NY Gen Bus L § 352-EEE (2021)
2021 New York Laws GBS - General Business Article 23-A - Fraudulent Practices in Respect to Stocks, Bonds and Other Securities 352-EEE - Conversions to Cooperative or Condominium Ownership in Certain Cities, Towns and Villages Located in the Counties of Nassau, Westchester and Rockland.

§  352-eee.  Conversions  to  cooperative  or condominium ownership in certain cities, towns and villages located in the  counties  of  Nassau, Westchester  and  Rockland.  1.  As  used in this section, the following words and terms shall have the following meanings:  (a) "Plan". Every offering statement or prospectus  submitted  to  the department  of law pursuant to section three hundred fifty-two-e of this article for the conversion of  a  building  or  group  of  buildings  or development from residential rental status to cooperative or condominium ownership or other form of cooperative interest in realty, other than an offering statement or prospectus for such conversion pursuant to article two, eight or eleven of the private housing finance law.  (b)  "Non-eviction  plan".  A plan which may not be declared effective until at least fifteen percent of those bona fide tenants  in  occupancy of  all  dwelling  units  in  the  building  or  group  of  buildings or development on the date  the  plan  is  declared  effective  shall  have executed and delivered written agreements to purchase under the plan. As to  tenants who were in occupancy on the date a letter was issued by the attorney general accepting the plan for filing, the  purchase  agreement shall  be  executed  and  delivered pursuant to an offering made in good faith without fraud and discriminatory repurchase  agreements  or  other discriminatory inducements.  (c)  "Eviction plan". A plan which, pursuant to the provisions of this section, can result in the eviction of a non-purchasing tenant by reason of the tenant failing to purchase pursuant thereto, and which may not be declared effective until written agreements to purchase under  the  plan pursuant  to  an  offering  made in good faith without fraud and with no discriminatory repurchase agreements or other discriminatory inducements shall have been executed  and  delivered  by:  (i)  at  least  fifty-one percent  of  the bona fide tenants in occupancy of all dwelling units in the building or group of  buildings  or  development  on  the  date  the offering statement or prospectus was accepted for filing by the attorney general  excluding,  for  the purposes of determining the number of bona fide tenants in occupancy on such date,  eligible  senior  citizens  and eligible  disabled persons; and (ii) at least thirty-five percent of the bona fide tenants in occupancy of all dwelling units in the building  or group  of buildings or development on the date the offering statement or prospectus was accepted for filing by the  attorney  general  including, for  the  purposes  of  determining  the  number of bona fide tenants in occupancy on such date eligible senior citizens  and  eligible  disabled persons.  (d) "Purchaser under the plan". A person who owns the shares allocated to a dwelling unit or who owns such dwelling unit itself.  (e)  "Non-purchasing tenant". A person who has not purchased under the plan and who is a tenant entitled to possession at the time the plan  is declared  effective  or  a  person  to  whom  a  dwelling unit is rented subsequent to the effective date. A person who sublets a  dwelling  unit from  a  purchaser  under  the plan shall not be deemed a non-purchasing tenant.  (f)  "Eligible  senior  citizens".  Non-purchasing  tenants  who   are sixty-two  years  of  age  or  older  on  the  date the plan is declared effective and the spouses of any such tenants  on  such  date;  provided that such tenant shall not be precluded from subsequently purchasing the dwelling unit on the terms then offered to tenants in occupancy.  (g)  "Eligible  disabled  persons". Non-purchasing tenants who have an impairment which results from anatomical, physiological or psychological conditions, other than addiction to alcohol, gambling, or any controlled substance, which are demonstrable by medically acceptable  clinical  and laboratory diagnostic techniques, and which are expected to be permanent  and  which  prevent  the tenant from engaging in any substantial gainful employment on the date the attorney general has accepted  the  plan  for filing,  and  the spouses of any such tenants on such date, and who have elected, within sixty days of the date the attorney general has accepted the  plan  for  filing, on forms promulgated by the attorney general and presented to such tenants  by  the  offeror,  to  become  non-purchasing tenants under the provisions of this section; provided, however, that if the  disability  first  occurs  after acceptance of the plan for filing, then such election may be made within sixty days following the onset  of such  disability  unless  during  the  period  subsequent  to sixty days following the acceptance of the  plan  for  filing  but  prior  to  such election,  the  offeror  accepts  a  written  agreement  to purchase the apartment from a bona fide purchaser; and  provided  further  that  such election shall not preclude any such tenant from subsequently purchasing the  dwelling  unit  or  the  shares allocated thereto on the terms then offered to tenants in occupancy.   