Establishes certain rights for shareholders in limited-profit housing companies

BILL NUMBER:S2249

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.