senate Bill S7604

2013-2014 Legislative Session

Relates to filing requirements relating to the sale of certain non-public real estate securities offerings

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Archive: Last Bill Status - In Committee

  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
May 15, 2014 referred to housing, construction and community development

S7604 - Bill Details

Current Committee:
Law Section:
General Business Law
Laws Affected:
Amd ยง352-e, Gen Bus L

S7604 - Bill Texts

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Relates to filing requirements relating to the sale of certain non-public real estate securities offerings.

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TITLE OF BILL: An act to amend the general business law, in relation
to filing requirements relating to the sale of certain non-public real
estate securities offerings

PURPOSE OR GENERAL IDEA OF BILL: This bill creates a requirement to
file with the department of law an offering statement or prospectus
for non-public real estate securities offerings.

SUMMARY OF SPECIFIC PROVISIONS: This bill adds new language to
section 352-e of the General Business Law to require the submission of
an offering statement of prospectus to the department of law when a
non-public offering of real estate related securities is made.

JUSTIFICATION: Under Article 23-A of the General Business Law,
generally referred to as the "Martin Act", the issuer of a real estate
related security must file an offering plan with the New York State
Attorney General, setting forth the detailed terms of the transaction.
Prospective purchasers rely upon the statements in the offering plan
in determining whether to purchase an apartment, and therefore the
Martin Act requires that all material information be disclosed and
that all representations in the offering plan are true. Currently,
this requirement is only for publicly offered securities, and
therefore prospective purchasers are left unsure of the existence and
validity of terms of any non-public securities related to a property.
This bill seeks to cure that uncertainty and give purchasers the best
information possible when choosing whether to purchase an interest in
a property. This would assist in protecting buyers from entering into
agreements related to properties that may try to hide unacceptable
types or levels of debt with terms unknown to the buyer.


FISCAL IMPLICATIONS: None to the state.

EFFECTIVE DATE: This act shall take effect immediately.

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


                            I N  S E N A T E

                              May 15, 2014

Introduced  by  Sen. HOYLMAN -- 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 general business law, in relation to filing require-
  ments  relating  to the sale of certain non-public real estate securi-
  ties offerings


  Section  1.  Paragraph  (a)  of  subdivision 1 of section 352-e of the
general business law, as amended by chapter 1085 of the laws of 1968, is
amended to read as follows:
  (a) It shall be illegal and prohibited for  any  person,  partnership,
corporation,  company,  trust  or  association, or any agent or employee
thereof, to make or take part in a public OR NON-PUBLIC offering or sale
in or from the state of New York of securities  constituted  of  partic-
ipation  interests  or  investments in real estate, mortgages or leases,
including stocks, bonds, debentures, evidences of  interest  or  indebt-
edness, limited partnership interests or other security or securities as
defined  in  section  three hundred fifty-two of this article, when such
securities consist primarily of participation interests  or  investments
in  one or more real estate ventures, including cooperative interests in
realty, unless and until there shall have been filed with the department
of law, prior to such offering, a written statement or statements, to be
known as an "offering statement" or "prospectus" concerning the  contem-
plated  offering which shall contain the information and representations
required by paragraph (b) of this subdivision unless the security offer-
ing is exempted hereunder or under  SUBDIVISION  TWO  OF  section  three
hundred  fifty-nine-f[,  subdivision  two,]  of  this article by rule or
action of the attorney general. The term "real estate" as used in  [the]
THIS  paragraph shall not include mineral, oil or timber leases or prop-
erties, or buildings,  structures,  land  or  other  realty  housing  or
containing  business offices or industry, owned or leased by the issuer,
where the issuer is not primarily engaged in the business of buying  and
selling  such  building  or other realty or leases or interests therein.

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

S. 7604                             2

The circulation or dissemination of a non-firm offer  (including  circu-
lation  or dissemination of a preliminary prospectus pursuant to section
ten (b) of the securities act of nineteen hundred thirty-three, and  the
rules  thereto  appertaining) shall not constitute making or taking part
in a public offering within the meaning of this section.
  S 2. This act shall take effect immediately.


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