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
                               ___________

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.