NY State Senate Bill 2009-S1013

Senate Bill S1013

2009-2010 Legislative Session

Provides omnibus co-op or condominium conversion requirements, including existing tenants right to purchase and capital replacement reserve fund

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Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to housing, construction and community development
Jan 22, 2009	referred to housing, construction and community development

2009-S1013 (ACTIVE) - Details

Current Committee:: Senate Housing, Construction And Community Development
Law Section:: General Business Law
Laws Affected:: Amd §§352-eee & 352-eeee, Gen Bus L
Versions Introduced in 2011-2012 Legislative Session:: S2091

2009-S1013 (ACTIVE) - Summary

Provides that a non-eviction plan submitted for conversion of dwelling units to cooperative or condominium ownership shall not be declared effective until at least 25% of the tenants shall have executed and delivered written agreement to purchase under such plan; requires a sponsor of a conversion to cooperative or condominium ownership to provide a reserve fund of at least 5% of the total offering price to be used exclusively for capital repairs, replacements or improvements; requires building to be certified in writing by municipality that such building is free of building or housing code violations prior to approval or acceptance for filing of plan; defines "vacancies" to mean dwelling units not occupied on a date that is 110 days after the date the offering was first submitted to the attorney general

2009-S1013 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S1013

 TITLE OF BILL :
An act to amend the general business law, in relation to the
conversion of residential property to cooperative or condominium
ownership


 PURPOSE/SUMMARY OF PROVISIONS :
To revise the statutes regulating cooperative and condominium
conversions of rental buildings in New York City, Westchester, Nassau
and Rockland Counties in order to make the process more equitable for
sponsors, purchasers and non-purchasing tenants and to improve the
physical and financial condition of converted buildings. This bill
increases from 15% to 25% the number of tenants in occupancy who must
purchase dwelling units in order to declare a cooperative or
condominium conversion plan effective. Such purchasers must have been
in occupancy at the time the plan was accepted for filing by the
Attorney General, rather than on the date the plan is declared
effective. Tenants in occupancy will be afforded a ninety-day
exclusive purchase period in all eviction and non-eviction conversions
and a one year additional period to match any purchase agreement for
the units they occupy. The bill also requires the creating of a
minimum 10% reserve fund for capital replacements of major building
systems in each conversion.  Restrictions on the warehousing of vacant
apartments are substantially modified to prohibit holding vacant more

that 5% of a building's units or more than one unit in buildings of
less than twenty units. The purchaser of any occupied apartment will
be required to sign an affidavit indicating his or her acknowledgment
of the rent regulated status of such apartment and the purchaser's
duty to abide by such regulation and other applicable housing laws.
Each building undergoing a conversion will be inspected by local code
enforcement authorities and must be certified as free of housing code
violations before the conversion plan can be declared effective.

 JUSTIFICATION :
Extensive experience with the vast number of cooperative and
condominium conversions in the New York City metropolitan area
demonstrates the need for significant reform of the conversion
process. This bill will give tenants in occupancy the ability to
participate in meaningful negotiations during the conversion of their
buildings under non-eviction plans. The bill will also eliminate
incentives to warehouse sound apartments that exist in the present
statutes and will insure that reserve funds are adequate to protect
purchasers against the need for special assessments for capital
replacements. provisions for code enforcement inspections will aid
both purchasers and non-purchasing tenants to upgrade their living
conditions. Purchasers of occupied apartments will benefit from
greater disclosure of their obligations to non-purchasing tenants.

 EXISTING LAW :
None.

 FISCAL IMPLICATIONS :
This bill will have minimal fiscal impact on state and local
governments.

 FISCAL IMPLICATIONS :
state and local government.

 EFFECTIVE DATE :
This act shall take effect immediately and shall apply to conversion
plans accepted for filing by the attorney general on or after the date
it shall have become a law; provided that the amendments to section
352-eee of the general business law made by this act shall expire on
the same date as such section expires and shall not affect the
expiration of such section as provided in section 4 of chapter 402 of
the laws of 1983, as amended and that the amendments to section
352-eeee of such law made by this act shall expire on the same date as
such section expires and shall not affect the expiration of such
section as provided in section 10 of chapter 555 of the laws of 1982,
as amended.

