New York Laws
Article 4 - Limited Dividend Housing Companies
82 - Limitations.

§ 82. Limitations. No housing company shall:

1. Acquire any real property or interest therein unless it shall first
have obtained approval of the project from the commissioner, and a
certificate that such acquisition is necessary or convenient for the
public purpose defined in this article, and unless any deed, lease or
other instrument by which such real property or interest therein is
acquired contains a statement that the conveyance is to a housing
company organized pursuant to article four of the private housing
finance law.

2. Sell, exchange, transfer or assign any real property except (a) to
a municipality wherein a project is to be located, for public purposes
only and upon such terms and conditions, with or without compensation,
as the commissioner may approve, or with the written consent of the
commissioner to another housing company formed under this chapter, and
(b) for a price not in excess of the cost of the said property less any
amounts paid in amortization of the mortgage indebtedness and the
retirement of capital, plus so much of the distribution on capital of
the said housing company as shall have been unpaid, and accrued interest
on the mortgage indebtedness and income debenture certificates. Real
property surplus to the needs of the housing company may be sold,
exchanged, transferred or assigned to any person, partnership, trust,
firm or corporation upon such terms and conditions as the commissioner
may approve.

3. Encumber or lease all or any part of its real property to any other
person, partnership, trust, firm, or public or private corporation,
without the written consent of the commissioner, provided, however, that
leases conforming to the regulations and rules of the commissioner and
for actual occupancy by the lessees may be made without the consent of
the commissioner. Any conveyance, encumbrance, lease or sub-lease made
in violation of the provisions of this section and any transfer or
assignment thereof shall be void.

4. Pay interest returns on its mortgage indebtedness at a higher rate
than six per centum per annum, or at the rates of interest of mortgages
or mortgage bonds insured by the federal housing administration or any
other instrumentality of the federal government applicable at the time
the housing company incurs the mortgage indebtedness, or at such higher
rates as may be approved by the commissioner, or pay interest upon its
income debenture certificates at a rate higher than six per centum per
annum.

5. Issue its shares, in the case of a housing company which is a
corporation, credit sums to partners on capital account, in the case of
a housing company which is a partnership, subject amounts to the trust,
in the case of a housing company which is a trust, and no housing
company shall issue debentures and bonds covering any project undertaken
by it in an amount greater in the aggregate than the total actual final
cost of such project, including the lands, improvements, charges for
financing and supervision approved by the commissioner and interest and
other carrying charges during construction, and an allowance for working
capital to be approved by the commissioner but not exceeding three per
centum of the estimated cost or of the total actual final cost of the
project if that shall be greater than the estimated cost.

6. Mortgage any real property without first having obtained the
consent of the commissioner.

7. Issue any securities or evidences of indebtedness without first
having obtained the approval of the commissioner.

8. Use any building erected or acquired by it for other than housing
purposes, except that when permitted by law the story of the building
above the cellar or basement and the space below such story may be used

for stores, co-operative or community purposes, and when permitted by
law the roof may be used for co-operative or community purposes.

9. Charge or accept any rental for housing accommodations in any
project constructed, acquired, operated or managed by it in excess of
the prices approved by the commissioner.

10. Enter into contracts for the payment of salaries to officers,
employees, directors, partners, trustees or beneficiaries except subject
to the approval of the commissioner and under such regulations as the
commissioner may from time to time prescribe.

11. Enter into contracts for the construction or for the substantial
repair, improvement or operation of projects except subject to the
approval of the commissioner and under such regulations as the
commissioner may from time to time prescribe.

12. Voluntarily dissolve, or in the case of a trust, terminate,
without first having obtained the consent of the commissioner.

13. Make any guaranty without the approval of the commissioner.

14. Without the prior approval of the commissioner as to the terms and
conditions thereof, sell, lease, or otherwise convey all or any part of
a project to an authority.

The commissioner may declare that any of the limitations set forth in
this section shall be inapplicable, in whole or in part, to mutual
housing companies after the period of municipal tax exemption granted to
such mutual housing company projects pursuant to this article has
expired.