S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3373
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 23, 2017
                                ___________
 
 Introduced  by  Sen. SANDERS -- 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 creating
   the  New  York City department of housing preservation and development
   homeowners improvement trust  fund  and  the  HPD  homeowner  standard
   warranty
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The private housing finance law is amended by adding a  new
 article 28 to read as follows:
                              ARTICLE XXVIII
           NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND
               DEVELOPMENT HOMEOWNERS IMPROVEMENT TRUST FUND
 SECTION 1233. DEFINITIONS.
         1234. NEW  YORK  CITY  DEPARTMENT  OF  HOUSING  PRESERVATION AND
                 DEVELOPMENT HOMEOWNERS IMPROVEMENT TRUST FUND.
         1235. WRITTEN WARRANTY; CONTENTS.
         1236. POWERS OF THE COMMISSIONER.
         1237. RESOLUTION OF DISPUTES REGARDING HPD PROJECTS.
         1238. PENALTIES FOR VIOLATION OF THIS ARTICLE.
   § 1233. DEFINITIONS. FOR THE PURPOSES OF THIS  ARTICLE  THE  FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1.  "BUSINESS  ENTITY"  MEANS A CORPORATION, ASSOCIATION, PARTNERSHIP,
 LIMITED LIABILITY COMPANY, LIMITED LIABILITY PARTNERSHIP, OR OTHER LEGAL
 ENTITY.
   2. "DELIVERED CONDITION" MEANS THE  PHYSICAL  CONDITION  OF  THE  HOME
 AFTER DELIVERY AND INSTALLATION AT THE HOME SITE HAS BEEN COMPLETED.
   3.  "DEPARTMENT"  MEANS  THE  NEW YORK STATE COMMUNITY HOMES & RENEWAL
 PROGRAM.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01173-01-7
              

 S. 3373                             2
 
   4. "FUND" MEANS THE NEW YORK CITY DEPARTMENT OF  HOUSING  PRESERVATION
 AND  DEVELOPMENT  HOMEOWNERS  IMPROVEMENT TRUST FUND CREATED PURSUANT TO
 THE PROVISIONS OF SECTION TWELVE HUNDRED THIRTY-FOUR OF THIS ARTICLE.
   5.  "SPONSOR"  MEANS ANY PERSON OR BUSINESS ENTITY, INCLUDING, BUT NOT
 LIMITED TO, A  SPONSOR,  DEVELOPER,  MORTGAGOR,  APPLICANT,  OR  GENERAL
 CONTRACTOR AS DEFINED IN SECTION 1-16, 29-01, 30-01, 34-01, AND 35-01 OF
 TITLE  TWENTY-EIGHT  OF THE RULES OF THE CITY OF NEW YORK WHO DEVELOPS A
 HOME THROUGH AN HPD PROJECT FOR SALE TO A BUYER.
   6. "HPD PROJECT" MEANS ANY CONSTRUCTION OF REHABILITATION OF ANY RESI-
 DENTIAL DWELLING, IN WHOLE OR IN PART, THROUGH THE PROGRAMS SET FORTH IN
 CHAPTERS TWENTY-NINE, THIRTY, THIRTY-FOUR AND THIRTY-FIVE OF TITLE TWEN-
 TY-EIGHT OF THE RULES OF THE CITY OF NEW YORK.
   7. "COMMISSIONER" MEANS THE COMMISSIONER OF THE NEW YORK STATE  COMMU-
 NITY HOMES & RENEWAL.
   8.  "SERVICE"  MEANS  THE  CONSTRUCTION, REHABILITATION, MODIFICATION,
 ALTERATION, OR REPAIR OF AN HPD PROJECT.
   9. "STATE ADMINISTRATIVE AGENCY" OR "SAA" MEANS  THE  NEW  YORK  STATE
 COMMUNITY HOMES & RENEWAL.
