S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1507
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 12, 2023
                                ___________
 
 Introduced  by  Sen.  BAILEY -- 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.
   §  2.  The  private  housing  finance  law  is amended by adding a new
 section 13-d to read as follows:
   § 13-D. 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04423-01-3
 S. 1507                             2
              

 
 ROOM,  ALLOWANCES  FOR  NORMAL WEAR AND TEAR, AND MATTERS RELATED TO THE
 EQUITY DISTRIBUTION; AND
   (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 CHARGE 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
 PROVIDE 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.
 S. 1507                             3
 
   9. THE BOARD OF DIRECTORS OF  ANY  COMPANY  AND  MANAGEMENT  SHALL  BE
 PROHIBITED  FROM  APPLYING ANY COSTS FOR RESTORATION OF THE HOUSING FROM
 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.
   § 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 implemen-
 tation of this act on its effective date are authorized to be made on or
 before such date.