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Compiled text through Jan 15, 2026Register checked through July 29, 2026/Vol. XLVIII, Issue 30 (2026-07-29)

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13 NYCRR 17.1 - General provisions

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Dates and status

Compiling agency: Department of Law
Text status: Westlaw Inline Boundary Correction
Compiled text through: Jan 15, 2026
Register checked through: July 29, 2026/Vol. XLVIII, Issue 30 (2026-07-29)
Activity status: No later Register activity identified in this check.
Source snapshot: Jun 6, 2026

(a)This Part shall be applicable to offering statements and “offering plans” required by section 352-e of the General Business Law (G.B.L.) for cooperatives, other than offering plans for the conversion of buildings occupied in whole or in part for residential purposes which shall be subject to Part 18 of this Subchapter and other than offering plans for vacant buildings which are subject to Part 21 of this Subchapter. The offering statement or “offering plan” required by section 352-e of the General Business Law (G.B.L.) shall be submitted in bound booklet form to the New York State Department of Law, Real Estate Finance Bureau, 28 Liberty Street, New York, NY 10005. The offering plan may be submitted for filing (hereinafter sometimes referred to as “final filing”) or submitted pursuant to the optional prefiling procedure described in section 17.3 of this Part. All offering plans submitted to the Department of Law shall be deemed submitted pursuant to the optional prefiling procedure described in section 17.3 of this Part unless the sponsor or the attorney for the sponsor specifically notifies the Department of Law in writing concurrently with such submission of the sponsor's election to submit for final filing.

(b)An offering plan must, at a minimum:

(1)contain in detail the terms of the transaction and be complete, current and accurate;

(2)afford potential investors, purchasers and participants an adequate basis upon which to found their judgment;

(3)not omit any material fact;

(4)not contain any untrue statement of a material fact;

(5)not contain any fraud, deception, concealment, suppression, false pretense or fictitious or pretended purchase or sale;

(6)not contain any promise or representation as to the future which is beyond reasonable expectation or unwarranted by existing circumstances; and

(7)not contain any representation or statement which is false, where the sponsor or the person who made such representation or statement:

(i)knew the truth;

(ii)with reasonable effort could have known the truth;

(iii)made no reasonable effort to ascertain the truth; or

(iv)did not have knowledge concerning the representation or statement made.

(c)As used in this Part, the word sponsor(s) or promoter(s) means any person, partnership, joint venture, corporation, company, trust or other entity or any agent or employee thereof who makes or takes part in a public offering or sale in or from the State of New York of securities consisting primarily of shares or participation interests or investments in entities that own and operate realty as a cooperative.

(d)If the offering plan is submitted for final filing pursuant to General Business Law section 352-e(2), the submission must include six copies of the bound offering plan and two copies of the exhibits described in section 17.2(c) of this Part.

(e)On the date the offering plan is submitted to the Department of Law for final filing, the sponsor shall serve each offeree, as defined in subdivision (f) of this section, of any occupied building with a copy of the offering plan together with the following notice. This notice shall not apply to offering plans that have completed the prefiling procedure set forth in section 17.3 of this Part.

Date of Notice: ____

We have submitted to the New York State Department of Law, Real Estate Finance Bureau, an offering plan for the conversion of [insert address and name of building, if any] to a cooperative. The law requires us to disclose all material information concerning the building and the conversion process in an offering plan. A copy of the offering plan is enclosed for you to retain. Additional copies of the offering plan are available for inspection and copying at the office of sponsor (or sponsor's selling agent) located at [insert name and address of sponsor or sponsor's selling agent] and the Department of Law. The Attorney General strongly urges you to read this offering plancarefully and to consult with an attorney to advise you as to the meaning and consequences of this plan.

We have submitted the offering plan to the Department of Law under section 352-e of the General Business Law. That law requires that the Department of Law, within not less than 120 days or more than 180 days from the date of submission of the offering plan, must either file the offering plan or indicate how the offering plan is deficient. You may send written comments to the Department of Law, Real Estate Finance Bureau, 28 Liberty Street, New York, NY 10005. You may also send your written comments to the sponsor (or sponsor's selling agent). No apartments may be sold or offered for sale, no subscription agreements may be executed, and no down payments may be accepted unless and until the Department of Law files the offering plan and a copy of the final plan is served on each tenant.

(f)Unless otherwise provided by statute or regulation, any documents required to be served by these regulations shall be served on tenants, purchasers who have executed and delivered subscription agreements to the sponsor and who are not in default, shareholders and any other person entitled to service pursuant to local law or regulations (collectively, “offerees”) in the following manner:

(1)personal delivery; or

(2)mailing by regular mail or registered or certified mail, with or without return receipt requested, addressed to the offeree at the building or group of buildings or development (“building”) being converted. If such building is not the place of residence of such offeree and sponsor has written information of the residence address of such offeree, the mailing shall be addressed to such last residence address. If sponsor has no such information but has written information of the place of business or employment of such offeree, the mailing shall be addressed to such last business or employment address.

Service shall be complete upon completion of personal delivery on all offerees or three days after mailing to all offerees not personally served.

(g)After submission of the offering plan for final filing, the Department of Law shall issue a letter to the sponsor or sponsor's attorney stating that the plan is filed, or indicating deficiencies. The Department of Law shall issue such a letter for a final offering plan submitted for a building occupied in whole or in part for residential purposes no sooner than 120 days and no later than 180 days after the date of submission of the final offering plan. For all other buildings, the Department of Law shall issue such a letter not later than 30 days after the date of submission of the final offering plan. The Department of Law may issue a deficiency letter whenever it appears that the department cannot make any finding mandated by law or that the offering plan is deficient in one or more respects.

(h)Offering literature and advertising to be employed in connection with the offering may accompany the submission for filing.

(i)Unless otherwise provided by regulation, documents filed with the Department of Law to supplement or amend an offering plan previously filed, and new or amended literature to be employed in connection with an offering, shall be deemed part of the offering statement, shall be signed by the sponsor and shall be accompanied by one executed copy of form RS-2 issued by the Attorney General with the appropriate filing fees. Such form, together with three copies of the supplemental, amended, or new literature, shall be submitted for filing with the Department of Law and shall not be used in the offering or sale unless and until filed.

(j)If any offering is abandoned or not consummated for any reason, the sponsor shall file two executed copies of form RS-3 issued by the Attorney General within 48 hours after such abandonment. Form RS-3 requires an explanation of the disposition of the funds raised, as well as an explanation for the failure to consummate the transaction.