2009-S1013 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1013

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            January 22, 2009
                               ___________

Introduced  by  Sen.  KRUGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Housing, Construction  and
  Community Development

AN  ACT to amend the general business law, in relation to the conversion
  of residential property to cooperative or condominium ownership

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.   Paragraph (b) of subdivision 1 of section 352-eee of the
general business law, as added by chapter 402  of the laws of  1983,  is
amended to read as follows:
  (b)  "Non-eviction  plan".  A plan which may not be declared effective
until at least [fifteen] TWENTY-FIVE 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] WAS ACCEPTED
FOR  FILING  BY  THE  ATTORNEY GENERAL 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 WITH NO discriminatory repurchase agreements or other discriminatory
inducements.
  S 2. Subdivision 1 of section 352-eee of the general business  law  is
amended by adding two new paragraphs (h) and (i) to read as follows:
  (H)  "TOTAL  PRICE".  (I) WITH RESPECT TO COOPERATIVE CONVERSIONS, THE
NUMBER OF ALL SHARES IN THE OFFERING MULTIPLIED BY THE  LAST  PRICE  PER
SHARE  WHICH  WAS OFFERED TO TENANTS IN OCCUPANCY PRIOR TO THE EFFECTIVE
DATE OF THE PLAN REGARDLESS OF NUMBER OF SALES MADE;
  (II) WITH RESPECT TO CONDOMINIUM CONVERSIONS, THE SUM OF THE  COST  OF
ALL UNITS IN THE OFFERING AT THE LAST PRICE WHICH WAS OFFERED TO TENANTS
IN  OCCUPANCY  PRIOR  TO  THE  EFFECTIVE  DATE OF THE PLAN REGARDLESS OF
NUMBER OF SALES MADE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06551-01-9

S. 1013                             2

  (I) "CAPITAL REPLACEMENT". A  BUILDING-WIDE  REPLACEMENT  OF  A  MAJOR
COMPONENT OF ANY OF THE FOLLOWING SYSTEMS:
  (I) ELEVATOR;
  (II) HEATING, VENTILATION AND AIR CONDITIONING;
  (III) PLUMBING;
  (IV) WIRING;
  (V) ROOF;
  (VI) WINDOWS;
OR,  A  MAJOR STRUCTURAL REPLACEMENT TO THE BUILDING; PROVIDED, HOWEVER,
THAT REPLACEMENTS MADE TO CURE CODE VIOLATIONS OF RECORD  SHALL  NOT  BE
INCLUDED.
  S  3.  Subparagraph  (i)  of paragraph (c) of subdivision 2 of section
352-eee of the general business law, as added by chapter 402 of the laws
of 1983, is amended to read as follows:
  (i) The plan may not be declared effective until  at  least  [fifteen]
TWENTY-FIVE  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] WAS ACCEPTED FOR FILING BY THE
ATTORNEY GENERAL 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 WITH NO  discrimina-
tory repurchase agreements or other discriminatory inducements.
  S  4. Paragraph (c) of subdivision 2 of section 352-eee of the general
business law is amended by adding two new subparagraphs (viii) and  (ix)
to read as follows:
  (VIII)  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  AND
PRESENTED  TO  THE  TENANTS,  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 ONE YEAR
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, SUBJECT  TO  THE  PROVISIONS  OF  THIS
PARAGRAPH,  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.
  (IX) THE PLAN INCLUDES A COPY OF THE AFFIDAVIT, IN A FORM TO BE ESTAB-
LISHED  BY  THE ATTORNEY GENERAL, WHICH SHALL BE SIGNED BY THE PURCHASER
OF ANY DWELLING UNIT OR THE SHARES ALLOCATED THERETO OCCUPIED BY A RESI-
DENTIAL TENANT. SUCH AFFIDAVIT SHALL SPECIFY THE RENT REGULATORY LAW, IF
ANY, TO WHICH THE UNIT IS SUBJECT AND SHALL CONTAIN AN ACKNOWLEDGMENT OF
SUCH RENT REGULATED STATUS OF THE UNIT AS WELL AS THE  PURCHASER'S  DUTY
TO ABIDE BY THE MAXIMUM LEGAL RENT STANDARDS, RENT REGISTRATION REQUIRE-
MENTS,  MAINTENANCE  OF SERVICES REQUIREMENTS AND ALL OTHER REQUIREMENTS
OF APPLICABLE HOUSING LAWS AND REGULATIONS.  EACH SUCH  PURCHASER  SHALL
AT  THE  TIME OF PURCHASE SIGN TWO COPIES OF THE AFFIDAVIT, ONE OF WHICH
SHALL BE DELIVERED BY THE OFFEROR TO THE TENANT  IN  OCCUPANCY  AND  THE
OTHER TO THE DIVISION OF HOUSING AND COMMUNITY RENEWAL.

