N.Y. Private Housing Finance Law § 577-b: Payment of arrears for certain taxes

§ 577-b. Payment of arrears for certain taxes. 1. The term eligible

property as used in this section shall mean a multiple dwelling located

in a city with a population of one million or more and owned by a

company established pursuant to this article which:

(a) is controlled by and provides housing accommodations to its

resident shareholders or members or agrees, on terms approved by the

supervising agency, to offer to the residents of the multiple dwelling

the opportunity to acquire ownership and control of the company; and

(b) on January first, two thousand two, had outstanding municipal real

estate taxes relating to any period prior to January first, two thousand

one.

2. (a) The supervising agency may offer to each company that owns an

eligible property an opportunity to enter into a regulatory agreement

pursuant to which the obligation to pay arrears of real estate taxes

attributable to such property, including interest and penalties if any,

shall be dealt with as provided in such agreement.

(b) The regulatory agreement shall include the following provisions:

(1) a term of thirty years;

(2) that the suspension of the obligation to pay arrears shall

continue provided that the company complies with the terms of the

regulatory agreement;

(3) that all suspended arrears including interest and penalties shall

be forgiven provided that the company complies with the regulatory

agreement for an initial period of ten years;

(4) that portions of the suspended arrears may be forgiven during the

initial ten year period pursuant to a schedule established in the

regulatory agreement;

(5) that any suspended obligations which have not been forgiven may be

reinstated if the company fails to comply with the regulatory agreement;

(6) that all new municipal charges must be paid in a timely fashion;

(7) that the supervising agency shall be authorized to assume control

of the company if the company fails to comply with the agreement;

(8) that the company must comply with customary financial and other

reporting requirements; and

(9) that the company shall be required to increase maintenance charges

or impose assessments to insure that the company can provide for its

obligations.

(c) The regulatory agreement shall also include terms to address the

following matters as well as any other issues that the supervising

agency deems appropriate:

(1) establishment of a structured reserve fund;

(2) restrictions to insure sales and rentals only to low income

individuals and families;

(3) establishment of a transfer fee payable to the company's reserve

fund upon the sale of any units;

(4) restrictions on subletting;

(5) primary residence requirements; and

(6) certification of annual elections.

(d) The regulatory agreement may contain such alterations to the terms

of the original disposition as the supervisory agency deems necessary.