Section 11-2801
§ 11-2801 Claims against fire insurance proceeds. Definitions. 1. As
used in this chapter, any inconsistent provision of law notwithstanding,
the following terms shall have the following meanings:
(a) "Commissioner" means the commissioner of finance.
(b) "Real property" means property upon which there is erected any
residential, commercial or industrial building or structure except a one
or two family residential structure.
(c) "Lien" means any lien including liens for taxes, special ad
valorem levies, special assessments and municipal charges arising by
operation of law against property in favor of the city and remaining
undischarged for a period of one year or more.
(d) "Board" means the board created by subdivision five of this
section.
(e) "Special lien" means a lien upon fire insurance proceeds pursuant
to this chapter and chapter seven hundred thirty-eight of the laws of
nineteen hundred seventy-seven.
(f) "Fund" means the fire insurance proceeds fund created pursuant to
subdivision ten of this section.
2. The commissioner shall file a notice of intention to claim against
the proceeds of fire insurance policies pursuant to section twenty-two
of the general municipal law with the state superintendent of insurance
for entry in the index of liens maintained by him or her as provided in
section three hundred thirty-one of the insurance law.
3. Prior to the payment of any proceeds of a policy of insurance for
damages caused by fire to real property, which policy insures the
interest of an owner and is issued on real property located within the
city, and following notification to the commissioner by an insurer of
the filing of a claim for payment of such proceeds, the commissioner
shall claim, by serving a certificate of lien, against such proceeds to
the extent of any lien (including interest and penalties to the date of
the claim) thereon, which claim when made and perfected in the manner
provided for in section twenty-two of the general municipal law and
section three hundred thirty-one of the insurance law, shall constitute
a special lien against such proceeds and shall, as to such proceeds, be
prior to all other liens and claims except the claim of a mortgagee of
record named in such policy. Notice of the service of the certificate of
the special lien shall be given to the insured by certified mail.
4. The provisions of this chapter shall not be deemed or construed to
alter or impair the right of the city to acquire or enforce any lien
against property but shall be in addition to any other power provided by
law to acquire or enforce such right.
5. The fire insurance proceeds claims board is hereby established to
administer the provisions of subdivisions six through thirteen of this
section. The board shall consist of the first deputy mayor, who shall be
chairperson, the commissioner of buildings, the commissioner of housing
preservation and development, the commissioner of finance and the deputy
mayor for economic development, each of whom shall have the power to
designate an alternate to represent him or her at board meetings with
all the rights and powers, including the right to vote, reserved to all
board members, provided that such designation shall be in writing to the
chairperson. So far as practicable and subject to the approval of the
mayor, the services of all other city departments and agencies shall be
made available by their respective heads to the board for the carrying
out of its functions. Each member shall serve without additional
compensation except for expenses actually incurred.
6. Whenever the proceeds of policy of fire insurance which will be or
has been paid to the city instead of an insured, all or part of such
proceeds may be paid or released to the insured if the insured satisfies
the board that the affected premises have been or will be repaired or
restored, that such repairs or restoration are in the public interest,
and the insured is issued and complies with a certificate of the board
pursuant to this chapter. To secure such payment or release of proceeds
the insured must notify the board within forty-five days after the
mailing to the insured of a notice of the service of the certificate of
special lien pursuant to subdivision three hereof, of the intention to
restore or repair the affected premises and must file with the board a
completed application with all required supporting documentation
pursuant to subdivision seven of this section within sixty days
thereafter, unless the board grants an extension for a stated period of
time.
7. The release or return to the insured of any amounts to which he or
she or it would otherwise be entitled to claim shall be subject to the
following conditions:
(a) Such release or return shall be subject to the repair or
restoration of the affected premises, in accordance with applicable
building laws, to the condition it was in prior to the time the lien of
the city arose, or to an improved condition.
(b) The insured shall file with the board an application in affidavit
form, with such supporting documentation as the board shall require,
containing the following:
(i) A complete description of the nature and extent of the damage to
the insured premises and of the condition of the premises prior to the
time the lien of the city arose;
(ii) A complete description of the nature of the repairs or
restoration to be undertaken and the cost thereof;
(iii) A statement as to the source of funds needed to complete such
repairs or restoration if the insurance proceeds are not sufficient
therefor;
(iv) The name and address of each contractor who will effect such
repairs or restoration;
(v) An estimated time schedule showing how long the repairs or
restoration, and each phase thereof, will take; and
(vi) Such other information as may be required by the board to enable
it to determine whether the repairs or restoration are in the public
interest and will be or have been timely and properly made.
(c) Upon a preliminary approval by the board of an application
pursuant to paragraph (b) of this subdivision, the board may issue a
certificate, to be signed by the chairperson or his or her designee;
evidencing the right of release to the insured of amounts representing
insurance proceeds, upon such conditions as may be set forth therein.
The repairs or restoration required by the board shall be completed in
compliance with the terms and conditions of the certificate prior to the
release or return of any part of the insurance proceeds, provided
however that the board may, upon the written request of the insured and
in its sole discretion, approve a prior release of such proceeds or a
portion thereof, in a lump sum or in installments, where the insured
certifies and demonstrates that such release is required to permit such
repairs or restoration to go forward. Any such insurance proceeds
released or returned prior to the completion of the repairs or
restoration required by the board may be paid directly to the contractor
or contractors responsible for making such repairs or restoration. Such
payment shall, to the extent thereof, release the board from further
liability to the insured.
8. If the insured: (i) fails to notify the city of his or her or its
intention to repair or restore the affected premises as required in
subdivision six of this section, (ii) fails to file a completed
application pursuant to this chapter, or (iii) fails to obtain a
certificate from the board or comply therewith within the time set
forth, the right of the insured to assert a claim against the insurance
proceeds, except to the extent they exceed the amount of the lien, shall
terminate.
9. Until such termination, any insurance proceeds received by the city
shall be deposited in a special fund and shall be retained therein. Upon
termination of the insured's right to claim against the proceeds, the
proceeds and any interest accrued thereon shall be applied to the liens
affecting the premises in a manner determined by the board and may be
transferred to the general fund.
10. There shall be established in the office of the commissioner a
fund for the deposit of fire insurance proceeds to be held and applied
in accordance with this chapter. Such funds shall not be held together
with the general tax levies in the general fund.
11. The lien or liens against the affected premises upon which the
special lien against proceeds is based shall continue in full force and
effect except to the extent that such lien or liens are or have been
paid.
12. The board may, pursuant to this chapter, release, compromise or
adjust the special lien upon insurance proceeds created by this chapter.
Any certificate issued by such board pursuant to this chapter shall be
for the purpose of preserving and evidencing the right of release of the
special lien created by this chapter, shall be subject solely to the
provisions of this chapter, and shall not be deemed to be a contract
subject to city regulation. Any repair or restoration performed in
anticipation of a release of insurance proceeds shall not be deemed to
be a public work or municipal project nor to have been done pursuant to
a muncipal contract.
13. The board shall be empowered to promulgate rules and regulations
and to adopt approved forms to be used by applicants.
To the extent possible under law, Friends of Devin Balkind for Public Advocate has waived all copyright and related or neighboring rights to New York City Administrative Code. This work is published from: United States.
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