S. 1013                             3

  S  5. Paragraph (e) of subdivision 2 of section 352-eee of the general
business law, as added by chapter 402 of the laws of 1983, is amended to
read as follows:
  (e) The attorney general finds that an excessive number of [long-term]
vacancies  did not exist on the date THAT IS ONE HUNDRED TEN DAYS SUBSE-
QUENT TO THE DATE that the offering statement or  prospectus  was  first
submitted to the department of law.  ["Long-term vacancies"] "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]  ON  SUCH ONE HUNDRED TENTH DAY.  "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]
FIVE PERCENT OF THE TOTAL NUMBER OF DWELLING UNITS IN  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] OFFERED UNDER THE PLAN, EXCEPT THAT
IN A BUILDING OR GROUP OF BUILDINGS OR DEVELOPMENT CONTAINING LESS  THAN
TWENTY UNITS, "EXCESSIVE" SHALL MEAN MORE THAN ONE VACANT DWELLING UNIT.
  S  6.  Subparagraph  (ix) of paragraph (d) of subdivision 2 of section
352-eee of the general business law, as added by chapter 402 of the laws
of 1983, is amended to read as follows:
  (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 AND PRESENTED TO THE
TENANTS,  during  which time a tenant's dwelling unit shall not be shown
to a third party unless he has, in writing, waived his OR HER  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] ONE
YEAR 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, SUBJECT TO THE PROVISIONS
OF THIS PARAGRAPH, 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.
  S 7. Subdivision 2 of section 352-eee of the general business  law  is
amended by adding a new paragraph (g) to read as follows:
  (G)  THE  ATTORNEY  GENERAL  FINDS  THAT AT THE TIME WHEN THE PLAN WAS
SUBMITTED FOR FILING, THE AGENCY OF THE MUNICIPALITY  WHICH  IS  CHARGED
WITH  THE  ENFORCEMENT  OF BUILDING OR HOUSING CODES WAS NOTIFIED OF THE
SUBMISSION  OF  THE  PLAN  AND  THE  NECESSITY  FOR  A  CODE  COMPLIANCE
INSPECTION  AND  THAT  PRIOR TO THE PLAN BEING DECLARED TO BE IN EFFECT,
THE BUILDING OR GROUP OF BUILDINGS SHALL BE CERTIFIED IN WRITING BY  THE
MUNICIPALITY  AS  BEING  FREE OF ANY BUILDING OR HOUSING CODE VIOLATIONS
AND THE PLAN PROVIDES FOR SUCH RECERTIFICATION WITHIN ONE MONTH PRIOR TO
THE PLAN BEING DECLARED EFFECTIVE.
  S 8. Section 352-eee of the general business law is amended by  adding
a new subdivision 4-a to read as follows:
  4-A. (A) WITHIN THIRTY DAYS AFTER THE CLOSING OF A CONVERSION PURSUANT
TO  AN  OFFERING  PLAN  THE  OFFEROR SHALL ESTABLISH AND TRANSFER TO THE
COOPERATIVE CORPORATION OR CONDOMINIUM BOARD OF MANAGERS, A RESERVE FUND
TO BE USED EXCLUSIVELY FOR MAKING CAPITAL REPLACEMENTS NECESSARY FOR THE
HEALTH AND SAFETY OF THE RESIDENTS OF SUCH BUILDINGS. SUCH RESERVE  FUND

