New York Codes, Rules and Regulations › Title 13 - DEPARTMENT OF LAW › Chapter II - SECURITIES TRANSACTIONS AND PERSONNEL › Subchapter B - REAL ESTATE SYNDICATES › Part 25 - NEWLY CONSTRUCTED OR VACANT SENIOR RESIDENTIAL COMMUNITIES › Section 25.2 - 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 Office of
				  the Attorney General and shall be subject to the sanctions of article 23-A of
				  the GBL. A notation of
"orig"
on the list below 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
				  Office of the Attorney General that is signed and affirmed by the individual
				  attorney who prepared the plan, or by the person or persons who prepared the
				  plan if not an attorney, containing the statements required by section
				  25.4(a)  of this
				  Part without qualification or alteration in substance. As specified in section
				  paragraph (5) 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-13. Exemption applications submitted pursuant to section
				  25.1(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. The
				  transmittal letter must note whether the offering plan is for a building or
				  development which is newly constructed, vacant or non-residential and to what
				  extent any existing structures are being rehabilitated. Pursuant to section
				  25.3(i)(4)  of
				  this Part, the transmittal letter must note any commercial units and whether
				  they are being offered for sale. Pursuant to section
				  25.3(m)(3)  of
				  this Part the transmittal letter must note financing offered to prospective
				  residents which contains any unusual risks. Pursuant to section
				  25.1(i)  of this
				  Part, the transmittal letter must note if the plan is an out-of-state plan. The
				  transmittal letter must also note if there is currently an investigation
				  pending by the Office of the Attorney General of the sponsor, a principal of
				  the sponsor or of the property to be constructed or to be converted to a senior
				  residential community.
(2) Checks
				  (certified or uncertified) for the filing fee under GBL, section 352-e(7)(a)
				  payable to "New York State Office of the Attorney General" and stapled or
				  clipped to the transmittal letter, with form of receipt issued by the Office of
				  the Attorney General. The filing fee is based on the number of units offered
				  multiplied by the entrance fee per unit. For out-of-state senior residential
				  communities the appraised valuation represents the total appraised valuation of
				  all unoccupied units at the date of submission to the Office of the Attorney
				  General. To expedite processing, the sponsor should submit two checks, each in
				  the amount of one-half of the total fee. One of the two checks will be a
				  non-refundable deposit. One check will be returned if the Office of the
				  Attorney General issues a final deficiency letter.
(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 GBL,
				  section 359-e(5) attached.
(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 senior residential
				  community 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 (1) of this
				  subdivision must note the omission of any exhibit, other than the exceptions
				  stated below and the reason for the omission. If exhibits B-3, B-4, B-8, B-9,
				  B-10, B-11, B-12, B-14, B-15 B-16, B-17 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
				  25.1(c) (orig)  of
				  this Part; see section
				  25.4(b)  of this
				  Part.
(b)
(A-2) Certification by the 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
				  25.4(c)  of this
				  Part.
(c)
(A-3) Certification by expert on adequacy of
				  budget for the first year of senior residential community operation (orig); see
				  section 25.4(d)  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, if applicable, dated or updated within 30 days of submission
				  (orig).
(b)
(B-2) A projection from a qualified expert or
				  local supplier of the consumption, rate and total cost for furnishing heat, hot
				  water and other utilities. If unit residents directly pay the cost of heating
				  their own units, include a similar projection for heat, hot water and
				  electricity for individual units.
(c)
(B-3)
				  Copy of proposed management agreement.
(d)
(B-4)
				  Copies of any contract which:
(1) will be
				  binding on the senior residential community for $10,000 or more per year;
				  or
(2) has a term in excess of
				  three years; or
(3) is with the
				  sponsor, a business associate or affiliate of the sponsor, or a principal of
				  the sponsor.
(e)
(B-5)
				  Copy of a letter from an insurance company or its authorized agent, stating
				  proposed insurance coverage and amounts, and the annual premium or
				  premiums.
(f)
(B-6) 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
				  co-insurer if the policy contains a co-insurance provision; or
(2) to cover replacement cost if the policy
				  is for an agreed amount which waives co-insurance. If the policy represents
				  replacement cost coverage, indicate the replacement cost per square
				  foot.
(g)
(B-7) Certified annual financial statements
				  for the last two years for the senior residential community, if the facility is
				  operating as of date of submission.
(h)
(B-8)
				  Certified financial statements for the last two years for the sponsoring
				  entity.
(i)
(B-9) Copy of sections 352-a/352-b
				  Designation of Secretary of State as agent (applicable only to out-of-state
				  issuers, sponsors, principals and/or broker), and filing receipt.
