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352-E - Real estate syndication offerings.

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§ 352-e. Real estate syndication offerings. 1. (a) It shall be illegalandprohibited for any person, partnership, corporation, company, trustor association, or any agent or employee thereof, to make ortakepartinapublicofferingorsaleinorfrom the state of New York ofsecurities constituted of participation interests or investments in realestate,mortgagesorleases,includingstocks,bonds,debentures,evidencesof interest or indebtedness, limited partnership interests orother securityorsecuritiesasdefinedinsectionthreehundredfifty-twoofthisarticle,when such securities consist primarily ofparticipation interests orinvestmentsinoneormorerealestateventures,includingcooperativeinterests in realty, unless and untilthere shall have been filed with the department of law,priortosuchoffering, a written statement or statements, to be known as an "offeringstatement"or"prospectus"concerning the contemplated offering whichshall contain the information and representations required byparagraph(b)ofthissubdivisionunlessthesecurityofferingis exemptedhereunder or under section three hundred fifty-nine-f, subdivisiontwo,ofthisarticlebyruleor action of the attorney general. The term"real estate" as used in the paragraph shall not include mineral, oil ortimber leases or properties, or buildings,structures,landorotherrealtyhousingorcontainingbusinessoffices or industry, owned orleased by the issuer, where the issuer is not primarily engagedinthebusinessofbuying and selling such building or other realty or leasesor interests therein. The circulation ordisseminationofanon-firmoffer (including circulation ordisseminationofapreliminaryprospectus pursuant to section ten (b) of the securities act of nineteenhundred thirty-three, and therulestheretoappertaining)shallnotconstitute making or taking part in a public offering within the meaningof this section.(b)Thedetailedtermsofthetransaction;a description of theproperty, the nature of the interest, and how titletheretoistobeheld;thegrossandnet income for a reasonable period preceding theoffering where applicable andavailable;thecurrentgrossandnetincomewhereapplicableandavailable; the basis, rate and method ofcomputing depreciation; adescriptionofmajorcurrentleases;theessentialtermsofallmortgages;the names, addresses and businessbackground of the principals involved, thenatureoftheirfiduciaryrelationship and their financial relationship, past, present and future,tothepropertyofferedtothesyndicateandto those who are toparticipateinitsmanagement;theinterestsandprofitsofthepromoters, offerors, syndicate organizers, officers, directors, trusteesor generalpartners,directandindirect,inthepromotionandmanagement of the venture; all restrictions,ifany,ontransferofparticipants'interests; a statement as to what stock or other securityinvolved in the transaction, if any, is non-voting; astatementastowhatdispositionwillbemadeofthefundsreceivedandof thetransaction if not consummated, which statement shall represent that allmoneys received from the sale of such securities until actually employedin connection withtheconsummationofthetransactionasthereindescribed,shallbekeptin trust and that in the event insufficientfunds are raised through the offering orotherwisetoeffectuatethepurchase orpurchasesorotherconsummationofthecontemplatedtransaction, or that the intended acquisition shall not be completed forany other reasonorreasons,thensuchmoneys,lesssuchamountsactually employed in connection withtheconsummationofthetransaction, shall be fully returnedtotheinvestor;whichofthesecuritiesoffered are unsecured; clearly distinguish between leaseholdand fee ownership, between fact andopinion;acommitmenttosubmitannualreportstoall participants, including an annual balance sheetand profit and loss statementcertifiedbyanindependentcertifiedpublic accountant;clearlydistinguishbetweenthoseportionsofpromiseddistributions which are income and those which are a return ofprincipal or capital; in the case of qualifiedleaseholdcondominiums,asdefinedin section three hundred thirty-nine-e of the real propertylaw, a disclosure of the unique requirements imposed on the unitownersofsuchcondominiumsbytheprovisionsofsectionsthree hundredthirty-nine-bb and three hundred thirty-nine-cc of suchlaw;andsuchadditionalinformationasthe attorney general may prescribe in rulesand regulations promulgated under subdivision six hereof as willaffordpotentialinvestors, purchasers and participants an adequate basis uponwhich to found their judgment and shall not omit anymaterialfactorcontain any untrue statement of a material fact.(c)Alladvertisinginconnectionwithan offering of securitiesdescribedinthis subdivision shall be consistent with therepresentations and information required to be set forth as hereinbeforein this subdivision provided.2.Unlessotherwiseprovidedbyregulation issued by the attorneygeneral, the offering statement or statements or prospectus requiredinsubdivisiononeofthis section shall be filed with the department oflaw at its office in the city of New York, prior to the publicofferingofthesecurityinvolved.Nooffer,advertisementor sale of suchsecurities shall be made in or from the stateofNewYorkuntiltheattorneygeneralhasissuedtothe issuer or other offerer a letterstating that the offering has beenfiled.Theattorneygeneral,notlaterthan thirty days after the submission of such filing, shall issuesuch aletteror,inthealternative,anotificationinwritingindicating deficienciesintheofferingstatement,statementsorprospectus; provided, however, that in the case of a buildingorgroupofbuildingstobeconverted to cooperative or condominium ownershipwhich is occupied in whole or in partforresidentialpurposes,suchletterornotificationshall be issued in not sooner than four monthsand not later than six monthsfromthedateofsubmissionofsuchfiling.Theattorney general may also refuse to issue a letter statingthat the offering statement or statements or prospectus hasbeenfiledwheneveritappearsthattheofferingstatementorstatements orprospectusdoesnotclearlysetforththespecificproperty orpropertiestobepurchased,leased,mortgaged,orotherwise to beacquired,financedorthesubjectofspecificinvestmentwithasubstantial portion of the offering proceeds.2-a.