New York Codes, Rules and Regulations
Title 13 - DEPARTMENT OF LAW
Chapter II - SECURITIES TRANSACTIONS AND PERSONNEL
Subchapter B - REAL ESTATE SYNDICATES
Part 18 - OCCUPIED COOPERATIVES
Section 18.2 - Procedure for submission
Universal Citation: 13 NY Comp Codes Rules and Regs ยง 18.2
Current through Register Vol. 46, No. 39, September 25, 2024
(a) The proposed offering plan and the exhibits described below shall be submitted to the New York State Department of Law, Real Estate Finance Bureau, 28 Liberty Street, New York, NY 10005.
(b) The exhibits shall accompany the proposed offering plan submitted to the Department of Law and shall be subject to the sanctions of article 23-A of the G.B.L. Whenever an exhibit document is marked "Original" ("Orig") on the list set forth below, it means that at least one document must be a duly executed, original document. Whenever a document is marked "copy" on the list set forth below, it means that a true and complete copy of the document must be included.
(c) The following are to be included when submitting a proposed offering plan pursuant to this Part:
(1) A transmittal letter addressed to the
Department of Law that is signed and affirmed by the attorney who prepared the
plan, containing the statements required by section
18.4(a) of this
Part, without qualification or alteration in substance. As specified in section
18.2(c)(4) of
this Part, the transmittal letter must expressly indicate any exhibit that is
not included, (apart from those noted) and set forth the reasons for the
omission. Exemption applications submitted pursuant to section
18.1(k) of this
Part must be annexed to and submitted with the transmittal letter. Omissions
and additions to the table of contents must be noted and explained. As
specified in section
18.3(m)(1)(ii) of
this Part, note if any model form(s) for description of tenants' rights have
been used. Pursuant to section
18.3(s) of this
Part, the transmittal letter must note whether the offering plan contains or
refers or to a short-term mortgage, negative amortization mortgage, wraparound
mortgage or other type of mortgage involving any unusual risks. Pursuant to
section 18.3(t)(12) of
this Part, the transmittal letter must note financing offered to purchasers
which contains any unusual risks. Pursuant to section
18.3(bb)(5)(v) of
this Part, the transmittal letter must note whether the offering plan contains
any description of or reference to leases with sponsor or affiliates of
sponsor.
(2) Staple or clip to the
transmittal letter a check (certified or uncertified) for one half of the
filing fee under G.B.L. section 352-e(7)(a) (a nonrefundable deposit) payable
to "New York State Department of Law". The filing fee(s) is (are) based on the
maximum total of the cash amount of the offering to non-tenant purchasers and
of the mortgages that will encumber the property after the closing.
(3) One paper copy of a typed or printed,
bound offering plan and one digital copy of the offering plan.
(4) One paper copy of all exhibits to the
offering plan and one digital copy of all exhibits to the offering plan. The
paper copy of the exhibits shall be in a binder from which documents can be
removed easily, and the binder must be indexed with tabs. The cover of the
binder must be labeled with the name and the address of the cooperative and the
name, address and telephone number of the attorney who prepared the plan. Both
the binder and the digital copy must contain an index of the documents. The
transmittal letter required by paragraph (l) of this subdivision must note the
omission of any exhibit, other than the exceptions stated below and the reason
for the omission. If exhibits A-4, B-3, B-4, B-8, B-9, B-10, B-11, B-16, B-17,
B-l8, B-19, B-20, B-21, B-22, B-23, B-24 are omitted solely because the exhibit
is not applicable to the offering, the omission need not be noted in the
transmittal letter.
(i) Part A of the exhibits
(Certifications) shall consist of the following documents. Photocopies or
conformed copies of the certifications shall appear in the offering plan.
(A-1) Certification by sponsor and sponsor's
principals signed by "sponsors" and "principals" as defined in section
18.1(c) and (d);
see section
18.4(b).
(Orig)
(A-2) Certification by
sponsor's engineer or architect concerning the description of the property and
building condition in Part II of the plan and at Exhibit C-1; see section
18.4(c).
(Orig)
(A-3) Certification by
expert as to adequacy of projected income and expenses for the first year of
cooperative operation; see section
18.4(d).
(Orig)
(ii) Part B of
the exhibits (General) shall consist of the following documents:
(B-1) Title company report, including a
report on housing or building code violations of record, dated or updated
within 90 days of submission. (Orig.)
(B-2) Proposed management agreement.
(Orig.)
(B-3) Copies of any
contract which:
(a) will be binding on the
apartment corporation for $2,500 or more per year;
(b) has a term in excess of two years;
or
(c) is with sponsor, a business
affiliate of the sponsor or a principal of the sponsor.
(B-4) Copy of letter from an insurance
company or its authorized agent, stating proposed insurance coverage and
amounts, and the annual premium or premiums.
(B-5) Copy of an opinion from an independent,
licensed insurance broker, insurance appraiser or real estate appraiser
representing that the fire insurance coverage budgeted in the plan is adequate
(a) so that the insured shall not be a coinsurer if policy
contains a coinsurance provision, or (b) to cover replacement
cost if policy is for an agreed amount which waives coinsurance.
(B-6) Copy of § 352-a/§ 352-b
Designation of Secretary of State as agent (applicable only to out-of-state
issuers, sponsors, principals and/or selling agents).