2. The attorney general shall refuse to issue a  letter  stating  that the  offering  statement  or  prospectus  required in subdivision one of section three  hundred  fifty-two-e  of  this  chapter  has  been  filed whenever it appears that the offering statement or prospectus offers for sale residential cooperative apartments or condominium units pursuant to a plan unless:  (a) The plan provides that it will be deemed abandoned, void and of no effect  if  it  does  not become effective within twelve months from the date of issue of the letter of the attorney  general  stating  that  the offering  statement  or  prospectus has been accepted for filing and, in the event of such abandonment, no new plan for the  conversion  of  such building  or group of buildings or development shall be submitted to the attorney general for at least fifteen months after such abandonment.  (b) The plan provides either that it is an eviction plan or that it is a non-eviction plan.  (c) The plan provides, if it is a non-eviction plan, as follows:  (i) The plan may not be declared  effective  until  at  least  fifteen percent of those bona fide tenants in occupancy of all dwelling units in the  building  or group of buildings or development on the date the plan is  declared  effective  shall  have  executed  and  delivered   written agreements  to  purchase  under  the  plan.  As  to  tenants who were in occupancy on the date a  letter  was  issued  by  the  attorney  general accepting  the plan for filing, the purchase agreement shall be executed and delivered pursuant to an offering made in good faith  without  fraud and   discriminatory   repurchase  agreements  or  other  discriminatory inducements.  (ii) No eviction proceedings will be commenced  at  any  time  against non-purchasing  tenants  for  failure  to  purchase  or any other reason applicable to expiration of tenancy; provided that such proceedings  may be  commenced  for  non-payment of rent, illegal use or occupancy of the premises, refusal of reasonable access to the owner or a similar  breach by  the  non-purchasing  tenant  of  his obligations to the owner of the dwelling unit or the shares allocated thereto; and provided further that an owner of a unit or of the shares allocated thereto may  not  commence an action to recover possession of a dwelling unit from a non-purchasing tenant  on  the  grounds that he seeks the dwelling unit for the use and occupancy of himself or his family.  (iii) Non-purchasing tenants who reside in dwelling units  subject  to government regulation as to rentals and continued occupancy prior to the conversion  of  the  building  or  group  of buildings or development to cooperative or  condominium  ownership  shall  continue  to  be  subject thereto.  (iv)  The  rentals  of  non-purchasing  tenants who reside in dwelling units not subject to government regulation as to rentals  and  continued occupancy  and  non-purchasing tenants who reside in dwelling units with respect to which government  regulation  as  to  rentals  and  continued occupancy  is eliminated or becomes inapplicable after the plan has been accepted for filing by the attorney general  shall  not  be  subject  to unconscionable   increases   beyond   ordinary  rentals  for  comparable apartments  during  the  period  of  their  occupancy.  In   determining comparability,  consideration shall be given to such factors as building services, level of maintenance and operating expenses.  (v) The plan may not be amended at any time to provide that  it  shall be an eviction plan.  (vi)  The  rights  granted under the plan to purchasers under the plan and  to  non-purchasing  tenants  may  not  be  abrogated   or   reduced notwithstanding any expiration of, or amendment to, this section.  (vii)  After  the  issuance  of  the  letter from the attorney general stating  that  the  offering  statement  or   prospectus   required   in subdivision one of section three hundred fifty-two-e of this article has been filed, the offeror shall, on the thirtieth, sixtieth, eighty-eighth and  ninetieth  day  after such date and at least once every thirty days until the plan is declared effective or is abandoned, as  the  case  may be,  and  on  the  second  day  before  the  expiration of any exclusive purchase period provided in a substantial amendment  to  the  plan,  (1) file  with the attorney general a written statement, under oath, setting forth the percentage of bona fide tenants in occupancy of  all  dwelling units  in  the  building  or  group of buildings or development who have executed and delivered written agreements to purchase under the plan  as of the date of such statement, (2) before noon on the day such statement is  filed  post a copy of such statement in a prominent place accessible to all tenants in each building covered by the plan.  (d) The plan provides, if it is an eviction plan, as follows:  (i) The plan may not  be  declared  effective  unless:  (1)  at  least fifty-one  percent of the bona fide tenants in occupancy of all dwelling units in the building or group of buildings or development on  the  date the  offering  statement  or  prospectus  was accepted for filing by the attorney general excluding, for the purposes of determining  the  number of bona fide tenants in occupancy on such date, eligible senior citizens and  eligible  disabled persons; and (2) at least thirty-five percent of the bona fide tenants in occupancy of all dwelling units in the building or group of buildings or development on the date the offering  statement or prospectus was accepted for filing by the attorney general including, for  the  purposes  of  determining  the  number of bona fide tenants in occupancy on such date eligible senior citizens  and  eligible  disabled persons;  shall  have  executed  and  delivered  written  agreements  to purchase under the plan pursuant to  an  offering  made  in  good  faith without  fraud and with no discriminatory repurchase agreements or other discriminatory inducements.  (ii)  No  eviction   proceedings   will   be   commenced   against   a non-purchasing  tenant  for  failure  to  purchase  or  any other reason applicable to expiration of tenancy until the later to occur of (1)  the date  which  is  the  expiration  date  provided  in such non-purchasing tenant's lease or rental agreement, and (2)  the  date  which  is  three years   after  the  date  on  which  the  plan  is  declared  effective. Non-purchasing  tenants  who  reside  in  dwelling  units   subject   to government  regulation  as  to  rentals and continued occupancy prior to conversion shall continue to be subject thereto  during  the  period  of occupancy  provided  in this paragraph.  Thereafter, if a tenant has not  purchased, he may be removed by the owner of the dwelling  unit  or  the shares allocated to such dwelling unit.  (iii) No eviction proceedings will be commenced, except as hereinafter provided,  at  any  time  against  either  eligible  senior  citizens or eligible disabled persons. The rentals of eligible senior  citizens  and eligible  disabled  persons  who reside in dwelling units not subject to government regulation as to rentals and continued occupancy and eligible senior citizens and eligible disabled persons  who  reside  in  dwelling units  with  respect  to  which  government regulation as to rentals and continued occupancy is eliminated or becomes inapplicable after the plan has been accepted for filing shall  not  be  subject  to  unconscionable increases  beyond  ordinary rentals for comparable apartments during the period of their occupancy  considering,  in  determining  comparability, such  factors  as  building services, level of maintenance and operating expenses; provided that such proceedings may be commenced  against  such tenants  for  non-payment  of  rent,  illegal  use  or  occupancy of the premises, refusal of reasonable access to the owner or a similar  breach by  the  tenant  of his obligations to the owner of the dwelling unit or the shares allocated thereto; and provided further that an  owner  of  a unit  or  of  the shares allocated thereto may not commence an action to recover possession of a dwelling unit from a  non-purchasing  tenant  on the grounds that he seeks the dwelling unit for the use and occupancy of himself or his family.  (iv) Eligible senior citizens and eligible disabled persons who reside in  dwelling  units  subject  to government regulation as to rentals and continued occupancy shall continue to be subject thereto.  (v) The rights granted under the plan to eligible senior citizens  and eligible   disabled   persons   may   not   be   abrogated   or  reduced notwithstanding any expiration of, or amendment to, this section.  (vi) Any offeror who disputes the  election  by  a  person  to  be  an eligible senior citizen or an eligible disabled person must apply to the attorney general within thirty days of the receipt of the election forms for   a   determination   by  the  attorney  general  of  such  person's eligibility. The attorney general shall, within thirty days  thereafter, issue  his  determination  of  eligibility.  The foregoing shall, in the absence of fraud, be the sole method for determining  a  dispute  as  to whether  a  person is an eligible senior citizen or an eligible disabled person. The determination of the attorney general  shall  be  reviewable only  through  a  proceeding  under  article  seventy-eight of the civil practice law and rules, which proceeding must be commenced within thirty days after such determination by the attorney general becomes final.  (vii) After the issuance of  the  letter  from  the  attorney  general stating   that   the   offering  statement  or  prospectus  required  in subdivision one of section three hundred fifty-two-e of this article has been accepted for filing, the offeror shall, on the thirtieth, sixtieth, eighty-eighth and ninetieth days after such date and at least once every thirty days until the plan is declared effective or  abandoned,  as  the case  may  be,  and  on  the  second  day  before  the expiration of any exclusive purchase period provided in a  substantial  amendment  to  the plan,  (1)  file  with  the  attorney general a written statement, under oath, setting forth the percentage of bona fide tenants in occupancy  of all  dwelling units in the building or group of buildings or development on the date the offering statement or prospectus was accepted for filing by  the  attorney  general  who  have  executed  and  delivered  written agreements  to purchase under the plan as of the date of such statement, and (2) before noon on the day such statement is filed post  a  copy  of such  statement  in  a prominent place accessible to all tenants in each building covered by the plan.  (viii) If the plan is amended  before  it  is  declared  effective  to provide  that it shall be a non-eviction plan, any person who has agreed to purchase under the plan prior to such amendment shall have  a  period of  thirty  days  after  receiving  written  notice of such amendment to revoke his agreement to purchase under the plan.  (ix) The tenants in occupancy on the date the attorney general accepts the  plan  for  filing  shall have the exclusive right to purchase their dwelling units or the shares allocated thereto for ninety days after the plan is accepted for filing by the attorney general, during which time a tenant's dwelling unit shall not be shown to a  third  party  unless  he has,  in  writing,  waived  his  right  to  purchase;  subsequent to the expiration of such ninety  day  period,  a  tenant  in  occupancy  of  a dwelling  unit  who has not purchased shall be given the exclusive right for an additional period of six months  from  said  expiration  date  to purchase  said dwelling unit or the shares allocated thereto on the same terms and conditions  as  are  contained  in  an  executed  contract  to purchase  said  dwelling  unit  or  shares  entered  into by a bona fide purchaser, such exclusive right to be exercisable  within  fifteen  days from  the  date of mailing by registered mail of notice of the execution of a contract of sale together with a copy of said executed contract  to said tenant.  (e)  The  attorney general finds that an excessive number of long-term vacancies did not exist on the  date  that  the  offering  statement  or prospectus  was  first  submitted  to  the department of law. "Long-term vacancies" shall mean dwelling units not leased or occupied by bona fide tenants for more than five months prior to the date of  such  submission to  the  department  of  law.  "Excessive"  shall mean a vacancy rate in excess of the greater of (i) ten percent and (ii) a percentage  that  is double  the  normal  average  vacancy  rate for the building or group of buildings or development for two years prior to  the  January  preceding the date the offering statement or prospectus was first submitted to the department of law.  (f)  The  attorney general finds that, following the submission of the offering statement or prospectus to the department of law,  each  tenant in the building or group of buildings or development was provided with a written  notice  stating  that such offering statement or prospectus has been submitted to the department of law for filing. Such notice shall be accompanied by a copy of the offering  statement  or  prospectus  and  a statement  that  the statements submitted pursuant to subparagraph (vii) of paragraph  (c)  or  subparagraph  (vii)  of  paragraph  (d)  of  this subdivision,  whichever  is applicable, will be available for inspection and copying at the office of the department of law where the  submission was  made  and  at  the  office of the offeror or a selling agent of the offeror. Such notice shall also  be  accompanied  by  a  statement  that tenants  or their representatives may physically inspect the premises at any time subsequent to the submission of the plan to the  department  of law,  during normal business hours, upon written request made by them to the offeror, provided such representatives are registered architects  or professional  engineers  licensed  to practice in the state of New York. Such notice shall be sent to each tenant in occupancy on  the  date  the plan is first submitted to the department of law and to the clerk of the municipality  wherein such building or group of buildings or development is located.   3. All dwelling units occupied  by  non-purchasing  tenants  shall  be managed  by the same managing agent who manages all other dwelling units in the building or group of  buildings  or  development.  Such  managing agent   shall   provide  to  non-purchasing  tenants  all  services  and facilities required by law on a non-discriminatory  basis.  The  offeror  shall guarantee the obligation of the managing agent to provide all such services  and  facilities  until  such  time  as  the offeror surrenders control to the board of directors or board of managers,  at  which  time the  cooperative corporation or the condominium association shall assume responsibility for the provision of all services and facilities required by law on a non-discriminatory basis.   4. It shall be unlawful for any person to  engage  in  any  course  of conduct,  including,  but not limited to, interruption or discontinuance of essential services, which substantially interferes with  or  disturbs the  comfort,  repose,  peace  or  quiet  of  any  tenant  in his use or occupancy of his dwelling unit or the facilities  related  thereto.  The attorney  general  may apply to a court of competent jurisdiction for an order restraining such conduct and, if he deems it appropriate, an order restraining the owner from selling the shares allocated to the  dwelling unit  or  the  dwelling  unit itself or from proceeding with the plan of conversion; provided that nothing contained herein shall  be  deemed  to preclude the tenant from applying on his own behalf for similar relief.   5.  Any  local  legislative  body may adopt local laws and any agency, officer or public body may prescribe rules and regulations with  respect to  the  continued  occupancy  by  tenants  of  dwelling units which are subject to regulation as to rentals and continued occupancy pursuant  to law,  provided  that  in  the  event  that  any  such local law, rule or regulation shall be inconsistent with the provisions  of  this  section, the provisions of this section shall control.   6.  Any  provision of a lease or other rental agreement which purports to waive a tenant's rights under this section or rules  and  regulations promulgated pursuant hereto shall be void as contrary to public policy.   7.  The  provisions  of  this  section shall only be applicable in the cities,  towns  and  villages  located  in  the  counties   of   Nassau, Westchester  and  Rockland which by resolution adopted by the respective local legislative body of such city, town or  village,  elect  that  the provisions  hereof shall be applicable therein. A certified copy of such resolution shall be filed in the  office  of  the  attorney  general  at Albany and shall become effective on the date of such filing.