   10.  "BUILDING  CODE"  MEANS  THE UNIFORM FIRE PREVENTION AND BUILDING
 CODE PROMULGATED UNDER SECTION THREE HUNDRED SEVENTY-SEVEN OF THE EXECU-
 TIVE LAW, LOCAL BUILDING CODE STANDARDS APPROVED  BY  THE  UNIFORM  FIRE
 PREVENTION  AND BUILDING CODE COUNCIL UNDER SECTION THREE HUNDRED SEVEN-
 TY-NINE OF THE EXECUTIVE LAW, AND THE BUILDING CODE OF THE CITY  OF  NEW
 YORK, AS DEFINED IN TITLE TWENTY-SEVEN OF THE ADMINISTRATIVE CODE OF THE
 CITY OF NEW YORK.
   11.  "CONSTRUCTED  IN  A  SKILLFUL  MANNER" MEANS THAT WORKMANSHIP AND
 MATERIALS MEET OR EXCEED THE SPECIFIC STANDARDS OF THE APPLICABLE BUILD-
 ING CODE. WHEN THE APPLICABLE BUILDING CODE DOES NOT PROVIDE A  RELEVANT
 SPECIFIC  STANDARD,  SUCH TERM MEANS THAT WORKMANSHIP AND MATERIALS MEET
 OR EXCEED THE STANDARDS OF LOCALLY ACCEPTED BUILDING PRACTICES.
   12. "MATERIAL DEFECT" MEANS ACTUAL PHYSICAL DAMAGE  TO  THE  FOLLOWING
 LOAD-BEARING PORTIONS OF THE HOME CAUSED BY FAILURE OF SUCH LOAD-BEARING
 PORTIONS  WHICH  AFFECTS THEIR LOAD-BEARING FUNCTIONS TO THE EXTENT THAT
 THE HOME BECOMES UNSAFE, UNSANITARY OR OTHERWISE UNLIVEABLE:  FOUNDATION
 SYSTEMS AND FOOTINGS, BEAMS, GIRDERS, LINTELS, COLUMNS, WALLS AND PARTI-
 TIONS, FLOOR SYSTEMS, AND ROOF FRAMING SYSTEMS.
   13.  "NEW  HOME"  OR  "HOME" MEANS ANY SINGLE FAMILY HOUSE OR FOR-SALE
 UNIT IN A MULTI-UNIT RESIDENTIAL STRUCTURE CONSTRUCTED OR  REHABILITATED
 THROUGH  AN HPD PROJECT IN WHICH TITLE TO THE INDIVIDUAL UNITS IS TRANS-
 FERRED TO OWNERS UNDER A CONDOMINIUM, COOPERATIVE, OR INDIVIDUAL  OWNER-
 SHIP  REGIME. SUCH TERMS DO NOT INCLUDE DWELLINGS CONSTRUCTED SOLELY FOR
 LEASE.
   14. "OWNER" MEANS THE FIRST PERSON TO  WHOM  THE  HOME  IS  SOLD  AND,
 DURING  THE  UNEXPIRED PORTION OF THE WARRANTY PERIOD, EACH SUCCESSOR IN
 TITLE TO THE HOME AND  ANY  MORTGAGEE  IN  POSSESSION.  OWNER  DOES  NOT
 INCLUDE  THE BUILDER OF THE HOME OR ANY FIRM UNDER COMMON CONTROL OF THE
 BUILDER.
   15. "PLUMBING, ELECTRICAL, HEATING, COOLING AND  VENTILATION  SYSTEMS"
 SHALL MEAN:
   A.  IN  THE  CASE  OF PLUMBING SYSTEMS: GAS SUPPLY LINES AND FITTINGS;
 WATER SUPPLY, WASTE AND VENT PIPES AND THEIR FITTINGS; SEPTIC TANKS  AND
 THEIR  DRAIN  FIELDS;  WATER,  GAS  AND  SEWER SERVICE PIPING, AND THEIR
 EXTENSIONS TO THE TIE-IN OF A PUBLIC UTILITY CONNECTION, OR ON-SITE WELL
 AND SEWAGE DISPOSAL SYSTEM;

 S. 3373                             3
 
   B. IN THE CASE OF ELECTRICAL SYSTEMS: ALL  WIRING,  ELECTRICAL  BOXES,
 SWITCHES,  OUTLETS  AND CONNECTIONS UP TO THE PUBLIC UTILITY CONNECTION;
 AND
   C.  IN  THE CASE OF HEATING, COOLING AND VENTILATION SYSTEMS: ALL DUCT
 WORK, STEAM, WATER AND REFRIGERANT LINES, REGISTERS,  CONVECTORS,  RADI-
 ATION ELEMENTS AND DAMPERS.
