New York Codes, Rules and Regulations › Title 13 - DEPARTMENT OF LAW › Chapter II - SECURITIES TRANSACTIONS AND PERSONNEL › Subchapter B - REAL ESTATE SYNDICATES › Part 23 - OCCUPIED CONDOMINIUMS › Section 23.2 - Procedure for submission

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
				  The proposed offering plan and the exhibits described in this section 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. A notation of "Orig" on
				  the list set forth in paragraph (c)(5) of this section means that at least one
				  document must be a duly executed, original document.
(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 individual attorney who
				  prepared the plan, containing the statements required by section
				  23.4(a)  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 and list any documents submitted as exhibit
				  B-21. Exemption applications submitted pursuant to section
				  23.1(k)  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. As
				  specified in section
				  23.3(n)(1)  of
				  this Part, note if any model form(s) for description of tenants' rights have
				  been used. Pursuant to section
				  23.3(j)(7), the
				  transmittal letter must note whether the offering plan contains any description
				  of or reference to a commercial unit. Pursuant to section
				  23.3(bb)(14), the
				  transmittal letter must note financing offered to purchasers which contains any
				  unusual risks. Pursuant to section
				  23.1(l)  of this
				  Part, the transmittal letter must note if the plan is an out-of-state
				  conversion plan which has already become effective and subject to a 30-day
				  review. The transmittal letter must also note if there is currently an
				  investigation pending by the Department of Law of the sponsor, a principal of
				  the sponsor or of the property to be converted to condominium
				  ownership.
(2) A check (certified
				  or uncertified) for one half of the filing fee under G.B.L., section
				  352-e(7)(a) (a nonrefundable deposit), payable to the New York State Department
				  of Law and stapled or clipped to the transmittal letter. The filing fee is
				  based on the maximum total amount of the offering price to nontenant
				  purchasers.
(3) Signed originals of
				  the following forms:
(i) M-2 and M-10 forms,
				  if new forms are submitted as exhibits D-1 and D-2, with a check for the filing
				  fee under G.B.L., section 359-e(5) attached; and
(ii) RI-1 forms, submitted as exhibit
				  D-3.
(4) One paper copy
				  of a typed or printed, bound offering plan and one digital copy of the offering
				  plan.
(5) 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
				  condominium 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, other than the exceptions
				  stated below and the reason for the omission. If exhibits A-4, B-3, B-4, B-8,
				  B-9, B-10, B-11, B-16, B-17, B-18, B-19, B-20, B-21, B-22, B-23, B-24 are
				  omitted solely because the exhibit is not applicable to the offering, the
				  omission need not be noted in the transmittal letter.
(i) Part A of the exhibits (certifications)
				  shall consist of the following documents. Photocopies or conformed copies of
				  the certifications must 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
				  23.1(c)  of this
				  Part (Orig); see section
				  23.4(b)  of this
				  Part.
(b)
(A-2) Certification by sponsor's engineer or
				  architect concerning the description of the property and building condition in
				  Part II of the plan and at exhibit C-1 (Orig); see section
				  23.4(c)  of this
				  Part.
(c)
(A-3) Certification by expert on adequacy of
				  budget for the first year of condominium operation (Orig); see section
				  23.4(d)  of this
				  Part.
(d)
(A-4) Certification by expert on adequacy of
				  common charges payable by the commercial unit owner(s) (Orig); see section
				  23.4(e)  of this
				  Part.
(ii)
				  Part B of the exhibits (general) shall consist of the following documents:
(a)
(B-1)
				  Title company report, including a report on housing or building code violations
				  of record, dated or updated within 90 days of submission (Orig).
(b)
(B-2) Proposed management agreement (Orig).
(c)
(B-3) Copies of any contract which:
(1) will be binding on the condominium for
				  $2,500 or more per year, or
(2) has
				  a term in excess of two years, or
(3) is with the sponsor, a business associate
				  or affiliate of the sponsor, or a principal of the sponsor.
(d)
(B-4) Copy of a letter from an insurance
				  company or its authorized agent, stating proposed insurance coverage and
				  amounts, and the annual premium or premiums.
(e)
(B-5)
				  Copy of 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 coinsurer if the policy contains a coinsurance
				  provision, or (
2
) to cover replacement cost if the policy is
				  for an agreed amount which waives coinsurance. If the policy represents
				  replacement cost coverage, indicate the replacement cost per square
				  foot.
(f)
(B-6) Copy of a fee quotation from a
				  certified public accountant for preparing the yearly financial statements for
				  the condominium.
(g)
(B-7) Copy of 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), and filing
				  receipt.
