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New York Department of State Division of Coastal Resources and Waterfront Revitalization @Hazardous Property Disclosure �309 Project of Special Merit Draft Law Revisions to the Office of Ocean and Coastal Resources Management National Ocean Service National Oceanic and Atmospheric Administration U.S. Department of Commerce June 1994 DOS 94-7 AN ACT to amend the executive law, the environmental conservation law, the real property law, chapter 535 of the laws of 1945 relating to authorizing and providing for the construction of erosion arresting public works to restore and protect the lands along the Atlantic ocean, the banking law and the tax law, in relation to coastal flooding and erosion The People of the State of New York, represented in Senate and Assembly, do enact as follows: 1 Section 1. Subdivision 5 of section 912 of the executive law, 2 as amended by chapter 366 of the laws of 1986, is amended to read 3 as follows: 4 5. To minimize damage to natural resources and property from 5 flooding and erosion, including proper location of new land 6 development away from coastal hazard areas_,__, protection of 7 beaches, dunes, barrier islands, bluffs and other critical coastal 8 and inland waterway features, [and] use of non-structural measures, 9 whenever possible and maintenance of existing shorelines in coastal 10 hazard areas where there are significant levels of development, 11 public infrastructure, and public investment. 12 �2. Subdivision 5 of section 34-0102 of the environmental 13 conservation law, as added by chapter 841 of the laws of 1981, is 14 amended to read as follows: 15 S. Publicly- financed structures to minimize erosion damage 16 should be utilized only where necessary to protect human life, 17 maintain existing shorelines where there are siqnificant levels of 18 existing development, public infrastructure, and public investment 19 [in] , or new development which requires a location within the 1 erosion hazard area or adjdcent coastal waters to be able to 2 function. Both publicly and privately financed erosion protective 3 structures should be designed to minimize damage to other man-made 4 property or to natural protective features or to other natural 5 resources; long term costs of such structures should be carefully 6 weighed against public benefits before construction is undertaken. 7 �3. The real property law is amended by adding a new section 8 333-b to read as follows: 9 333-b. Lands in coastal erosion hazard areas; disclosure. 10 Any verson, firm, company, partnership or corporation off eripZ 11 to sell real proverty located. in an area identified by the 12 commissioner of the department of environmental conservation as a 13 coastal erosion hazard area pursuant to section 34-0104 of the 14 environmental conservation law or as an area of sipecial flood 15 hazard pursuant to section 36-0103 of the environmental 16 conservation law shall provide written notice in the contract of 17 sale to the prospective 1purchaser or the prospective purchaser's 18 agent, stating as follows: "This proverty is located in an area 19 identified as a Coastal Erosion Hazard Area or an area of special 20 flood hazard and activities or develonment may be recrulated or 21 prohibited ipursuant to article thirty-four or thirty-six, 22 respectively, of the Environmental Conservation Law. Further 23 inf ormation regarding this property can be obtained f rom the 24 nearest office of the New York State Department of Environmental 25 Conservation." Such notice shall be T)rinted or written in a size 26 eaual to at least ten point ty-pe in any contract of sale of real 27 i)roperty located in a coastal erosion hazard area or area of 1 special flood hazard. Failure to iprovide such notice shall, at the. 2 option of the prosipective purchaser or the -orosvective -ourchaser's 3 agent, result in cancellation of the contract of sale without any 4 penalty or obligation at any time prior to transfer of title by 5 mailing a notice of cancellation to the address of the r)erson 6 offering to sell said real T)roperty. If the contract is canceled, 7 any -oavments made thereunder shall be returned within ten business 8 days following receiipt of the cancellation notice. 9 2. Any prosi)ective or actual purchaser who has suffered a 10 loss due to a violation of this section is entitled to recover any 11 actual damages incurred from the person offering to sell or selling 12 said real T)roiperty. In addition, the court may award to the 13 prosvective or actual purchaser reasonable attorney fees and court 14 costs. 15 �4. Section 2 of chapter 535 of the laws of 1945, relating to 16 authorizing and providing for the construction of erosion arresting 17 public works to restore and protect the lands along the Atlantic 18 ocean, as amended by chapter 941 of the laws of 1970, is amended to 19 read as follows: 20 2. Construction costs; contracts; apportionment. 