(k)Unless expressly provided herein, nothing contained in this Part shall be construed as limiting the requirements of disclosure set forth in article 23-A of the General Business Law and regulations promulgated thereunder (see, e.g., Part 16 of this Subchapter), applicable to offerings of cooperative apartments.

(l)The offering plan in bound booklet form shall be delivered to prospective purchasers at least three business days before a subscription agreement is mailed or delivered to them.

(m)Within three business days following completion of service on all offerees, as defined in subdivision (f) of this section, of:

(1)a draft offering plan pursuant to the optional prefiling procedure set forth in section 17.3 of this Part; or

(2)an offering plan submitted for final filing:

sponsor shall establish by proof satisfactory to the Department of Law that there were no excessive long-term vacancies if G.B.L. section 352-eee(2)(h) or 352-eeee(3)(a) is applicable, and that each offeree was served with a copy of the offering plan and with the notice required by subdivision (e) of this section or section 17.3(b) of this Part, whichever is applicable.

(n)All offering plans submitted to the Department of Law for prefiling or final filing shall:

(1)Be accompanied by a transmittal letter addressed to the Department of Law, that is signed and affirmed by the attorney who prepared the offering plan, and containing the following unqualified statements:

I/We am/are the attorney(s) who prepared the cooperative offering plan for the captioned property. Enclosed for filing pursuant to 13 NYCRR Part 17 are copies of the offering plan together with two copies of the exhibits (including filing fees).

I/We am/are fully familiar with the provisions of article 23-A of the General Business Law and the regulations promulgated by the Attorney General in 13 NYCRR Part 17.

I/We prepared the attached offering plan and exhibits based on information from the sponsor. I/We have read all the printed copy submitted to the Department of Law but expressly disclaim any responsibility to have made an independent inspection of the property or investigation of the information furnished to me/us by sponsor.

I/We have no actual knowledge of a violation of article 23-A of the General Business Law or 13 NYCRR Part 17 promulgated by the Department of Law, nor do I/we know of any material fact omitted or any untrue statement of a material fact included in the offering plan.

(2)Include in the body of the plan and in the exhibits a certification subscribed and sworn to by the sponsor and sponsor's principals, in the following form. (For purposes of this Part, unless otherwise noted, principals means all individual sponsors; all general partners of sponsors that are partnerships; all officers, directors and shareholders of a corporate sponsor that are actively involved in the planning and consummation of the offering; and all other individuals who both own an interest in or control sponsor and actively participate in the planning and consummation of the offering, regardless of the form of organization of sponsor.)

We are the sponsor and the principals of sponsor of the offering to convert this property to cooperative ownership.

We understand that we have primary responsibility for compliance with the provisions of article 23-A of the General Business Law, the regulations promulgated by the Attorney General in 13 NYCRR Part 17 and such other laws and regulations as may be applicable.

We have read the entire offering plan. We have investigated the facts set forth in the offering plan and the underlying facts. We have exercised due diligence to form a basis for making this certification. We jointly and severally certify that the offering plan does, and that all documents submitted hereafter by us which amend or supplement the offering plan will:

(1)set forth the detailed terms of the transaction and be complete, current and accurate;

(2)afford potential investors, purchasers and participants an adequate basis upon which to found their judgment;

(3)not omit any material fact;

(4)not contain any untrue statement of a material fact;

(5)not contain any fraud, deception, concealment, suppression, false pretense or fictitious or pretended purchase or sale;

(6)not contain any promise or representation as to the future which is beyond reasonable expectation or unwarranted by existing circumstances; and

(7)not contain any representation or statement which is false, where I/we:

(i)knew the truth;

(ii)with reasonableeffort could have known the truth;

(iii)made no reasonable effort to ascertain the truth; or

(iv)did not have knowledge concerning the representation or statement made.

This certification is made under penalty of perjury for the benefit of all persons to whom this offer is made. We understand that violations are subject to the civil and criminal penalties of the General Business Law and Penal Law.

(3)Include in the body of the plan and the exhibits a certification subscribed and sworn to by sponsor's engineer or architect (who must either be registered as an architect in New York State or be licensed to practice as a professional engineer in New York State) in the following form:

The undersigned, (an architect registered in New York State)or (an engineer licensed to practice as a professional engineer in New York State), certifies as follows:

The sponsor of the offering to convert the captioned property to a cooperative retained me/our firm to prepare a report disclosing the condition of the property (the report). We visually inspected the property on ______ and prepared the report dated ______, a copy of which is intended to be incorporated into the offering plan so that tenants and prospective purchasers may rely on the report.

I/We understand that I/we am/are responsible for complying with article 23-A of the General Business Law and the regulations promulgated by the Attorney General in 13 NYCRR Part 17 insofar as they are applicable to this report.

I/We have read the entire report and investigated the facts set forth in the report and the facts underlying it, and conducted the visual inspection referred to above, with due diligence in order to form a basis for this certification.

I/We certify that the report and all documents prepared by me/us disclose all the material facts which were then discernible from a visual inspection of the property. This certification is made for the benefit of all persons to whom this offer is made. I/We certify that the report and all documents prepared by me/us, based on my/our visual inspection:

(1)set forth in narrative form the physical condition of the entire property and are current and accurate as of the date of inspection;

(2)afford potential investors, purchasers and participants an adequate basis upon which to found their judgment concerning the physical condition of the property;

(3)do not omit any material fact;

(4)do not contain any untrue statement of a material fact;

(5)do not contain any fraud, deception, concealment or suppression;

(6)do not contain any promise or representation as to the future which is beyond reasonable expectation or unwarranted by existing circumstances; and

(7)do not contain any representation or statement which is false, where I/we:

(i)knew the truth;

(ii)with reasonable effort could have known the truth;

(iii)made no reasonable effort to ascertain the truth; or

(iv)did not have knowledge concerning the representation or statement made.

I/We further certify that I/we am/are not owned or controlled by and have no beneficial interest in the sponsor and that my/our compensation for preparing this report is not contingent on the conversion of the property to a cooperative or on the profitability or price of the offering. This statement is not intended as a guarantee or warranty of the physical condition of the property.

(o)If shares in a cooperative corporation are offered for sale pursuant to an offering plan for the alteration or conversion of a building located in the city of New York to cooperative ownership, which was or was substantially used for or will be offered substantially for manufacturing, commercial or warehouse purposes, the sponsor shall send one copy of the offering plan to the New York City Loft Board, 280 Broadway, 3rd Floor, New York, NY 10007.

