This chapter is enacted to provide prospective
homeowners with security against loss of their deposits through the
contractor's default. Any contractor who agrees to build a home and
accepts a deposit from the future owner must either place the deposit
in an escrow account or post bond in the amount of the deposit.
When used in this chapter, the following terms,
unless the context requires otherwise, shall have the following meanings:
DEFAULT
Occurs where title to a 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
vendor undertook to build or construct a home for the vendee, or where
the vendor becomes insolvent.
DEMAND
Communication of an actual notice to the vendor of request
made therein.
DEPOSIT
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 vendee
wherein vendor undertakes to build or construct a home for the vendee.
HOME
A new one-family dwelling intended to be used primarily as
a residence.
VENDEE
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.
VENDOR
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 and such vendee is required to pay a deposit to
such vendor, the vendor shall post with the Treasurer of the Village
of Lake Grove wherein such home is to be erected or constructed a
bond in the amount of such deposit or deposits. Such bond shall be
posted within five business days after receipt by the vendor of said
deposit or deposits and shall secure the payment of said deposit to
the vendee upon the vendor's default. Such bond shall be in such form
as required by the village.
In lieu of posting a bond as provided in this
chapter, the vendor shall place the deposit or deposits paid to him
by the vendee in an interest-bearing escrow account with a bank as
defined in the Banking Law 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.