   16.  "WARRANTY  DATE"  MEANS  THE  DATE OF THE PASSING OF TITLE TO THE
 FIRST OWNER FOR OCCUPANCY BY SUCH OWNER OR  SUCH  OWNER'S  FAMILY  AS  A
 RESIDENCE,  OR  THE  DATE OF FIRST OCCUPANCY OF THE HOME AS A RESIDENCE,
 WHICHEVER FIRST OCCURS.
   17. "HPD OWNER WARRANTY" MEANS THE WARRANTY REQUIRED TO BE PROVIDED TO
 EACH OWNER OF A HOME.
   § 1234. NEW YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND  DEVELOP-
 MENT HOMEOWNERS IMPROVEMENT TRUST FUND. 1. A NEW YORK CITY DEPARTMENT OF
 HOUSING  PRESERVATION  AND DEVELOPMENT HOMEOWNERS IMPROVEMENT TRUST FUND
 (HEREINAFTER, "THE FUND") IS  HEREBY  ESTABLISHED  TO  PROVIDE  FOR  THE
 PAYMENT  OF  APPROVED REPAIRS TO AGGRIEVED HOMEOWNERS WHO ARE VICTIMS OF
 SUBSTANDARD HOUSING BUILT BY A SPONSOR ON AN HPD PROJECT. THE FUND SHALL
 BE ADMINISTERED BY THE COMMISSIONER OF NEW YORK STATE COMMUNITY HOMES  &
 RENEWAL.
   2.  A. A SPONSOR OF AN HPD PROJECT SHALL BE REQUIRED TO PARTICIPATE IN
 THE FUND UNLESS A SPONSOR PROVIDES A BOND OR OTHERWISE MEETS THE WARRAN-
 TIES SET FORTH IN SECTION TWELVE HUNDRED THIRTY-FIVE OF THIS ARTICLE.
   B. ANY SPONSOR WHO IS GRANTED OR RECEIVES THE RIGHT TO DEVELOP AN  HPD
 PROJECT MUST PARTICIPATE IN THE FUND BY SUBMITTING TO THE COMMISSIONER A
 CHECK  IN THE AMOUNT OF NOT LESS THAN FIVE PERCENT OF THE TOTAL VALUE OF
 THE HPD PROJECT BEFORE AN HPD PROJECT MAY BE AWARDED TO A SPONSOR.
   C. THE COMMISSIONER MAY, FROM TIME TO  TIME,  AMEND  THIS  SECTION  TO
 REQUIRE SUCH ADDITIONAL CONTRIBUTIONS BY PARTICIPANTS IN THE FUND AS THE
 COMMISSIONER  DETERMINES  TO  BE  NECESSARY TO MAINTAIN AN AMOUNT IN THE
 FUND WHICH IS  ADEQUATE  TO  FULFILL  ITS  PURPOSES  AND  TO  COUNTERACT
 DEPLETION  OF  THE  FUND  RESULTING  FROM  PAYMENTS MADE OUT OF THE FUND
 PURSUANT TO SUBDIVISION THREE OF THIS SECTION.
   D. FUND PARTICIPANTS MAY DISCONTINUE THEIR PARTICIPATION IN  THE  FUND
 AT  ANY TIME BY FILING A BOND IN ACCORDANCE WITH REGULATIONS PROMULGATED
 BY THE COMMISSIONER AND IN EFFECT.
   E. THE FUNDS WILL BE RETURNED TO THE SPONSOR AS FOLLOWS:    (1)  FIFTY
 PERCENT  RETURNED AFTER THIRTY MONTHS AFTER COMPLETION OF THE PROJECT SO
 LONG AS THERE ARE NO UNRESOLVED WARRANTY ISSUES; AND (2)  FIFTY  PERCENT
 RETURNED  AFTER  SIXTY MONTHS AFTER COMPLETION OF THE PROJECT SO LONG AS
 THERE ARE NO UNRESOLVED WARRANTY ISSUES. UNDER  NO  CIRCUMSTANCES  SHALL
 FUNDS  BE  RETURNED  IF  THERE  ARE  ANY OUTSTANDING UNRESOLVED WARRANTY
 ISSUES.
