[HISTORY: Adopted by the Board of Trustees of the Village
of Fort Edward as indicated in article histories. Amendments noted
where applicable.]
[Adopted 6-4-2018 by L.L. No. 2-2018]
The Village of Fort Edward (the "Village"), pursuant to General
Municipal Law § 22, has the authority to make claims against
fire insurance policy proceeds for liens for taxes, special ad valorem
levies, special assessments and municipal charges and debts incurred
by the Village for properties impacted by fire. After due deliberation,
the Board of Trustees finds that it is necessary to adopt such a local
law to be made whole for certain instances where debt is incurred
by the Village for maintaining such properties. It is further declared
that if left unregulated the municipality and its taxpayers would
be prejudiced by the lack such a regulation, necessitating the regulation
thereof. The Board of Trustees finds that adoption of such a local
law is necessary to protect the health, safety and welfare of the
public in the Village.
This article shall be known as "A Local Law Regulating Fire
Insurance Claims." It is adopted pursuant to § 10 of the
Municipal Home Rule Law.
As used in this article, any inconsistent provisions of law
notwithstanding, the following terms shall have the following meanings:
Any unpaid tax, special ad valorem levy, special assessment
or other charge imposed upon real property by or on behalf of the
Village or special district which is an encumbrance on real property
and which has remained undischarged for a period of one year or more.
The Mayor for the Village of Fort Edward.
Any property upon which there is erected any residential,
commercial or industrial building or structure.
A lien upon fire insurance proceeds pursuant to this article
and § 22 of the General Municipal Law and § 331
of the Insurance Law, and any amendments thereto.
The Mayor shall file a notice of intention to claim against
the proceeds of fire insurance policies with the State Superintendent
of Insurance for entry in the Index of Tax Districts in accordance
with § 22 of the General Municipal Law, the New York State
Insurance Law and all rules and regulations promulgated by the New
York State Department of Insurance with respect to this procedure.
Prior to the payment of any proceeds of a policy of insurance
for damages caused by fire to real property, which policy insures
the interest of an owner and is issued on real property located within
the Village, and following notification to the Village by an insurer
of the filing of a claim for payment of such proceeds, the Village,
by way of the Mayor, shall claim, by serving a certificate of lien,
against such proceeds to the extent of any lien, including interest
and penalties to the date of the claim, thereon, which claims, when
made and perfected in the manner provided for in § 22 of
the General Municipal Law and § 331(a) of the Insurance
Law, and any amendments thereto, shall constitute a special lien against
such proceeds and shall, as to such proceeds, be prior to all other
liens and claims except the claim of a mortgagee of record named in
such policy. Notice of the service of the certificate of the special
lien shall be given to the insured by certified mail.
The provisions of this article shall not be deemed or construed
to alter or impair the right of the Village to acquire or enforce
any lien against property but shall be in addition to any other power
provided by law to acquire or enforce such right.
Whenever the proceeds of a policy of fire insurance which will be or have been paid to the Village instead of an insured, all or part of such proceeds may be paid or released to the insured if the insured satisfies the Mayor that the affected premises have been or will be repaired or restored, that such repairs or restoration are in the public interest and that the insured is issued and complies with an agreement entered into pursuant to this article. To secure such payment or release of proceeds, the insured must notify the office of the Mayor within 45 days after the mailing to the insured of a notice of the service of the certificate of special lien, pursuant to § 190-5, of this article; of the intention to restore or repair the affected premises and must file with the Mayor a completed application with all required supporting documentation, pursuant to § 190-8, within 60 days thereafter, unless the Mayor grants an extension for a stated period of time.
The release or return to the insured of any amounts to which
he or it would otherwise be entitled to claim shall be subject to
the following conditions:
A.
Such release or return shall be subject to the repair or restoration
of the affected premises, in accordance with applicable building laws,
to the condition it was in prior to the time the lien of the Village
arose or to any improved conditions.
B.