13 NYCRR 17.2 - Contents of offering plan

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Dates and status

Compiling agency: Department of Law
Text status: Source receipt
Compiled text through: Jan 15, 2026
Register checked through: July 29, 2026/Vol. XLVIII, Issue 30 (2026-07-29)
Activity status: No later Register activity identified in this check.
Source snapshot: Jun 6, 2026

(a)Cover.

(1)The lower portion of the outside front cover of every offering plan shall contain the following statement in capital letters printed in boldface roman type of at least 10-point modern type and at least two points leaded:

THIS OFFERING PLAN IS THE SPONSOR's ENTIRE OFFER TO SELL THESE COOPERATIVE APARTMENTS. NEW YORK LAW REQUIRES THE SPONSOR TO DISCLOSE ALL MATERIAL INFORMATION CONCERNING THE COOPERATIVE APARTMENTS IN THIS PLAN AND TO FILE THIS PLAN WITH THE NEW YORK STATE DEPARTMENT OF LAW PRIOR TO SELLING OR OFFERING TO SELL ANY APARTMENT. FILING WITH THE DEPARTMENT OF LAW DOES NOT MEAN THAT THE DEPARTMENT OR ANY OTHER GOVERNMENT AGENCY HAS APPROVED THIS OFFERING.

(2)There shall be set forth on the outside front cover page of every plan of cooperative organization the following information:

(i)the amount of money to be raised if all apartments are sold;

(ii)the name and address of the cooperative corporation (which shall not be a general name for several co-ops, but the specific name of the corporation whose stock is being offered);

(iii)the approximate date of the proposed first offer to the public. The term of the initial offer is 12 months, commencing on the filing date indicated in the letter from the Department of Law;

(iv)a listing of the names and addresses of the actual promoters (whether they be builders, general contractors, landowners, etc.), which shall include dummy corporations only at the bottom of such listing (unless such listing is included on the face of the first inside leaf); and

(v)the names and addresses of the selling agents.

(3)On the inside front cover, or the next immediate page, there shall be printed a table of contents.

(b)Body of offering plan; informational content.

(1)

(i)If there is no undertaking contained in the offering plan by the offerors or others to return all moneys invested in the offering in the event of the failure or discontinuance of the promotion, the following language shall be employed in the offering plan in italics:

If insufficient funds are raised to complete this offering, or if the offering is not completed for any other reason, you may receive back only part of your investment, not your full investment.

(ii)If the promoters reserve the right to change the price of any apartment without substantial limitation, then such fact and the effects thereof shall be set forth within the plan and such fact must be included in easily readable, bold print on the front cover of the offering plan. And in such case, the front page statement shall be as follows:

“The prices for these apartments may be changed from time to time during this offering, so that prior or subsequent purchasers may pay or may have paid less or more than present subscribers for similar apartments. The effect of such is set forth on page [indicate page].”

(iii)And above the price schedule, in such case, there shall be the statement:

“See page [indicate page] for conditions applicable to these prices.”

(2)Each offering should contain a fair summary of material relevant to the particular offering. Each offering plan should be viewed with respect to the special nature of that particular offering. The following factors, in addition to those facts and representations required by subdivision (1)(b) of section 352-e of the New York Real Estate Syndicate Act, should be considered with respect to every offering of cooperative apartments. However, the necessary addition of other factors shall depend on the nature of the particular offering. Thus, for example, type of “landfill” should be included in developments on swamp or other marginal lands, or where existing buildings in the area have been troubled by excessive settling, etc.

(i)A description of the premises and locality, including but not limited to:

(a)The surrounding neighborhood, growth and changing phases. The aforesaid shall include, for example, in new developments or in outlying areas: shopping facilities in actual existence; schools actually existing or under actual construction; transportation facilities in actual existence; the zoning of the immediate adjacent areas surrounding the existing building or the building to be constructed.

(b)With reference to any swimming pools which are not to be owned by the cooperative organization, but to which residents of the cooperative are to be given access under the terms of any proposed or existing agreement with the builder, etc.: the size of the pool in existence or to be constructed; the type of construction; the name of the contractor who built or will build such pool; the proposed fee to be charged for the use thereof; residence restriction or priority on use of pool; and the date set forth for final completion and the availability of the finished pool.

(ii)The assessed valuation and tax rate for the past two years, also indicating the approximate date for each assessment; if new construction, the fact that the assessment is open for determination by the government units involved, and will affect any projection now made of real estate taxes.

(iii)Attached to and made a part of the plan of cooperative organization, there shall be a concise separate schedule of the description of the land, buildings, apartments and equipment to be owned by the cooperative corporation, which shall include detailed information concerning those factors pertinent to the particular type of offering. Examples of factors to be considered, where relevant are: type of landfill; the general nature of structure (concrete, steel, etc.); exterior and interior walls and facing; floors and ceilings; bathrooms; painting and papering; roof; insulation and heating; windows and doors; kitchen equipment; patios, sun decks, terraces, etc.; hardware and lighting fixtures; ventilators and air conditioning; basement; water supply (including name of company servicing area); sanitary sewage system, plumbing and storm water disposal; swimming pool, boat mooring and other recreational facilities (if such facilities are to be owned by cooperative organization, full information as to the size, type of construction, name of contractor and scheduled date of completion); TV antenna; landscaping; parking and garaging; laundry facilities; public halls, stairways, entrances and exits; elevators; disposal facilities; service personnel and duties; storage space per apartment and general storage facilities; special sources of income for the cooperative organization. Irrespective of above, where all or most of the prospective purchasers have been in actual residence in the premises for several years (as in the case of rent-controlled conversions), emphasis should be on present condition of premises, including deficiencies probably unknown to occupants, rather than description of material make-up visually obvious to each resident.

(iv)Date of construction or scheduled completion of construction.

(v)Date present owner acquired property.

(vi)Type of deed to be conveyed.

(vii)The financial details: the terms of all institutional and other financing, including rate of interest, method of amortization (and whether self-liquidating), amount of each mortgage, rights pertaining to prepayment, the names and addresses of all present and prospective holders of relevant mortgages and the status of all commitments, a description of any governmental mortgage, insurance or guaranty; the necessity for future refinancing of “balloon-type” mortgages, if applicable, and the concurrent problem of additional assessments.

(viii)A separate schedule including: identification of each apartment; number of rooms and baths in each; the allocation of shares; the stock price per apartment; the estimated annual expense and maintenance per share, per apartment and per total of all apartments.