   F. PARTICIPATION IN THE FUND DOES NOT RELIEVE A SPONSOR OF  ANY  OBLI-
 GATION  TO PAY AWARDS OR FINES IMPOSED BY THE DEPARTMENT OR JUDGMENTS OR
 ARBITRATION AWARDS RENDERED AGAINST A SPONSOR BY A  COURT  OF  COMPETENT
 JURISDICTION.
   3. A. THE COMMISSIONER MAY REQUIRE THAT DISBURSEMENTS BE MADE FROM THE
 FUND TO PAY OUTSTANDING AWARDS TO AN OWNER, ON BEHALF OF AN OWNER WHEN:
   (1)  THE  DEPARTMENT  HAS  CONDUCTED  AN  ADMINISTRATIVE  HEARING THAT
 RESULTS IN A DECISION THAT A SPONSOR IS IN VIOLATION OF A LAW, ORDINANCE
 OR REGULATION ENFORCED BY THE DEPARTMENT OR THE HPD OWNER WARRANTY;
   (2) THE SPONSOR IS ORDERED BY THE DEPARTMENT TO PAY  AN  AWARD  TO  AN
 OWNER;
   (3) THE SPONSOR HAS FAILED TO PAY SUCH AWARD TO AN OWNER WITHIN THIRTY
 DAYS OF THE DATE OF THE DEPARTMENT'S ORDER; AND

 S. 3373                             4
 
   (4)  THE  SPONSOR HAS CONDUCTED AN ADMINISTRATIVE HEARING THAT RESULTS
 IN A DECISION THAT A  SPONSOR  HAS  NOT  REMEDIED  MATERIAL  DEFECTS  IN
 CONSTRUCTION  OR REHABILITATION OF AN HPD PROJECT AND IS IN VIOLATION OF
 THE HPD OWNER WARRANTY.
   B.  DISBURSEMENTS  FROM THE FUND WILL BE MADE AT THE DISCRETION OF THE
 COMMISSIONER OR HIS OR HER DESIGNEE.
   C. THE COMMISSIONER OR HIS OR HER  DESIGNEE  MAY  ORDER  THAT  PARTIAL
 PAYMENT OF AWARDS BE MADE FROM THE FUND.
   D. NOTHING CONTAINED IN THIS SUBDIVISION SHALL BE CONSTRUED TO:
   (1)  LIMIT THE RIGHTS AND REMEDIES OF ANY PARTY, INCLUDING THE DEPART-
 MENT, TO PURSUE A CAUSE OF ACTION AGAINST A SPONSOR WHO IS A PARTICIPANT
 IN THE FUND;
   (2) CREATE A RIGHT OF ANY PERSON TO A PORTION  OF  ANY  OF  THE  FUND,
 EXCEPT IN THE CASE OF AN AWARD DULY MADE BY THE COMMISSIONER PURSUANT TO
 THE PROVISIONS HEREIN; OR
   (3)  PROVIDE  FOR  THE PAYMENT OF AWARDS OR JUDGMENTS RENDERED AGAINST
 FUND PARTICIPANTS IN PERSONAL INJURY ACTIONS.
   4. THE COMMISSIONER SHALL, BY JANUARY THIRTY-FIRST OF EACH YEAR, CAUSE
 AN ACCOUNTING TO BE MADE OF ALL OF  THE  FUND'S  ACTIVITIES  DURING  THE
 PRECEDING CALENDAR YEAR.
