Legislation
SECTION 1506-E
Lease of cemetery lands
Not-for-Profit Corporation (NPC) CHAPTER 35, ARTICLE 15
§ 1506-e. Lease of cemetery lands.
(a) Cemetery board approval. Except as set forth in paragraph (i) of
this section, no cemetery corporation shall lease any portion of its
land without notice to and approval of the cemetery board.
(b) Requirements for approval of a lease of cemetery land. The
application to the cemetery board for approval to lease cemetery land
shall meet the following requirements:
(1) The cemetery's lot owners or board of directors have approved the
lease.
(2) If the cemetery has any existing leases of land, it must disclose
them so the board can consider the impact of existing leases on cemetery
operations.
(3) In addition to its submission to the cemetery board, the cemetery
corporation shall, no earlier than ten days prior to such submission,
post notices in the immediate proximity of the land proposed to be
leased, the cemetery office and, in a manner so as not to violate local
zoning ordinances or to create a traffic hazard, all entrances. Each
such notice shall provide information written in plain English
concerning the proposed lease and, if the proposed lease includes
construction of new structures or buildings, include a drawing, which
shall be an accurate rendition of the proposed construction. In
addition, such notices shall state the telephone number and address
where comments may be received and the last date on which such comments
will be accepted, which shall be no earlier than sixty days following
the date the notices are posted.
(4) The proposed lease has been negotiated at arm's length for a fair
market rent and contains all of the agreements between the parties.
Where the proposed lease would be a related party transaction under this
chapter, the cemetery shall disclose this fact and demonstrate
compliance with restrictions related to such transactions, as set forth
in section seven hundred fifteen of this chapter, and the cemetery board
may require that the lease contain a clause by which the cemetery board
may set reasonable reporting requirements that would disclose any
financial relationship between the lessor and lessee related to the
leased property.
(5) The initial lease term is not greater than forty-nine years, and
the cemetery demonstrates that such a term will not interfere with land
needed for burial purposes. Notwithstanding the provisions of this
subparagraph, the cemetery board may approve a lease with extensions of
the initial term not to exceed ninety-nine years from the date of the
initial lease, provided that the security shall be updated at year
forty-nine and every twenty years afterward during the term of the lease
and all extensions thereof, if applicable, and approved pursuant to
paragraph (h) of this section.
(6) If the proposed lease involves land adjacent to cemetery
operations, the proposed lease requires the tenant to construct and
maintain a physical or visual buffer approved by the cemetery board,
which may be vegetative, and that protects visitors to the cemetery, and
that otherwise complies with the requirements of this section.
(7) The proposed lease requires the tenant to be responsible for any
and all taxes, assessments, and charges related to its occupancy and use
of the land, whether imposed against the tenant or the cemetery
corporation.
(8) If the proposed lease includes permission to construct any
infrastructure, buildings or other structures, the application to the
cemetery board shall provide for the removal of such infrastructure,
buildings or other structures after the cemetery retakes possession of
the land, unless the infrastructure, buildings or other structures are
to be retained by the cemetery pursuant to paragraph (f) of this
section.
(9) The proposed lease shall include an agreement to pay for the
removal of any proposed infrastructure, buildings and structures, except
any that are approved to be retained as set forth in paragraph (f) of
this section, and return the land to a condition suitable for cemetery
use upon the expiration or termination of the lease and such agreement
shall be secured by a fund, bond, letter of credit or other security
sufficient to pay for such future removal. The application shall include
a written description of the proposed funding mechanism for the
establishment of a fund, written evidence of a bond, or other security
to the cemetery board for payment of the cost of restoring the leased
premises to a condition suitable for use for cemetery purposes at the
end or earlier termination of the term of the lease, including but not
limited to the cost of removing any and all buildings and structures
that may then be located on the leased premises and will not be
retained. Any such bond shall be issued by an entity authorized to do
business in the state of New York, and any irrevocable letter of credit
or a certificate of deposit shall be from a New York state or federally
chartered bank, trust company, savings bank or savings and loan
association that is qualified to do business in the state of New York
and insured by the federal deposit insurance corporation.
(10) The land proposed to be leased will not be used for any activity
that would be disruptive to cemetery operations or that would have a
significant impact on cemetery traffic.