The insured shall file with the Mayor an application, in affidavit
form, with such supporting documentation as the Mayor shall require,
containing the following:
(1)
A complete description of the nature and extent of the damage to
the insured premises and of the condition of the premises prior to
the time the lien of the Village arose.
(2)
A complete description of the nature of the repairs or restoration
to be undertaken and the cost thereof.
(3)
A statement as to the source of funds needed to complete such repairs
or restoration if the insurance proceeds are not sufficient therefor.
(4)
The name and address of each contractor who will effect such repairs
or restoration.
(5)
An estimated time schedule showing how long the repairs or restoration,
and each phase thereof, will take.
(6)
Such other information as may be required by the Mayor to enable
him to determine whether the repairs or restoration are in the public
interest and will be or have been timely and properly made.
C.
Upon preliminary approval of an application by the Mayor and the
Building Inspector/Code Enforcement Officer, the Mayor may enter into
a written agreement with the insured, which shall set forth the terms
and conditions for the release and return of all or part of the proceeds,
and the Mayor is hereby authorized to enter into such agreement on
behalf of the Village.
D.
The repairs or restoration required by the Mayor shall be completed
in compliance with the terms and conditions of the agreement prior
to the release or return of any part of the insurance proceeds; provided,
however, that the Mayor may, upon the written request of the insured
and in its sole discretion, approve a prior release of such proceeds
or a portion thereof in a lump sum or in installments, where the insured
certifies and demonstrates that such release is required to permit
such repairs or restoration to go forward. Any such insurance proceeds
released or returned prior to the completion of the repairs or restoration
required by the Mayor may be paid directly to the contractor or contractors
responsible for making such repairs or restoration. Such payment shall,
to the extent thereof, release the Mayor from further liability to
the insured.
E.
Whenever the Mayor releases the entire amount of the proceeds prior
to compliance with the terms and conditions of the agreement, the
insured shall post an undertaking in an amount sufficient to assume
the restoration or improvement of the property.
If the insured fails to notify the Village of its intention to repair or restore the affected premises, as required in § 190-7, or fails to file a completed application pursuant to this article or fails to enter an agreement with the Mayor or comply therewith within the time set forth, the right of the insured to assert a claim against the insurance proceeds, except to the extent it exceeds the amount of the lien, shall terminate.
There shall be established in the office of the Mayor a fund
for the deposit of fire insurance proceeds to be held and applied
in accordance with this article. Such funds shall not be held together
with the general tax levies in the general fund.
Until such termination, any insurance proceeds received by the
Village shall be deposited in a special fund and shall be retained
therein. Upon termination of the insured's right to claim against
the proceeds, the proceeds and any interest accrued thereon shall
be applied to the liens affecting the premises in a manner to be determined
by the Mayor and may be transferred to the general fund.
The lien or liens against the affected premises upon which the
special lien against proceeds is based shall continue in full force
and effect, except to the extent that such lien or liens are or have
been paid.
Any agreement entered into by the Mayor pursuant to this article
shall be for the purpose of preserving and evidencing the right of
release of the special lien created by this article and shall be subject
solely to the provisions of this article. Any repair or restoration
performed in anticipation of a release of insurance proceeds shall
not be deemed to be a public work or Village project nor to have been
done pursuant to a Village contract.
The Mayor shall be empowered to promulgate rules and regulations
and to adopt approved forms to be used by applicants.
If any clause, sentence, paragraph, subdivision, section, or
part of this article or the application thereof to any person, individual,
corporation, firm, partnership, entity, or circumstance shall be adjudged
by any court of competent jurisdiction to be invalid or unconstitutional,
such order or judgment shall not affect, impair or invalidate the
remainder thereof, but shall be confined in its operation to the clause,
sentence, paragraph, subdivision, section, or part of this article,
or in its application to the person, individual, corporation, firm,
partnership, entity, or circumstance directly involved in the controversy
in which such order or judgment shall be rendered.
