GBL 352-h Trust Funds / Escrow

N.Y. Gen. Bus. Law § 352-h

Under New York's Martin Act, money received from purchasers in connection with a real estate securities offering (the syndication/cooperative/condominium offerings governed by GBL § 352-e) remains the purchaser's money and must be held in trust by the seller: it cannot be commingled with the seller's personal funds, cannot become an asset of the seller, and is not subject to attachment, levy, or other encumbrance by the seller's third-party creditors. The funds stay in trust until actually employed to consummate the transaction and must be returned to purchasers (less amounts actually employed) if the offering fails or insufficient funds are raised. Any contract provision purporting to waive these protections is absolutely void.