21 The cost of preparing plans, specifications, cost estimates, 22 engineering and inspection services shall be deemed to be a part of 23 the cost of construction. Such construction shall be subject to 24 any consent or approval required under or pursuant to federal law 25 or order, which consent shall be obtained by the commissioner of 26 the department of environmental conservation. All such works or I improvements shall be constructed by contract let by the said 2 commissioner [of conservation] in the manner provided by the public 3 buildings law, or by forces of the department of environmental 4 conservation, or partly by such contract and partly by such forces. 5 However, if the commissioner (of conservation] deems it to be in 6 the interest of the public, the commissioner may contract with the 7 municipality or municipalities affected (a) to have the employees 8 thereof prepare plans, specifications, cost estimates, engineering 9 and inspection services, (b) to have the forces and equipment 10 thereof perform such work of construction, and (c) to purchase the 11 material; upon such terms as the commissioner may deem 12 advantageous to the state. Such municipality or municipalities are 13 hereby authorized to enter into such contract in order to restore, 14 control and prevent economic and recreational losses. The cost of 15 construction of any such works or improvements shall be paid in the 16 first instance by the state frorn moneys appropriated therefor and 17 upon completion of such construction and certification by the state 18 comptroller of the total cost thereof, the municipality or 19 municipalities affected shall reimburse the state to the extent of 20 [thirty] fifty per centum. of such cost. Upon the adoption of a 21 resolution by the affirmative vote of a majority of the members of 22 the governing boards or bodies of such municipalities, any two or 23 more of such municipalities may, by agreement, approved by the 24 state comptroller and without further authorization, participate in 25 the cost of such construction. For the purpose of reimbursing the 26 state for [thirty] fifty per centum. of the cost of such 27 construction which is hereby declared to be a specific object or 1 purpose, and not a class of or different objects or purposes, such 2 municipality or municipalities may and are hereby authorized to 3 raise the amount certified by the state comptroller by general tax 4 upon all taxable real property located therein, or by special 5 assessment upon the real property benefitted thereby, or partly by 6 such general tax and partly by such special assessment or by the 7 issuance of obligations pursuant to the local finance law provided, 8 however, that (a) in towns of the second class any resolution 9 authorizing the issuance of serial bonds for such object or purpose 10 shall be subject to permissive referendum only, or such resolution 11 may be subject to a referendum only, or such resolution may be 12 subject to a referendum by the finance board of the town on its own 13 motion, in the manner prescribed in article seven of the town law, 14 as amended, from time to time; (b) notwithstanding the provisions 15 of section one hundred seven of the local finance law no down 16 payment shall be required; and (c) the period of probable 17 usefulness of such object or purpose shall be governed by the type 18 of work or improvements, as follows: 19 (1) Construction work of steel, stone, or concrete, thirty 20 years; 21 (2) Construction work of wood, or partly wood, twenty years; 22 and 23 (3) Dredging work, fill work, dune restoration or other work 24 or improvements, to which items (1) and (2) above, do not apply, 25 five years. The period of probable usefulness for such dredging, 26 fill, dune restoration or other work or improvements shall apply 27 even though easements on land on which such work is done have a 1 duration of less than five years. In the event of failure of such 2 municipality or municipalities to raise or to pay to the state 3 [thirty] fifty per centum of the cost of construction or any 4 portion thereof within six months of the certification of costs by 5 the state comptroller, the state comptroller shall cause to be 6 withheld from state-collected, locally-shared taxes, to which the 7 municipality or municipalities would otherwise be entitled, a sum 8 sufficient to reimburse the state for any amount remaining unpaid, 9 together with interest on any such unpaid amount at the rate of two 10 per centum, per annum. from the date of such certification by the 11 state comptroller. Such moneys so withheld, including interest, 12 shall be credited against the amount payable to the state by such 13 municipality or municipalities on account of such construction. 