This article is enacted pursuant to the authority
granted by Chapter 643, Laws of the State of New York, 1975, which
amended the General Business Law of the State of New York by adding
a new Article 37 thereto.
It is declared to be the public policy of the
Town of Yorktown to protect purchasers of new homes by providing security
for their deposits to vendors and to prevent violations of this article
by appropriate criminal penalties, in order to more completely serve
the general welfare and economic and social well-being of the residents
of the Town.
When used in this article, the following terms,
unless the context requires otherwise, shall have the following meanings:
Occurs where title to the home is not transferred to the
vendee because of the failure of the vendor to substantially perform
those provisions of the agreement between the vendor and vendee wherein
the vendor undertook to build or construct a home for the vendee or
where the vendor becomes insolvent.
Communication of an actual notice to the vendor of requests
made therein.
Any moneys given as down payment by the vendee to the vendor
as required by the vendor prior to the commencement of the work to
be performed pursuant to an agreement between the vendor and vendee
wherein the vendor undertook to build or construct a home for the
vendee.
A new one- or two-family dwelling intended to be used primarily
as a residence.
Any individual or individuals who have contracted with a
vendor for construction of a home on land not owned at the time of
such agreement by such individual or individuals.
Any person, firm, corporation or association engaged in the
erection or construction of a home or homes in the Town of Yorktown.
When a vendor undertakes to build or construct
a home for a vendee and such vendee is required to pay a deposit to
such vendor, the vendor shall post with the Supervisor of the Town
of Yorktown a bond in the amount of such deposit or deposits. Such
bond shall be posted within five business days after receipt of said
deposit or deposits by the vendor and shall secure the payment of
said deposit to the vendee upon the vendor's default. Such bond shall
be in such form as required by the Superintendent of Insurance.
In lieu of posting a bond as provided in this
article, the vendor shall place the deposit or deposits paid to him
by the vendee in an interest-bearing escrow account with a bank as
defined in the Banking Law within five business days after receipt
of such deposit or deposits. Such deposit or deposits, together with
interest accumulated thereon, shall remain the property of the vendee,
except as otherwise provided herein. Notice of such deposit, including
the name and address of the bank where the funds were deposited, shall
be given, in writing, to the vendee within three days of such deposit
and a copy of such notice shall be filed with the Supervisor of the
Town of Yorktown.
A.Â
Upon transfer of title of the home to the vendee,
the bond posted pursuant to this article shall be released, and any
funds held in escrow pursuant to the provisions of this article, together
with interest accumulated thereon, shall become the property of the
vendor, unless otherwise agreed between the vendor and the vendee.
B.Â
Upon default by the vendor, the vendee may demand
return of his deposit or deposits from the vendor. If the vendor has
placed the deposit or deposits in an escrow account pursuant to the
provisions of this article, he shall physically transfer the account
to the vendee or pay the balance of said account to the vendee within
14 business days after the day on which the demand was made. If the
vendor has posted a bond pursuant to the provisions of this article,
the vendee may initiate action for payment thereon if his deposit
or deposits have not been paid to such vendee by the vendor within
14 business days after the day in which said demand was made.
A.Â
Failure of the vendor to comply with any of the provisions
of this article is a misappropriation of funds and action may be brought
by the vendee against the vendor for the return of any moneys advanced.
In addition, such vendor shall be liable for criminal action pursuant
to the provisions of Subdivision B of this section.
B.Â
Failure of the vendor to comply with any of the provisions
of this article shall be deemed a misdemeanor.
C.Â
Nothing in this article shall impair, limit or reduce
the statutory, common law or contractual duties or liability of any
vendor in the construction of a home, nor shall these provisions apply
to any local law or ordinance which requires the posting of public
improvement bonds.