(a)Forthepurposesof this subdivision the following wordsshall have the following meanings:(i) "Plan". Every offering statement or prospectussubmittedtothedepartment of law for the conversion of a building or group of buildingsor developmentfromresidentialrentalstatustocooperativeorcondominium ownership, other than a plan governed by theprovisionsofeither section three hundred fifty-two-eee or threehundredfifty-two-eeee of this chapter, or a plan for suchconversionpursuantto article two, eight or eleven of the private housing finance law.(ii) "Non-purchasing tenant". A person who has not purchased under theplanand who is a tenant entitled to possession at the time the plan isdeclared effective or apersontowhomadwellingunitisrentedsubsequenttothe effective date. A person who sublets a dwelling unitfrom a purchaser under the plan shall notbedeemedanon-purchasingtenant.(iii)"Eligibleseniorcitizens".Non-purchasingtenantswho aresixty-two years of age or older on the datetheattorneygeneralhasacceptedtheplanforfiling, and the spouses of any such tenants onsuch date, and who have elected, withinsixtydaysofthedatetheattorneygeneral has accepted the plan for filing, on forms promulgatedby the attorney general and presented to such tenants by the offeror, tobecomenon-purchasing tenants under the provisions of this subdivision;provided that such election shall notprecludeanysuchtenantfromsubsequentlypurchasingthe dwelling unit on the terms then offered totenants in occupancy.(iv) "Eligible disabled persons". Non-purchasing tenants whohaveanimpairment which results from anatomical, physiological or psychologicalconditions, other than addiction to alcohol, gambling, or any controlledsubstance,whichare demonstrable by medically acceptable clinical andlaboratory diagnostic techniques, and which are expected to be permanentand which prevent the tenant from engaging inanysubstantialgainfulemploymentonthedate the attorney general has accepted the plan forfiling, and the spouses of any such tenants on such date, andwhohaveelected, within sixty days of the date the attorney general has acceptedtheplanforfiling, on forms promulgated by the attorney general andpresented to such tenantsbytheofferor,tobecomenon-purchasingtenantsundertheprovisionsof this subdivision; provided, however,that if the disability first occurs after acceptanceoftheplanforfiling,thensuch election may be made within sixty days following theonset of such disability unless during the periodsubsequenttosixtydaysfollowingthe acceptance of the plan for filing but prior to suchelection, the offeroracceptsawrittenagreementtopurchasetheapartmentfromabonafide purchaser; and provided further that suchelection shall not preclude any such tenant from subsequently purchasingthe dwelling unit or the shares allocatedtheretoonthetermsthenoffered to tenants in occupancy.(b)Theattorney general shall refuse to issue a letter stating thatthe offering statement or prospectus required in subdivision one of thissection has been filed whenever it appears that theofferingstatementorprospectusoffersforsaleresidential cooperative apartments orcondominium units pursuant to a plan unless the plan provides that:(i) No eviction proceedings will be commenced, exceptashereinafterprovided,atanytimeagainsteithereligibleseniorcitizens oreligible disabled persons. The rentals of eligible seniorcitizensandeligibledisabledpersonswho reside in dwelling units not subject togovernment regulation as to rentals and continued occupancy and eligiblesenior citizens and eligible disabled personswhoresideindwellingunitswithrespecttowhichgovernment regulation as to rentals andcontinued occupancy is eliminated or becomes inapplicable after the planhas been accepted for filing shallnotbesubjecttounconscionableincreasesbeyondordinary rentals for comparable apartments during theperiod of their occupancyconsidering,indeterminingcomparability,suchfactorsas building services, level of maintainance and operatingexpenses; provided that such proceedings may be commencedagainstsuchtenantsfornon-paymentofrent,illegaluseoroccupancy of thepremises, refusal of reasonable access to the owner or a similarbreachbythetenantof his obligations to the owner of the dwelling unit orthe shares allocated thereto and provided further thatanownerofaunitorofthe shares allocated thereto may not commence an action torecover possession of a dwelling unit from anon-purchasingtenantonthe grounds that he seeks the dwelling unit for the use and occupancy ofhimself or his family.(ii) Eligible senior citizens and eligible disabled persons who resideindwellingunitssubjectto government regulation as to rentals andcontinued occupancy shall continue to be subject thereto.(iii) The rights granted under the plan toeligibleseniorcitizensand eligible disabledpersonsmaynotbeabrogatedorreducednotwithstanding any expiration of, or amendment to, this section.