Senate Bill S7076

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

                                  7076

                            I N  S E N A T E

                             April 27, 2012
                               ___________

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
ROOM,  ALLOWANCES  FOR  NORMAL WEAR AND TEAR, AND MATTERS RELATED TO THE
EQUITY DISTRIBUTION; AND

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15281-02-2

              

S. 7076                             2

  (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.
  9.  THE  BOARD  OF  DIRECTORS  OF  ANY COMPANY AND MANAGEMENT SHALL BE
PROHIBITED FROM APPLYING ANY COSTS FOR RESTORATION OF THE  HOUSING  FROM

S. 7076                             3

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.