   § 1235. WRITTEN WARRANTY; CONTENTS. 1. THE HPD OWNER WARRANTY SHALL BE
 PROVIDED  TO THE OWNER THAT ACCORDS WITH THE PROVISIONS OF ARTICLE THIR-
 TY-SIX-B OF THE GENERAL BUSINESS LAW, INCLUDING THE FOLLOWING:
   A. ONE YEAR FROM AND AFTER THE WARRANTY DATE THE  HOME  WILL  BE  FREE
 FROM  DEFECTS  DUE  TO  A FAILURE TO HAVE BEEN CONSTRUCTED IN A SKILLFUL
 MANNER;
   B. TWO YEARS FROM AND AFTER THE  WARRANTY  DATE  THE  PLUMBING,  ELEC-
 TRICAL,  HEATING,  COOLING  AND  VENTILATION SYSTEMS OF THE HOME WILL BE
 FREE FROM DEFECTS DUE TO A FAILURE BY THE BUILDER TO HAVE INSTALLED SUCH
 SYSTEMS IN A SKILLFUL MANNER; AND
   C. SIX YEARS FROM AND AFTER THE WARRANTY DATE THE HOME  WILL  BE  FREE
 FROM  MATERIAL  DEFECTS, INCLUDING, BUT NOT LIMITED TO, ANY CONSTRUCTION
 THAT IS NOT IN COMPLIANCE WITH THE BUILDING CODE OR  THE  ZONING  RESOL-
 UTION OF THE CITY OF NEW YORK.
   2.  A.  THE  SPONSOR  SHALL  TAKE APPROPRIATE CORRECTIVE ACTION WITHIN
 SIXTY DAYS OF RECEIPT OF WRITTEN NOTIFICATION AT THE SITE OF THE HOME IN
 INSTANCES OF SUBSTANTIAL DEFECTS  IN  MATERIALS  OR  WORKMANSHIP,  WHICH
 BECOME EVIDENT WITHIN ONE YEAR FROM THE DATE OF THE DELIVERY OF THE HOME
 TO  THE OWNER, PROVIDED THE OWNER OR HIS TRANSFEREE GIVES WRITTEN NOTICE
 OF SUCH DEFECTS TO THE SPONSOR AT THEIR BUSINESS ADDRESS NOT LATER  THAN
 ONE YEAR AND TEN DAYS AFTER DATE OF DELIVERY.
   B.  THE  SPONSOR  WILL, AS A MINIMUM REMEDY, MAKE REPAIRS OR INDEMNIFY
 THE OWNER FOR THE ACTUAL COST OF REPAIRING ANY RUST  DAMAGE  COVERED  BY
 THE WARRANTY.
   C.  THE SPONSOR WILL HONOR ALL VALID CLAIMS UNDER THE WARRANTY REGARD-
 LESS OF THEIR NUMBER.
   D. NOTHING CONTAINED IN THIS SECTION SHALL BE  DEEMED  TO  PRECLUDE  A
 SPONSOR  FROM  ENTERING  INTO A CONTRACT REQUIRING A FINANCIALLY SOLVENT
 CONTRACTOR WHO WORKED ON THE HOME TO BE INITIALLY  RESPONSIBLE  FOR  THE
 COST  OF  ANY  CORRECTIVE  ACTION  AS  A RESULT OF THE NEGLIGENCE OF THE
 CONTRACTOR.
   3. A. THE WARRANTY UNDER THIS ARTICLE SHALL BE IN ADDITION TO AND  NOT
 IN  DEROGATION  OF  ALL OTHER RIGHTS AND PRIVILEGES WHICH SUCH OWNER MAY
 HAVE UNDER ANY OTHER LAW OR INSTRUMENT. WAIVER  OF  ANY  RIGHTS  BY  THE
 OWNER  UNDER  THIS ARTICLE SHALL BE DEEMED CONTRARY TO PUBLIC POLICY AND
 SHALL BE UNENFORCEABLE AND VOID.

 S. 3373                             5
 
   B. THE PROVISIONS OF THIS ARTICLE SHALL PREEMPT ANY LOCAL  LAW  INCON-
 SISTENT  WITH  THE  PROVISIONS  OF  THIS ARTICLE. THIS ARTICLE SHALL NOT
 PREEMPT ANY BUILDER SUBJECT TO ITS PROVISIONS FROM  COMPLYING  WITH  ANY
 LOCAL LAW WITH RESPECT TO THE REGULATION OF SPONSORS EXCEPT AS EXPRESSLY
 PROVIDED HEREIN.