S. 1013                             4

SHALL  BE EXCLUSIVE OF ANY OTHER FUNDS REQUIRED TO BE RESERVED UNDER THE
PLAN OR APPLICABLE LAW OR REGULATION  OF  THE  STATE  ATTORNEY  GENERAL,
EXCEPT  A FUND FOR CAPITAL REPLACEMENTS SUBSTANTIALLY SIMILAR IN PURPOSE
TO  AND  IN  AN  AMOUNT  NOT LESS THAN THE RESERVE FUND MANDATED BY THIS
SUBDIVISION. SUCH RESERVE FUND ALSO SHALL BE EXCLUSIVE  OF  ANY  WORKING
CAPITAL  FUND  AND  SHALL NOT BE SUBJECT TO REDUCTION FOR CLOSING APPOR-
TIONMENTS.
  (B) SUCH FUND SHALL BE ESTABLISHED IN AN AMOUNT EQUAL  TO  EITHER  (I)
TEN  PERCENT  OF  THE TOTAL PRICE OR, (II) (A) TEN PERCENT OF THE ACTUAL
SALES PRICE OF ALL COOPERATIVE SHARES OR CONDOMINIUM UNITS SOLD  BY  THE
OFFEROR  AT  THE TIME THE PLAN IS DECLARED EFFECTIVE, PROVIDED, HOWEVER,
THAT IF SUCH AMOUNT IS LESS THAN THREE PERCENT OF THE TOTAL PRICE,  THEN
THE FUND SHALL BE ESTABLISHED AS A MINIMUM OF THREE PERCENT OF THE TOTAL
PRICE;  PLUS (B) SUPPLEMENTAL CONTRIBUTIONS TO BE MADE BY THE OFFEROR AT
A RATE OF TEN PERCENT OF THE ACTUAL SALES PRICE OF COOPERATIVE SHARES OR
CONDOMINIUM UNITS FOR EACH UNIT OF ITS  ALLOCABLE  SHARES  HELD  BY  THE
OFFEROR  AND  SOLD  TO  BONA FIDE PURCHASERS SUBSEQUENT TO THE EFFECTIVE
DATE OF THE PLAN AND WITHIN FIVE YEARS OF THE CLOSING OF THE  CONVERSION
PURSUANT  TO SUCH PLAN NOTWITHSTANDING THAT THE TOTAL AMOUNT CONTRIBUTED
MAY EXCEED TEN PERCENT OF THE TOTAL PRICE; AND PROVIDED,  FURTHER,  THAT
IF  FIVE  YEARS  FROM  THIRTY  DAYS  AFTER THE CLOSING OF THE CONVERSION
PURSUANT TO SUCH PLAN THE TOTAL CONTRIBUTIONS BY THE OFFEROR TO THE FUND
ARE LESS THAN TEN PERCENT OF THE TOTAL PRICE THE OFFEROR SHALL  PAY  THE
DIFFERENCE  BETWEEN  THE AMOUNT CONTRIBUTED AND TEN PERCENT OF THE TOTAL
PRICE. SUPPLEMENTAL CONTRIBUTIONS SHALL BE MADE WITHIN  THIRTY  DAYS  OF
EACH SALE.
  (C)  THE  CONTRIBUTIONS  REQUIRED  PURSUANT TO THIS SUBDIVISION MAY BE
MADE EARLIER OR IN AN AMOUNT GREATER THAN SO PROVIDED.  AN  OFFEROR  MAY
CLAIM  AND  RECEIVE CREDIT AGAINST THE MANDATORY INITIAL CONTRIBUTION TO
THE RESERVE FUND FOR THE ACTUAL COST OF CAPITAL  REPLACEMENTS  WHICH  HE
HAS BEGUN AFTER THE PLAN IS SUBMITTED FOR FILING TO THE ATTORNEY GENERAL
AND  BEFORE  THE PLAN IS DECLARED EFFECTIVE; PROVIDED, HOWEVER, THAT ANY
SUCH REPLACEMENTS MUST BE SET FORTH IN  THE  PLAN  TOGETHER  WITH  THEIR
ACTUAL  OR  ESTIMATED COSTS AND FURTHER PROVIDED, THAT SUCH CREDIT SHALL
NOT EXCEED THE LESSER OF THE ACTUAL COST OF THE CAPITAL REPLACEMENTS  OR
ONE PERCENT OF THE TOTAL PRICE.
  (D)  ANY  BUILDING,  CONSTRUCTION  OF WHICH WAS COMPLETED WITHIN THREE
YEARS PRIOR TO THE CLOSING OF A CONVERSION PURSUANT TO AN OFFERING PLAN,
SHALL BE EXEMPT FROM THE REQUIREMENTS OF THIS SUBDIVISION.
  (E) THE COOPERATIVE CORPORATION OR CONDOMINIUM BOARD OF MANAGERS SHALL
REPORT TO SHAREHOLDERS AND UNIT  OWNERS  ON  A  SEMI-ANNUAL  BASIS  WITH
RESPECT  TO  ALL  DEPOSITS  INTO  AND  WITHDRAWALS FROM THE RESERVE FUND
MANDATED BY THIS SUBDIVISION.
  S 9. Paragraph (b) of subdivision 1 of section 352-eeee  of the gener-
al business law, as added by chapter 555 of the laws of 1982, is amended
to read as follows:
  (b) "Non-eviction plan". A plan which may not  be  declared  effective
until [written purchase agreements have been executed and delivered for]
at least [fifteen] TWENTY-FIVE percent of THE BONA FIDE TENANTS IN OCCU-
PANCY  OF  all  dwelling  units in the building or group of buildings or
development [by bona fide tenants in occupancy or bona  fide  purchasers
who represent that they intend that they or one or more members of their
immediate family intend to occupy the unit when it becomes vacant. 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] ON THE DATE THE OFFERING STATEMENT OR