(h)
(B-8) For condominiums located outside of New
				  York, New Jersey, Florida, Pennsylvania and Connecticut, copy of statutes and
				  regulations concerning the registration and formation of condominiums. All
				  condominiums located outside of New York State must include evidence of
				  compliance with local laws and regulations concerning the registration and
				  formation of condominiums.
(i)
(B-9)
				  Copy of the form of promissory note and mortgage required by sponsor if the
				  plan offers financing, together with any other document which significantly
				  affects a purchaser's obligations for financing offered by sponsor.
(j)
(B-10) Copy of any mortgage financing
				  commitment letter, and amendments or extensions of the commitment
				  letter.
(k)
(B-11) Copies of all existing and proposed
				  professional and commercial leases and subleases, and concession
				  agreements.
(l)
(B-12) Rent roll certified by the sponsor,
				  managing agent or current owner, as of a date that is within 60 days prior to
				  submission including the name of each tenant, apartment number, rent, term and
				  termination date of lease, and status under any rent regulatory laws
				  (Orig).
(m)
(B-13) If the building receives tax abatement
				  or exemption benefits, copy of proof of the level and duration of benefits
				  described in the plan.
(n)
(B-14)
				  Copy of sponsor's or present owner's deed to the property, and copy of contract
				  of sale between owner and sponsor if sponsor is contract vendee.
(o)
(B-15) Copy of a specimen title insurance
				  policy, applicable to individual units, which unconditionally insures that a
				  valid condominium has been established. At closing, the policy shall not
				  contain an exception indicating the existence of a mortgage or other liens
				  affecting the unit insured.
(p)
(B-16)
				  Original letter from a title company stating it has reviewed the declaration,
				  the bylaws and other relevant documents and is prepared to insure title to
				  purchasers in accordance with exhibit B-15 and is prepared to insure that a
				  valid condominium will be established upon the recording of the declaration and
				  bylaws and the filing of the floor plans as required by the New York
				  Condominium Act or applicable State and local law.
(q)
(B-17)
				  Copy of the agreements or other documents of local taxing authorities relating
				  to the separate assessment of each condominium unit for real estate taxes, if
				  available.
(r)
(B-18) Copy of the escrow agreement between
				  the sponsor and the board of managers relating to the payment of real estate
				  taxes pending the separate assessment of each condominium unit for real estate
				  taxes, if applicable.
(s)
(B-19)
				  Copy of documentary evidence that the holder of any mortgage existing after the
				  conveyance of the first unit will either:
(1)
				  consent to the formation of a condominium and acknowledge that its lien will be
				  limited to unsold condominium units; or
(2) subordinate the lien of its mortgage to
				  the declaration of condominium; or
(3) release its lien on the condominium unit
				  being conveyed.
(t)
(B-20)
				  Proof of registration of the building with the New York State Division of
				  Housing and Community Renewal (registration summary and building service
				  registration), if applicable.
(u)
(B-21)
				  Copy of any other material document(s), each of which should be described in
				  the transmittal letter,
e.g.,
copy of a regulatory agreement
				  with F.H.A., H.U.D. or other government agency.
(v)
(B-22)
				  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.
(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 and building condition 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 23.7  of this Part; see exhibit
				  A-2.
(b)
(C-2) Asbestos report, dated within 90 days
				  of submission to the Department of Law. The report must conform to the
				  requirements of section
				  23.7(cc)  of this
				  Part.
(c)
(C-3) Copy of currently valid temporary,
				  partial or permanent certificate of occupancy. If a certificate of occupancy is
				  not available because the building was constructed before the municipality
				  began to issue certificates of occupancy, include a representation from the
				  sponsor that the proposed use by the condominium is identical to the present
				  use of the building.
(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 G.B.L. section 359-e and signed M-2 form(s), salespersons'
				  statements, for all individual employees who act as salespersons (Orig) unless
				  exempted by G.B.L. 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 G.B.L., 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 copy of the form is submitted as
				  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 sponsor's net
				  worth is or will be sufficient to meet the requirements of G.B.L., section
				  352-k and all of the unsecured obligations sponsor assumes in the offering
				  plan, including sponsor's obligations for unsold units (Orig).
(e)
(D-5) An affidavit from sponsor and
				  principals of sponsor, as defined in section
				  23.1(c)  of this
				  Part, stating whether sponsor and principals of sponsor have taken part in real
				  estate syndications of securities consisting of participation interests or
				  investments in real estate, including limited partnership interests or private
				  or public offerings of cooperative interests in realty, including condominiums,
				  in or from New York, which were initially offered during the preceding five
				  years. State the addresses of the realty, the name of the syndication or
				  partnership and whether it received an exemption and the approximate date the
				  offering plan was filed, and the date of the closing for cooperatives or the
				  date of first closing for condominiums.
(f)
(D-6)
				  Completed statistical information card (available from the Department of Law).