119 Misc. 2d 241 | N.Y. Sup. Ct. | 1983
OPINION OF THE COURT
Local Law No. 70 of 1982 was enacted by the Council of the City of New York and approved by the Mayor in October, 1982; it became effective on February 1,1983. The law amends chapter 51 of the Administrative Code of the City of New York by adding a new title (§ YYYY51-1.0 et seq.) to the chapter. By its terms title YYYY regulates certain aspects of the conversion of rental units to cooperative or condominium status within the City of New York. Specifically, YYYY requires the sponsor of a conversion to do the following: first, within 30 days after the closing of the conversion, the sponsor must establish a reserve fund equal to 3% of the total purchase price of the conversion. This fund must then be transferred to the co
Aside from the Council for Owner Occupied Housing, Inc., which is a not-for-profit corporation, the individual plaintiffs and partnerships suing herein are owners of residential buildings which are projected to be converted to co-operative or condominium status in the future and which will be affected by the operation of the local law.
In approaching the question of the constitutionality of a statute, the court is guided by several bright-line concepts:
The applicable State statute regulating the sale of real estate securities is section 352-e of the General Business Law; and in July, 1982 the State Legislature enacted section 352-eeee which applies to conversions within the City of New York. Pursuant to authority granted in subdivisions 2-b and 6 of section 352-e the Attorney-General has promulgated various rules and regulations setting forth the procedures to be followed for submission of an offering plan; these regulations are contained in 13 NYCRR subch B, parts 16-21. Neither the statutes nor the regulations require the sponsor to create a reserve fund or to post building violations. It is the position of the plaintiffs that the regulatory scheme established by these statutes and regulations evidences an intention by the State to fully occupy the field of co-operative and condominium conversions and preclude varying local legislation. It is further argued that by requiring the sponsor to create a specific
After consideration of the arguments and review of the relevant authority, the court does not agree with plaintiffs.
The mere fact that a local law may touch upon some of the same matters treated by the State law does not render the local law invalid automatically. Rather it is only when the State has evidenced a desire to occupy the entire field to the exclusion of local law that a municipality is powerless to act. (Wholesale Laundry Bd. of Trade v City of New York, 17 AD2d 327, affd 12 NY2d 998; People v Cook, 34 NY2d 100; People v Judiz, 38 NY2d 529; Monroe-Livingston Sanitary Landfill v Town of Caledonia, 51 NY2d 679; People v New York Trap Rock Corp., 57 NY2d 371.) In making such a determination the court should look to the legislative history of the statute as well as the existing regulatory machinery of the State. (Wholesale Laundry Bd. of Trade v City of New York, supra; Matter of Kress & Co. v Department of Health of City of N. Y., 283 NY 55; F. T. B. Realty Corp. v Goodman, 300 NY 140; Robin v Incorporated Vil. of Hempstead, 30 NY2d 347; Builders’ Council of Suburban N. Y. v City of Yonkers, 106 Misc 2d 700, affd 79 AB2d 696.) While it is true that sections 352-e and 352-eeee of the General Business Law regulate the sale of real estate securities, they are in essence disclosure laws. (Matter of Greenthal & Co. v Lefkowitz, 32 NY2d 457; Matter of Whalen v Lefkowitz, 36 NY2d 75; Apfelberg v East 56th Plaza, 78 AD2d 606, app dsmd 54 NY2d 680.) Those sections together with the regulations promulgated by the Attorney-General mandate disclosure of the minimum
Although the State has not pre-empted an area, a local law may be struck down as inconsistent with existing State laws if the court finds either that the local law permits an act which has been specifically prohibited by the State law or its converse, that the local law prohibits an act which has been specifically permitted by State law. (Matter of Kress & Co. v Department of Health of City of N. Y., supra; People v Cook, supra; People v Lewis, 295 NY 42.) Admittedly neither the General Business Law nor the regulations promulgated by the Attorney-General require a sponsor to establish a reserve fund or to post building violations. However silence on this issue should not be interpreted as an expression of intent by the Legislature. To interpret a statute in that manner would vitiate the concept of home rule; anytime a State is silent the likelihood exists that a local law will regulate the activity and will prohibit something permitted elsewhere in the State. (People v Cook, supra, p 109.) Pursuant to article IX (§ 2, subd [c], cl [10]) of the New York State Constitution and section 10 (subd a, par [12]) of the Municipal Home Rule Law the local government has broad powers to enact legislation for the protection and welfare of persons and property. Thus the fact that both the State and a municipality seek to regulate an activity does not of itself create an inconsistency (People v Cook, supra; Sonmax, Inc. v City of New York, 43 NY2d 253); in this context “inconsistent” is not the equivalent of “different” and it is only those local laws which would contradict or be incompatible with the general laws of the State which must be struck down. (Town of Clifton Park v C.P. Enterprises, 45 AD2d 96.) Title YYYY of the Administrative Code, although it does impact on an
Finally there is no inference to be drawn from the failure of the Legislature to enact proposed legislation which would have required a reserve fund similar to that required by Local Law No. 70. There is no legislative record concerning these bills and thus the court would be forced to speculate as to the reasons for their disposition. That would be an exercise beyond the authority of this court. (Ross v Arbury, 206 Misc 74, affd no opn 285 App Div 886.)
Having determined that section YYYY51-1.0 et seq. of the Administrative Code is neither pre-empted by sections 352-e and 352-eeee of the General Business Law nor inconsistent with those statutes, but was a reasonable exercise of the legislative authority vested in the City Council, the inquiry of this court must end. (Matter of Spielvogel v Ford, 1 NY2d 558, supra; Defiance Milk Prods. Co. v Du Mond, 309 NY 537, supra.)
Accordingly, the motion of plaintiffs for judgment declaring section YYYY51-1.0 et seq. of the Administrative Code of the City of New York unconstitutional is denied
. The Attorney-General has begun to require compliance with Local Law No. 70 and has apparently refused to accept several offering plans which have not provided for a reserve fund.
. Senate Bill No. 8506-a and Assembly Bill No. 9930-a were introduced but not acted upon by the Legislature nor is there any legislative history available for either bill.