S. 1013                             5

PROSPECTUS WAS ACCEPTED FOR FILING BY THE ATTORNEY  GENERAL  SHALL  HAVE
EXECUTED  AND  DELIVERED  WRITTEN  AGREEMENTS TO PURCHASE UNDER THE PLAN
pursuant to an offering made in good faith without fraud and discrimina-
tory repurchase agreements or other discriminatory inducements.
  S 10. Subdivision 1 of section 352-eeee of the general business law is
amended by adding two new paragraphs (h) and (i) to read as follows:
  (H)  "TOTAL  PRICE".  (I) WITH RESPECT TO COOPERATIVE CONVERSIONS, THE
NUMBER OF ALL SHARES IN THE OFFERING MULTIPLIED BY THE  LAST  PRICE  PER
SHARE  WHICH  WAS OFFERED TO TENANTS IN OCCUPANCY PRIOR TO THE EFFECTIVE
DATE OF THE PLAN REGARDLESS OF NUMBER OF SALES MADE;
  (II) WITH RESPECT TO CONDOMINIUM CONVERSIONS, THE SUM OF THE  COST  OF
ALL UNITS IN THE OFFERING AT THE LAST PRICE WHICH WAS OFFERED TO TENANTS
IN  OCCUPANCY  PRIOR  TO  THE  EFFECTIVE  DATE OF THE PLAN REGARDLESS OF
NUMBER OF SALES MADE.
  (I) "CAPITAL REPLACEMENT". A  BUILDING-WIDE  REPLACEMENT  OF  A  MAJOR
COMPONENT OF ANY OF THE FOLLOWING SYSTEMS:
  (I) ELEVATOR;
  (II) HEATING, VENTILATION AND AIR CONDITIONING;
  (III) PLUMBING;
  (IV) WIRING;
  (V) ROOF;
  (VI) WINDOWS;
OR,  A  MAJOR STRUCTURAL REPLACEMENT TO THE BUILDING; PROVIDED, HOWEVER,
THAT REPLACEMENTS MADE TO CURE CODE VIOLATIONS OF RECORD  SHALL  NOT  BE
INCLUDED.
  S  11.  Subparagraph  (i) of paragraph (c) of subdivision 2 of section
352-eeee of the general business law, as added by  chapter  555  of  the
laws of 1982, is amended to read as follows:
   (i)  The  plan  may not be declared effective until [written purchase
agreements have been executed and  delivered  for]  at  least  [fifteen]
TWENTY-FIVE  percent of THE BONA FIDE TENANTS IN OCCUPANCY OF all dwell-
ing  units  in  the  building  or  group  of  buildings  or  development
[subscribed  for by bona fide tenants in occupancy or bona fide purchas-
ers who represent that they intend that they or one or more  members  of
their  immediate family occupy the dwelling unit when it becomes vacant.
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 agree-
ment shall be executed and delivered] ON THE DATE THE OFFERING STATEMENT
OR PROSPECTUS WAS ACCEPTED FOR FILING BY THE ATTORNEY GENERAL SHALL HAVE
EXECUTED AND DELIVERED WRITTEN AGREEMENTS TO  PURCHASE  UNDER  THE  PLAN
pursuant to an offering made IN GOOD FAITH without FRAUD AND discrimina-
tory repurchase agreements or other discriminatory inducements.
  S  12.  Paragraph  (c)  of  subdivision 2 of section 352-eeee   of the
general business law is amended by adding two new  subparagraphs  (viii)
and (ix) to read as follows:
  (VIII)  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  AND
PRESENTED  TO  THE  TENANTS,  DURING WHICH TIME A TENANT'S DWELLING UNIT
SHALL NOT BE SHOWN TO A THIRD PARTY UNLESS HE OR SHE  HAS,  IN  WRITING,
WAIVED  HIS  OR  HER  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 PERI-
OD OF ONE YEAR FROM SAID EXPIRATION DATE TO PURCHASE SAID DWELLING  UNIT
OR  THE SHARES ALLOCATED THERETO ON THE SAME TERMS AND CONDITIONS AS ARE

