[HISTORY: Adopted by the Town Board of the
Town of Tuxedo 5-10-1978 as L.L. No. 1-1978. Amendments noted where
applicable.]
The Town Board of the Town of Tuxedo, taking
cognizance of the exposure to loss, because of a builder's financial
failure, of contract deposits placed with a builder for the purchase
of a home in the Town of Tuxedo and further taking cognizance of the
desire on the part of all responsible businessmen in the building
and construction industry in the Town of Tuxedo to preserve their
reputations from the adverse effect of possible losses of home buyer
deposits as above described, hereby determines that the enactment
of this chapter pursuant to the general powers granted by § 10
of the Municipal Home Rule Law will contribute to the public welfare
and safety and to the orderly development of the Town of Tuxedo and
will reinforce public confidence in the financially responsible builders
and contractors in the Town of Tuxedo.
As used in this chapter, the following terms,
unless the context requires otherwise, shall have the meanings indicated:
Where title to the home is not transferred to the vendee
because of the failure of the vendor to substantially perform those
provisions of the agreement between the vendor and vendee wherein
the vendor undertook to build or construct a home for the vendee or
where the vendor becomes insolvent.
Communication of an actual notice to the vendor of requests
made therein.
The ten percent down payment given by the vendee to the vendor
as required by the vendor prior to the commencement of the work to
be performed, pursuant to an agreement between the vendor and vendee
wherein the vendor undertook to build or construct a home for the
vendee.
A new one- or two-family dwelling intended to be used primarily
as a residence.
The Town of Tuxedo.
Any individual or individuals who have contracted with a
vendor for construction of a home on land not owned at the time of
such agreement by such individual or individuals.
Any person, firm, corporation or association engaged in the
business of erecting or constructing homes.
A.Â
Posting bond. When a vendor undertakes to build or
construct a home for a vendee and such vendee is required to pay a
deposit to such vendor, the vendor shall post with the Supervisor,
as chief fiscal officer of the Town, a bond in the amount of such
deposit or deposits. Such bond shall be posted within five business
days after receipt of said deposit by the vendor and shall secure
the payment of said deposit to the vendee upon the vendor's default.
In no event shall the vendor secure a building permit from the Zoning
and Building Inspector until the posting of such bond is completed.
B.Â
Alternative to posting bond. In the event that the
vendor is unable to post a bond as hereinabove provided, the vendor
shall place the deposit or deposits paid to him by the vendee in an
interest-bearing escrow account maintained by the vendor's attorney
within five business days after receipt of such deposit or deposits.
Such deposit or deposits, together with interest accumulated thereon,
shall remain the property of the vendee, except as otherwise provided
herein. No building permit shall be issued until evidence that the
deposit or deposits have been placed in an interest-bearing escrow
account has been presented to the Supervisor as chief fiscal officer
of the Town.
Upon transfer of title of the home to the vendee
and upon presentation of evidence that such transfer has occurred,
the posted bond or funds held in escrow, together with interest accumulated
thereon, shall become the property of the vendor, unless otherwise
agreed between the vendor and vendee.
In the event of a default by the vendor, the
vendee may demand return of his deposit or deposits from the vendor
or his attorney, and the vendor or his attorney shall physically transfer
the account to the vendee or pay the balance of said account to the
vendee within 14 business days after the day on which the demand was
made. If the vendor has posted a bond pursuant to the provisions of
this chapter, the vendee may initiate an action for the payment thereon
for the amount of the deposit or deposits.
[Amended 10-10-1979 by L.L. No. 7-1979]
Failure of the vendor to comply with any of
the provisions of this chapter is a misappropriation of funds, and
action may be brought by the vendee against the vendor for the return
of any moneys advanced. In addition, the failure of the vendor to
so comply with the provisions of this chapter shall be deemed a violation
pursuant to the Penal Law of the State of New York, punishable by
a fine not exceeding $250 or by imprisonment for not exceeding 15
days, or by both such fine and imprisonment.
A.Â
Nothing in this chapter shall impair, limit or reduce
the statutory, common law or contractual duties or liability of any
vendor in the construction of a home, nor shall these provisions apply
to any local law or ordinance which requires the posting of public
improvement bonds.
B.Â
This chapter is intended to prevent loss of contract
deposits on homes being built in the Town of Tuxedo. It shall not
be construed to make the Town or any agency or department of the Town
a party to a contract of sale of real property or an arbiter or guarantor
of the terms of such a contract.
