§ 98-4Establishment of reserve fund.
§ 98-5Report on status of reserve fund.
The Board of Trustees of the Village of Spring Valley finds that the protection of the health, safety and welfare of persons within the village who reside in residential buildings being converted from rental status to cooperative or condominium ownership requires that such persons be informed of the physical condition of such buildings and of any outstanding notices of code violations issued with respect to such buildings. The Board of Trustees further finds that for the health, safety and welfare of residents of the village and for the preservation and improvement of this substantial and increasing form of housing accommodation, it is essential that funds be set aside for the purpose of making capital repairs, replacements and improvements to such buildings.
The provisions of this chapter shall apply to conversions from rental to cooperative or condominium status of a building or a group of buildings or a development for which a plan must be filed with the State Department of Law pursuant to § 352-eee of the General Business Law.
As used in this chapter, the following terms shall have the meanings indicated:
- Any building, group of buildings or development.
- CAPITAL REPLACEMENT
- A building-wide replacement of a major component of any of the following systems: elevator; heating, ventilation and air conditioning; plumbing; wiring; or window, or a major structural replacement to the building; provided, however, that replacements made to cure code violations of record shall not be included.
- The offeror, his nominees, assignees and successors in interest.
With respect to cooperative conversions, the number of all shares in the offering multiplied by the last price per share which was offered to tenants in occupancy prior to the effective date of the plan, regardless of the number of sales made;
With respect to condominium conversions, the sum of the cost of all units in the offering at the last price which was offered to tenants in occupancy prior to the effective date of the plan, regardless of the number of sales made.
Within thirty (30) days after the closing of a conversion pursuant to an offering plan, the offeror shall establish and transfer to the Cooperative Corporation or the Condominium Board of Managers a reserve fund to be used exclusively for making capital repairs, replacements and improvements necessary for the health and safety of the residents of such buildings. Such reserve shall be exclusive of any other funds required to be reserved under the plan or applicable law or regulation of the State Attorney General, except a fund for capital repairs, replacements and improvements substantially similar in purpose to and in an amount not less than the reserve fund mandated by this section. Such reserve fund also shall be exclusive of any working capital fund and shall not be subject to reduction for closing apportionments.
Such fund shall be established in an amount equal to either three percent (3%) of the total price or three percent (3%) of the actual sales price of all cooperative shares or condominium units sold by the offeror at the time the plan is declared effective; provided, however, that if such amount is less than one percent (1%) of the total price, then the fund shall be established as a minimum of one percent (1%) of the total price, plus supplemental contribution to be made by the offeror at a rate of three percent (3%) of the actual sales price of cooperative shares or condominium units for each unit or its allocable shares held by the offeror and sold to bona fide purchasers subsequent to the effective date of the plan and within five (5) years of closing of the conversion pursuant to such plan, notwithstanding that the total amount contributed may exceed three percent (3%) of the total price; and provided, further, that if, five (5) years from thirty (30) days after the closing of the conversion pursuant to such plan, the total contribution by the offeror to the fund are less than three percent (3%) of the total price, the offeror shall pay the difference between the amount contributed and three percent (3%) of the total price. Supplemental contributions shall be made within thirty (30) days of each sale.
The contributions required pursuant to this action may be made earlier or in an amount greater than so provided. An offeror may claim and receive credit against the mandatory initial contribution to the reserve fund for the actual cost of capital replacements which he has begun after the plan is submitted for filing to the State Department of Law and before the plan is declared effective; provided, however, that any such replacements must be set forth in the plan, together with their actual or estimated costs; and further provided that such credit shall not exceed the lesser of the actual cost of the capital replacements or one percent (1%) of the total price.
Any building, construction of which was completed within three (3) years prior to the closing of a conversion pursuant to an offering plan, shall be exempt from the requirements of this section.
The Cooperative Corporation or the Condominium Board of Managers shall report to shareholders and unit owners on a semiannual basis with respect to all deposits into and withdrawals from the reserve fund mandated by § 98-4.
Any person who knowingly violates or assists in the violation of § 98-4 shall be guilty of a violation and, upon conviction thereof, shall be punished by a fine not more than two (2) times the amount required to be reserved by § 98-4 which was not so reserved. Any person who violates or assists in the violation of § 98-4 shall also be subject to a civil penalty of one thousand dollars ($1,000.) per day for each day that the reserve fund required by § 98-4 is not established; provided, however, that such civil penalty shall not exceed the amount required to be reserved pursuant to § 98-4.
In addition, any other action or proceeding in any court of competent jurisdiction that may be appropriate or necessary for the enforcement of the provisions of this chapter may be brought in the name of the village, including actions to secure permanent injunctions enjoining any acts or practices which constitute a violation of any provision of this chapter, mandating compliance with the provisions of this chapter or for such other relief as may be appropriate. In any such action or proceeding, the village may apply to any court of competent jurisdiction or to a judge or justice thereof for a temporary restraining order or preliminary injunction enjoining and restraining all persons from violating any provision of this chapter, mandating compliance with the provisions of this chapter or for such other relief as may be appropriate, until the hearing and determination of such action or proceeding and the entry of final judgment or order therein. The court or judge or justice thereof to whom such application is made is hereby authorized forthwith to make any or all of the orders above specified, as may be required in such application, with or without notice, and to make such other or further orders or directions as may be necessary to render the same effectual. No undertaking shall be required as a condition of the granting or issuing of such order or by reason thereof.
Nothing contained in this section shall impair any rights, remedies or causes of action accrued or accruing to purchasers of cooperative shares or condominium units.