(j)
(B-10) For senior residential communities
				  located outside New York State, copy of statutes and regulations concerning the
				  registration and formation of senior residential communities. All senior
				  residential communities located outside New York State must include evidence of
				  compliance with local laws and regulations concerning the registration and
				  formation of senior residential communities.
(k)
(B-11)
				  Copy of the form of promissory note required by sponsor if the plan offers
				  financing, together with any other document which significantly affects a
				  resident's obligations for financing offered by sponsor. If the documents are
				  not available at the time of submission to the Department of Law, so indicate
				  and forward when available.
(l)
(B-12)
				  Copy of any financing commitment letter pertaining to building construction
				  loans, and amendments or extensions of the commitment letter, and a copy of any
				  mortgage and note or bond that will be a lien on the property after
				  commencement of occupancy or which presently encumbers the property. If
				  construction financing is not available at the time of submission to the
				  Department of Law, so indicate and forward as soon as available.
(m)
(B-13) 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. If sponsor's interest will be a leasehold, include
				  such leasehold in this exhibit.
(n)
(B-14)
				  Copy of any other material document(s), each of which should be described in
				  the transmittal letter.
(o)
(B-15)
				  For rehabilitated buildings, an affidavit by sponsor stating how the building
				  became vacant, that there was no harassment, and whether any apartments were
				  vacated pursuant to vacate orders. If so, provide copy of vacate
				  order.
(p)
(B-16) An affidavit by sponsor stating that
				  no money has been taken during any market test pursuant to Cooperative Policy
				  Statement No. 1, if applicable.
(q)
(B-17)
				  Copies of all existing and proposed professional and commercial leases and
				  subleases, and concession agreements.
(r)
(B-18)
				  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.
(s)
(B-19)
				  Copy of surety bonds or letter of credit proposed to secure entrance fees and
				  any other deposits and any underlying agreement or related agreement, and any
				  undertaking called for in the Regulations or proposed to be
				  furnished.
(t)
(B-20) Copy of any license or operating
				  certification from the Department of Health for services to be provided by the
				  facility.
(u)
(B-21) Copy of Certificate of Incorporation
				  and receipt from Secretary of State, if the residence is organized as a
				  corporation.
(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 architects or
				  engineer's seal and original signature. The description must be dated within 90
				  days of submission to the Office of the Attorney General and conform to the
				  requirements of section
				  25.7  of this Part; see exhibit
				  A-2. The Office of the Attorney General may in its discretion require a further
				  inspection and report.
(b)
(C-2)
				  Asbestos report, except in the case of newly constructed buildings, dated
				  within 90 days of submission to the Office of the Attorney General. The report
				  must conform to the requirements of section
				  25.7  of this Part.
(c)
(C-3) Copy of currently valid temporary,
				  partial or permanent certificate of occupancy or its equivalent. If a
				  certificate of occupancy is not available because the building was constructed
				  before the municipality began to issue certificates of occupancy, include an
				  affidavit from the sponsor that the proposed use by the senior residential
				  community is identical to the original use of the building. If no certificate
				  of occupancy has yet been issued, so indicate and forward to the Office of the
				  Attorney General when issued.
(d)
(C-4)
				  Copy of approved building plans required by local law, any specifications
				  required by government agencies having jurisdiction, and copies of all required
				  construction permits from government agencies having jurisdiction. If such
				  plans have not yet been approved, provide evidence of zoning and site plan
				  approval by the appropriate local government authority.
(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 broker (orig), and signed
				  M-2 form(s), statements for all individual employees who act as brokers (orig).
				  Forms do not have to be submitted if currently valid registration forms are on
				  file with the Office of the Attorney General 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 GBL,
				  section 359-e (orig). Uncompensated directors of not-for-profit corporations
				  need only disclose their name, a contract address and phone number. Forms do
				  not have to be submitted if currently valid registration forms are on file with
				  the Office of the Attorney General from prior offerings and a copy of the form
				  is submitted as exhibit D-2.
(c)
(D-4)
				  Sponsor's affidavit that sponsor's net worth is or will be sufficient to meet
				  the requirements of GBL, section 352-k and all of the unsecured obligations
				  sponsor assumes in the offering plan including sponsor's obligations for
				  unoccupied units (orig).
(d)
(D-5) An
				  affidavit from sponsor and principals of sponsor, as defined in section
				  25.1(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 senior
				  residential communities, 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 with
				  the apartment corporation for cooperatives or the date of commencement of
				  occupancy for senior residential communities.
(e)
(D-6)
				  Completed statistical information card (available from the Office of the
				  Attorney General).
(f)
(D-7) Exemption application pursuant to
				  General Business Law, section
				  359-e.