S. 1013                             6

CONTAINED IN AN EXECUTED CONTRACT TO PURCHASE, SUBJECT TO THE PROVISIONS
OF THIS PARAGRAPH, 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.
  (IX) THE PLAN INCLUDES A COPY OF THE AFFIDAVIT, IN A FORM TO BE ESTAB-
LISHED  BY  THE ATTORNEY GENERAL, WHICH SHALL BE SIGNED BY THE PURCHASER
OF ANY DWELLING UNIT OF THE SHARES ALLOCATED THERETO OCCUPIED BY A RESI-
DENTIAL TENANT. SUCH AFFIDAVIT SHALL SPECIFY THE RENT REGULATORY LAW, IF
ANY, TO WHICH THE UNIT IS SUBJECT AND SHALL CONTAIN AN ACKNOWLEDGMENT OF
SUCH RENT REGULATED STATUS OF THE UNIT AS WELL AS THE  PURCHASER'S  DUTY
TO ABIDE BY THE MAXIMUM LEGAL RENT STANDARDS, RENT REGISTRATION REQUIRE-
MENTS,  MAINTENANCE  OF SERVICES REQUIREMENTS AND ALL OTHER REQUIREMENTS
OF APPLICABLE HOUSING LAWS AND REGULATIONS.  EACH SUCH  PURCHASER  SHALL
AT  THE  TIME OF PURCHASE SIGN TWO COPIES OF THE AFFIDAVIT, ONE OF WHICH
SHALL BE DELIVERED BY THE OFFEROR TO THE TENANT  IN  OCCUPANCY  AND  THE
OTHER TO THE DIVISION OF HOUSING AND COMMUNITY RENEWAL.
  S  13.  Subparagraph (ix) of paragraph (d) of subdivision 2 of section
352-eeee of the general business law, as added by  chapter  555  of  the
laws of 1982, is amended to read as follows:
  (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 AND PRESENTED TO THE
TENANTS, during which time a tenant's dwelling unit shall not  be  shown
to  a  third party unless he OR SHE 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]  ONE
YEAR  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, SUBJECT TO THE PROVISIONS
OF  THIS  PARAGRAPH, 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.
  S  14.  Paragraph  (e)  of  subdivision 2 of section 352-eeee   of the
general business law, as added by chapter 555 of the laws  of  1982,  is
amended to read as follows:
  (e) The attorney general finds that an excessive number of [long-term]
vacancies  did  not exist on the date THAT IS ONE HUNDRED TEN DAYS AFTER
THE DATE that the offering statement or prospectus was  first  submitted
to  the  department  of law.   ["Long-term vacancies"] "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] ON SUCH ONE HUNDRED TENTH  DAY.    "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]
FIVE  PERCENT  OF  THE TOTAL NUMBER OF DWELLING UNITS IN 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] OFFERED UNDER THE PLAN, EXCEPT  THAT
IN  A BUILDING OR GROUP OF BUILDINGS OR DEVELOPMENT CONTAINING LESS THAN
TWENTY UNITS, "EXCESSIVE" SHALL MEAN MORE THAN ONE VACANT DWELLING UNIT.