(B-7) For cooperatives located outside of New
York, New Jersey, Florida, Pennsylvania and Connecticut, copy of statutes and
regulations concerning the registration and formation of cooperatives. All
cooperatives located outside of New York must include evidence of compliance
with local laws and regulations concerning registration and formation of
cooperatives.
(B-8) Copy of the
form of promissory note and mortgage on the proprietary lease, security
agreement, stock power, assignment of lease and recognition agreement required
by sponsor if the plan offers financing, together with any other document which
significantly affects a purchaser's obligations for financing offered by
sponsor.
(B-9) Copy of certificate
of incorporation and receipt from Secretary of State for the apartment
corporation, if available.
(B-10)
Copy of specimen stock certificate. Include any restrictions on transferring
and any other endorsements.
(B-11)
Copy of any mortgage and note or bond that will be a lien on the property after
closing or which presently encumbers the property.
(B-12) Copy of any mortgage financing
commitment letter and amendments or extensions of the commitment
letter.
(B-13) Copies of present
and proposed professional and commercial leases, and any concession
agreements.
(B-14) Copy of contract
of sale or exchange between the sponsor and the apartment corporation that
conforms to the contract described in the offering plan, and copy of proposed
deed to the apartment corporation.
(B-15) Rent roll certified by the sponsor,
managing agent or current owner, as of a date that is within 60 days prior to
submission, including the name of each tenant, apartment number, rent, term and
termination date of lease, and status under any rent regulatory laws.
(B-16) If the building receives tax abatement
or exemption benefits, copy of proof of the level and duration of benefits
described in the plan.
(B-17) Copy
of sponsor's or present owner's deed to the property, and copy of contract of
sale between owner and sponsor if sponsor is contract vendee.
(B-18) Copy of any other material
document(s), each of which should be described in the transmittal letter,
e.g., copy of regulatory agreement with a government
agency.
(B-19) Copy of the escrow
agreement between the sponsor and the attorney(s) acting as escrow agent. If
the model form is not used, so indicate. Copy of bank forms to be used to open
any escrow account.
(iii) Part C of the exhibits (Engineering)
shall consist of the following documents:
(C-1) Architect's or engineer's detailed
description of the property and building condition, with the architect's or
engineer's seal and original signature. The description must be dated within 90
days of submission to the Department of Law and conform to the requirements of
section 18.7 of this Part; see Exhibit
A-2.
(C-2) Copy of currently valid
temporary, partial or permanent certificate of occupancy. If a certificate of
occupancy is not available because the building was constructed before the
municipality began to issue certificates of occupancy, include a representation
from sponsor that the proposed use by the apartment corporation is identical to
the present use of the building.
(iv) Part D of the exhibits (Other
Information) shall consist of the following documents:
(D-1) Signed M-10 form(s), broker dealer
statement, for the selling agents (Orig), unless exempted by General Business
Law section 359-e, and signed M-2 form(s), salespersons' statements, for all
individual employees who act as salespersons (Orig) unless exempted by General
Business Law section 359-e. Forms do not have to be submitted if currently
valid registration forms are on file with the Department of Law from prior
offerings and a copy of the form is submitted as Exhibit D-1.
(D-2) Signed M-10 form(s), for the sponsoring
entity, which shall include all officers, directors, partners or principals who
are "dealers" for purposes of G.B.L. section 359-e (Orig). Forms do not have to
be submitted if currently valid registration forms are on file with the
Department of Law from prior offerings and a representation to that effect is
stated in Exhibit D-2 (Orig).
(D-3)
Signed RI-1 form(s), registrant information form(s), concerning prior
convictions, judgments, administrative actions, bankruptcy, employment and
business affiliations for all principals of the sponsor (Orig).
(D-4) Sponsor's affidavit that sponsor's net
worth is or will be sufficient to meet the requirements of G.B.L. section 352-k
and all of the unsecured obligations sponsor assumes in the offering plan,
including sponsor's obligations for unsold shares (Orig).
(D-5) An affidavit from sponsor and
principals of sponsor, as defined in section
18.1(c) and (d)
of this Part, stating whether sponsor and principals of sponsor have taken part
in public offerings of cooperative interests in realty, including condominiums,
in or from New York, which were initially offered during the preceding five
years. State the addresses of the realty and approximate date the offering plan
was filed, and the date of the closing for cooperatives or the date of first
closing for condominiums (Orig).
(D-6) Completed statistical information card
(available from the Department of Law).
(d) Upon preliminary advice from the Department of Law that the proposed offering plan may be filed, sponsor must submit:
(1) checks (certified or
uncertified) for the balance of the filing fees under G.B.L. section
352-e(7)(a) and the filing fees under G.B.L. section 359-e(5), payable to "New
York State Department of Law";
(2)
one paper copy of the typed or printed, bound offering plan and one digital
copy of the offering plan with the filing date left blank (the filing date
shall be inserted after receipt of the letter from the Department of Law
accepting the offering plan for filing; all offering plans must be dated before
being presented to offerees); and
(3) two copies of the rent roll as of the
month the plan is to be filed, certified by the sponsor, managing agent or
current owner.
(e) The plan is filed on the date indicated in the letter from the Department of Law stating that the plan is filed.
(f) Sponsor should present the plan within a reasonable time after the filing.
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