NY Priv Hous Fin L § 576 (2021)
2021 New York Laws PVH - Private Housing Finance Article 11 - Housing Development Fund Companies 576 - Regulatory Agreements.

§  576.  Regulatory  agreements.  1.  Every  housing  development fund   company as a condition precedent to receiving  an  advance  pursuant  to   this  article,  shall  enter  into an agreement with the commissioner or   with the supervising agency, as the case may  be,  to  be  regulated  as   follows:a.  Maximum  rentals  shall  be  fixed  by  the  commissioner  or  the   supervising agency, as the case may  be,  based  upon  the  final  gross   project  cost, at an amount sufficient to pay the necessary costs of the   project.b. Dwellings in any such project shall be  available  for  persons  or   families  whose  probable  aggregate  annual  income does not exceed six   times the rental (including the value or cost to them  of  heat,  light,   water and cooking fuel) of the dwellings to be furnished such persons or   families,  except  that in the case of persons or families with three or   more dependents, such ratio shall not exceed seven to one. For  purposes   of this paragraph, tenants in a housing project of a housing development   fund company organized under the provisions of the business corporations   law  and  this  article  shall have added to their total annual carrying   charges an amount equal to six per centum of the original investment  of   such person or family in the equity obligations of such housing company.c.  Profits  shall  be  used  for  capital  improvements  or to reduce   rentals.d. Ordinary dividends may not be declared. Capital  dividends  may  be   declared  only  with  the consent of the commissioner or the supervising   agency, as the case may be.e. The property or franchises of the corporation may not  be  disposed   of without the consent of the commissioner or the supervising agency, as   the  case may be, nor may the corporation be dissolved unless payment in   full is made of remaining balances of principal  and  interest  due  and   unpaid  on any mortgage or mortgages, of any advances made from the fund   pursuant to this article  and  of  any  and  all  expenses  incurred  in   effecting such dissolution.f.  The  commissioner  or  the supervising agency, as the case may be,   shall have power, in his or its discretion, if he or it determines  that   any advance pursuant to this article is in jeopardy of not being repaid,   or  that the proposed housing project for which such advance was made is   in jeopardy of not  being  constructed,  to  appoint  to  the  board  of   directors  of  the  corporation  a number of new directors, which number   shall be sufficient to constitute a majority of such board. Directors so   appointed  need  not  be  stockholders  or   members   or   meet   other   qualifications   which   may   be   prescribed  by  the  certificate  of   incorporation or by-laws.    In  the  absence  of  fraud  or  bad  faith   directors  so  appointed  shall  not be personally liable for the debts,   obligations or liabilities of the corporation.2. A regulatory agreement pursuant to this section shall be terminated   upon repayment in full of any and all advances  made  pursuant  to  this   article  provided  that  such termination shall not take place until (a)   assumption of the regulation of the project by the commissioner, in  the   case  of  a  state-aided  mortgage, or by the supervising agency, in the   case of a municipally-aided  mortgage  or  by  the  appropriate  federal   authorities  in  the  case  of  a federally-aided mortgage or (b) if the   project is not to be financed with a state-aided,  municipally-aided  or   federally-aided  mortgage,  the  expiration of any exemption of the real   property of the project from local and municipal taxes.3. The commissioner  or  supervising  agency  may  require  a  housing   development  fund  company  receiving  advances  under  this  article to   execute  a  financing  statement  for  real  property  improvement.  The   financing  statement  shall  be  in  such  form  as  the commissioner or    supervising agency shall  prescribe  and  shall  include  the  name  and   address of the housing development fund company and of the agency making   the advances, the location of the project, with a description sufficient   to  identify  the  property,  including  street  address,  if any, and a   statement that funds have or will be advanced to the company pursuant to   this article and the maximum amount of such advances, together with such   other information as the form shall  specify.  The  financing  statement   shall  be  filed  in the office in which a mechanic's lien affecting the   property would be filed, which office shall accept it for filing without   fee and docket it in the manner of such lien.  From  the  date  of  such   filing  the state or municipality, as the case may be, shall have a lien   for the total of advances under this article made and  not  repaid.  The   provisions  of  articles two and three of the lien law shall govern such   lien, except that it shall be valid for a period of three years from the   date of filing, unless extended as provided in section seventeen of  the   lien   law.   Upon  repayment  of  the  advances,  the  commissioner  or   supervising agency shall deliver to the housing development fund company   a copy of the financing statement with an endorsement thereon  that  the   lien  is satisfied. Upon filing of such copy, without payment of fee, in   the office in which the financing statement was filed, the lien shall be   discharged.