S. 1013                             7

  S 15. Subdivision 2 of section 352-eeee of the general business law is
amended by adding a new paragraph (g) to read as follows:
  (G)  THE  ATTORNEY  GENERAL  FINDS  THAT AT THE TIME WHEN THE PLAN WAS
SUBMITTED FOR FILING, THE AGENCY OF THE MUNICIPALITY  WHICH  IS  CHARGED
WITH  THE  ENFORCEMENT  OF BUILDING OR HOUSING CODES WAS NOTIFIED OF THE
SUBMISSION  OF  THE  PLAN  AND  THE  NECESSITY  FOR  A  CODE  COMPLIANCE
INSPECTION  AND  THAT  PRIOR TO THE PLAN BEING DECLARED TO BE IN EFFECT,
THE BUILDING OR GROUP OF BUILDINGS SHALL BE CERTIFIED IN WRITING BY  THE
MUNICIPALITY  AS  BEING  FREE OF ANY BUILDING OR HOUSING CODE VIOLATIONS
AND THE PLAN PROVIDES FOR SUCH RECERTIFICATION WITHIN ONE MONTH PRIOR TO
THE PLAN BEING DECLARED EFFECTIVE.
  S 16. Section 352-eeee of the  general  business  law  is  amended  by
adding a new subdivision 4-a to read as follows:
  4-A. (A) WITHIN THIRTY DAYS AFTER THE CLOSING OF A CONVERSION PURSUANT
TO  AN  OFFERING  PLAN  THE  OFFEROR SHALL ESTABLISH AND TRANSFER TO THE
COOPERATIVE CORPORATION OR CONDOMINIUM BOARD OF MANAGERS, A RESERVE FUND
TO BE USED EXCLUSIVELY FOR MAKING CAPITAL REPLACEMENTS NECESSARY FOR THE
HEALTH AND SAFETY OF THE RESIDENTS OF SUCH BUILDINGS. SUCH RESERVE  FUND
SHALL  BE EXCLUSIVE OF ANY OTHER FUNDS REQUIRED TO BE RESERVED UNDER THE
PLAN OR APPLICABLE LAW OR REGULATION  OF  THE  STATE  ATTORNEY  GENERAL,
EXCEPT  A FUND FOR CAPITAL REPLACEMENTS SUBSTANTIALLY SIMILAR IN PURPOSE
TO AND IN AN AMOUNT NOT LESS THAN THE  RESERVE  FUND  MANDATED  BY  THIS
SUBDIVISION.  SUCH  RESERVE  FUND ALSO SHALL BE EXCLUSIVE OF ANY WORKING
CAPITAL FUND AND SHALL NOT BE SUBJECT TO REDUCTION  FOR  CLOSING  APPOR-
TIONMENTS.
  (B)  SUCH  FUND  SHALL BE ESTABLISHED IN AN AMOUNT EQUAL TO EITHER (I)
TEN PERCENT OF THE TOTAL PRICE OR, (II) (A) TEN PERCENT  OF  THE  ACTUAL
SALES  PRICE  OF ALL COOPERATIVE SHARES OR CONDOMINIUM UNITS SOLD BY THE
OFFEROR AT THE TIME THE PLAN IS DECLARED EFFECTIVE,  PROVIDED,  HOWEVER,
THAT  IF SUCH AMOUNT IS LESS THAN THREE PERCENT OF THE TOTAL PRICE, THEN
THE FUND SHALL BE ESTABLISHED AS A MINIMUM OF THREE PERCENT OF THE TOTAL
PRICE; PLUS (B) SUPPLEMENTAL CONTRIBUTIONS TO BE MADE BY THE OFFEROR  AT
A RATE OF TEN PERCENT OF THE ACTUAL SALES PRICE OF COOPERATIVE SHARES OR
CONDOMINIUM  UNITS  FOR  EACH  UNIT  OF ITS ALLOCABLE SHARES HELD BY THE
OFFEROR AND SOLD TO BONA FIDE PURCHASERS  SUBSEQUENT  TO  THE  EFFECTIVE
DATE  OF THE PLAN AND WITHIN FIVE YEARS OF THE CLOSING OF THE CONVERSION
PURSUANT TO SUCH PLAN NOTWITHSTANDING THAT THE TOTAL AMOUNT  CONTRIBUTED
MAY  EXCEED  TEN PERCENT OF THE TOTAL PRICE; AND PROVIDED, FURTHER, THAT
IF FIVE YEARS FROM THIRTY DAYS  AFTER  THE  CLOSING  OF  THE  CONVERSION
PURSUANT TO SUCH PLAN THE TOTAL CONTRIBUTIONS BY THE OFFEROR TO THE FUND
ARE  LESS  THAN TEN PERCENT OF THE TOTAL PRICE THE OFFEROR SHALL PAY THE
DIFFERENCE BETWEEN THE AMOUNT CONTRIBUTED AND TEN PERCENT OF  THE  TOTAL
PRICE.  SUPPLEMENTAL  CONTRIBUTIONS  SHALL BE MADE WITHIN THIRTY DAYS OF
EACH SALE.
  (C) THE CONTRIBUTIONS REQUIRED PURSUANT TO  THIS  SUBDIVISION  MAY  BE
MADE  EARLIER  OR  IN AN AMOUNT GREATER THAN SO PROVIDED. AN OFFEROR MAY
CLAIM AND RECEIVE CREDIT AGAINST THE MANDATORY INITIAL  CONTRIBUTION  TO
THE  RESERVE  FUND  FOR THE ACTUAL COST OF CAPITAL REPLACEMENTS WHICH HE
HAS BEGUN AFTER THE PLAN IS  SUBMITTED  FOR  FILING  WITH  THE  ATTORNEY
GENERAL  AND  BEFORE  THE PLAN IS DECLARED EFFECTIVE; PROVIDED, HOWEVER,
THAT ANY SUCH REPLACEMENTS MUST BE SET FORTH IN THE PLAN  TOGETHER  WITH
THEIR  ACTUAL  OR ESTIMATED COSTS AND FURTHER PROVIDED, THAT SUCH CREDIT
SHALL NOT EXCEED THE LESSER OF THE ACTUAL COST OF THE  CAPITAL  REPLACE-
MENTS OR ONE PERCENT OF THE TOTAL PRICE.

