New York Codes, Rules and Regulations › Title 13 - DEPARTMENT OF LAW › Chapter II - SECURITIES TRANSACTIONS AND PERSONNEL › Subchapter B - REAL ESTATE SYNDICATES › Part 24 - TIMESHARE OFFERING PLANS › Section 24.2 - Procedure for submission

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
				  The proposed offering plan and the exhibits described below shall be submitted
				  to the New York State Department of Law, Real Estate Finance Bureau, 28 Liberty
				  Street, New York, NY 10005.
(b) The
				  exhibits shall accompany the proposed offering plan submitted to the Department
				  of Law, and shall be subject to the sanctions of article 23-A of the General
				  Business Law. Whenever an exhibit document is marked "orig." on the list set
				  forth in paragraph (c)(4) of this section, it means that at least one document
				  must be a duly executed, original document. If a document is not so marked on
				  the list set forth below, it means that a true and complete copy of the
				  document must be included.
(c) The
				  following are to be included when submitting a proposed offering plan pursuant
				  to this Part:
(1) A transmittal letter,
				  addressed to the Department of Law, that is signed and affirmed by the attorney
				  who prepared the plan, containing the statements required by section
				  24.4  of this Part without
				  qualification or alteration in substance. As specified in paragraph (4) of this
				  subdivision, the transmittal letter must expressly indicate any exhibit that is
				  not included (apart from those noted), and set forth the reasons for the
				  omission. Exemption applications submitted pursuant to section
				  24.1(h)  of this
				  Part, must be annexed to and submitted with the transmittal letter. Omissions
				  and additions to the table of contents must be noted and explained.
(2) Staple or clip to the transmittal letter
				  a check (certified or uncertified) for one half of the filing fee under General
				  Business Law, section
				  352-e(7)(a) (a
				  nonrefundable deposit) payable to New York State Department of Law. The filing
				  fee is based on the maximum total amount of the offering.
(3) One paper copy of a typed or printed,
				  bound offering plan and one digital copy of the offering plan.
(4) One paper copy of all exhibits to the
				  offering plan and one digital copy of all exhibits to the offering plan. The
				  paper copy of the exhibits shall be in a binder from which documents can be
				  removed easily, and the binder must be indexed with tabs. The cover of the
				  binder must be labeled with the name and the address of the timesharing plan
				  and the name, address and telephone number of the attorney who prepared the
				  plan. Both the binder and the digital copy must contain an index of the
				  documents. The transmittal letter required by paragraph (l) of this subdivision
				  must note the omission of any exhibit, and the reason for the omission.
(i) Part A of the exhibits (certifications)
				  shall consist of the following documents. Photocopies or conformed copies of
				  the certifications shall appear in the offering plan:
(a)
(A-1)
				  Certification by the sponsor and the sponsor's principals, signed by "sponsors"
				  and "principals" as defined in section
				  24.1(c)  (orig.);
				  see section
				  24.4(b).
(b)
(A-2) Certification by sponsor's engineer or
				  architect concerning the property description in part II of the plan and at
				  exhibit C-1 (orig.); see section
				  24.4(c).
(c)
(A-3) Certification by expert as to adequacy
				  of projected income and expenses for the timesharing plan (orig.); see section
				  24.4(d).
(ii) Part B of the
				  exhibits (general) shall consist of the following documents:
(a)
(B-1) A
				  projection, by a qualified expert or local supplier, of the consumption, rate
				  and total cost of furnishing heat, hot water, electricity and other utilities
				  to timeshare property.
(b)
(B-2)
				  Title company report for all property subject to the use and occupancy of
				  purchasers under and as part of the timesharing plan, including property
				  outside the immediate timeshare regime, dated within 30 days of submission
				  (orig.).
(c)
(B-3) Proposed management agreement
				  (orig.).
(d)
(B-4) Letter from an insurance company or its
				  authorized agent, stating proposed insurance coverage and amounts, and the
				  annual premium or premiums.