(ix)Miscellaneous expenses incurred or to be incurred in effecting the offering, including a breakdown of selling commissions, realty brokerage fees, legal expenses, accounting fees, mortgage placement and processing fees, advertising expenses, special payments to any person or firm for any services, counsel or other reason relating to the offering and not otherwise covered by this Part. Insofar as legal and accounting fees are concerned, the aforesaid relates only to amounts paid by the cooperative corporation, which fees may be grouped together with other expenses, in a reasonable manner, where the individual fees are not paid to any of the promoters or firms associated with them. A “promoter” for this purpose is not meant to include members of any law firm merely used to fill cooperative corporation offices on a temporary basis.

(x)The names of the recipients of the expenditures set forth in the preceding subparagraph and the relationship, if any, directly or indirectly, to any of the promoters.

(xi)The approximate amount of any inspection fee to be paid to any government agency for physical inspection or appraisal of the property (FHA, NYS Retirement Fund, etc.).

(xii)A breakdown of projected maintenance (including labor) charges, including: the projected totals for itemized expenses and the basis thereof (whether based on the figures of the previous owner, promoter's estimate, etc.) indicating the specific qualification of all persons making such projections and the basis upon which the projections are made; specific coverage of “maintenance charges”, and whether it includes utilities, telephone, garage, rights to recreational facilities (such as swimming pools); whether the projection is based on joint contracting not obligatory by proprietary lease agreement; if the cooperative corporation is only one of several in the same development area, whether the projected charges are based on projections made for prior offerings; and if so, whether such prior projections have proved accurate; whether the applicable tax assessment has been made, and if not, how the real estate taxes and other relevant taxes have been projected; and whether the projection is the work of, or has been approved by any government agency (such as FHA).

(xiii)Promoters' (including builders') profits are specifically required by section 352-e of the General Business Law. The profits of each promoter (including all dummy entities, nominees, agencies, or other intermediaries subject to his control, directly or indirectly) shall be given or projected with conditioning language where the exact profit cannot be given. In the latter case, the maximum possible profit should be projected with a summary of the many conditions that may affect the eventual profit or loss. Where, however, part or all of the promoters' profits come solely from the sale or other transfer of land, building or interest therein, the original cost thereof and resulting profit need not be given if the particular promoter has held continuous control of such ownership or interest for three years prior to the proposed first offering of cooperative apartments.

(xiv)Provisions made for units unsold at the time the cooperative takes title (including the name of the person to whom such reserved units may be transferred, whether or not they will be held by a nominee, the obligations assumed by such holder, any rights and restrictions which have been imposed on the selling price of reserved units, and the voting position relative to such reserved units).

(xv)The description of major concessions to commercial tenants or purchasers or other transferees of apartments. For all conversions of existing rent controlled buildings in New York State, there shall be included a general summary in a short paragraph of essential provisions of municipal or State statutes and regulations which govern the rights of the tenants in occupancy not wishing to participate in the cooperative venture and the procedures necessary for the cooperative or nonoccupant purchaser to acquire possession from such tenants.

(xvi)The nature of any contractual obligations or bonds, whether in writing or otherwise, and conditions or limitations attached thereto. The word “guarantee” should be avoided, because of its misleading nature.

(xvii)A projected statement of income and expenses for the first full year of operation by the cooperative organization with identification of the source of such projection and the basis thereof. If any such figures are expected to change in the following year or years, it shall be so stated.

(xviii)Whether or not a letter of adequacy for the projected maintenance charges has been issued by the selling agent, managing agent or any other source.

(xix)If the cooperative organization itself has contracted new construction, a schedule of payments to the builder or contractor and indication whether there will be any certification prior to the disbursement of money at various stages of completion.

(xx)Any existing law suits or other proceedings against the cooperative organization, any promoter, the managing agent, the sales agent or any other person or firm connected with the offering, which could materially affect this offering.

(xxi)Whether or not there shall be distributed to stockholders any or all of the following annually: a tax deduction statement, an annual report of total corporate affairs, including a balance sheet and profit and loss statement certified by an independent certified public accountant (required by section 352-e of the General Business Law); and a notice of the holding of an annual stockholders meeting for the purpose of election of a board of directors.

(xxii)A summary of all contracts, appointments, agreements and binding obligations made by promoters (their nominees or dummies) that will be binding upon the cooperative organization after it is actually tenanted, setting forth the full details thereof, including the length of time of the obligations or arrangements and the reasons why binding agreements were made for the purpose involved (include garage concessions, laundry concessions, managing agent contracts, etc.), before the actual tenant stockholders could act upon these matters.

(xxiii)In a new construction, whether there will be a completion bond furnished by the builder and, if so, the relevant terms thereof; also the estimated date of beginning of construction, the estimated date of completion of construction, the estimated date when occupancy will be permitted and the method of determining when the building will be completed.

(xxiv)A summary of the major terms of the proprietary lease, including: relationship of stock rights to lease rights; the rights of possession and use of premises; voting rights; rights to sublet or assign and the conditions relative thereto; provisions in the event of default and nonpayment of maintenance charges, restrictions on the cancelability of lease; the duration of the lease. The inclusion in an offering plan of a true copy of the proprietary lease will ordinarily substantially reduce the need for greatly comprehensive detail in the summary portion of the offering plan.

(xxv)The terms governing deposits by prospective shareholders.

(xxvi)A summary of important features of ground leases involved in the cooperative venture, including an explanation of rights and obligations on the expiration date of any such leases.

(xxvii)A full description of the rights and obligations of the cooperative and management under any agreement made with a managing agent, including: the assignability and cancelability of the management agreement by either side; the duration of the agreement and renewability provisions, if any; fees paid to and other profits of the managing agent; whether the managing agent is or will be bonded; any relationship between managing agent or any of its officers and any promoter of the cooperative venture.

(xxviii)A special risk section that, if applicable, must be on a separate page, immediately following the table of contents. All features of a plan which involve significant risk or will disproportionately or unusually affect maintenance charges or obligations of tenant shareholders in future years of cooperative operation must be conspicuously disclosed and highlighted. A brief description of the risk should be given in this section and a more thorough description should be given in a referenced later section. Questions as to whether a risk should be highlighted in this section should be resolved in favor of inclusion. Special risks include, but are not limited to, the examples set forth below:

(a)If the subscription agreement is not contingent on obtaining financing, the purchaser's obligations to pay the balance of the purchase price without regard to the availability of financing and purchaser's maximum loss upon failure to pay the balance of the purchase price must be explained.

(b)If a mortgage has a balloon payment that is due in less than 10 years after the anticipated date of closing, the risks and costs of refinancing should be discussed.

(c)If any nonresidential lease may generate less income than the pro rata share of expenses attributable to the leased space now or in the future, or if the ratio of income generated by the lease to the share of expenses fairly attributable to the leased space may decline in the future, the potential burden to the apartment corporation should be highlighted and estimates of expenses and income for the lease term should be fully disclosed.