S. 1013                             8

  (D)  ANY  BUILDING,  CONSTRUCTION  OF WHICH WAS COMPLETED WITHIN THREE
YEARS PRIOR TO THE CLOSING OF A CONVERSION PURSUANT TO AN OFFERING PLAN,
SHALL BE EXEMPT FROM THE REQUIREMENTS OF THIS SUBDIVISION.
  (E) THE COOPERATIVE CORPORATION OR CONDOMINIUM BOARD OF MANAGERS SHALL
REPORT  TO  SHAREHOLDERS  AND  UNIT  OWNERS  ON A SEMI-ANNUAL BASIS WITH
RESPECT TO ALL DEPOSITS INTO  AND  WITHDRAWALS  FROM  THE  RESERVE  FUND
MANDATED BY THIS SUBDIVISION.
  S  17.  Severability.  If  any clause, sentence, paragraph, section or
part of this act shall be adjudged by any court of  competent  jurisdic-
tion to be invalid, such judgment shall not affect, impair or invalidate
the  remainder  thereof,  but  shall be confined in its operation to the
clause, sentence, paragraph, section, or part thereof directly  involved
in the controversy in which such judgment shall have been rendered.
  S  18.  This  act  shall  take  effect  immediately and shall apply to
conversion plans accepted for filing by the attorney general on or after
the date it shall have become a law; provided  that  the  amendments  to
sections  352-eee  and 352-eeee of the general business law made by this
act shall not affect the expiration of such sections  and  shall  expire
therewith.

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