(e)
(B-5)
				  An opinion, from an independent licensed insurance broker, insurance appraiser
				  or real estate appraiser, representing that the fire insurance coverage
				  budgeted in the plan is adequate (
1
) so that the insured shall
				  not be a co-insurer if the policy contains a co-insurance provision, or
				  (
2
) to cover replacement cost if policy is for an agreed
				  amount which waives co-insurance.
(f)
(B-6)
				  Section 352-a/section 352-b designation of Secretary of State as agent
				  (applicable only to out-of-state issuers, sponsors, principals and/or selling
				  agents).
(g)
(B-7) For a timesharing plan located outside
				  of New York, submit any statutes and regulations governing the registration and
				  formation of the timesharing plan. A timesharing plan located outside of New
				  York must include evidence of compliance with any local laws and regulations
				  concerning registration and formation of the timesharing plan.
(h)
(B-8) If a homeowner's association or
				  cooperative corporation is part of the offering, submit the certificate of
				  incorporation and receipt from the New York Secretary of State (or equivalent
				  proof of organization of such entity for out-of-state plans), bylaws and other
				  relevant organizational documents.
(i)
(B-9)
				  If the plan offers financing, submit all financing documents, including but not
				  limited to the promissory note and mortgage or other security
				  instrument.
(j)
(B-10) If applicable, submit an estimate of
				  the assessed valuation, after completion of construction or rehabilitation,
				  from the local tax assessor. If not available, submit an estimate of the
				  assessed valuation, after completion of construction or rehabilitation, from a
				  real estate broker, appraiser, attorney or other professional familiar with the
				  tax assessment practices in the locality in which the timeshare property is
				  located.
(k)
(B-11) If, as part of the timesharing plan,
				  timeshare owners have the right to use and occupy property outside the
				  immediate timeshare regime (at no additional charge or at a discount from rates
				  charges to the general public), submit an easement which establishes this
				  right, along with evidence that it has been recorded against the servient
				  estate in accordance with the recording act of the jurisdiction in which the
				  servient estate is located.
(l)
(B-12)
				  If, as part of the timesharing plan, timeshare owners have the right to use and
				  occupy property outside the immediate timeshare regime (at no additional charge
				  or at a discount from rates charged to the general public), submit a covenant
				  (running with the land) that such property will be used only as set forth in
				  the offering plan, along with evidence that the covenant has been recorded
				  against the other property in accordance with the recording act of the
				  jurisdiction in which the other property is located.
(m)
(B-13)
				  Any mortgage and note or bond that presently encumbers any property subject to
				  the use and occupancy of purchasers under and as part of the timesharing plan,
				  including property outside the immediate timeshare regime.
(n)
(B-14)
				  Any instrument which establishes a trust to hold title to timeshare property
				  pending the full satisfaction of a purchaser's financing obligation.
(o)
(B-15) For timesharing plans located outside
				  New York, submit an opinion, from independent counsel admitted to practice in
				  the jurisdiction in which the timeshare property is located:
(1) that any escrow account for purchaser's
				  funds established in a bank located outside the State of New York is not
				  subject to attachment, garnishment, foreclosure, levy or other legal seizure by
				  the creditors or bankruptcy trustee of the sponsor, selling agent, the owner of
				  the timeshare property or the principals of any of them;
(2) that any property (both real and
				  personal) held in a trust pending the satisfaction of a purchaser's
				  purchase-money financing obligation is not subject to attachment, garnishment,
				  foreclosure, levy or other legal seizure by the creditors or bankruptcy trustee
				  of the sponsor, the selling agent, the owner of the timeshare property or the
				  principals of any of them; and
(3)
				  that the timesharing plan complies with all applicable statutes, regulations
				  and ordinances of the jurisdiction in which the timeshare property is
				  located.
(o)
				  The opinion should discuss the foregoing issues in detail and include citations
				  to relevant statutory and decisional law. The Department of Law may require an
				  opinion from local counsel on other issues as well.