14 �5. Section 103 of the banking law is amended by adding a new 15 subdivision 3 to read as follows: 16 3. Make any loan upon the security of real egtate located 17 within a special flood hazard area designated by the federal 18 emergency management acrency, unless such real estate has been 19 insured against the full cash amount of any loss resulting either 20 from flood, the rising of the waters of an adlacent waterbody, or 21 erosion, or has been insured against any such loss to the maximum 22 extent possible under the national flood insurance program, and a v Lly 23 such insurance shall remain in force and effect throughout the term 24 of the loan. 25 �6. . Subdivision 1 of section 174 of the banking law, as 26. amended by chapter 111 of the laws of 1960, is amended to read as 27 follows: 1 1. No private banker shall: 2 (a) Purchase with funds held by him as a private banker any 3 real estate except a plot upon which there is or may be erected a 4 building suitable for the convenient transaction of his business; 5 nor make a loan of such funds upon the security of real estate, if 6 such real estate is unimproved, in excess of two-thirds, and if 7 such real estate is improved by a building or buildings or is to be 8 improved by a building or buildings in the process of construction, 9 the major portion of which building or buildings is used or in the 10 case of a building under construction is to be used, for 11 residential, business, manufacturing or agricultural purposes, in 12 excess of three-fourths, of the appraised value of such real 13 estate, or in an amount which when added to the amount. unpaid upon 14 prior mortgages, liens and encumbrances upon such real estate 15 exceeds such real estate is subject to prior mortgage, lien or 16 encumbrance and the amount unpaid upon such prior mortgage, lien or 17 encumbrance or the aggregate amount unpaid upon all prior 18 mortgages, liens and encumbrances exceeds ten per centum of the 19 permanent capital of such private banker. 20 (b) Make any loan upon the security of real estate located 21 within a special flood hazard area desicTnated by the federal 22 emergency manacrement agency, unless such real estate has been 23 insured against the full cash amount of any loss resulting either 24 from flood, the rising of the waters of an adlacent waterbody, or 25 erosion, or has been insured against any such loss to the maximum 26 extent T)ossible under the national flood insurance program, and au 27 such insurance shall remain in force and effect throughout the term 1 of the loan. 2 �7. Subdivision 6 of section 202 of banking law, as amended 3 by chapter 360 of the laws of 1984, is amended to read as follows: 4 6. No foreign banking corporation licensed pursuant to 5 article two of this chapter to maintain one or more branches in 6 this state shall in this state [make]: 7 (a) Make any loan for the purpose of financing the purchase of 8 or refinancing an existing ownership interest in certificates of 9 stock or other evidence of an ownership interest in, and a 10 proprietary lease from, a corporation or partnership formed for the 11 purpose of the cooperative ownership of real estate, unsecured 12 except to the extent of an assignment or transfer of the stock 13 certificates or other evidence of ownership interest of the 14 borrower and the proprietary lease within ninety days from the 15 making of the loan, which shall exceed the same maximum per cent of 16 the purchase price or, in the case of a refinancing, the appraised 17 value of such certificates of stock or other evidence of an 18 ownership interest as is permitted to be made on real estate 19 improved by a single family residence occupied by the owner and 20 which shall fail to provide for full repayment of principal and 21 interest within the same number of years as a loan secured by real 22 estate as hereinabove described; provided that such loan shall be 23 subject to such regulations as the banking board may from time to 24 time promulgate. Notwithstanding any other provision of law, the 25 maximum rate of interest which may be charged, taken or received 26 upon any loan or forbearance made pursuant to this subdivision may 1 exceed the rate of interest prescribed by the banking board in 2 accordance with section fourteen-a of this chapter by no more than 3 one and one-half per centum. per annum. 4 (b) Make any loan upon the security of real estate located 5 within a sipecial flood hazard area desicrnated by the federal 6 emercrency management acrency, unless such real estate has been 7 insured against the full cash amount of any loss resulting either 8 from flood, the rising of the waters of an adlacent waterbody, or 9 erosion, or has been insured agginst any such loss to the maximum 10 extent possible under the national flood insurance program, and any 11 such insurance shall remain in force and effect throughout the term 12 of the loan. 13 �8. Section 235 of the banking law is amended by adding a new 14 subdivision 6-b to read as follows: 15 6-b. No savings bank shall make any loan upon the security of 16 real estate located within a spgcial flood hazard area designated 17 by the federal emergency managemgnt agenc unless such real estate 18 has been insured acrainst the full cash amount of any loss resulting 19 either from flood, the rising of the waters of an adlacent 20 waterbody, or erosion, or has been insured against any such loss to 21 the maximum extent possible under the national flood insurance 22 program, and any such insurance shall remain in force and effect 23 throuc[hout the term of the loan. 24 �9. Subdivision 4 of section 380 of the banking law is 25 amended by adding a new paragraph (c) to read as follows: 26 (c) Relating