   C.  NOTHING  IN THIS ARTICLE SHALL BE CONSTRUED TO REPEAL, INVALIDATE,
 SUPERSEDE OR RESTRICT ANY RIGHT, LIABILITY OR  REMEDY  PROVIDED  BY  ANY
 OTHER  STATUTE  OF THE STATE, EXCEPT WHERE SUCH CONSTRUCTION WOULD, AS A
 MATTER OF LAW, BE UNREASONABLE.
   § 1236. POWERS OF THE COMMISSIONER. THE COMMISSIONER  SHALL  HAVE  THE
 FOLLOWING POWERS AND DUTIES WITH RESPECT TO HPD PROJECTS:
   1.  TO  CREATE  AND MAINTAIN A REGISTRY ACCESSIBLE TO THE PUBLIC WHICH
 SHALL INCLUDE, BUT NOT BE LIMITED TO THE FOLLOWING INFORMATION:
   A. A LISTING OF ALL PRE-APPROVED, PRE-QUALIFIED, OR APPROVED  SPONSORS
 FOR HPD PROJECTS AND ALL SPONSORS AWARDED HPD PROJECTS; AND
   B.  RECORDS  OF  ALL  VIOLATIONS ISSUED, DISCIPLINARY ACTION TAKEN AND
 PENALTIES PAID AND LEVIED PURSUANT TO THIS ARTICLE;
   2. TO RETAIN RECORDS AND ALL APPLICATION MATERIALS SUBMITTED TO IT;
   3. TO RECEIVE COMPLAINTS, CONDUCT INVESTIGATIONS AND ESTABLISH  PROCE-
 DURES FOR THE RESOLUTION OF DISPUTES RELATING TO THE CONSTRUCTION OF HPD
 PROJECTS AND TO RESOLVE SUCH COMPLAINTS AND DISPUTES PURSUANT TO SECTION
 TWELVE HUNDRED THIRTY-FOUR OF THIS ARTICLE;
   4.  TO  PROMULGATE RULES AND REGULATIONS RELATING TO THE PROVISIONS OF
 THIS ARTICLE;
   5. TO CONDUCT ADJUDICATORY HEARINGS, PURSUANT TO THE STATE ADMINISTRA-
 TIVE PROCEDURE ACT TO RESOLVE VIOLATIONS OF THIS ARTICLE AND  THE  RULES
 AND REGULATIONS PROMULGATED THEREUNDER;
   6.  TO SEEK INJUNCTIVE RELIEF IN THE SUPREME COURT IN THE COUNTY WHERE
 THE COMPLAINANT RESIDES; AND
   7. TO PROMULGATE RULES AND REGULATIONS  TO  REQUIRE  BONDING,  MINIMUM
 CAPITAL REQUIREMENTS OR OTHER REASONABLE METHODS TO ENSURE THAT SPONSORS
 ARE  FINANCIALLY  RESPONSIBLE TO FULLY COMPLY WITH THIS ARTICLE AND HAVE
 THE FINANCIAL RESOURCES TO MEET THEIR WARRANTY,  CONTRACTUAL  AND  OTHER
 OBLIGATIONS  REQUIRED  UNDER  THIS SECTION. IN CONNECTION THEREWITH, THE
 COMMISSIONER MAY REQUIRE THE POSTING  OF  SURETY  BONDS  TO  ENSURE  THE
 SATISFACTORY COMPLETION OF HPD PROJECTS.
   §  1237.  RESOLUTION  OF DISPUTES REGARDING HPD PROJECTS. 1. ANY OWNER
 MAY FILE A COMPLAINT WITH THE COMMISSIONER  AS  A  STATE  ADMINISTRATIVE
 AGENCY  SEEKING  RESOLUTION  OF  AN ALLEGATION THAT A SUBSTANTIAL DEFECT
 EXISTS IN THE DELIVERED CONDITION, INSTALLATION, SERVICE OR CONSTRUCTION
 OF AN HPD PROJECT. THE COMMISSIONER  SHALL  PROMULGATE  FORMS  FOR  SUCH
 COMPLAINTS  AND  SUCH  FORMS SHALL ALSO BE AVAILABLE ON THE DEPARTMENT'S
 WEB-SITE. FOR THE PURPOSE OF THIS ARTICLE, A SUBSTANTIAL DEFECT SHALL BE
 A DEFECT OR A NUMBER OF DEFECTS OR OTHER CONDITIONS  WHICH  COLLECTIVELY
 CAN REASONABLY BE EXPECTED TO COST ONE THOUSAND DOLLARS OR MORE TO CURE.
