New York Codes, Rules and Regulations › Title 13 - DEPARTMENT OF LAW › Chapter II - SECURITIES TRANSACTIONS AND PERSONNEL › Subchapter B - REAL ESTATE SYNDICATES › Part 22 - NEWLY CONSTRUCTED, VACANT HOMEOWNERS ASSOCIATIONS OR NON-RESIDENTIAL PROPERTY OWNERS ASSOCIATIONS › Section 22.1 - General

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
Applicability.
The offering statement or "offering plan" required by
					 section 352-e  of the General Business Law (GBL)
					 for membership in a homeowners association or other property owners association
					 (HOA) that meets the requirements set forth below is subject to this Part,
					 Newly Constructed, Vacant or Non-Residential Homeowners Associations.
					 Residentially occupied HOAs are subject to the disclosure requirements
					 concerning tenants' rights of Part 18 of this Title and the substantive
					 disclosure requirements of this Part. Those offerings of memberships in an HOA
					 which do not meet the requirements set forth below are subject to Part 17 of
					 this Title if they are not subject to Part 20 or 21 of this Title. Offerings
					 previously filed with the Department of State pursuant to article 9-A of the
					 Real Property Law (RPL) are hereby exempted from the filing required by this
					 Part.
(1) All homes or lots to be sold
				  in conjunction with membership interests in the HOA are completely vacant of
				  individuals residing in the homes or entitled to residential occupancy on the
				  date of submission of the proposed offering plan to the Department of Law or
				  the homes are to be newly constructed. In the case of a newly constructed
				  out-of-state project, the homes may be partially occupied by out-of-state
				  purchasers.
(2) The HOA and the
				  homes or lots to be sold in conjunction with membership interests in the HOA
				  are not organized as a timesharing arrangement.
(3) Members of the HOA will take title in fee
				  simple to a home or lot sold in conjunction with membership interests in the
				  HOA.
(4) The units to be sold in
				  conjunction with membership interests in the HOA are not part of a newly
				  constructed, vacant or non-residential condominium (subject to Part 20 of this
				  Title) or a newly constructed, vacant or non-residential cooperative (subject
				  to Part 21 of this Title).
(5) In
				  the event that any major system,
i.e.,
heating or electric, is
				  so structured that one unit cannot function independently of any other unit,
				  the provisions of the following sections of Part 20 of this Title shall apply
				  in addition to the disclosure requirements contained in this Part unless an
				  exemption pursuant to section
				  22.1(i)  has been
				  requested and granted: section
				  20.2(c)(5) 
				  (exhibits required); section
				  20.3(a)(2)  (cover
				  to include total amount of offering based on aggregate price at which homes or
				  lots are initially offered); section
				  20.3(d)(4) 
				  (pricing of homes); section
				  20.3(e) 
				  (description of property including description of individual homes); section
				  20.3(g)  (Schedule
				  A requirements concerning price and description of individual homes); section
				  20.3(h)  (Schedule
				  B requirements concerning budget); section
				  20.3(k)  (changes
				  in prices and homes); section
				  20.3(o) 
				  (procedure to purchase); section
				  20.3(q) 
				  (effectiveness provision); section
				  20.3(r)  (terms of
				  sale); section
				  20.3(s)  (closing
				  costs and adjustments); section
				  20.3(t) 
				  (sponsor's obligations with respect to individual homes); section
				  20.3(w)(6) 
				  (insurance coverage on individual homes); section
				  20.7  (description of the property,
				  including description of individual homes). In making the disclosure required
				  by these provisions of Part 20 of this Title, ignore any references to
				  "condominium" or to article 9-B of the Real Property Law. Also include a
				  representation that the offering prices set forth in Schedule A may be changed
				  only by a duly filed amendment to the plan when the change in price is an
				  across-the-board increase or decrease affecting one or more lines of homes or
				  home models, or is to be advertised, or is a price increase for an individual
				  purchaser. Individually negotiated price decreases may be made without
				  amendment to the plan. The transmittal letter and certifications required by
				  section 22.4  of this Part must include a
				  representation of compliance with the above sections.
(6) Conversions of residential rental
				  developments to ownership of a home and membership in an HOA are subject to the
				  substantive requirements of Part 18 of this Title as modified to be consistent
				  with the disclosures required by this Part.