(iv)Anyofferorwhodisputestheelectionby a person to be aneligible senior citizen or an eligible disabled person must apply to theattorney general within thirty days of the receipt of the election formsforadeterminationbytheattorneygeneral of such person'seligibility.The attorney general shall, within thirty days thereafter,issue his determination of eligibility.Theforegoingshall,intheabsenceoffraud,bethe sole method for determining a dispute as towhether a person is an eligible senior citizen or aneligibledisabledperson.Thedeterminationof the attorney general shall be reviewableonly through a proceedingunderarticleseventy-eightofthecivilpractice law and rules, which proceeding must be commenced within thirtydays after such determination by the attorney general becomes final.(c)Theprovisionsofthissubdivision shall be applicable in anycity, town or village not covered by theprovisionsofsectionthreehundredfifty-two-eeeeof this chapter, or which has not elected to becovered by section three hundred fifty-two-eee of this chapter, providedthe locallegislativebodyelects,bymajorityvotetoadoptbyresolution,coverage provided by this section. A certified copy of suchresolution shall be filed in theofficeoftheattorneygeneralatAlbany and shall become effective on the date of such filing.2-b.In the case of offerings of cooperatives, condominiums, interestin homeowners association and othercooperativeinterestsinrealty,includinghomessubjecttodeedor covenant or agreements requiringinvestment therein, the attorney general may refuse to issue a letter ofacceptance unless theofferingstatement,prospectusorplanshallprovidethat all deposits, down-payments or advances made by purchasersof residential units shall be held in a special escrowaccountpendingdeliveryofthecompletedapartmentorunitandadeed or leasewhichever is applicable, unlessinsuranceofsuchfundsinaformsatisfactory to the attorney general has been obtained prior thereto. Inadditiontothe general regulatory authority provided in this section,the attorney general is hereby authorized toadopt,promulgate,amendandrescindsuitable rules and regulations to carry out the provisionsof this subdivision, including, but notlimitedto,determiningwhenescrowfundsmay be released, the nature of escrowees, and other termsand conditions relating thereto deemed necessary in the public interest.2-c. Payment of legal fees for representation of a tenant ortenant'sassociation in a residentialbuildingundergoingconversiontocooperative or condominium ownership shall not be made from anyreservefund, working capital fund, or other fund established to cover expenses,repairsandcapital improvements of buildings converted to cooperativeor condominium ownership, unless made pursuant to aretaineragreemententered into before this subdivision shall have become a law. Payment oflegalfeesmaybemade,however,fromanotherfundspecificallydesignated for such purpose.2-d. (a) For the purposes of this subdivision theterm"self-dealingcontract"shallbe defined as any contract or portion thereof which isentered into after October eighth, nineteen hundred eighty, and which:(i)providesforoperation,maintenance,or management of acondominiumorcooperativeassociation in a conversion project, or ofproperty serving the condominium orcooperativeunitownersinsuchprojects;(ii) is between such unit owners or such association and the developeror an affiliate of the developer;(iii)wasenteredinto while such association was controlled by thedeveloper through special developer controlorbecausethedeveloperheld a majority of the votes in such association;(iv) is for a period of more than three years, including any automaticrenewalprovisionswhichareexercisableatthe sole option of thedeveloper or an affiliate of the developer; and(v) may not be terminated without penalty by such unit owners orsuchassociation.(b)Inthecase of offerings of cooperatives, condominiums or otherinterests in realty covered by the provisionsofsectionsixhundredeightoftheCondominium and Cooperative Abuse Relief Act of 1980, 15U.S.C. 3607, the attorney general shall refusetoissuealetterofacceptanceunlesstheoffering statement, prospectus or plan providesthat the tenant shareholders or owners entitled to vote toterminateaself-dealing contract pursuant to such section twice be notified of suchrightin writing (i) once within thirty days of the date that the rightto terminate pursuant to subsection (b) of suchsectioncommencesand(ii)secondlyat least six months prior to the date that such right toterminate will expire.3. No offeringliteratureshallbeemployedintheofferingofsecuritiesasdefined in subdivision one of this section except by theoffering statement or statements filed in the department of law pursuantto the provisions of this section. Alladvertisinginwhateverform,includingperiodicalsoronradioortelevisionshallcontainastatement that no offer ofsuchsecuritiesismadeexceptbysuchoffering statement or statements.4.Inallliteratureemployedin the offer and sale of securitiesdefined in subdivision one of this section andinalladvertisinginconnectiontherewith there shall be contained, in easily readable printon the facethereof,astatementthatthefilingofanofferingstatementor statements or prospectus as required by subdivision one ofthis section with the department of law does not constitute approvaloftheissueor the sale thereof by the department of law or the attorneygeneral of this state.5. No offering or sale whatever of securities described in subdivisionone of this section shall be made except on thebasisofinformation,statements,literature,orrepresentationsconstituting the offeringstatement or statements or prospectus described in such subdivision, andno information, statements, literature, or representations shall be usedin the offering or sale ofsecuritiesdescribedinsuchsubdivisionunless it is first so filed and the prospective purchaser furnished withtrue copies thereof.6.