(d)If any nonresidential lease does not give the apartment corporation control over the future use of the leased space, the possibility that the future use could be objectionable to the apartment corporation should be explained.

(c)Exhibits required.

The offering plan submitted to the Department of Law must contain the exhibits described below and provide that all exhibits are part of the offering plan required by General Business Law article 23-A and subject to the requirements and sanctions of the law. Whenever an exhibit document is marked “Original” (orig.), it means that all copies must be duly executed, original documents. Whenever a document is marked “copy”, it means that a true and complete copy of the document should be included. Two copies of parts A (Certifications) and B (General) of the exhibits are required, indexed with numbered tabs and secured in a folder so that documents can easily be removed. In addition, conformed or photostatic copies of the part A certifications should appear in the body of the plan. Inapplicable exhibits should be expressly noted and explained in the transmittal letter.

(1)Part A of the exhibits (Certifications) shall include:

(i)(A-1)—certification by sponsor and sponsor's principals (orig.); and

(ii)(A-2)—certification by sponsor's engineer or architect (orig.).

(2)Part B of the exhibits (General) shall include:

(i)(B-1)—copy of title company report, dated within 30 days of submission;

(ii)(B-2)—copy of proposed management agreement;

(iii)(B-3)—copies of all contracts which will become binding on the apartment corporation, for $2,500 or more per year, such as service, union, washing machine, television antennae, cable television, snow removal, landscaping, security, exterminating, elevator, heating and air conditioning contracts;

(iv)(B-4)—copy of letter from insurance company or its authorized agent, stating proposed insurance coverage [including fire liability and officers' and directors' liability (if any)] and amounts, the applicable tariff classifications and the annual premium or premiums and a copy of an opinion from a licensed insurance broker appraiser concerning adequacy of coverage to avoid being a coinsurer and/or the adequacy of coverage to replace the building;

(v)(B-5)—copies of G.B.L. section 352-b designations of Secretary of State as agent (for out-of-state issuers, sponsors, principals and selling agents);

(vi)(B-6)—worksheets which set forth bases for projections and method and calculations used to prepare first-year operating budget;

(vii)(B-7)—copy of certificate of incorporation and receipt from Secretary of State;

(viii)(B-8)—copy of specimen stock certificate;

(ix)(B-9)—copy of mortgage commitment (if any);

(x)(B-10)—copy of any mortgage and bond or note that will be a lien after closing;

(xi)(B-11)—copy of proposed purchase money mortgage and note (if any);

(xii)(B-12)—copies of all professional and commercial leases;

(xiii)(B-13)—certified rent roll including the name of each tenant, apartment number, rent, term and termination date of lease, and status under any rent regulatory laws for the month in which the offering plan was submitted to the Department of Law. Indicate vacant apartments and the date on which each such apartment first became vacant. Include an affidavit setting forth the identity of any tenants who are related by blood, marriage or adoption to the sponsor or selling agent, or who are principals, employees, shareholders, limited partners or business associates of the sponsor or selling agent;

(xiv)(B-14)—copy of contract to acquire property if not currently owned by sponsor;

(xv)(B-15)—copy of the mortgage and note or bond required by a sponsor if sponsor is offering financing, or required by a mortgage lender procured by sponsor, together with any other document which significantly affects a purchaser's obligations for financing offered or procured by sponsor. If the documents are not available at the time of submission to the Department of Law, so indicate and forward when available;

(xvi)(B-16)—for cooperatives located outside of New York, copy of statutes and regulations governing cooperatives and evidence of compliance with that law;

(xvii)(B-17)—copy of contract of sale or exchange between the sponsor and the apartment corporation that conforms to the contract described in the offering plan; and

(xviii)(B-18)—other material document(s), each of which should be described in the transmittal letter, e.g., copy of regulatory agreement with a government agency.

(3)Two copies of part C (Engineering) of the exhibits in a separate folder similarly secured and indexed.

Part C of the exhibits shall include:

(i)(C-1)—architect's or engineer's detailed description of the physical aspects of the cooperative with the architect's or engineer's stamp and original signature; and

(ii)(C-2)—copy of certificate of occupancy, if available.

(4)Two copies of the exhibits, part D (Fees, and other information) in a separate folder similarly secured and indexed.

Part D of the exhibits shall include:

(i)(D-1)—personal or certified checks for one half the filing fees due under G.B.L. section 352-e(7)(a) and the entire amount of the fees due under G.B.L. section 359-e(5), both payable to the New York State Department of Law and placed within an envelope together with the form of receipt issued by the Department of Law;

(ii)(D-2)—signed M-10 forms, registration for broker-dealer, for the selling agent(s) (orig.), and signed M-2 forms, salesman statement, for all individual employees who act as salesmen for selling agents (orig.). Forms do not have to be submitted if currently valid registration forms are on file with the Department of Law from prior public offerings;

(iii)(D-3)—signed M-10 form(s), registration for broker-dealer, for all principals of the sponsor (orig.). Forms do not have to be submitted if currently valid registration forms are on file with the Department of Law from prior public offerings;

(iv)(D-4)—signed RI-1 form, registrant information form(s) concerning prior convictions, judgments, administrative actions, bankruptcy, employment and business affiliations for all principals of the sponsor (orig.);

(v)(D-5)—proof of financial responsibility of sponsor (certified sponsor's statement or affidavit of sponsor's net worth) and sponsor's certification that its net worth is sufficient to meet sponsor's unsecured obligations under the plan including sponsor's obligations for unsold shares (orig.);

(vi)(D-6)—an affidavit from sponsor and principals of sponsor, as defined in section 21.1(c) and (d) of this Chapter, stating whether sponsor and principals of sponsor have taken part in public offerings of cooperative interests in realty including condominiums in or from New York which were initially offered during the preceding five years. State the address of the realty and approximate date of the closing for cooperatives and the first closing for condominiums;

(vii)(D-7)—exemption application pursuant to G.B.L. section 359-e; and

(viii)(D-8)—completed statistical information card(s) available from the Department of Law.

13 NYCRR 17.3 - Prefiling procedure (optional)

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Dates and status

Compiling agency: Department of Law
Text status: Source receipt
Compiled text through: Jan 15, 2026
Register checked through: July 29, 2026/Vol. XLVIII, Issue 30 (2026-07-29)
Activity status: No later Register activity identified in this check.
Source snapshot: Jun 6, 2026

(a)Sponsors of cooperative offerings may submit their proposed offering plans in draft form to the Real Estate Financing Bureau, Department of Law, 28 Liberty Street, New York, NY 10005, with a request for analysis and comments. Three copies of such proposed plan should be submitted together with two copies of the exhibits described in section 17.2(c) of this Part.