to -real estate located within a sipecial flood .27 hazard area designate.d by the federal emergency manacrement acrency, 1 unless such real estate has been insured against the full cash 2 amount of any loss resulting either from flood, the rising of the 3 waters of an adlacent waterbody, or erosion, or has been insured 4 acrainst any such loss to the maximum extent ipossible under the 5 national flood insurance vrocrram, and any such insurance shall 6 remain in force and effect throughout the term of the loan. 7 �10. Section 454 of the banking law is amended by adding a new 8 subdivision 11-a to read as follows: 9 11-a. Make any loan upon the security of real estate located 10 within a special flood hazard area as designated by the federal 11 emergency management acrency, unless such real estate has been 12 insured against the full cash amount of any loss resulting either 13 from flood, the rising of the waters of an adjacent waterbody, or 14 erosion, or has been insured against any such loss to the maximum 15 extent T)ossible under the national flood insurance iprogram, and any 16 such insurance shall remain in force and effect throughout the term 17 of the loan. 18 �11. Section 509 of the banking law is amended by adding a 19 new subdivision 5 to read as follows: 20 5. Make any loan upon the security of real estate located 21 within a special flood hazard area as designated by the federal 22 emercrency management agency, unless such real estate has been 23 insured against the full cash amount of any loss resulting either 24 from flood, the rising of the waters of an adiacent waterbody, or 25 erosion, or has been insured against any such loss to the maximum 26 extent possible under the national flood insurance T)rogram, and any 27 such insurance shall remain in force and effect throughout the term I of the loan. 2 �12. Section 595-a of the banking law is amended by adding a 3 new subdivision 4 to read as follows: 4 4. Mortgages in coastal erosion hazard areas. No licensee 5 under this article shall make any loan uvon the security of real 6 estate located within a special flood hazard area as designated by 7 the federal emergency management agency, unless such real estate 8 has been insured against the full cash amount of any loss regulting 9 either from flood, the rising of the waters of an adlacent 10 waterbody, or erosion, or has been insured against any such loss to 11 the maximum extent possible under the national flood insurance 12 1program, and any such insurance shall remain in force and effect 13 throughout the term of the loan,-- 14 913. Article 2 of the banking law is amended by adding a new 15 section 14-f to read as follows: 16 14-f. Escrow of flood insurance 1premiums and fees. 17 1. Any mortgacre lendinq institution which recruires the is escrowing of taxes, insurance premiums, fees or any other charges 19 for a loan secured by real estate, shall recTuire the escrowing of 20 all premiums and fees for flood insurance for real estate located 21 within a special -flood hazard area desicrnated by the federal 22 emergency management aqency. Premiums and fees paid to the 23 mortgage lending institution shall be r)aid in a manner sufficient 24 to make 1payments as due for the duration of the loan. Upon receint 25 of the i)remiums and fees, the mortgage lending institution shall 26 deposit such 1premiums and fees in an escrow account on behalf of 27 the borrower. UT)on receilpt of notice from the director of the 1 federal emergency agency or the insurance T)rovider that insurance 2 premiums are due, the mortgage lending institution shall pay fr 3 the escrow account to the provider of the insurance, the amount of 4 insurance 1premiums owed. 5 2. No mortcracre lending institution shall imipose a service 6 charge in connection with the maintenance of an escrow account 7 unless provision therefor was expressly made in a loan contract 8 executed prior to the effective date of this section. 9 3. The banking board shall have the power, by a three-fifths 10 vote of all its members, to adopt such regulations as it shall deem 11 necessary or appropriate to implement the Provisions of this 12 section. 13 �14. Subsection (c) of section 615 of the tax law is amended 14 by adding a new paragraph 4 to read as follows: 15 (4) any loss e,,&perienced by a structure constructed or 16 substantially reconstructed- after the effective date of this 17 chapter in a flood hazard area designated as a 'IV" zQne on a flood 18 insurance rate may prepared by the federal emergency management 19 agency or within a coastal erosion hazard area as identified by the 20 commissioner of environmental conservation pursuant to section 34- 21 0104 of the environmental conservation law, which is attributable 22 to a disaster occurring in an area subsecruently determined by the 23 president of the united states to warrant assistance by the federal 24 government under the disaster relief act of 1974, to the extent 25 that such expenses and 1premiums are deductible in determining 26 federal taxable income. 27 �15. This act shall take effect immediately. OAA COASTAL SERVICES CTR LIBRARY 3 6668 14111871 3 1@ I