(a)Theattorneygeneralis hereby authorized and empowered toadopt, promulgate, amend and rescind suitable rules andregulationstocarryout the provisions of this section, including regulations for themethod, contents and filing procedures with respecttothestatementsrequired by subdivision one and the making of amendments thereto.(b)The attorney general is hereby authorized and empowered to adopt,promulgate, amend and rescind suitable rules and regulations relating totheinformationfurnishedtoinvestorsofthe sources of anydistributionor distributions made by any issuer in connection with thesaleofrealtysecuritiessinceJanuaryfirst,nineteen hundredsixty-one within the provisions of section three hundred fifty-two-e andsection three hundred fifty-two-g of this article.7.(a) The department of law shall collect the following fees for thefilingofeachofferingstatementorprospectusasdescribedinsubdivisiononeof this section: seven hundred fifty dollars for everyoffering not in excess of two hundred fifty thousand dollars; foreveryoffering in excess of two hundred fifty thousand dollars, four-tenths ofonepercentofthetotal amount of the offering but not in excess ofthirty thousand dollars of which one-half ofsaidamountshallbeanonrefundabledepositpaidatthetimeofsubmitting the offeringstatement to the department of law for review andthebalancepayableupontheissuanceofa letter of acceptance for filing said offeringstatement. The department of law shall, in addition, collectafeeoftwohundredtwenty-fivedollarsforeachamendmentto an offeringstatement. For each application granted by the department oflawwhichpermitstheapplicanttosolicitpublicinterestorpublic fundspreliminary to the filing of an offering statement or fortheissuanceofa "no-filing required" letter, the department of law shall collect afee of twohundredtwenty-fivedollars.Intheeventthesponsorthereafter files an offering statement, the fee paid for the preliminaryapplicationshallbecreditedagainst the balance of the fee due andpayable on filing. For eachapplicationgrantedpursuanttosectionthreehundredfifty-two-g of this article, the department of law shallcollect a fee of two-tenths of one percent of the amount of the offeringof securities; however, the minimum fee shallbesevenhundredfiftydollarsandthemaximumfeeshallbethirty thousand dollars. Allrevenue from that portion of any fee imposed pursuant to this paragraph,which exceeds twenty thousand dollars shall be paid by the department oflaw to the state comptroller to be deposited in and credited to the realestate finance bureau fund, established pursuant tosectioneightyofthe state finance law.(b) The attorney general may, in his discretion, require an inspectiontobemadebythe department of law in connection with a real estatesyndication, cooperative, or condominium offering, of lands and propertythereon, situated outside of the state of NewYork,involvedinsuchoffering.Insuchcase, prior to the acceptance of such filing, thereshall be remitted to the department of law an amount equivalenttothecost of travel from New York to the location of the property involved intheofferingandreturn, as estimated by the department of law, and afurther reasonableamountestimatedtobenecessarytocovertheadditionalexpensesofsuchinspection.The department of law shallreturn to the person making the remittance any amount advanced in excessof the actual expenses incurred, and where there isadeficiency,thedepartmentoflaw shall be empowered to collect the difference betweenthe actual expenses and the amount advanced.(c)Notwithstandingtheprovisionsofparagraph (a) of thissubdivision,thedepartmentof law shall not collect any fees for thefiling of an offering statement or prospectusoranyamendedfilingstheretoasdescribedinsubdivisiononeof this section whenever aconversion of a mobile home park, buildingorgroupofbuildingsordevelopment from residential rental status to cooperative or condominiumownership is being made pursuant to article eighteen, nineteen or twentyof the private housing finance law.8.Withinfourmonthsaftertheendofitsfiscal year, everysyndicate which shall have been required to file anofferingstatementorstatements or prospectus under subdivision one of this section shallfile with the department of law at its office in the city of New York anannual report of the syndicate operation, includinganannualbalancesheetandprofitandlossstatementcertifiedbyanindependentcertified public accountant. The department of law shall collectafeeof five dollars for the filing of each such annual report.9.Eachoffering statement or prospectus as described in subdivisionone of this section, and all exhibits or documents referredtothereinshall be available for inspection by any person who shall have purchasedasecuritydescribed in this section or shall have participated in theoffering of such security.