(p)
(B-16)
				  The sponsor's or present owner's deed to the property, and copy of the contract
				  of sale between owner and sponsor if the sponsor is a contract
				  vendee.
(q)
(B-17) An affidavit from the sponsor setting
				  forth the total number of timeshares in the timesharing plan, the jurisdictions
				  in which sales are authorized, the total number of timeshares sold and the
				  number of timeshares in the timesharing plan which have been sold to residents
				  of the State of New York, if any.
(r)
(B-18)
				  Any other material document(s), each of which should be described in the
				  transmittal letter.
(s)
(B-19) Copy of the escrow agreement between
				  the sponsor and the attorney(s) acting as escrow agent. If the model form is
				  not used, so indicate. Copy of bank forms to be used to open any escrow
				  account.
(t)
(B-20) Copy of surety bonds or letter of
				  credit proposed to secure down payments and any underlying agreement or related
				  agreement, and any undertaking called for in the regulations or proposed to be
				  furnished.
(iii) Part C of the exhibits (engineering)
				  shall consist of the following documents:
(a)
(C-1) Architect's or engineer's detailed
				  description of the property, with the architect's or engineer's seal and
				  original signature. The description must be dated within 90 days of submission
				  to the Department of Law and conform to the requirements of section
				  24.7  of this Part; see exhibit
				  A-2.
(b)
(C-2) Copies of currently valid temporary,
				  partial or permanent certificates of occupancy, if available and if required.
				  If a certificate of occupancy for any building or buildings has not been
				  issued, so indicate and forward to the Department of Law when issued.
(iv) Part D of
				  the exhibits (other information) shall consist of the following documents:
(a)
(D-1)
				  Signed M-10 form(s), broker-dealer statement, for the selling agent (Orig),
				  unless exempted by General Business Law section
				  359-e, and signed M-2 form(s),
				  salespersons' statements, for all individual employees who act as salespersons
				  (Orig), unless exempted by General Business Law section
				  359-e. Forms do not have to be submitted
				  if currently valid registration forms are on file with the Department of Law
				  from prior offerings and a copy of the form is submitted as Exhibit D-1.
(b)
(D-2) Signed M-10 form(s), for the sponsoring
				  entity, which shall include all officers, directors, partners or principals who
				  are "dealers" for purposes of General Business Law, section
				  359-e (orig.). Forms do not have to be
				  submitted if currently valid registration forms are on file with the Department
				  of Law from prior offerings and a representation to that effect is made in
				  exhibit D-2 (Orig).
(c)
(D-3) Signed RI-1 form(s), registrant
				  information form(s), concerning prior convictions, judgments, administrative
				  actions, bankruptcy, employment and business affiliations for all principals of
				  the sponsor (orig.).
(d)
(D-4) Sponsor's affidavit that the sponsor's
				  net worth, together with the proceeds of firmly committed construction
				  financing, is sufficient to meet the requirements of General Business Law,
				  section
				  352-k and all of the unsecured obligations
				  assumed by the sponsor under the offering plan, including the sponsor's
				  obligation to complete all work and the sponsor's obligations for unsold
				  timeshares.
(e)
(D-5) Sponsor's audited financial statements
				  for the last two fiscal years ending prior to the date of submission. Timeshare
				  sales financed by the sponsor must be presented in the sponsor's financial
				  statements on an installment sale basis unless the purchase-money notes
				  executed by timeshare purchasers are negotiated to an unaffiliated third party
				  or parties without direct or indirect recourse to the sponsor.
(f)
(D-6) An affidavit from the sponsor and
				  principals of the sponsor, as defined in section
				  24.1(c)  of this
				  Part, stating whether the sponsor and principals of the sponsor have taken part
				  in public offerings of cooperative interests in realty, including timesharing
				  plans, in or from New York, which were initially offered during the preceding
				  five years. State the addresses of the realty and approximate date the offering
				  plan was filed (orig.).
(g)
(D-7)
				  Completed statistical information card (available from the Department of Law).