2012 New York Consolidated Laws
RPP - Real Property
Article 9-A - (337 - 339-C) SUBDIVIDED LANDS
338 - Inspection power of department of state; unlawful practices; penalties.

 
    §  338.  Inspection  power of department of state; unlawful practices;
  penalties. 1. The department of state may cause an investigation and  an
  inspection  to  be made of any subdivision of vacant land proposed to be
  offered for sale or lease in this state pursuant to this article and may
  make a report of its findings thereon.
    2. Where an inspection is to be made  of  subdivided  lands,  situated
  outside  of  the  state  of  New York and being offered for sale in this
  state, the statement required by section  three  hundred  thirty-seven-a
  shall  be  accompanied  by the filing fee and in addition there shall be
  remitted to the department of state an amount equivalent to the cost  of
  travel  from  New  York  to  the  location of the project and return, as
  estimated by the department of state, and a further amount estimated  to
  be necessary to cover the additional expenses of such inspection, not to
  exceed  fifteen  dollars a day, for each day consumed in the examination
  of the project.
    3. It shall be unlawful for the subdivider or his  or  its  agent,  to
  change  the  financial  structure  of such offering after the submission
  thereof  to  the  department  of  state  without  first  notifying   the
  department in writing of such intention.
    4.  Where the vacant lands to be subdivided shall be subject to a lien
  or encumbrance securing or evidencing the payment of  money  other  than
  taxes  or  assessments levied by public authority, or where the interest
  of the owner and subdivider or his or its agent be held under option  or
  contract  of  purchase  or  in  trust,  it shall be unlawful to sell any
  vacant  land  in  such  subdivision  unless  provision  in  such   lien,
  encumbrance,  option,  contract  or  trust agreement, or in an agreement
  supplementary thereto, enables the vendor to convey valid title to  each
  parcel  so  sold  or  leased  free  of  such  lien, encumbrance, option,
  contract or  trust  agreement,  upon  completion  of  all  payments  and
  performance  of  all  the  terms  and conditions required to be made and
  performed  by  the  vendee  under  the  agreement  of  sale.  Where  the
  consideration  price  for  the lot or lots sold has been amortized to an
  extent that the balance due and owing thereunder  equals  in  an  amount
  required   to   release  such  lot  or  lots  from  any  existing  lien,
  encumbrance, tax, assessment, option contract or  first  agreement,  and
  the initial cost for said vacant land has not been paid for by the owner
  or  subdivider, that in such event all moneys thereafter received by the
  owner or subdivider from the purchaser of said  lot  or  lots  shall  be
  segregated  and kept in a separate account and be impressed with a trust
  which shall be applied towards the clearance of title to the vacant land
  thereafter intended to be conveyed to  the  purchaser.    After  default
  shall  have  occurred in the payment of any tax or assessment levied and
  assessed against the premises or after default shall have occurred under
  and pursuant to the terms of any  contract,  mortgage  lien,  charge  or
  encumbrance,  all  moneys  received  by the owner or subdivider from the
  purchaser of said lot or lots shall be segregated and kept in a separate
  account and be impressed with a trust which shall be applied towards the
  clearance of title to the vacant land thereafter intended to be conveyed
  to the purchaser. Certified or verified copies of  documents  containing
  such provisions shall be filed with the department of state prior to the
  sale or lease or offer of sale or lease of any part of the subdivision.
    5.  (a)  Every  person,  officer,  director,  agent  or  employee of a
  company, partnership, association or corporation who or which  knowingly
  offers to sell or to lease, or sells or leases subdivided lands prior to
  the filing of the offering statement and the verified statement required
  by this article shall be guilty of a felony.
    (b)  Except  as  provided  in  subdivision  (a)  hereof, every person,
  officer,  director,  agent  or  employee  of  a  company,   partnership,

  corporation,  or  association who or which knowingly authorizes, directs
  or aids in the publication, advertisement, distribution  or  circulation
  of  any  device,  scheme  or artifice for obtaining money or property by
  means  of  any  false pretense, representation or promise concerning any
  vacant land or lands or subdivision thereof, offered for sale or  lease,
  and  every  person,  officer,  director, agent or employee of a company,
  partnership, corporation or association who or which shall have made  or
  attempts to make in the state fictitious or pretended purchases or sales
  of  vacant  lands,  or  who,  in any other respect, wilfully violated or
  fails to comply with any of the provisions of this article, or knowingly
  omits or neglects to obey, observe or comply  with  any  order,  permit,
  decision,  demand  or  requirement  of the department of state under the
  provisions of this article,  is  guilty  of  a  misdemeanor  and,  if  a
  licensee  under  article  twelve  (a) of this chapter, the department of
  state also may revoke or suspend his license in the manner  provided  in
  such  article. The commission of a single act prohibited by this article
  shall constitute a violation thereof. All courts  of  special  sessions,
  within  their  respective territorial jurisdiction, are hereby empowered
  to hear, try, and determine such violations without indictment,  and  to
  impose the punishments prescribed by law therefor.
    6.  It  shall  be  the  duty  of the attorney-general to prosecute all
  violations of the provisions of this article; such prosecutions  may  be
  instituted  upon  the  written  request  or  demand of the department of
  state.  In all criminal proceedings, the attorney-general may appear  in
  person or by his deputy before any court of record or any grand jury and
  exercise  all  the  powers and perform all the duties in respect of such
  actions or proceedings which the district attorney  would  otherwise  be
  authorized  or  required to exercise or perform; or the attorney-general
  may in his discretion transmit evidence, proof  and  information  as  to
  such offense to the district attorney of the county or counties in which
  the  alleged violation has occurred, and every district attorney to whom
  such evidence, proof and information is so transmitted  shall  forthwith
  proceed  to prosecute any corporation, company, association, or officer,
  manager or agent thereof, or  any  firm  or  person  charged  with  such
  violation.  In  any  such  proceeding,  wherein the attorney-general has
  appeared either in person or by deputy, the district attorney shall only
  exercise such powers and perform such duties as are required of  him  by
  the  attorney-general  or  the deputy attorney-general so appearing. The
  attorney-general shall,  upon  a  conviction  for  a  violation  of  any
  provision of this article, and within ten days thereafter, make and file
  with  the department of state a detailed report showing the date of such
  conviction, the name of the person convicted and the exact nature of the
  charge.
    7. Any false statement contained  in  any  statement  or  supplemental
  statement   filed   with   the  department  of  state  pursuant  to  the
  requirements of this article, or  in  any  affidavit  attached  thereto,
  shall constitute a violation of this article.
    8.  Any  person,  partnership,  corporation,  company  or  association
  representing in any manner that the state, the department of  state,  or
  any  officer thereof has recommended or acquiesced in the recommendation
  of the purchase of any subdivided lands offered for sale  or  lease,  in
  advertising  or  offering such subdivided lands for sale or lease, shall
  be guilty of a misdemeanor punishable by a fine of  not  more  than  one
  thousand  dollars, or imprisonment for not more than one year or by both
  such fine and imprisonment.