(11) If the proposed use or activity arising therefrom could disturb
normal and usual cemetery activities, the proposed lease limits the
hours of activity.
(12) The proposed lease will not include the manufacture or disposal
of hazardous material or the use or storage of hazardous material in
violation of any law or otherwise create a significant risk of
environmental harm to the cemetery property.
(13) The proposed lease may permit assignment or sub-leases, including
sub-leasing and assignment of space on cell towers to communications
providers, provided the original lease remains in effect and the use
remains the same.
(c) The following uses are deemed to comply with subparagraph ten of
paragraph (b) of this section:
(1) Communications service facilities, also known as cell towers;
(2) Solar panels; and
(3) Energy storage equipment, as defined in section four hundred
ninety-nine-aaaa of the real property tax law.
(d) For any lease involving related party transactions pursuant to
section seven hundred fifteen of this chapter, the cemetery board may
set reasonable reporting requirements that would disclose any financial
relationship between the lessor and lessee related to the leased
property.
(e) Any material modification, alteration or expansion of the lease or
additions of any infrastructure, structures or buildings outside the
scope of the prior approval requires cemetery board approval.
(f) If the cemetery corporation intends that any infrastructure,
structures or buildings proposed under the lease be retained and used
for cemetery purposes after the lease terminates or expires, the
application to approve the lease shall also include an application for
approval of such infrastructure, structures or buildings as intended to
be used by the cemetery. The board shall render decision on the
application for a major alteration in conjunction with the decision on
the application to lease cemetery land. If that application is approved,
such infrastructure, buildings or structures shall be excluded from the
requirements of subparagraph nine of paragraph (b) of this section.
(g) The application shall include at least two written estimates of
the cost of removing the infrastructure, buildings and structures
excluding retained infrastructure and associated structures and
returning the land to a condition suitable for burial purposes at the
conclusion of the lease.
(h) (1) The cemetery board shall approve the type and amount of the
security which shall be maintained in full force and effect, in an
amount not less than that which was approved by the cemetery board,
until: (i) the leased premises shall have been restored to a condition
suitable for use for cemetery purposes at the end or earlier termination
of the term of the lease, (ii) any and all buildings and structures then
located on the leased premises shall have been removed, (iii) proof in
form acceptable to the cemetery board demonstrating that all costs of
such restoration and removal work have been paid in full and that no
person or entity performing labor or furnishing materials for such work
has filed a notice of mechanic's lien that shall have been delivered to
the cemetery board, provided however that a cemetery may contest such
lien as long as such contest prevents the foreclosure of a lien, and
(iv) if applicable, each governmental unit or agency that issued any
permit for such restoration and removal work shall have issued a
certificate of compliance or other similar instrument indicating that
such work has been completed in a due and proper manner. The parties
directed to perform the restoration and removal work contemplated by
this paragraph and as approved by the cemetery board shall not be
limited by the amount of the bond, letter of credit, or certificate of
deposit or by any inability to recover all or any part of such bond,
letter of credit, or certificate of deposit from the issuing surety,
bank, trust company, savings bank, or savings and loan association.
Neither the cemetery board nor the department of state shall be liable
to the tenant, the cemetery, or any other person or entity by reason or
any determination or approval made under this paragraph.
(2) Prior to the commencement of construction, the cemetery shall
submit proof to the cemetery board that such security in such amount is
in place.
(i) Leases for the following uses do not require cemetery board
approval:
(1) A lease or license to grow and harvest crops with a term less than
five years;
(2) A lease of a dwelling to the caretaker or other officer or
employee of the cemetery that is actually used and occupied as that
person's residence; and
(3) A renewal or assignment of an existing lease of existing
structures on land owned by the cemetery, not dedicated to cemetery
purposes and that was subject to a lease, provided that such purchase or
acquisition was approved by a court or the cemetery board, if such
renewal does not change the scope of the existing lease.
(j) All lease payments and other consideration received by the
cemetery corporation, less the necessary expenses incurred, shall be
deposited into the permanent maintenance fund established by the
cemetery corporation pursuant to paragraph (a) of section fifteen
hundred seven of this article, except that upon a showing of a need to
fund specific projects, maintain and preserve, or expand current
cemetery operations, the cemetery board may permit any portion of the
lease payments or other consideration to be used for such purposes, with
the remainder to be deposited to the permanent maintenance fund.