(b)On the date the proposed offering plan in draft form is submitted to the Department of Law, the sponsor shall serve each offeree, as defined in section 17.1(f) of this Part, of any occupied building, with a copy of the proposed offering plan together with the following notice:

Date of Notice:

We have submitted for prefiling review to the New York State Department of Law, Real Estate Financing Bureau, a proposed offering plan for the conversion of [insert address or name of building] to a cooperative. The law requires us to disclose all material information concerning the building and the conversion process in an offering plan. A copy of the proposed offering plan is enclosed for you to retain. Other copies of the offering plan are available for inspection and copying at the office of the sponsor (or sponsor's selling agent) located at [insert address of sponsor or selling agent] and at the Department of Law.

The Attorney General strongly urges you to read this offering plan carefully and to consult with an attorney to advise you as to the meaning and consequences of the offering plan.

You may send written comments to the Department of Law, Real Estate Financing Bureau, 28 Liberty Street, New York, NY 10005. You may also send your written comments to the sponsor (or sponsor's selling agent).

No apartments may be sold or offered for sale, no subscription agreements may be executed and no down payments may be accepted unless and until the Department of Law files the offering plan and a copy of the filed plan is served on each tenant.

(c)The upper portion of the front cover of every proposed offering plan shall contain the following statement in capital letters printed in red in boldface roman type of at least 10-point modern and at least two points leaded:

THIS IS A PROPOSED OFFERING PLAN (“RED HERRING”) TO CONVERT THE APARTMENTS IN THIS BUILDING TO A COOPERATIVE. IT HAS BEEN SUBMITTED TO THE NEW YORK STATE DEPARTMENT OF LAW, REAL ESTATE FINANCING BUREAU. THIS PROPOSED OFFERING PLAN IS SUBJECT TO MODIFICATION. APARTMENTS MAY NOT BE SOLD OR OFFERED FOR SALE UNTIL THE OFFERING PLAN IS FILED AND A FINAL COPY IS DELIVERED TO EACH TENANT.

(d)The Department of Law, in its discretion, may issue a letter to the sponsor or sponsor's attorney stating that an offering plan that was submitted pursuant to the prefiling procedure for a building occupied in whole or in part for residential purposes is filed when:

(1)more than 120 days have elapsed from the date the draft offering plan was submitted to the Department of Law; and

(2)after analysis and comment as provided under subdivision (a) of this section, the sponsor submits 15 copies of the bound offering plan and a personal or certified check for one half the filing fees due under G.B.L. section 352-e(7)(a) payable to the New York State Department of Law.

At any time during the prefiling procedure, or if the Department of Law declines to issue such a letter to the sponsor or sponsor's attorney under the prefiling procedure, the sponsor may elect to submit for final filing. The sponsor then must comply with section 17.1(d) and (e) of this Part and shall be subject to the minimum and maximum time requirements and other requirements of section 17.1(g) of this Part.

13 NYCRR 17.4 - Advertising

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Dates and status

Compiling agency: Department of Law
Text status: Source receipt
Compiled text through: Jan 15, 2026
Register checked through: July 29, 2026/Vol. XLVIII, Issue 30 (2026-07-29)
Activity status: No later Register activity identified in this check.
Source snapshot: Jun 6, 2026

(a)All advertising in connection with offerings made by cooperative apartments shall contain the following statement in easy readable print, except as provided herein:

“This advertisement is not an offering. No offering is made except by a prospectus filed wth the Department of Law of the State of New York. Such filing does not constitute approval of the issue or the sale thereof by the Department of Law or the Attorney General of the State of New York.”

(b)The statement required under the foregoing subdivision shall similarly be contained on the cover page of all circulars, flyers, cards, letters and other literature employed in connection with soliciting interests in the offering, except that a single page letter of transmittal actually accompanying an offering plan duly filed with the Department of Law need not contain such a statement. A subscription form need not contain such a statement, if included therein there is an acknowledgement of a prior receipt of such an offering plan.

(c)Irrespective of subdivision (a) of this section, in all classified-type advertisements not more than five inches long and not more than one column of print wide the following statement may be used, in lieu of the statement required in subdivision (a) of this section:

“THIS OFFERING IS MADE BY PROSPECTUS ONLY.”

(d)All advertisements may be submitted for comment to the Condominium Theatre and Syndication Financing Bureau of the Department of Law, 28 Liberty Street, New York, NY 10005, at least 48 hours before publication.

(e)No room plan, chart or diagram may be used in connection with the offer or sale of any cooperative unit unless such document has been filed as part of the plan of cooperative organization.

(f)No advertisement shall include any representation or statement not covered in and consistent with the offering plan on file with the Department of Law of the State of New York. Monthly maintenance charges shall be preceded by the word “estimated” where only an anticipation; and there shall be no subtraction or representation of specific dollar or percentage savings because of anticipated tax deductions.

13 NYCRR 17.5 - Amendments

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Dates and status

Compiling agency: Department of Law
Text status: Westlaw Inline Boundary Correction
Compiled text through: Jan 15, 2026
Register checked through: July 29, 2026/Vol. XLVIII, Issue 30 (2026-07-29)
Activity status: No later Register activity identified in this check.
Source snapshot: Jun 6, 2026

(a)General.

Documents to supplement or amend an offering plan—collectively, amendment(s)—shall be deemed part of the offering plan and shall meet the following requirements:

(1)If the offering plan does not comply with section 17.1(b) of this Part due to change of events, the passage of time or any other reason, the offering plan must be amended promptly.

(2)An amendment must include a representation that all material changes of facts or circumstances affecting the property or the offering are included, unless the changes were described in prior amendment(s) submitted to but not yet filed with the Department of Law.

(3)Except as otherwise provided, an amendment to an offering plan shall be filed on the date indicated in the letter issued by the Department of Law stating that the amendment has been filed, and not sooner.

(4)Amendments that have been filed with Department of Law must be attached to the inside front cover of the offering plan before the amended plan is distributed to the public. The cover of the offering plan must be stamped: “This plan has been amended. See inside cover.” Any revisions, additions or deletions of specific language in the offering plan should reprint a sufficient portion of the paragraph from the offering plan, as revised, so that the revised portion of the offering plan may be understood easily. An offering plan that has been amended extensively may be rewritten to incorporate the amendments into the body of the plan.

