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History
- Referred to housing, construction and community development
Full text
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Sponsor's memo
BILL NUMBER:S7604
Title of bill
An act to amend the general business law, in relation to filing requirements relating to the sale of certain non-public real estate securities offerings
Purpose or general idea of bill
This bill creates a requirement to file with the department of law an offering statement or prospectus for non-public real estate securities offerings.
Summary of specific provisions
This bill adds new language to section 352-e of the General Business Law to require the submission of an offering statement of prospectus to the department of law when a non-public offering of real estate related securities is made.
Justification
Under Article 23-A of the General Business Law, generally referred to as the "Martin Act", the issuer of a real estate related security must file an offering plan with the New York State Attorney General, setting forth the detailed terms of the transaction. Prospective purchasers rely upon the statements in the offering plan in determining whether to purchase an apartment, and therefore the Martin Act requires that all material information be disclosed and that all representations in the offering plan are true. Currently, this requirement is only for publicly offered securities, and therefore prospective purchasers are left unsure of the existence and validity of terms of any non-public securities related to a property. This bill seeks to cure that uncertainty and give purchasers the best information possible when choosing whether to purchase an interest in a property. This would assist in protecting buyers from entering into agreements related to properties that may try to hide unacceptable types or levels of debt with terms unknown to the buyer.
Prior legislative history
New Legislation
Fiscal implications
None to the state.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.