N.Y. Private Housing Finance Law § 573: Incorporation and organization of non-profit housing corporations

§ 573. Incorporation and organization of non-profit housing

corporations. 1. A housing development fund company shall be

incorporated pursuant to the provisions of this article and the

provisions of either (a) the business corporations law, (b) the

not-for-profit corporation law, or (c) the not-for-profit corporation

law and article two of this chapter.

2. The term "housing development fund corporation" or "housing

development fund company" shall be included as a part of the corporate

name as set forth in the certificate of incorporation.

3. The certificate of incorporation of any such corporation shall, in

addition to any other requirements of law, provide:

a. that the company has been organized exclusively to develop a

housing project for persons of low income;

b. that all income and earnings of the corporation shall be used

exclusively for corporate purposes, and that no part of the net income

or net earnings of the corporation shall inure to the benefit or profit

of any private individual, firm, corporation or association;

c. that if the corporation receives a temporary loan or advance from

the housing development fund or a municipal housing development fund, as

established by or pursuant to article eleven of the private housing

finance law, it shall be authorized to enter into an agreement with the

commissioner of housing and community renewal of the state of New York

or the supervising agency, as the case may be, providing for regulation

with respect to rents, profits, dividends and disposition of property or

franchises;

d. that if the corporation receives a temporary loan or advance from

the housing development fund or a municipal housing development fund, as

established by or pursuant to article eleven of the private housing

finance law, the commissioner of housing and community renewal of the

state of New York or the supervising agency, as the case may be, shall

have the power, if, in his or its discretion, he or it determines either

that any such temporary loan or advance is in jeopardy of not being

repaid, or that the proposed housing project for which such temporary

loan or advance was made is in jeopardy of not being constructed, to

appoint to the board of directors of such corporation a number of new

directors, which number shall be sufficient to constitute a majority of

such board, notwithstanding any other provision of such certificate of

incorporation or of any other provision of law.

4. The certificate of incorporation of any such corporation organized

pursuant to the business corporation law and this article shall, in

addition, provide that each housing project of such corporation shall be

operated exclusively for the benefit of the persons or families who are

entitled to occupancy in such housing project by reason of ownership of

shares in such corporation, and that such corporation may issue shares

for home owners purchase notes if the purchase transaction has received

the written endorsement of the commissioner in accordance with

supplementary rules and regulations of the commissioner made therefor

and if at least two hundred dollars in money or property is received by

such corporation toward the issuance of such shares.

5. The secretary of state shall not file the certificate of

incorporation of any such corporation or any amendment thereto unless

the consent or approval of the commissioner or the supervising agency,

as the case may be, is affixed thereon or attached thereto. Consent to

the filing of such certificate of incorporation shall be based upon

findings by the commissioner or supervising agency as to the character

and competence of the sponsor.