONS WHICH HAVE BEEN CLASSIFIED AS "NON-HA-
ZARDOUS" PURSUANT TO SUCH SECTION.
S 3. Severability. If any clause, sentence, paragraph, section or part
of this act shall be adjudged by any court of competent jurisdiction to
be invalid, such judgment shall not affect, impair or invalidate the
remainder thereof, but shall be confined in its operation to the clause,
A. 4536 3
sentence, paragraph, section, or part thereof directly involved in the
controversy in which such judgment shall have been rendered.
S 4. This act shall take effect immediately and shall apply to every
offering statement or prospectus submitted to the attorney general on
and after such date and to every offering statement or prospectus
submitted to the attorney general which has not yet been declared effec-
tive; provided, that the amendments to section 352-eee of the general
business law made by section one of this act shall not affect the expi-
ration of such section pursuant to chapter 402 of the laws of 1983, as
amended, and shall be deemed to expire therewith; provided further, that
the amendments to section 352-eeee of the general business law made by
section two of this act shall not affect the expiration of such section
pursuant to chapter 555 of the laws of 1982, as amended, and shall be
deemed to expire therewith.