(5)Amendments must be served on offerees in accordance with section 17.1(f) of this Part.

(b)Procedure for submission of amendments.

Amendments must be mailed to or submitted during business hours to the New York State Department of Law, Real Estate Finance Bureau, 28 Liberty Street, New York, NY 10005. Include the following when submitting an amendment to the Department of Law:

(1)A transmittal letter, signed by the attorney who prepared the amendment, that:

(i)states the date the offering plan was filed;

(ii)identifies the subject amendment(s) in numerical order;

(iii)states whether prior amendments had been submitted to but not yet filed with the Department of Law; and

(iv)identifies, if possible, the attorney in the Department of Law who reviewed the most recent submission.

(2)Three copies of the amendment to the offering plan.

(3)Check (certified or uncertified) for filing fees under G.B.L. section 352-e(7), payable to New York State Department of Law, stapled or clipped to the transmittal letter together with three copies of the form of receipt issued by the Department of Law.

(4)Two copies of the offering plan, including all filed amendments.

(5)One form RS-2.

If the amendment is submitted before the closing, or if the amendment discloses the events that took place at the closing, the form must be signed by the sponsor. If the amendment is submitted after the closing, the form must be signed by one or more holders of unsold shares and must include the sponsor or principals of sponsor if the sponsor or principals are holders of unsold shares.

(c)Extensions of offering plans.

The term of the initial offer is 12 months, commencing on the date indicated in the letter issued by the Department of Law stating that the plan is filed. Any amendment extends the term of the offering for an additional six-month term, unless the term is shorter by the provisions of the amendment. In the absence of any amendments, an extension of the term must be made by amendment before the end of the then current term, and must comply with the provisions of section 17.5 of this Part and the requirements set forth below. An extension of time is for an additional six-month term.

(1)The amendment must disclose all material changes, such as decreases or increases in maintenance charges.

(2)If the closing has occurred, the amendment must state:

(i)the number of unsold shares remaining; and

(ii)the extent to which the sponsor controls the board of directors.

13 NYCRR 17.6 - Review by residents of proposed submission of offering plan to convert residential premises to cooperative or condominium ownership

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Dates and status

Compiling agency: Department of Law
Text status: Source receipt
Compiled text through: Jan 15, 2026
Register checked through: July 29, 2026/Vol. XLVIII, Issue 30 (2026-07-29)
Activity status: No later Register activity identified in this check.
Source snapshot: Jun 6, 2026

(General Business Law, § 352-e[2-a])

(a)Definitions.

(1)Review shall mean inspection, examination, reading or perusal.

(2)Proposed submission shall mean the initial proposed offering plan which shall include an affidavit of no excessive long-term vacancies.

(3)Resident shall mean occupant, tenant, subtenant of each of the apartments in the affected premises or their attorneys.

(b)Review of proposed submission.

With respect to any proposed offering involving conversion of a rented building or groups of buildings or development to cooperative or condominium status within the State of New York, the offeror shall give each and every resident a 15-day period after the date of the submission of the proposed offering plan to the Attorney General for examination of the said proposed submission. Said period of examination shall commence on the date of submission to the Attorney General or within three calendar days after mailing notice to residents pursuant to subdivision (c) of this section with enclosures required pursuant to subdivision (e) of this section.

(c)Notice to residents.

Written notice of said proposed submission shall be mailed to each resident of the premises sought to be converted and a copy thereof posted in a prominent place in the lobby or lobbies of the building or buildings affected. Said notice shall set forth the date when the proposed submission was made to the Attorney General which shall be the same date the aforesaid notice of opportunity to review shall be mailed to the residents.

(d)Enclosures with notice to residents.

The notices mailed to residents shall be accompanied by the initial proposed offering plan and a copy of the affidavit of no excessive long-term vacancies. On the face of the proposed plan, there shall be printed in red ink, the following legend:

“A PROPOSED OFFERING PLAN RELATING TO CONVERSION TO COOPERATIVE (OR CONDOMINIUM) STATUS OF THE APARTMENTS IN THIS BUILDING HAS BEEN SUBMITTED TO THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK, BUREAU OF SECURITIES AND PUBLIC FINANCING, BUT HAS NOT BEEN ACCEPTED FOR FILING AND HAS NOT YET BECOME EFFECTIVE. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THESE APARTMENTS MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED UNTIL SUCH TIME AS A COMPLETED OFFERING PLAN HAS BEEN ACCEPTED FOR FILING AND A FINAL COPY DELIVERED TO EACH PURCHASER.”

(e)Form of notice to residents.

The notice to residents of opportunity to review shall be in substantially the following form:

Name

Address

Date

Re: Address of Premises Proposed Conversion to Cooperative (or Condominium) Status

Dear Resident:

Please take notice that the undersigned sponsor has this day submited to the Attorney General of the State of New York an initial proposed offering plan for the conversion of (premises) New York, to cooperative (or condominium) status. This is a preliminary plan which has not yet become effective.

Under the laws of the State of New York residents including tenants and subtenants have 15 days from the receipt of this plan within which to examine said proposed submission. Herewith enclosed for your convenience is a copy of the initial proposed offering plan which you may review and retain. Also included herewith is a copy of an affidavit of no excessive long-term vacancies. One copy of these documents is also available for review during the same period at the New York State Department of Law, 28 Liberty Street, New York, NY 10005.

If and when an offering plan is accepted for filing by the Attorney General pursuant to law you will be duly notified and a copy of the plan as accepted will be delivered to you. It is only thereafter that the offering will actually be made.

Comments regarding the proposed submission may be addressed to the sponsor with a copy forwarded to the New York State Department of Law, Real Estate Finance Bureau, 28 Liberty Street, New York, NY 10005, or you may wish to write to the Department of Law directly.

Very truly yours,

(f)Affidavit of service of notice.

An affidavit of such mailing and posting shall be mailed or delivered to the Attorney General and copies thereof shall be mailed to the residents within three days of service. Said affidavit shall include the name, address and apartment number of each such resident, tenant and subtenant, and a copy of said notice.

(g)Affidavit of no excessive long-term vacancies.

(1)Definition.

(i)Long-term vacancies shall mean apartments not leased and occupied by bona fide tenants or subtenants for more than five months prior to the date of a proposed submission.

(ii)Excessive shall mean double the normal average vacancy rate for the building or group of buildings or development for two years prior to the last preceding January 31 prior to the date of submission, in cases where apartments in the building or group of buildings or development were offered for the entire period involved.

(iii)Offered for entire period involved shall mean operated as rental property for the entire period involved.