(a) Cemetery board approval. Except as set forth in paragraph (i) of
this section, no cemetery corporation shall lease any portion of its
land without notice to and approval of the cemetery board.
(b) Requirements for approval of a lease of cemetery land. The
application to the cemetery board for approval to lease cemetery land
shall meet the following requirements:
(1) The cemetery's lot owners or board of directors have approved the
lease.
(2) If the cemetery has any existing leases of land, it must disclose
them so the board can consider the impact of existing leases on cemetery
operations.
(3) In addition to its submission to the cemetery board, the cemetery
corporation shall, no earlier than ten days prior to such submission,
post notices in the immediate proximity of the land proposed to be
leased, the cemetery office and, in a manner so as not to violate local
zoning ordinances or to create a traffic hazard, all entrances. Each
such notice shall provide information written in plain English
concerning the proposed lease and, if the proposed lease includes
construction of new structures or buildings, include a drawing, which
shall be an accurate rendition of the proposed construction. In
addition, such notices shall state the telephone number and address
where comments may be received and the last date on which such comments
will be accepted, which shall be no earlier than sixty days following
the date the notices are posted.
(4) The proposed lease has been negotiated at arm's length for a fair
market rent and contains all of the agreements between the parties.
Where the proposed lease would be a related party transaction under this
chapter, the cemetery shall disclose this fact and demonstrate
compliance with restrictions related to such transactions, as set forth
in section seven hundred fifteen of this chapter, and the cemetery board
may require that the lease contain a clause by which the cemetery board
may set reasonable reporting requirements that would disclose any
financial relationship between the lessor and lessee related to the
leased property.
(5) The initial lease term is not greater than forty-nine years, and
the cemetery demonstrates that such a term will not interfere with land
needed for burial purposes. Notwithstanding the provisions of this
subparagraph, the cemetery board may approve a lease with extensions of
the initial term not to exceed ninety-nine years from the date of the
initial lease, provided that the security shall be updated at year
forty-nine and every twenty years afterward during the term of the lease
and all extensions thereof, if applicable, and approved pursuant to
paragraph (h) of this section.
(6) If the proposed lease involves land adjacent to cemetery
operations, the proposed lease requires the tenant to construct and
maintain a physical or visual buffer approved by the cemetery board,
which may be vegetative, and that protects visitors to the cemetery, and
that otherwise complies with the requirements of this section.
(7) The proposed lease requires the tenant to be responsible for any
and all taxes, assessments, and charges related to its occupancy and use
of the land, whether imposed against the tenant or the cemetery
corporation.
(8) If the proposed lease includes permission to construct any
infrastructure, buildings or other structures, the application to the
cemetery board shall provide for the removal of such infrastructure,
buildings or other structures after the cemetery retakes possession of
the land, unless the infrastructure, buildings or other structures are
to be retained by the cemetery pursuant to paragraph (f) of this
section.
(9) The proposed lease shall include an agreement to pay for the
removal of any proposed infrastructure, buildings and structures, except
any that are approved to be retained as set forth in paragraph (f) of
this section, and return the land to a condition suitable for cemetery
use upon the expiration or termination of the lease and such agreement
shall be secured by a fund, bond, letter of credit or other security
sufficient to pay for such future removal. The application shall include
a written description of the proposed funding mechanism for the
establishment of a fund, written evidence of a bond, or other security
to the cemetery board for payment of the cost of restoring the leased
premises to a condition suitable for use for cemetery purposes at the
end or earlier termination of the term of the lease, including but not
limited to the cost of removing any and all buildings and structures
that may then be located on the leased premises and will not be
retained. Any such bond shall be issued by an entity authorized to do
business in the state of New York, and any irrevocable letter of credit
or a certificate of deposit shall be from a New York state or federally
chartered bank, trust company, savings bank or savings and loan
association that is qualified to do business in the state of New York
and insured by the federal deposit insurance corporation.
(10) The land proposed to be leased will not be used for any activity
that would be disruptive to cemetery operations or that would have a
significant impact on cemetery traffic.
(11) If the proposed use or activity arising therefrom could disturb
normal and usual cemetery activities, the proposed lease limits the
hours of activity.
