Establishes certain rights for shareholders in limited-profit housing companies.
TITLE OF BILL: An act to amend the private housing finance law, in relation to establishing certain rights for shareholders in limited-profit housing companies
PURPOSE OR GENERAL IDEA OF BILL: This bill amends the private housing finance law by establishing certain rights for shareholders in limited profit housing companies. These rights include the right of a shareholder to receive a copy of the initial bank statement reflecting the amount of the subscription or down payment, including the projected per annum interest rate; yearly bank statements reflecting the amount of equity; a copy and synopsis of New York State real estate laws governing the management and distribution of shareholder's equity and the accrued equity value for cooperative apartment units; detailed information outlining the process, policies and procedures for surrendering the apartment unit, the shareholder's obligations when surrendering an apartment unit; a punch list for satisfactory conditions of each room being surrendered, allowances for normal wear and tear and matters related to equity distribution; in the event of sickness or death the right of a shareholder to appoint a designee to who shall assume responsibility for surrendering the apartment, a table of carrying charges after surrender; creation repair and restoration fund; notice of equity; notice of deficient conditions outside inspectors.
JUSTIFICATION: Shareholders of "Mitchell Lama" cooperatives often are not aware of their equity in their housing units. Additionally, when they surrender their apartment units, many shareholders are not aware of their responsibilities and liabilities over the condition of the apartment . Furthermore, children of shareholders who die or fall gravely ill, have no formal authority to manage their parents legal affairs. Moreover, there is no formal procedure for reviewing financial deductions necessary to repair or restore apartments which are surrendered. This bill will require cooperatives to provide annual notification of equity accounts to shareholders. Additionally, the bill gives the shareholder the right to appoint a designee to assume responsibility for the surrender of the apartment unit. The bill establishes a table of carry over charges when the unit is surrendered and creates a fund for repairs and restoration when the apartment is surrendered.
LEGISLATIVE HISTORY: New law.
FISCAL IMPLICATIONS: None to the State of New York.
EFFECTIVE DATE: This act shall take effect on the one hundred twentieth day after it shall become a law.
STATE OF NEW YORK ________________________________________________________________________ 3381 2013-2014 Regular Sessions IN SENATE February 1, 2013 ___________Introduced by Sen. HASSELL-THOMPSON -- 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 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 EACHEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02799-01-3 S. 3381 2
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. 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.S. 3381 3
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 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.