(2)The affidavit of no excessive long-term vacancies sworn to by the sponsor (if a corporate sponsor, by its president) shall contain a representation of the average vacancy for two years prior to the last preceding January 31 prior to the date of submission and a representation setting forth the vacancy rate for the five-month period next preceding the date of submission of the proposed offering plan for conversion from rental to cooperative or condominium status.

(i)Annexed to the affidavit and made a part thereof as exhibit “A” shall be a schedule of apartments located in the premises sought to be converted which shall contain a list of all apartments, the names of the tenants (or occupants, if different from the tenant), the date of commencement of the term of their occupancy and the termination thereof for the two-year period to the last preceding January 31.

(ii)Annexed to said affidavit and made a part thereof as exhibit “B” shall be a schedule of apartments located in the premises sought to be converted which shall contain a list of all apartments, the names of the tenants (or occupants, if different from the tenant), the date of their occupancy and termination thereof for a five-month period next preceding the date of submission of the proposed offering plan.

(iii)Annexed to the affidavit and made a part thereof as exhibit “C” shall be a schedule of apartments and the names of the tenants or occupants who are related to the sponsor or any of its principals by blood or marriage or who are employees or agents of the sponsor or selling agent or who have had prior business or professional relations with the sponsor or selling agents or any of their principals.

(iv)Annexed to the affidavit and made a part thereof as exhibit “D” shall be a schedule showing in part I the vacancy rate for the two-year period prior to next preceding January 31 and how calculated and in part II the vacancy rate for the five-month period next preceding the date of submission of the proposed offering plan and how calculated.

13 NYCRR 17.8 - Determinations of elections by eligible senior citizens, eligible handicapped persons and eligible disabled persons

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Dates and status

Compiling agency: Department of Law
Text status: Source receipt
Compiled text through: Jan 15, 2026
Register checked through: July 29, 2026/Vol. XLVIII, Issue 30 (2026-07-29)
Activity status: No later Register activity identified in this check.
Source snapshot: Jun 6, 2026

(a)Election.

A nonpurchasing tenant may elect not to purchase as an eligible senior citizen or eligible disabled person as defined in General Business Law section 352-eeee or as an eligible handicapped person as defined in General Business Law section 352-eee within 60 days from the presentation date by completing the applicable form, SH-1, SH-2 or SH-3 prescribed by the Department of Law and included in the offering plan immediately preceding the introduction page, signing the election form and having the signature notarized and personally delivering it to the named sponsor or agent at a location specified by the sponsor in the plan or by mailing it by certified or registered mail, return receipt requested to the named sponsor or agent at an address specified by the sponsor in the plan.

(1)An election form is timely if it is personally delivered or postmarked before midnight of the 60th day after the presentation date subject to statutory rules of construction.

(2)The sponsor or agent shall acknowledge receipt of the election form and promptly return an acknowledged copy to the nonpurchasing tenant.

(b)Determination of disputed elections.

A sponsor who disputes the election by a nonpurchasing tenant to be an eligible senior citizen, an eligible handicapped person or an eligible disabled person, must apply to the Department of Law for a determination by the Department of Law of such person's eligibility within 30 days following receipt of the election form.

(1)The application is timely if it is personally delivered to the New York State Department of Law, Real Estate Finance Bureau, 28 Liberty Street, New York, NY 10005, during business hours or postmarked before midnight of the 30th day following receipt by the sponsor or agent of the election form.

(2)An untimely application will not be entertained, in which case the tenant whose eligibility is disputed will be deemed eligible under the statute.

(3)The application shall include the following:

(i)one copy of the election form;

(ii)one original and one copy of an affidavit, sworn to by a person having knowledge of the facts, setting forth the following:

(a)that the application is timely in accordance with this Part;

(b)the specific ground(s) for disputing the election; and

(c)the basis for the affiant's statement that the tenant is not an eligible senior citizen, eligible handicapped person or eligible disabled person; and

(iii)two copies of all supporting information or documentation in the possession of the sponsor or the affiant bearing on eligibility.

(4)The application must be complete at submission. The Department of Law need not consider any additional or supplemental information subsequently submitted by sponsor.

(5)The Department of Law shall notify the person that the sponsor disputes the person's election to be an eligible senior citizen, eligible handicapped person or eligible disabled person and shall request the person to submit an answer to the application on a form prescribed by the Department of Law and support the answer with information or documentation bearing on the specific grounds raised by sponsor to dispute the election. The answer and supporting documentation must be submitted to the Department of Law within 10 days of the date of the notice from the Department of Law. Failure to submit an answer shall not preclude the Department of Law from issuing a determination.

(6)The Department of Law may, in its discretion, require the appearance of any witness for the purpose of obtaining oral testimony on the specific grounds for disputing the election. A witness shall be notified that he may be represented by counsel.

(7)On the basis of the information contained in the election form, the sponsor's application, the answer, if any, and oral testimony, if any, the Department of Law shall issue a determination of eligibility. The determination shall become final three days after the Department of Law mails notice of the determination to the parties.

(c)Sale of units or shares allocated to units occupied by eligible senior citizens, eligible handicapped persons and eligible disabled persons.

(1)A unit or shares allocated to a unit occupied by an eligible senior citizen, eligible handicapped person or eligible disabled person or a person seeking exemption as an eligible senior citizen, eligible handicapped person or eligible disabled person, may not be offered to a third party during the exclusive purchase period granted to tenants in occupancy in the offering plan and any amendments thereto unless the sponsor, in writing, waives any right to challenge the eligibility of the occupant of the unit.

(2)Where the sponsor has disputed the eligibility of a person seeking an exemption, the unit or shares allocated thereto may not be offered to a third party for 30 days after the Department of Law has made its determination of eligibility. If a proceeding to review such determination is commenced under article 78 of the Civil Practice Law and Rules in a court of competent jurisdiction, the unit or shares allocated thereto may not be offered to a third party for 30 days after notice of entry of the final order in such proceeding. If such final determination or order finds that the person seeking the exemption is not an eligible senior citizen, eligible handicapped person or eligible disabled person, such person may purchase the unit or shares allocated thereto for a period not to exceed 30 days following such final determination or order on the most favorable terms offered to tenants in occupancy at any time prior to such final determination or order; provided, however, that if such final determination or order includes a finding that the exemption was sought fraudulently or made in bad faith, such person may purchase the unit or shares allocated thereto as provided in paragraph (3) of this subdivision.

(3)Notwithstanding an election not to purchase, an eligible senior citizen, eligible handicapped person or eligible disabled person may purchase the unit or shares allocated thereto on the terms then offered to tenants in occupancy.

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