Current through Register Vol. 46, No. 52, December 24, 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 General
Business Law. Whenever an exhibit document is marked "orig." on the list set
forth in paragraph (c)(4) of this section, it means that at least one document
must be a duly executed, original document. If a document is not so marked 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
24.4 of this Part without
qualification or alteration in substance. As specified in paragraph (4) of this
subdivision, 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
24.1(h) 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.
(2) Staple or clip to the transmittal letter
a check (certified or uncertified) for one half of the filing fee under General
Business Law, section 352-e(7)(a) (a nonrefundable deposit) payable to New York
State Department of Law. The filing fee is based on the maximum total amount of
the offering.
(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
timesharing plan 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, and the reason for the
omission.
(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)
(A-1)
Certification by the sponsor and the sponsor's principals, signed by "sponsors"
and "principals" as defined in section
24.1(c) (orig.);
see section
24.4(b).
(b)
(A-2) Certification by sponsor's engineer or
architect concerning the property description in part II of the plan and at
exhibit C-1 (orig.); see section
24.4(c).
(c)
(A-3) Certification by expert as to adequacy
of projected income and expenses for the timesharing plan (orig.); see section
24.4(d).
(ii) Part B of the
exhibits (general) shall consist of the following documents:
(a)
(B-1) A
projection, by a qualified expert or local supplier, of the consumption, rate
and total cost of furnishing heat, hot water, electricity and other utilities
to timeshare property.
(b)
(B-2)
Title company report for all property subject to the use and occupancy of
purchasers under and as part of the timesharing plan, including property
outside the immediate timeshare regime, dated within 30 days of submission
(orig.).
(c)
(B-3) Proposed management agreement
(orig.).
(d)
(B-4) Letter from an insurance company or its
authorized agent, stating proposed insurance coverage and amounts, and the
annual premium or premiums.
(e)
(B-5)
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 (
1) so that the insured shall
not be a co-insurer if the policy contains a co-insurance provision, or
(
2) to cover replacement cost if policy is for an agreed
amount which waives co-insurance.
(f)
(B-6)
Section 352-a/section 352-b designation of Secretary of State as agent
(applicable only to out-of-state issuers, sponsors, principals and/or selling
agents).
(g)
(B-7) For a timesharing plan located outside
of New York, submit any statutes and regulations governing the registration and
formation of the timesharing plan. A timesharing plan located outside of New
York must include evidence of compliance with any local laws and regulations
concerning registration and formation of the timesharing plan.
(h)
(B-8) If a homeowner's association or
cooperative corporation is part of the offering, submit the certificate of
incorporation and receipt from the New York Secretary of State (or equivalent
proof of organization of such entity for out-of-state plans), bylaws and other
relevant organizational documents.
(i)
(B-9)
If the plan offers financing, submit all financing documents, including but not
limited to the promissory note and mortgage or other security
instrument.
(j)
(B-10) If applicable, submit an estimate of
the assessed valuation, after completion of construction or rehabilitation,
from the local tax assessor. If not available, submit an estimate of the
assessed valuation, after completion of construction or rehabilitation, from a
real estate broker, appraiser, attorney or other professional familiar with the
tax assessment practices in the locality in which the timeshare property is
located.
(k)
(B-11) If, as part of the timesharing plan,
timeshare owners have the right to use and occupy property outside the
immediate timeshare regime (at no additional charge or at a discount from rates
charges to the general public), submit an easement which establishes this
right, along with evidence that it has been recorded against the servient
estate in accordance with the recording act of the jurisdiction in which the
servient estate is located.
(l)
(B-12)
If, as part of the timesharing plan, timeshare owners have the right to use and
occupy property outside the immediate timeshare regime (at no additional charge
or at a discount from rates charged to the general public), submit a covenant
(running with the land) that such property will be used only as set forth in
the offering plan, along with evidence that the covenant has been recorded
against the other property in accordance with the recording act of the
jurisdiction in which the other property is located.
