New York Codes, Rules and Regulations
Title 14 - DEPARTMENT OF MENTAL HYGIENE
Chapter XIII - Office of Mental Health
Part 521 - Financial Assistance For Capital Acquisition And Construction
Section 521.6 - Title requirements for property
Universal Citation: 14 NY Comp Codes Rules and Regs ยง 521.6
Current through Register Vol. 46, No. 39, September 25, 2024
(a) At the time of receiving a State aid grant, the applicant must be able to demonstrate to the Office of Mental Health that the applicant will possess property rights over the facility that are of sufficient quality and are for the requisite duration.
(1) For the purposes of this subdivision, the
following definitions shall apply:
(i)
Possession of property rights means that these rights are presently held by the
applicant or that the applicant is under contract to acquire them.
(ii) Property rights means the ability to
possess and use the premises and includes a fee simple, a fee on limitation, a
rental agreement, a contract, a contract coupled with possession or a
cooperative interest.
(iii)
Sufficient quality means that the applicant will be able to utilize the
property for the intended purpose without the risk of losing rights to the
property. It is such an interest, when viewed in conjunction with recorded
documents or secured contractual agreements, which provides for undisturbed use
and possession for the purposes of the facility.
(iv) Requisite duration means that the
applicant can use the premises for the period of time required for program
operation at the facility. This period of time is specified in section
521.10(a)(6)
of this Part.
(2) The
commissioner may, upon written application and in his sole discretion, pay a
limited portion of the State aid grant prior to the time the applicant is able
to demonstrate the presence of the title characteristics required by this
subdivision. The applicant's prospective ability to demonstrate the required
title characteristics must be established in such a manner as is required by
the commissioner in each case. Payment may be made in whatever form the
commissioner determines to be necessary to protect the interest of the
OMH.
(b) Based upon the type of interest, the possession of property rights must be demonstrated to the Office of Mental Health as detailed below:
(1)
A fee interest in real property, requires the submission to the Office of
Mental Health of a copy of a title insurance policy and a counsel's opinion
letter.
(i) The title insurance may be a
final policy or a marked title report. It must certify the applicant's interest
in the property.
(ii) A survey and
a survey reading must be included in the policy. If the survey was last updated
more than 90 days before the acquisition of the property, a current survey
inspection is required, unless the property is located in a
condominium.
(iii) Counsel's
opinion letter must certify that the applicable recorded documents, declaration
of condominium, bylaws and protective covenants, as well as zoning ordinances
and local regulations have been examined and that the interest held is of
sufficient quality and for the requisite duration.
(2) A lease or a contract to acquire an
interest in real property requires submission of documents and the applicant's
counsel's opinion letter.
(i) The documents
required include copies of the recorded lease agreement and/or memorandum of
lease or contract to purchase.
(ii)
Counsel's legal opinion letter must certify that the interest, in conjunction
with any documents of record, including recorded mortgage instruments, is of
sufficient quality and for the requisite duration.
(3) Cooperative interests and contracts to
acquire them, such as a subscription agreement or a contract to purchase,
require that the applicant investigate the rules governing the interest and
submit the applicant's counsel's legal opinion letter.
(i) The applicant should assure that the
proprietary lease runs for a period greater than the period of time required
for the operation of the facility; the proprietary lease permits subletting
and/or transient subletting; default provisions based on occupant behavior;
allow for removal of the occupant/subtenant rather than loss of the applicant's
interest; and, these rights are stated in the certificate of incorporation of
the cooperative corporation and its bylaws and are protected by appropriate
supra-majority amendment provisions. These matters may be determined through
investigation of the prospectus as currently amended, and confirmed in the
documents listed above.
(ii)
Counsel's legal opinion letter must certify that the interest is of sufficient
quality and for the requisite duration. It must contain specific citation of
the portions of the relevant documentation upon which the legal opinion was
based, in addition to copies of such supporting documentation (e.g., the
certificate of incorporation, the bylaws, the proprietary lease and/or the
prospectus).
(4) The
applicant for a Housing Finance Agency mortgage loan must have or will have, at
the time the Housing Finance Agency mortgage is executed and delivered, a fee
simple including necessary easements and rights-of-way free and clear of all
covenants, mortgages, easements and encumbrances, sufficient to assure
undisturbed use and possession for the purposes of the facility.
Disclaimer: These regulations may not be the most recent version. New York may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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