S T A T E   O F   N E W   Y O R K
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                                  10278

                          I N  A S S E M B L Y

                              May 17, 2012
                               ___________

Introduced  by  M.  of  A.  STEVENSON  --  read once and referred to the
  Committee on Housing

AN ACT to amend the private housing finance law, in relation  to  estab-
  lishing  certain  rights  for  shareholders  in limited-profit housing
  companies

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

  Section 1. Section 12 of the private housing finance law is amended by
adding a new subdivision 17 to read as follows:
  17.  "SHAREHOLDER."  A  TENANT  ENTITLED  TO OCCUPANCY IN A PROJECT BY
REASON OF OWNERSHIP OF SHARES IN A COMPANY.
  S 2. The private housing finance  law  is  amended  by  adding  a  new
section 13-c to read as follows:
  S 13-C. RIGHTS OF SHAREHOLDERS. 1. NEW AND EXISTING SHAREHOLDERS SHALL
RECEIVE THE FOLLOWING INFORMATION:
  (A)  AN  INITIAL BANK STATEMENT FROM THE COMPANY REFLECTING THE AMOUNT
OF THE SUBSCRIPTION OR DOWN PAYMENT INCLUDING, BUT NOT  LIMITED  TO  THE
NAME  OF  THE BANK, THE TYPE OF BANK ACCOUNT AND THE PROJECTED PER ANNUM
INTEREST RATE;
  (B) FOR EACH YEAR OF TENANCY, SHAREHOLDERS SHALL RECEIVE A BANK STATE-
MENT REFLECTING THE AMOUNT OF EQUITY IN THEIR BANK ACCOUNTS;
  (C) A COPY AND SYNOPSIS OF THE NEW YORK STATE REAL ESTATE LAWS GOVERN-
ING THE MANAGEMENT AND DISTRIBUTION  OF  SHAREHOLDERS'  EQUITY  AND  THE
ACCRUED  EQUITY  VALUE FOR COOPERATIVE APARTMENT UNITS. SUCH INFORMATION
SHALL BE PRESENTED IN STRAIGHTFORWARD, EASILY COMPREHENSIBLE LANGUAGE;
  (D) DETAILED INFORMATION OUTLINING THE PROCESS,  POLICIES  AND  PROCE-
DURES  FOR  SURRENDERING  THE  APARTMENT  UNIT INCLUDING TIME FRAMES FOR
NOTIFYING  MANAGEMENT,  SHAREHOLDERS'  OBLIGATIONS,  MANAGEMENT'S  OBLI-
GATIONS,  A  PUNCH  LIST  FOR  REQUIRED SATISFACTORY CONDITIONS FOR EACH
ROOM, ALLOWANCES FOR NORMAL WEAR AND TEAR, AND MATTERS  RELATED  TO  THE
EQUITY DISTRIBUTION; AND
  (E)  THE NAMES OF STATE OFFICIALS OR DISTRICT MANAGEMENT EXECUTIVES TO
CONTACT IN THE EVENT OF ANY DISPUTE RELATED TO THE  SURRENDER  OF  THEIR
HOUSING.

