N.Y. Private Housing Finance Law § 35-a: Requirements regarding dissolution

§ 35-a. Requirements regarding dissolution. Mutual housing companies

considering dissolution and/or reconstitution pursuant to section

thirty-five of this article shall be subject to the following

requirements:

1. Any preliminary vote to authorize a feasibility study, or to

approve a special assessment to fund such feasibility study shall

require the approval of a minimum of two-thirds of all dwelling units

for which shares have been issued by the mutual housing company,

regardless of whether such dwelling units are occupied or vacant,

provided however, that where the shareholder of record is deceased, any

vote attributable to the dwelling unit shall be discounted, both in the

number of votes cast and in the total number of dwelling units upon

which the vote is calculated, until such time as a new shareholder of

record is determined for that dwelling unit.

2. Except as provided for in subdivision seven of this section, any

vote to authorize the funding, development, and submission to the

attorney general of an offering plan for dissolution and reconstitution

of the mutual housing company, or to authorize the funding, development,

and submission to the attorney general of a proxy statement, or any

other documents permitted by the attorney general instead of such

offering plan, or any other preliminary vote for review by the

commissioner or supervising agency relating to the dissolution or

reconstitution required by the regulations of the commissioner or

supervising agency, shall require the approval of eighty percent of all

dwelling units for which shares have been issued, regardless of whether

such dwelling units are occupied or vacant, provided however, that where

the shareholder of record is deceased, any vote attributable to the

dwelling unit shall be discounted, both in the number of votes cast and

in the total number of dwelling units upon which the vote is calculated,

until such time as a new shareholder of record is determined for that

dwelling unit.

3. No funds from the operating budget of the mutual housing company

shall be used for the preparation or distribution of a feasibility

study, a preliminary or filed offering plan for dissolution and

reconstitution of the mutual housing company, a proxy statement or any

other documents permitted by the attorney general instead of such

offering plan, or a notice of intent to dissolve, or to pay for any

services related to evaluation of, preparation for, or execution of

dissolution and/or reconstitution pursuant to section thirty-five of

this article, including but not limited to legal services, but such

funds may only be raised by special assessment voted on and applicable

to all shareholders using such procedures as required by regulations of

the commissioner or the supervising agency which shall not allow

proxies.

4. Except as provided for in subdivision seven of this section, any

vote authorized by the regulations promulgated by the commissioner or

the supervising agency that constitutes the vote for submission of a

certificate of no objection, consent to dissolution or reconstitution,

for submission to the attorney general of an offering plan for

dissolution and reconstitution of the mutual housing company, or for

submission to the attorney general of a proxy statement or any other

documents permitted by the attorney general instead of such offering

plan shall require the approval of eighty percent of all dwelling units

for which shares have been issued by the mutual housing company,

regardless of whether such dwelling units are occupied or vacant,

provided however, that where the shareholder of record is deceased, any

vote attributable to the dwelling unit shall be discounted, both in the

number of votes cast and in the total number of dwelling units upon

which the vote is calculated, until such time as a new shareholder of

record is determined for that dwelling unit.

5. No vote as set forth pursuant to subdivision one, two, three or

four of this section, shall occur within five years following a vote

undertaken pursuant to such subdivisions that failed to pass. No vote as

set forth pursuant to subdivision seven of this section shall occur

within three years following a vote undertaken pursuant to such

subdivision that failed to pass.

6. For any vote pursuant to subdivision one, two, three or seven of

this section, the proposal to be voted on shall state that the cost of

the action to be approved will be paid by a special assessment on

shareholders, that approval of the proposal authorizes the mutual

housing company to impose the assessment, and shall include the total

dollar amount of the proposed assessment and the dollar amount per

dwelling unit that will be imposed to fund the action if it is approved.

Once an assessment has been so approved by shareholder vote, the mutual

housing company shall not increase the amount of the approved assessment

except by further vote subject to the same procedures and threshold for

approval as were required for the vote initially approving the

assessment.

7. Notwithstanding any other provision to the contrary, any final or

preliminary vote regarding dissolution and reconstitution that involves

a conversion to a housing company organized under article eleven of this

chapter including, but not limited to, votes on the authorization to

fund, develop, and submit any required filing to the attorney general,

which pursuant to the conversion shall remain under the supervision of

the commissioner or the supervising agency, shall only require a vote of

a minimum of two thirds of the dwelling units for which shares have been

issued by the mutual housing company regardless of whether such dwelling

units are occupied or vacant, provided however, that where the

shareholder of record is deceased, any vote attributable to the dwelling

unit shall be discounted, both in the number of votes cast and in the

total number of dwelling units upon which the vote is calculated, until

such time as a new shareholder of record is determined for that dwelling

unit. Provided further however, that any dissolution and reconstitution

to a housing company organized under article eleven of this chapter as

provided by this subdivision shall not utilize funds from the operating

budget of such housing company to fund the preparation, creation or

distribution of any materials required for a vote to authorize any

dissolution and reconstitution to a housing company organized under

article eleven of this chapter as provided by this subdivision, and the

preparation, creation or distribution of such materials shall be

financed by special assessment voted on and applicable to all

shareholders as provided by subdivision three of this section, unless

such housing company took any actions toward dissolution or

reconstitution prior to the date this section took effect.