As used in this chapter, any inconsistent provisions
of law notwithstanding, the following terms shall have the following
meanings:
DIRECTOR
The City's Director of Finance.
LIEN
Any unpaid tax, special ad valorem levy, special assessment
or other charge imposed upon real property by or on behalf of the
City or special district, which is an encumbrance on real property
and which has remained undischarged for a period of one year or more.
REAL PROPERTY
Any property upon which there is erected any residential,
commercial or industrial building or structure except a one- or two-family
residential structure.
SPECIAL LIEN
A lien upon fire insurance proceeds pursuant to this chapter
and § 22 of the General Municipal Law.
The Director of Finance 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 City and following notification to the Director by an insurer
of the filing of a claim for payment of such proceeds, the Director
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 § 33-a of the Insurance Law, 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
or record name 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 chapter shall not be
deemed or construed to alter or impair the right of the City 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 has been paid to the City instead of an insured, all or part of such proceeds may be paid or released to the insured if the insured satisfies the Director 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 Department of Finance within 45 days after the mailing by the insured of a notice of the service of the certificate of special lien pursuant to §
155-3 of this chapter of the intention to restore or repair the affected premises and must file with the Director a completed application with all required supporting documentation pursuant to §
155-6 of this chapter within 60 days thereafter, unless the Director 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 City arose or to an improved condition.
B. The insured shall file with the Director an application
in affidavit form, with such supporting documentation as the Director
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 City 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 Director
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
Director and the Building Inspector, the Director 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 Director is hereby authorized to enter into such agreement
on behalf of the City.
D. The repairs or restoration required by the Director
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 Director 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 Director 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 Director from further liability to the insured.
E. Whenever the Director 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 City of his or its intention to repair or restore the affected premises as required in §
155-5 of this chapter or fails to file a completed application pursuant to this chapter or fails to enter an agreement with the Director 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 they exceed the amount of the lien, shall terminate.
There shall be established in the office of
the Director a fund for the deposit of fire insurance proceeds to
be held and applied in accordance with this chapter. 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 City 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 Director 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 Director pursuant
to this chapter shall be for the purpose of preserving and evidencing
the right of release of the special lien created by this chapter and
shall be subject solely to the provisions of this chapter. Any repair
or restoration performed in anticipation of a release of insurance
proceeds shall not be deemed to be a public work or municipal project
nor to have been done pursuant to a municipal contract.
The Director shall be empowered to promulgate
rules and regulations and to adopt approved forms to be used by applicants.