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

                                                           LBD15281-02-2

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  2.  SHAREHOLDERS  SHALL IDENTIFY A FAMILY MEMBER OR DESIGNATED CONTACT
PERSON WHO SHALL ASSUME RESPONSIBILITY FOR SURRENDER OF THEIR HOUSING IN
THE EVENT OF A MEDICAL EMERGENCY OR DEATH. THE REQUIRED  DOCUMENT  SHALL
BE  IN  SUCH  FORM AND MANNER AS THE COMMISSIONER MAY PRESCRIBE. A NOTA-
RIZED  COPY OF THE DOCUMENT SHALL BE FILED IN THE MANAGEMENT OFFICE, AND
THE ORIGINAL AND COPIES MAINTAINED BY THE SHAREHOLDER, FAMILY MEMBER  OR
DESIGNATED PERSON.
  3.  (A)  OUTGOING COOPERATIVE SHAREHOLDERS SHALL BE LIABLE FOR MAINTE-
NANCE OR CARRYING CHARGES AFTER SURRENDERING THEIR APARTMENT UNITS BASED
ON THE FOLLOWING SCALE:
  (I) 0-45 DAYS NOTIFICATION TO THE COOPERATIVE BOARD - THREE MONTHS.
  (II) 45-90 DAYS NOTIFICATION TO THE COOPERATIVE BOARD - TWO MONTHS.
  (III) OVER 90 DAYS NOTIFICATION TO THE COOPERATIVE BOARD - ONE MONTH.
  (B) SHAREHOLDERS SHALL BE CHARGED A  MAXIMUM  THREE  MONTHS'  CARRYING
CHARGES.  IF  HOUSING  IS  SURRENDERED  INVOLUNTARILY BECAUSE OF MEDICAL
REQUIREMENTS OR DEATH, THE MAXIMUM CARRYING CHARGE  TO  THE  SHAREHOLDER
SHALL  BE ONE MONTH. OUTGOING SHAREHOLDERS SHALL HAVE THE OPTION FOR THE
INCOMING SHAREHOLDER TO PURCHASE OTHER PERSONAL PROPERTY INCLUDING,  BUT
NOT LIMITED TO KITCHEN APPLIANCES AND CARPETING.
  4.  (A)  THE  BOARD  OF  DIRECTORS  OF  EACH COMPANY SHALL APPORTION A
PERCENTAGE OF EACH MONTHLY MAINTENANCE OR CARRYING CHARGES IN A  RESERVE
FUND FOR EACH SHAREHOLDER THAT SHALL BE USED EXCLUSIVELY FOR REPAIRS AND
RESTORATION COSTS TO HOUSING AT THE END OF THE SHAREHOLDERS' TENANCY.
  (B)  SHAREHOLDERS  SHALL  RECEIVE A WRITTEN STATEMENT OF THE AMOUNT OF
MONEY AVAILABLE IN THEIR RESERVE FUND FOR USE TO CURE  DEFICIENT  CONDI-
TIONS  TO  THEIR  HOUSING. THE SHAREHOLDERS' ALLOTMENT SHALL BE DEDUCTED
FROM THE FINAL COST AMOUNT. IF COSTS FOR  REPAIRS  AND  RESTORATION  ARE
LESS  THAN  THE  AMOUNT  IN  THE RESERVE FUND, THE REMAINING MONEY SHALL
REVERT TO AN ACCOUNT MAINTAINED BY COMPANY MANAGEMENT.
  5. (A) WITHIN THIRTY DAYS AFTER NOTIFICATION TO SURRENDER THEIR  HOUS-
ING,  SHAREHOLDERS  SHALL  RECEIVE A BANK STATEMENT INDICATING THE TOTAL
AMOUNT OF THEIR EQUITY, AND IF APPLICABLE, THE ACCRUED  VALUE  OR  ADDI-
TIONAL PERCENTAGE OF EQUITY.
  (B)  WITHIN  TWO  WEEKS  OF NOTIFICATION TO SURRENDER HOUSING, COMPANY
MANAGEMENT  SHALL  SCHEDULE  AN  INITIAL  INSPECTION.  MANAGEMENT  SHALL
PROVIDER SHAREHOLDERS WITH A PUNCH LIST OF DEFICIENT CONDITIONS ASSESSED
IN  THE HOUSING. SHAREHOLDERS SHALL HAVE THE OPTION TO CURE THE ASSESSED
DEFICIENT CONDITIONS BY AN APPROVED INDEPENDENT CONTRACTOR PRIOR TO  THE
FINAL INSPECTION OF THEIR HOUSING.
  6.  IF  SHAREHOLDERS DISPUTE ANY OUTSTANDING COSTS, SHAREHOLDERS SHALL
HAVE AN OPPORTUNITY TO CURE THE DEFICIENT  CONDITIONS  AFTER  THE  FINAL
INSPECTION. IF THE DISPUTE IS NOT RESOLVED, SHAREHOLDERS MAY CONFER WITH
EXECUTIVES  AT  THE  DISTRICT MANAGEMENT OFFICE OR FOLLOW AN ESTABLISHED
PROCEDURE FOR THE RESOLUTION OF SUCH MATTERS.
  7. SHAREHOLDERS SHALL RECEIVE THE TOTAL EQUITY DISTRIBUTION, INCLUDING
THE EQUITY AND  ACCRUED  EQUITY  VALUE,  WITHIN  NINETY  DAYS  FOLLOWING
SURRENDER OF THE HOUSING.
  8.  IF  SHAREHOLDERS  INVOLUNTARILY SURRENDER THEIR HOUSING BECAUSE OF
MEDICAL CIRCUMSTANCES OR DEATH, THE EQUITY  FOR  THE  HOUSING  SHALL  BE
TRANSFERRED  TO  THE  STATE  COMMENSURATE  WITH  STATE  REGULATIONS  FOR
UNCLAIMED FUNDS.
  9. THE BOARD OF DIRECTORS OF  ANY  COMPANY  AND  MANAGEMENT  SHALL  BE
PROHIBITED  FROM  APPLYING ANY COSTS FOR RESTORATION OF THE HOUSING FROM
SHAREHOLDERS' EQUITY DISTRIBUTION UNTIL, AND UNLESS, IT  IS  DETERMINED,
THE  RESERVE  FUND  AND  APPLICABLE CARRYING CHARGES ARE NOT ADEQUATE TO
COVER COSTS. SHAREHOLDERS, THEIR FAMILY  MEMBERS,  OR  HEIRS,  HAVE  THE

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OPTION  TO HIRE AN OUTSIDE INSPECTOR TO ASSESS THE COSTS AND PAY FOR THE
COSTS THEMSELVES. IF THESE OPTIONS  ARE  NOT  EXERCISED,  THE  BOARD  OF
DIRECTORS  AND  MANAGEMENT SHALL COMPLETE AN AFFIDAVIT OR OTHER DOCUMENT
DETAILING  THE  LIST  OF  REPAIRS,  DEFICIENT  CONDITIONS OF THE HOUSING
INCLUDING PHOTOGRAPHS, THE AMOUNT OF THE SHAREHOLDER'S RESERVE FUND, AND
THE ADDITIONAL PROPOSED COSTS TO BE DEDUCTED FROM THE EQUITY.
  S 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law. Effective immediately, the addition,  amend-
ment and/or repeal of any rule or regulation necessary for the implanta-
tion  of  this  act on its effective date is authorized to be made on or
before such date.