[HISTORY: Adopted by the Town Board of the
Town of Clarkstown: Art. I, 10-9-1990 as L.L. No. 6-1990. Amendments noted where
applicable.]
[Adopted 10-9-1990 as L.L. No. 6-1990]
The Town Board of the Town of Clarkstown, being
aware of the exposure to loss, because of a builder's financial failure,
of contract deposits placed with a builder for the purchase of a new
one- or two-family residence or residential condominium in the Town
of Clarkstown, and further realizing that it is the desire on the
part of all responsible persons in the building and construction industry
in the Town of Clarkstown 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 Article, pursuant to
the general powers granted by § 10 of the Municipal Home
Rule Law and the specific authority of Article 37, § 779,
of the General Business Law, will contribute to the public welfare
and safety and to the orderly development of the Town of Clarkstown
and will reinforce public confidence in the financially responsible
builders and contractors in the Town of Clarkstown.
When used in this Article, the following terms,
unless the context requires otherwise, shall have the following meanings:
Occurs 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 the 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.
Any moneys given as down payment 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 the 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 Clarkstown.
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.
When a vendor undertakes to build or construct
a home for a vendee within the Town of Clarkstown, and such vendee
is required to pay a deposit to such vendor, the vendor shall post
with the Town Attorney a bond or letter of credit in the amount of
such deposit or deposits. Such bond or letter of credit shall be posted,
within five (5) business days after receipt of said deposit or deposits,
by the vendor and shall secure the payment of said deposit to the
vendee upon the vendor's default. Such bond or letter of credit shall
be in such form as required by the Town Attorney.
In lieu of posting a bond or letter of credit
as provided in this Article, the vendor shall place the deposit or
deposits paid to him or her by the vendee in an interest-bearing escrow
account with a bank, as defined in the Banking Law, within five (5)
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. Verification
of the escrow account must be submitted by the bank to the Town Attorney
within five (5) business days after receipt by the bank of such deposit
or deposits.
A.
Upon transfer of title of the home to the vendee,
the bond or letter of credit posted pursuant to this Article shall
be released, and any funds held in escrow pursuant to the provisions
of this Article, together with interest accumulated thereon, shall
become the property of the vendor, unless otherwise agreed between
the vendor and vendee.
B.
Upon default by the vendor, the vendee may demand
return of his deposit or deposits from the vendor. If the vendor has
placed the deposit or deposits in an escrow account pursuant to the
provisions of this Article, he or she shall physically transfer the
account to the vendee or pay the balance of said account to the vendee
within fourteen (14) business days after the day on which the demand
was made. If the vendor has posted a bond or letter of credit pursuant
to the provisions of this Article, the vendee may initiate action
for payment thereon if his or her deposit or deposits have not been
paid to such vendee by the vendor within fourteen (14) business days
after the day in which said demand was made.
A.
Failure of the vendor to comply with any of the provisions of this Article 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, such vendor shall be liable for criminal action pursuant to the provisions of Subsection B of this section and be subject to the provisions of Subsection C of this section.
B.
Failure of the vendor to comply with any of the provisions
of this Article shall be deemed a misdemeanor.
C.
Failure of the vendor to comply with any of the provisions
of this Article shall result in the revocation of any building permit
issued for the construction of a new home pursuant to a contract between
the vendor and vendee.
D.
Nothing in this Article 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.
Any agreement entered into by a vendee which
waives, limits or disclaims the rights or obligations set forth in
this Article shall be void as contrary to public policy.
A.
This Article is intended to prevent loss of contract
deposits on new homes being built in the Town of Clarkstown. 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 nor an arbiter
or guarantor of the terms of such a contract.
B.
This Article shall apply in that portion of the Town
of Clarkstown outside the limits of any incorporated village.