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  • § 352-e. Real estate syndication offerings. 1. (a) It shall be illegal and prohibited for any person, partnership, corporation, company, trust or association, or any agent or employee thereof, to make or take part in a public offering or sale in or from the state of New York of securities constituted of participation interests or investments in real estate, mortgages or leases, including stocks, bonds, debentures, evidences of interest or indebtedness, limited partnership interests or other security or securities as defined in section three hundred fifty-two of this article, when such securities consist primarily of participation interests or investments in one or more real estate ventures, including cooperative interests in realty, unless and until there shall have been filed with the department of law, prior to such offering, a written statement or statements, to be known as an "offering statement" or "prospectus" concerning the contemplated offering which shall contain the information and representations required by paragraph (b) of this subdivision unless the security offering is exempted hereunder or under section three hundred fifty-nine-f, subdivision two, of this article by rule or action of the attorney general. The term "real estate" as used in the paragraph shall not include mineral, oil or timber leases or properties, or buildings, structures, land or other realty housing or containing business offices or industry, owned or leased by the issuer, where the issuer is not primarily engaged in the business of buying and selling such building or other realty or leases or interests therein. The circulation or dissemination of a non-firm offer (including circulation or dissemination of a preliminary prospectus pursuant to section ten (b) of the securities act of nineteen hundred thirty-three, and the rules thereto appertaining) shall not constitute making or taking part in a public offering within the meaning of this section. (b) The detailed terms of the transaction; a description of the property, the nature of the interest, and how title thereto is to be held; the gross and net income for a reasonable period preceding the offering where applicable and available; the current gross and net income where applicable and available; the basis, rate and method of computing depreciation; a description of major current leases; the essential terms of all mortgages; the names, addresses and business background of the principals involved, the nature of their fiduciary relationship and their financial relationship, past, present and future, to the property offered to the syndicate and to those who are to participate in its management; the interests and profits of the promoters, offerors, syndicate organizers, officers, directors, trustees or general partners, direct and indirect, in the promotion and management of the venture; all restrictions, if any, on transfer of participants' interests; a statement as to what stock or other security involved in the transaction, if any, is non-voting; a statement as to what disposition will be made of the funds received and of the transaction if not consummated, which statement shall represent that all moneys received from the sale of such securities until actually employed in connection with the consummation of the transaction as therein described, shall be kept in trust and that in the event insufficient funds are raised through the offering or otherwise to effectuate the purchase or purchases or other consummation of the contemplated transaction, or that the intended acquisition shall not be completed for any other reason or reasons, then such moneys, less such amounts actually employed in connection with the consummation of the transaction, shall be fully returned to the investor; which of the securities offered are unsecured; clearly distinguish between leasehold and fee ownership, between fact and opinion; a commitment to submitannual reports to all participants, including an annual balance sheet and profit and loss statement certified by an independent certified public accountant; clearly distinguish between those portions of promised distributions which are income and those which are a return of principal or capital; in the case of qualified leasehold condominiums, as defined in section three hundred thirty-nine-e of the real property law, a disclosure of the unique requirements imposed on the unit owners of such condominiums by the provisions of sections three hundred thirty-nine-bb and three hundred thirty-nine-cc of such law; and such additional information as the attorney general may prescribe in rules and regulations promulgated under subdivision six hereof as will afford potential investors, purchasers and participants an adequate basis upon which to found their judgment and shall not omit any material fact or contain any untrue statement of a material fact. (c) All advertising in connection with an offering of securities described in this subdivision shall be consistent with the representations and information required to be set forth as hereinbefore in this subdivision provided. 2. Unless otherwise provided by regulation issued by the attorney general, the offering statement or statements or prospectus required in subdivision one of this section shall be filed with the department of law at its office in the city of New York, prior to the public offering of the security involved. No offer, advertisement or sale of such securities shall be made in or from the state of New York until the attorney general has issued to the issuer or other offerer a letter stating that the offering has been filed. The attorney general, not later than thirty days after the submission of such filing, shall issue such a letter or, in the alternative, a notification in writing indicating deficiencies in the offering statement, statements or prospectus; provided, however, that in the case of a building or group of buildings to be converted to cooperative or condominium ownership which is occupied in whole or in part for residential purposes, such letter or notification shall be issued in not sooner than four months and not later than six months from the date of submission of such filing. The attorney general may also refuse to issue a letter stating that the offering statement or statements or prospectus has been filed whenever it appears that the offering statement or statements or prospectus does not clearly set forth the specific property or properties to be purchased, leased, mortgaged, or otherwise to be acquired, financed or the subject of specific investment with a substantial portion of the offering proceeds. 