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.
Last modified: February 3, 2019