(12) The proposed lease will not include the manufacture or disposal
of hazardous material or the use or storage of hazardous material in
violation of any law or otherwise create a significant risk of
environmental harm to the cemetery property.
(13) The proposed lease may permit assignment or sub-leases, including
sub-leasing and assignment of space on cell towers to communications
providers, provided the original lease remains in effect and the use
remains the same.
(c) The following uses are deemed to comply with subparagraph ten of
paragraph (b) of this section:
(1) Communications service facilities, also known as cell towers;
(2) Solar panels; and
(3) Energy storage equipment, as defined in section four hundred
ninety-nine-aaaa of the real property tax law.
(d) For any lease involving related party transactions pursuant to
section seven hundred fifteen of this chapter, the cemetery board may
set reasonable reporting requirements that would disclose any financial
relationship between the lessor and lessee related to the leased
property.
(e) Any material modification, alteration or expansion of the lease or
additions of any infrastructure, structures or buildings outside the
scope of the prior approval requires cemetery board approval.
(f) If the cemetery corporation intends that any infrastructure,
structures or buildings proposed under the lease be retained and used
for cemetery purposes after the lease terminates or expires, the
application to approve the lease shall also include an application for
approval of such infrastructure, structures or buildings as intended to
be used by the cemetery. The board shall render decision on the
application for a major alteration in conjunction with the decision on
the application to lease cemetery land. If that application is approved,
such infrastructure, buildings or structures shall be excluded from the
requirements of subparagraph nine of paragraph (b) of this section.
(g) The application shall include at least two written estimates of
the cost of removing the infrastructure, buildings and structures
excluding retained infrastructure and associated structures and
returning the land to a condition suitable for burial purposes at the
conclusion of the lease.
(h) (1) The cemetery board shall approve the type and amount of the
security which shall be maintained in full force and effect, in an
amount not less than that which was approved by the cemetery board,
until: (i) the leased premises shall have been restored to a condition
suitable for use for cemetery purposes at the end or earlier termination
of the term of the lease, (ii) any and all buildings and structures then
located on the leased premises shall have been removed, (iii) proof in
form acceptable to the cemetery board demonstrating that all costs of
such restoration and removal work have been paid in full and that no
person or entity performing labor or furnishing materials for such work
has filed a notice of mechanic's lien that shall have been delivered to
the cemetery board, provided however that a cemetery may contest such
lien as long as such contest prevents the foreclosure of a lien, and
(iv) if applicable, each governmental unit or agency that issued any
permit for such restoration and removal work shall have issued a
certificate of compliance or other similar instrument indicating that
such work has been completed in a due and proper manner. The parties
directed to perform the restoration and removal work contemplated by
this paragraph and as approved by the cemetery board shall not be
limited by the amount of the bond, letter of credit, or certificate of
deposit or by any inability to recover all or any part of such bond,
letter of credit, or certificate of deposit from the issuing surety,
bank, trust company, savings bank, or savings and loan association.
Neither the cemetery board nor the department of state shall be liable
to the tenant, the cemetery, or any other person or entity by reason or
any determination or approval made under this paragraph.
(2) Prior to the commencement of construction, the cemetery shall
submit proof to the cemetery board that such security in such amount is
in place.
(i) Leases for the following uses do not require cemetery board
approval:
(1) A lease or license to grow and harvest crops with a term less than
five years;
(2) A lease of a dwelling to the caretaker or other officer or
employee of the cemetery that is actually used and occupied as that
person's residence; and
(3) A renewal or assignment of an existing lease of existing
structures on land owned by the cemetery, not dedicated to cemetery
purposes and that was subject to a lease, provided that such purchase or
acquisition was approved by a court or the cemetery board, if such
renewal does not change the scope of the existing lease.
(j) All lease payments and other consideration received by the
cemetery corporation, less the necessary expenses incurred, shall be
deposited into the permanent maintenance fund established by the
cemetery corporation pursuant to paragraph (a) of section fifteen
hundred seven of this article, except that upon a showing of a need to
fund specific projects, maintain and preserve, or expand current
cemetery operations, the cemetery board may permit any portion of the
lease payments or other consideration to be used for such purposes, with
the remainder to be deposited to the permanent maintenance fund.