(m)
(B-13)
Any mortgage and note or bond that presently encumbers any property subject to
the use and occupancy of purchasers under and as part of the timesharing plan,
including property outside the immediate timeshare regime.
(n)
(B-14)
Any instrument which establishes a trust to hold title to timeshare property
pending the full satisfaction of a purchaser's financing obligation.
(o)
(B-15) For timesharing plans located outside
New York, submit an opinion, from independent counsel admitted to practice in
the jurisdiction in which the timeshare property is located:
(1) that any escrow account for purchaser's
funds established in a bank located outside the State of New York is not
subject to attachment, garnishment, foreclosure, levy or other legal seizure by
the creditors or bankruptcy trustee of the sponsor, selling agent, the owner of
the timeshare property or the principals of any of them;
(2) that any property (both real and
personal) held in a trust pending the satisfaction of a purchaser's
purchase-money financing obligation is not subject to attachment, garnishment,
foreclosure, levy or other legal seizure by the creditors or bankruptcy trustee
of the sponsor, the selling agent, the owner of the timeshare property or the
principals of any of them; and
(3)
that the timesharing plan complies with all applicable statutes, regulations
and ordinances of the jurisdiction in which the timeshare property is
located.
(o)
The opinion should discuss the foregoing issues in detail and include citations
to relevant statutory and decisional law. The Department of Law may require an
opinion from local counsel on other issues as well.
(p)
(B-16)
The sponsor's or present owner's deed to the property, and copy of the contract
of sale between owner and sponsor if the sponsor is a contract
vendee.
(q)
(B-17) An affidavit from the sponsor setting
forth the total number of timeshares in the timesharing plan, the jurisdictions
in which sales are authorized, the total number of timeshares sold and the
number of timeshares in the timesharing plan which have been sold to residents
of the State of New York, if any.
(r)
(B-18)
Any other material document(s), each of which should be described in the
transmittal letter.
(s)
(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.
(t)
(B-20) Copy of surety bonds or letter of
credit proposed to secure down payments and any underlying agreement or related
agreement, and any undertaking called for in the regulations or proposed to be
furnished.
(iii) Part C of the exhibits (engineering)
shall consist of the following documents:
(a)
(C-1) Architect's or engineer's detailed
description of the property, 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
24.7 of this Part; see exhibit
A-2.
(b)
(C-2) Copies of currently valid temporary,
partial or permanent certificates of occupancy, if available and if required.
If a certificate of occupancy for any building or buildings has not been
issued, so indicate and forward to the Department of Law when issued.
(iv) Part D of
the exhibits (other information) shall consist of the following documents:
(a)
(D-1)
Signed M-10 form(s), broker-dealer statement, for the selling agent (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.
(b)
(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 General Business Law, 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 made in exhibit D-2 (Orig).
(c)
(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)
(D-4) Sponsor's affidavit that the sponsor's
net worth, together with the proceeds of firmly committed construction
financing, is sufficient to meet the requirements of General Business Law,
section 352-k and all of the unsecured obligations assumed by the sponsor under
the offering plan, including the sponsor's obligation to complete all work and
the sponsor's obligations for unsold timeshares.
(e)
(D-5)
Sponsor's audited financial statements for the last two fiscal years ending
prior to the date of submission. Timeshare sales financed by the sponsor must
be presented in the sponsor's financial statements on an installment sale basis
unless the purchase-money notes executed by timeshare purchasers are negotiated
to an unaffiliated third party or parties without direct or indirect recourse
to the sponsor.
(f)
(D-6) An affidavit from the sponsor and
principals of the sponsor, as defined in section
24.1(c) of this
Part, stating whether the sponsor and principals of the sponsor have taken part
in public offerings of cooperative interests in realty, including timesharing
plans, 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 (orig.).
(g)
(D-7)
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 the following:
(1) checks (certified
or uncertified) for the balance of the filing fee under General Business Law,
section 352-e(7)(a) and the filing fees under General Business Law, section
359-e (5), payable to New York State Department of Law; and
(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).
(e) The plan is filed on the date indicated
in the letter from the Department of Law stating that the plan is
filed.