JOHN G. MOORE, ESQ. Town Attorney, North Castle
This is in reply to your letter of January 19, 1976, requesting the opinion of the Attorney General as to the constitutionality of Article 37 of the General Business Law, added by chapter 643 of the Laws of 1975, in light of the decision of the Appellate Division, Second Department, in Bon-Aire Estates, Inc. v.Building Inspector of the Town of Ramapo (31 A.D.2d 502 [1969]).
At issue in that case was a local law of the Town of Ramapo requiring an escrow deposit of contract down payments by builders of new homes and an undertaking guaranteeing good workmanship to be filed at the time of application for a certificate of occupancy. That local law was held invalid primarily because it was local, since the police power belongs to the State alone and had not been delegated to local governments. Additionally, the Court found the undertaking requirement to be an impairment of existing contracts.
Article 37 of the General Business Law specifically authorizes the local ordinances in question and was enacted to meet the defect found by the Court in the local law in the Bon-Aire case. Additionally, since the deposit would be required at the time of the inception of the purchase contract, it is prospective only and would not affect existing contracts.
It is, therefore, our opinion that Article 37 of the General Business Law is an exercise of the State's police power and a local ordinance adopted pursuant thereto would be constitutional and valid.