2-a. (a) For the purposes of this subdivision the following words shall have the following meanings: (i) "Plan". Every offering statement or prospectus submitted to the department of law for the conversion of a building or group of buildings or development from residential rental status to cooperative or condominium ownership, other than a plan governed by the provisions of either section three hundred fifty-two-eee or three hundred fifty-two-eeee of this chapter, or a plan for such conversion pursuant to article two, eight or eleven of the private housing finance law. (ii) "Non-purchasing tenant". A person who has not purchased under the plan and who is a tenant entitled to possession at the time the plan is declared effective or a person to whom a dwelling unit is rented subsequent to the effective date. A person who sublets a dwelling unit from a purchaser under the plan shall not be deemed a non-purchasing tenant. (iii) "Eligible senior citizens". Non-purchasing tenants who are sixty-two years of age or older on the date the attorney general hasaccepted the plan for filing, and the spouses of any such tenants on such date, and who have elected, within sixty days of the date the attorney general has accepted the plan for filing, on forms promulgated by the attorney general and presented to such tenants by the offeror, to become non-purchasing tenants under the provisions of this subdivision; provided that such election shall not preclude any such tenant from subsequently purchasing the dwelling unit on the terms then offered to tenants in occupancy. (iv) "Eligible disabled persons". Non-purchasing tenants who have an impairment which results from anatomical, physiological or psychological conditions, other than addiction to alcohol, gambling, or any controlled substance, which are demonstrable by medically acceptable clinical and laboratory diagnostic techniques, and which are expected to be permanent and which prevent the tenant from engaging in any substantial gainful employment on the date the attorney general has accepted the plan for filing, and the spouses of any such tenants on such date, and who have elected, within sixty days of the date the attorney general has accepted the plan for filing, on forms promulgated by the attorney general and presented to such tenants by the offeror, to become non-purchasing tenants under the provisions of this subdivision; provided, however, that if the disability first occurs after acceptance of the plan for filing, then such election may be made within sixty days following the onset of such disability unless during the period subsequent to sixty days following the acceptance of the plan for filing but prior to such election, the offeror accepts a written agreement to purchase the apartment from a bona fide purchaser; and provided further that such election shall not preclude any such tenant from subsequently purchasing the dwelling unit or the shares allocated thereto on the terms then offered to tenants in occupancy. (b) The attorney general shall refuse to issue a letter stating that the offering statement or prospectus required in subdivision one of this section has been filed whenever it appears that the offering statement or prospectus offers for sale residential cooperative apartments or condominium units pursuant to a plan unless the plan provides that: (i) No eviction proceedings will be commenced, except as hereinafter provided, at any time against either eligible senior citizens or eligible disabled persons. The rentals of eligible senior citizens and eligible disabled persons who reside in dwelling units not subject to government regulation as to rentals and continued occupancy and eligible senior citizens and eligible disabled persons who reside in dwelling units with respect to which government regulation as to rentals and continued occupancy is eliminated or becomes inapplicable after the plan has been accepted for filing shall not be subject to unconscionable increases beyond ordinary rentals for comparable apartments during the period of their occupancy considering, in determining comparability, such factors as building services, level of maintainance and operating expenses; provided that such proceedings may be commenced against such tenants for non-payment of rent, illegal use or occupancy of the premises, refusal of reasonable access to the owner or a similar breach by the tenant of his obligations to the owner of the dwelling unit or the shares allocated thereto and provided further that an owner of a unit or of the shares allocated thereto may not commence an action to recover possession of a dwelling unit from a non-purchasing tenant on the grounds that he seeks the dwelling unit for the use and occupancy of himself or his family. (ii) Eligible senior citizens and eligible disabled persons who reside in dwelling units subject to government regulation as to rentals and continued occupancy shall continue to be subject thereto.