§ 2-06 Construction Requirements and Payment of Loan Proceeds.
RCNY § 2-06
(a)Cost estimates, construction contract and contractors.
(1)Scope of work and cost estimates. Applicants shall be required to submit estimates showing the nature and cost of each item of the rehabilitation or improvement. The Department may require the applicant to submit more than one estimate per trade and may prescribe forms on which such estimates shall be prepared or summarized. The plans, specifications, work write-ups or any other description of work to be performed must be approved by the Department prior to the commencement of any rehabilitation work or the making of a loan for same. The technical specifications shall conform to the standards established by the Department and where applicable, shall be subject to the approval of the Department of Buildings or other governmental agencies having jurisdiction.
(2)Approval of construction contract. The specifications approved by the Department shall be made part of the written construction contract between the owner and the general contractor, and such construction contract shall be subject to the written approval of the Department. If a general contractor is not engaged, the owner shall enter into a written construction contract with each subcontractor. The pertinent specifications approved by the Department shall be made a part of each such contract and each such contract shall be subject to the written approval of the Department.
(3)Contractors. The Department reserves the right to disapprove any contractor or subcontractor because of previous violation of statutes, rules or regulations relating to discrimination, standards of employment or labor standards, or because of inefficiency, abandonment of duties, or disregard for creditors on prior jobs performed under this Program or other programs of the City.
(b)Payment of loan proceeds.
(4)Escrow provisions. The Department may require the deposit of loan advances in a separate escrow account, in a bank designated by the Department, subject to withdrawal only upon the joint signatures of the borrower and a representative of the Department. The Department may further require that the owner deposit in such escrow account, or in a separate trust account in such bank under such provisions as the Department shall prescribe, all or a designated portion of the rents collected from the multiple dwelling during the period of construction.
(5)Failure to complete work. If the borrower for any reason fails to diligently pursue or timely complete the rehabilitation to the full satisfaction of the Department, the Department may, after written notice to the borrower, enter upon the premises, effect the completion of the rehabilitation and charge the cost thereof to the borrower.
(6)Adjustments for interim interest. Any portion of the loan representing interest on advances during construction shall be adjusted upon completion of the rehabilitation as follows. If such portion shall be more than the amount required for interest on advances, the excess shall be credited to the borrower in reduction of the principal of the loan; if less than the amount required for such interest, the difference shall be deducted from the final advance of loan proceeds due borrower and paid to the City.
(c)Non-discrimination and affirmative action.
(d)Labor standards.
