* § 339-mm. Establishment of reserve fund and dedicated capital fund\nfor buildings converting to condominium ownership under section three\nhundred fifty-two-eeeee of the general business law. 1. Within thirty\ndays after the consummation of a preservation plan, the offeror thereof\n(and/or its designee or designees and/or successor or successors) shall\nestablish and transfer:\n (a) to the condominium board of managers a reserve fund to be used\nexclusively for making capital repairs, replacements and improvements\nnecessary for the health and safety of the residents (including\nresidents of the income-restricted rental units) of such building or\ngroup of buildings or development. Such reserve fund shall be exclusive\nof any other funds required to be reserved under the preservation plan\nor applicable law or regulation of the attorney general, except a fund\nfor capital repairs, replacements and improvements substantially similar\nin purpose to and in an amount not less than the reserve fund mandated\nby this section. Such reserve fund shall also be exclusive of any\nworking capital fund or dedicated capital fund and shall not be subject\nto reduction for closing apportionments.\n (b) to the qualified owner of the income-restricted rental units, and\nsubject to the oversight of the relevant housing finance agency set\nforth in a regulatory agreement, a dedicated capital fund to be used\nexclusively for making unit repairs, replacements and improvements\nnecessary for the health and safety of the residents of an\nincome-restricted rental unit or units of such building or group of\nbuildings or development. Such dedicated capital fund shall be exclusive\nand supplemental of any other funds required to be reserved under the\npreservation plan or applicable law or regulation. Such dedicated\ncapital fund shall also be exclusive and supplemental of any reserve\nfund or working capital fund and shall not be subject to reduction for\nclosing apportionments. The dedicated capital fund shall not be used\ntowards any building-wide capital replacement, and instead shall be used\nsolely for unit repairs, replacements and improvements of the\nincome-restricted rental units.\n 1-a. In the event that the funds are insufficient, unless the relevant\nhousing finance agency provides otherwise, repairs and capital\nimprovements necessary for the health and safety of the residents in all\ncommon areas and building infrastructure shall be at the sole expense of\nthe condominium board of managers. The relevant housing finance agency\nmay establish penalties for failure to comply with legal and regulatory\nrequirements.\n 2. (a) Such reserve fund shall be established in an amount equal to\neither (i) three percent of the total price or, (ii) (A) three percent\nof the actual sales price of all condominium units sold by the offeror\nat the time the preservation plan is declared effective, provided,\nhowever, that if such amount is less than one percent of the total\nprice, then the fund shall be established as a minimum of one percent of\nthe total price; plus (B) supplemental contributions to be made by the\nofferor at a rate of three percent of the actual sales price of\ncondominium units for each unit held by the offeror and sold to bona\nfide purchasers subsequent to the effective date of the preservation\nplan and within five years of the consummation of the preservation plan,\nnotwithstanding that the total amount contributed may exceed three\npercent of the total price; and provided, further, that if five years\nfrom thirty days after the consummation of the preservation plan the\ntotal contributions by the offeror to the fund are less than three\npercent of the total price the offeror shall pay the difference between\nthe amount contributed and three percent of the total price.\nSupplemental contributions shall be made within thirty days of each\nsale.\n (b) Such dedicated capital fund shall be established in an amount\nequal to one-h
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