(iii) The rights granted under the plan to eligible senior citizens and eligible disabled persons may not be abrogated or reduced notwithstanding any expiration of, or amendment to, this section. (iv) Any offeror who disputes the election by a person to be an eligible senior citizen or an eligible disabled person must apply to the attorney general within thirty days of the receipt of the election forms for a determination by the attorney general of such person's eligibility. The attorney general shall, within thirty days thereafter, issue his determination of eligibility. The foregoing shall, in the absence of fraud, be the sole method for determining a dispute as to whether a person is an eligible senior citizen or an eligible disabled person. The determination of the attorney general shall be reviewable only through a proceeding under article seventy-eight of the civil practice law and rules, which proceeding must be commenced within thirty days after such determination by the attorney general becomes final. (c) The provisions of this subdivision shall be applicable in any city, town or village not covered by the provisions of section three hundred fifty-two-eeee of this chapter, or which has not elected to be covered by section three hundred fifty-two-eee of this chapter, provided the local legislative body elects, by majority vote to adopt by resolution, coverage provided by this section. A certified copy of such resolution shall be filed in the office of the attorney general at Albany and shall become effective on the date of such filing. 2-b. In the case of offerings of cooperatives, condominiums, interest in homeowners association and other cooperative interests in realty, including homes subject to deed or covenant or agreements requiring investment therein, the attorney general may refuse to issue a letter of acceptance unless the offering statement, prospectus or plan shall provide that all deposits, down-payments or advances made by purchasers of residential units shall be held in a special escrow account pending delivery of the completed apartment or unit and a deed or lease whichever is applicable, unless insurance of such funds in a form satisfactory to the attorney general has been obtained prior thereto. In addition to the general regulatory authority provided in this section, the attorney general is hereby authorized to adopt, promulgate, amend and rescind suitable rules and regulations to carry out the provisions of this subdivision, including, but not limited to, determining when escrow funds may be released, the nature of escrowees, and other terms and conditions relating thereto deemed necessary in the public interest. 2-c. Payment of legal fees for representation of a tenant or tenant's association in a residential building undergoing conversion to cooperative or condominium ownership shall not be made from any reserve fund, working capital fund, or other fund established to cover expenses, repairs and capital improvements of buildings converted to cooperative or condominium ownership, unless made pursuant to a retainer agreement entered into before this subdivision shall have become a law. Payment of legal fees may be made, however, from another fund specifically designated for such purpose. 2-d. (a) For the purposes of this subdivision the term "self-dealing contract" shall be defined as any contract or portion thereof which is entered into after October eighth, nineteen hundred eighty, and which: (i) provides for operation, maintenance, or management of a condominium or cooperative association in a conversion project, or of property serving the condominium or cooperative unit owners in such projects; (ii) is between such unit owners or such association and the developer or an affiliate of the developer;(iii) was entered into while such association was controlled by the developer through special developer control or because the developer held a majority of the votes in such association; (iv) is for a period of more than three years, including any automatic renewal provisions which are exercisable at the sole option of the developer or an affiliate of the developer; and (v) may not be terminated without penalty by such unit owners or such association. (b) In the case of offerings of cooperatives, condominiums or other interests in realty covered by the provisions of section six hundred eight of the Condominium and Cooperative Abuse Relief Act of 1980, 15 U.S.C. 3607, the attorney general shall refuse to issue a letter of acceptance unless the offering statement, prospectus or plan provides that the tenant shareholders or owners entitled to vote to terminate a self-dealing contract pursuant to such section twice be notified of such right in writing (i) once within thirty days of the date that the right to terminate pursuant to subsection (b) of such section commences and (ii) secondly at least six months prior to the date that such right to terminate will expire. 3. No offering literature shall be employed in the offering of securities as defined in subdivision one of this section except by the offering statement or statements filed in the department of law pursuant to the provisions of this section. All advertising in whatever form, including periodicals or on radio or television shall contain a statement that no offer of such securities is made except by such offering statement or statements. 4. In all literature employed in the offer and sale of securities defined in subdivision one of this section and in all advertising in connection therewith there shall be contained, in easily readable print on the face thereof, a statement that the filing of an offering statement or statements or prospectus as required by subdivision one of this section with the department of law does not constitute approval of the issue or the sale thereof by the department of law or the attorney general of this state. 