2023 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.