   2.  COMPLAINTS  FILED  WITH THE COMMISSIONER RELATING TO THE DELIVERED
 CONDITION OR CONSTRUCTION OF AN HPD PROJECT SHALL  BE  MADE  WITHIN  ONE
 YEAR  AND  TEN  DAYS  AFTER  THE  DATE OF THE DELIVERY OF TITLE, OR OF A
 CERTIFICATE OF OCCUPANCY, OR THE EXPIRATION OF ANY APPLICABLE  PROVISION
 OF A CONTRACT OR WARRANTY, WHICHEVER IS LATER.
   3.  A.  UPON  THE  DEPARTMENT'S DETERMINATION THAT A COMPLAINT, ON ITS
 FACE, ALLEGES  A  SUBSTANTIAL  DEFECT  IN  THE  DELIVERED  CONDITION  OR
 CONSTRUCTION  OF  AN  HPD PROJECT, THE DEPARTMENT SHALL NOTIFY THE OWNER
 AND SPONSOR.
   B. INITIALLY, THE DEPARTMENT MAY ATTEMPT  TO  INFORMALLY  RESOLVE  THE
 COMPLAINT.  IF INFORMAL RESOLUTION OF THE COMPLAINT IS UNSUCCESSFUL, THE

 S. 3373                             6
 
 DEPARTMENT SHALL RESOLVE SUCH COMPLAINTS AND DISPUTES BY  ADMINISTRATIVE
 HEARING, PURSUANT TO THE STATE ADMINISTRATIVE PROCEDURE ACT.
   C.  THE  DECISION SHALL PROVIDE COMPENSATION TO THE AGGRIEVED PARTY IN
 AN AMOUNT WHICH SHALL INCLUDE, BUT NOT BE LIMITED TO:
   (1) FILING AND RECORDING FEES,  INSPECTION  FEES  AND  OTHER  REQUIRED
 COSTS  THAT THE AGGRIEVED PARTY WOULD NOT HAVE INCURRED HAD THE HOME MET
 APPLICABLE STANDARDS; AND
   (2) THE COST OF CONFORMING REPAIRS OR REPLACEMENTS.
   D. THE DEPARTMENT MAY APPORTION LIABILITY BETWEEN TWO OR MORE  PARTIES
 OR BUSINESS ENTITIES WHERE APPROPRIATE.
   E.  THE DECISION RESOLVING THE COMPLAINT SHALL BE IN WRITING AND SHALL
 PROVIDE THE REASON THEREFOR, A COPY OF THE DECISION SHALL BE PROVIDED TO
 ALL INTERESTED PARTIES, INCLUDING THE SPONSOR AND OWNER.
   F. ANY PARTY MAY SEEK JUDICIAL REVIEW OF THE  ADMINISTRATIVE  DETERMI-
 NATION  PURSUANT  TO ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND
 RULES.
   § 1238. PENALTIES FOR VIOLATION OF THIS ARTICLE. ANY PERSON  OR  BUSI-
 NESS  ENTITY FOUND GUILTY, AFTER A HEARING, OF A VIOLATION OF THIS ARTI-
 CLE, MAY BE REQUIRED TO PAY A CIVIL PENALTY OF NOT MORE THAN  TEN  THOU-
 SAND  DOLLARS  FOR EACH SUCH VIOLATION, BUT NOT MORE THAN FIFTY THOUSAND
 DOLLARS FOR MORE THAN ONE VIOLATION RELATING TO EACH HPD  PROJECT.  SUCH
 FINE SHALL BE COLLECTED AND DEPOSITED IN THE FUND.
   §  2. This act shall take effect on the first of January next succeed-
 ing the date upon which it shall have become a law.