5. No offering or sale whatever of securities described in subdivision one of this section shall be made except on the basis of information, statements, literature, or representations constituting the offering statement or statements or prospectus described in such subdivision, and no information, statements, literature, or representations shall be used in the offering or sale of securities described in such subdivision unless it is first so filed and the prospective purchaser furnished with true copies thereof. 6. (a) The attorney general is hereby authorized and empowered to adopt, promulgate, amend and rescind suitable rules and regulations to carry out the provisions of this section, including regulations for the method, contents and filing procedures with respect to the statements required by subdivision one and the making of amendments thereto. (b) The attorney general is hereby authorized and empowered to adopt, promulgate, amend and rescind suitable rules and regulations relating to the information furnished to investors of the sources of any distribution or distributions made by any issuer in connection with the sale of realty securities since January first, nineteen hundred sixty-one within the provisions of section three hundred fifty-two-e and section three hundred fifty-two-g of this article. 7. (a) The department of law shall collect the following fees for the filing of each offering statement or prospectus as described in subdivision one of this section: seven hundred fifty dollars for every offering not in excess of two hundred fifty thousand dollars; for everyoffering in excess of two hundred fifty thousand dollars, four-tenths of one percent of the total amount of the offering but not in excess of thirty thousand dollars of which one-half of said amount shall be a nonrefundable deposit paid at the time of submitting the offering statement to the department of law for review and the balance payable upon the issuance of a letter of acceptance for filing said offering statement. The department of law shall, in addition, collect a fee of two hundred twenty-five dollars for each amendment to an offering statement. For each application granted by the department of law which permits the applicant to solicit public interest or public funds preliminary to the filing of an offering statement or for the issuance of a "no-filing required" letter, the department of law shall collect a fee of two hundred twenty-five dollars. In the event the sponsor thereafter files an offering statement, the fee paid for the preliminary application shall be credited against the balance of the fee due and payable on filing. For each application granted pursuant to section three hundred fifty-two-g of this article, the department of law shall collect a fee of two-tenths of one percent of the amount of the offering of securities; however, the minimum fee shall be seven hundred fifty dollars and the maximum fee shall be thirty thousand dollars. All revenue from that portion of any fee imposed pursuant to this paragraph, which exceeds twenty thousand dollars shall be paid by the department of law to the state comptroller to be deposited in and credited to the real estate finance bureau fund, established pursuant to section eighty of the state finance law. (b) The attorney general may, in his discretion, require an inspection to be made by the department of law in connection with a real estate syndication, cooperative, or condominium offering, of lands and property thereon, situated outside of the state of New York, involved in such offering. In such case, prior to the acceptance of such filing, there shall be remitted to the department of law an amount equivalent to the cost of travel from New York to the location of the property involved in the offering and return, as estimated by the department of law, and a further reasonable amount estimated to be necessary to cover the additional expenses of such inspection. The department of law shall return to the person making the remittance any amount advanced in excess of the actual expenses incurred, and where there is a deficiency, the department of law shall be empowered to collect the difference between the actual expenses and the amount advanced. (c) Notwithstanding the provisions of paragraph (a) of this subdivision, the department of law shall not collect any fees for the filing of an offering statement or prospectus or any amended filings thereto as described in subdivision one of this section whenever a conversion of a mobile home park, building or group of buildings or development from residential rental status to cooperative or condominium ownership is being made pursuant to article eighteen, nineteen or twenty of the private housing finance law. 8. Within four months after the end of its fiscal year, every syndicate which shall have been required to file an offering statement or statements or prospectus under subdivision one of this section shall file with the department of law at its office in the city of New York an annual report of the syndicate operation, including an annual balance sheet and profit and loss statement certified by an independent certified public accountant. The department of law shall collect a fee of five dollars for the filing of each such annual report. 9. Each offering statement or prospectus as described in subdivision one of this section, and all exhibits or documents referred to therein shall be available for inspection by any person who shall have purchaseda security described in this section or shall have participated in the offering of such security.

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