*57 OPINION OF THE COURT
Dеfendant owns the building located at 239 East 79th Street in Manhattan, which was converted to cooperative ownership in 1983. This appеal stems from a longstanding dispute over the rights of plaintiffs George and Sara Kralik as proprietary lessees and owners of the shаres of the corporation purchased from the cooperative’s sponsor as unsold shares. We conclude that whether plaintiffs are holders of unsold shares should be determined solely by applying ordinary contract principles to interpret the terms of the documents defining their contractual relationship with the cooperative corporation.
I.
Plaintiffs became the proprietary lessees of apartment 16E on May 16, 1985 by an assignment of proprietary lease from the cooperative’s sponsor. According to plaintiffs, they purchased apartment 16E for investment purposes, 1 understanding that they were holders of unsоld shares exempt from some of the restrictions applicable to residential tenants—most relevantly, a restriction on sublets withоut approval or fee. Consistent with this status, plaintiffs apparently sublet apartment 16E from June 1, 1986 through May 31, 1988 without approval of the сooperative’s Board of Directors or payment of a sublet fee. In June 1988, however, the Board insisted that plaintiffs pay a sublеt fee “under threat of exclusion” of their second subtenant. Plaintiffs paid this fee and another fee in 1989 “under duress,” and then stopped paying. In 1992, plaintiffs received a notice of default from the Board, which threatened lease termination.
After a six-year standoff, in 1998 рlaintiffs acted to resolve their dispute with the Board by commencing this lawsuit. Plaintiffs asked for a declaration that they were holders оf unsold shares and therefore entitled to sublet apartment 16E without obtaining the Board’s consent or paying a sublet fee. They also sought damages for breach of fiduciary duty and lost rental income allegedly caused by defendant’s interference with their right to sublet.
After issue was joined, defendant moved for summary judgment on the ground that, as a matter of law, plaintiffs were not *58 holders. Specifically, defendаnt claimed that this was so because plaintiffs failed to comply with various requirements of 13 NYCRR part 18 (“Occupied Cooperativеs”). Defendant did not dispute that plaintiffs never intended to occupy and never actually resided in apartment 16E.
Supreme Court granted defendant summary judgment and declared that plaintiffs were not holders because neither “they [n]or the sponsor complied with a numbеr of. . . prerequisites for acquiring that status,” including 13 NYCRR 18.3 (w) (3) and (4) (sponsor must guarantee payment of all maintenance charges and assessmеnts and make certain financial representations with respect to unsold shares) and 13 NYCRR 18.3 (w) (11) (holder must amend the cooperative’s offering plan to provide specified information). Supreme Court cited
Pacella v 107 W. 25th St. Corp.
(
The Appellate Division affirmed, holding that, “as a matter of law,” plaintiffs never became holders (
II.
The Martin Act governs the offer and sale of securities in and from New York State, including securities representing “participation interests” in cooperative apartment buildings. The Attorney General bears sole responsibility for implementing and enforcing the Martin Act, which grants both regulatory and remedial powers aimed at detecting, preventing and stopping
*59
fraudulent securities practices
(see CPC Intl. v McKesson Corp.,
To carry out his responsibilities under section 352-e, the Attorney General has promulgated 13 NYCRR part 18
{see
General Business Law § 352-e [6] [b] [empowering Attorney General to “adopt, promulgate, amend and rescind suitable rules and regulations” relating generally to General Business Law § 352-e]). Because section 352-e is “a disclosure statute, designed to prоtect the public from fraudulent exploitation in the sale of real estate securities”
(Council for Owner Occupied Hous. v Abrams,
In short, the terms of the controlling documents—not part 18—determine whether plaintiffs are holders of unsold shares.
2
Plаintiffs’ status must be decided by applying the usual rules of contract interpretation to those documents
(see e.g. Fe Bland v Two Trees Mgt. Co.,
Accordingly, the order of the Appellate Division should be reversed, without costs, and the case remitted to Supreme Court for further proceedings in accordance with this opinion.
*60 Chief Judge Kaye and Judges G.B. Smith, Ciparick,' Rosenblatt, Graffeo and R.S. Smith concur.
Order reversed, etc.
Notes
. Plaintiffs are also proprietary lessees and shareholders of apartments 11N (their residence) and 1A (where plaintiff George Kralik conducts his dental praсtice).
. Craig, Gorbatov, Pacella and any other decisions relying on them are incorrect to the extent they suggest that the requirements of 13 NYCRR part 18 apply where no shares are offered for sale.