S T A T E O F N E W Y O R K
________________________________________________________________________
5747
2009-2010 Regular Sessions
I N A S S E M B L Y
February 19, 2009
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Introduced by M. of A. V. LOPEZ -- Multi-Sponsored by -- M. of A. BREN-
NAN, DINOWITZ, GLICK -- read once and referred to the Committee on
Housing
AN ACT to amend the general business law, in relation to the content of
real estate syndication offerings
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision 1 of section 352-e of the general business law
is amended by adding a new paragraph (d) to read as follows:
(D) (1) THE ATTORNEY GENERAL SHALL REFUSE TO ISSUE A LETTER STATING
THAT THE OFFERING HAS BEEN FILED OR IN THE CASE OF AN OFFERING PLAN
ALREADY ACCEPTED FOR FILING, SHALL REFUSE TO ACCEPT AN AMENDMENT TO THE
PLAN UNLESS THE OFFERING STATEMENT, PROSPECTUS, PLAN OR AMENDMENT
PROVIDES THAT UNTIL SUCH TIME AS LESS THAN TEN PERCENT OF THE SHARES OR
COMMON INTERESTS ARE OWNED BY THE OFFEROR, THE OFFEROR SHALL: (I) POST A
BOND, (II) FUND A RESERVE ACCOUNT, (III) OBTAIN AN IRREVOCABLE LETTER OF
CREDIT, OR (IV) FURNISH ANOTHER FORM OF SECURITY IN A FORM ACCEPTABLE TO
THE DEPARTMENT OF LAW. IF A PLAN HAS ALREADY BEEN DECLARED EFFECTIVE ON
THE EFFECTIVE DATE OF THIS PARAGRAPH, AN OFFEROR WHO STILL OWNS TEN
PERCENT OR MORE OF THE SHARES OR COMMON INTERESTS SHALL FURNISH THE
SECURITY DESCRIBED HEREIN.
(2) THE BOND, RESERVE ACCOUNT, LETTER OF CREDIT OR OTHER SECURITY
SHALL BE IN AN AMOUNT CERTIFIED AS SUFFICIENT TO COVER THE ESTIMATED
COSTS OF THE OFFEROR'S OBLIGATIONS PURSUANT TO THE OFFERING PLAN OR
AMENDMENT FOR A PERIOD OF THREE YEARS, INCLUDING, BUT NOT LIMITED TO,
THE OFFEROR'S OBLIGATION TO PAY MAINTENANCE, COMMON CHARGES AND REAL
ESTATE TAXES EQUAL TO THE AMOUNT BY WHICH THE ESTIMATED COSTS OF SUCH
CHARGES FOR A THREE YEAR PERIOD EXCEED ANTICIPATED RENTAL RECEIPTS TO
THE OFFEROR OR FOR SUCH THREE YEAR PERIOD, AND THE OFFEROR'S OBLIGATION
TO MAKE ANY REPAIRS OR IMPROVEMENTS PROMISED IN THE OFFERING PLAN. THE
COST OF THE OFFEROR'S OBLIGATION TO MAKE SUCH REPAIRS AND IMPROVEMENTS
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08861-01-9
A. 5747 2
MUST BE CERTIFIED BY A REGISTERED ARCHITECT, OR PROFESSIONAL ENGINEER OR
LICENSED CONTRACTOR.
(3) AN OFFEROR'S LIABILITY FOR PROMISES AND REPRESENTATIONS CONTAINED
IN THE OFFERING PLAN SHALL NOT BE LIMITED BY THE PROVISION OF THIS PARA-
GRAPH.
(4) THE AMOUNT OF SUCH BOND, RESERVE ACCOUNT, LETTER OF CREDIT OR
OTHER SECURITY SHALL BE DISCLOSED IN THE OFFERING PLAN OR AMENDMENT.
(5) THE OFFEROR SHALL MAINTAIN THE FULL AMOUNT OF SECURITY REQUIRED TO
COVER THREE YEARS WORTH OF ITS OBLIGATIONS PURSUANT TO SUBPARAGRAPH TWO
OF THIS PARAGRAPH UNTIL IT OWNS LESS THAN TEN PERCENT OF THE SHARES OR
COMMON INTERESTS IN THE OFFERING. THE OFFEROR SHALL FILE AN AMENDMENT
DISCLOSING ANY MATERIAL CHANGES IN THE AMOUNT OF SECURITY MAINTAINED IN
ACCORDANCE WITH SUBPARAGRAPH TWO OF THIS PARAGRAPH.
S 2. This act shall take effect on the sixtieth day after it shall
have become a law and shall apply to all plans not yet accepted for
filing and to all plans already accepted for filing, except those where
the offeror owns less than ten percent of the shares or common inter-
ests. Effective immediately all actions and procedures with respect to
the proposed adoption, amendment, suspension or repeal of any rule or
regulation necessary to the timely implementation of this act are
authorized.