Upon the foregoing papers, the decision and order of the Court is as follows:

The following facts are largely undisputed. Plaintiff HDFCs, defendants 67 HDFC, 72 HDFC and 100 HDFC (collectively the "defendant HDFCs"), and non-party 61 West 87th Street HDFC ("non-party HDFC") are all residential cooperatives on the upper west side of New York County. In 2003 and 2004, the buildings associated with these housing development fund corporations ("HDFCs") were converted from the City's Interim Lease Program to cooperative ownership pursuant to Article XI of the Private Housing Finance Law via the Tenant Interim Lease ("TIL") program.

Three of the fourteen buildings covered by the [RRA] contain commercial space. A portion of the commercial rental income from the stores at [67 HDFC, 72 HDFC and 100 HDFC] will fund a Replacement Reserve Account for the benefit of all of the buildings covered by the Replacement Reserve Agreement. The HDFCs purchasing the buildings that contain commercial space will execute enforcement notes and enforcement mortgages to secure their obligation to contribute commercial rental income to the Replacement Reserve Account.

Schedule A of the RRA sets forth the defendant HDFC's contributions to the Reserve Account: year 1, 10% of commercial income; year 2, 20% of commercial income; year 3, 30% of commercial income; year 4, 40% of commercial income; year 5, 50% of commercial income; and year 6 to 30, 80% of commercial income.

The subject HDFCs signed the RRA. Rafael Arias, then Tenants' Association President and now Board Secretary of 72 HDFC, signed the RRA on behalf of 72 HDFC. Norma DeJesus, then President of the Tenants' Association of 100 HDFC, signed the RRA on behalf of 100 HDFC. Angel Vera, then Secretary of the Tenants' Association of 67 HDFC, signed the RRA on [*3]behalf of 67 HDFC.

To date, UHAB has only received a check for $5,000 from 67 HDFC. Plaintiffs seek to enforce the RRA against defendants. Plaintiffs have asserted three causes of action: [1] requiring Defendants to render to Plaintiffs an accounting of the monies collected by the defendants from the commercial occupants of the buildings owned by them (first COA); [2] an order declaring the Defendants must deposit the sums due from each of them under the terms of the Reserve Agreement into the Reserve Account (second COA); and on the third cause of action, an order awarding plaintiffs specific performance requiring defendants to deposit into the Reserve Account an amount equal to the unpaid deposits required to be deposited pursuant to the RRA, or alternatively an order awarding plaintiffs damages for breach of contract in an amount equal to the unpaid deposits to the Reserve Account to be paid into a reserve fund established and administered by HPD or its assignee, plus pre-judgment interest (third COA).

The City has provided the affidavit of Mirsa Morales, President of Plaintiff 63 West 87th Street Housing Development Fund Corporation ("63 HDFC"), wherein she states that "[i]n 2001, the [City] notified all of the buildings that are parties to the [RRA] that execution of the [RRA] would be a condition of the sales of the buildings.

Defendants argue that neither the City Council nor Community Board 7 intended to make the defendant HDFCs subject to the RRA as a condition of cooperative conversion. Defendants rely on the testimony of Andrew Reicher, Executive Director of UHAB: Mr. Reicher testified that there are no other RRAs that UHAB or any other entity is involved with. Defendants point to the fact that the buildings are not contiguous, that UHAB did not open a Replacement Reserve Account even after the $5,000 deposit was made, and the fact that UHAB only demanded payment under the RRA approximatley four years after conversion of the defendant's buildings.

Defendants also argue that the Subscription Agreement is silent as to the RRA and the requirement that the defendant HDFCs would have to share commercial rental income with twelve or more unrelated HDFCs. Mark Matthews, the TIL Coordinator for the TIL program, testified at his deposition that the Subscription Agreement was given to tenants prior to selling to discuss with their attorneys. He said "it's the disclosure, exactly what HPD is doing with the property." Paragraph 14 of the Subscription Agreement provides: The entire agreement between HPD and me is set forth in this Agreement. The only representations made by HPD to me are contained in this Agreement and in the TIL Conversion Information and Documents, and I am not and have not relied on any representations, statements or promises, written or verbal, that are not set forth in this Agreement or the TIL Conversion Information and Documents. I have had enough time and opportunity to examine all the documents and investigate all the facts contained in this Agreement. I understand that I may not sell or assign the Agreement to anyone else; that this Agreement binds me and HPD as set forth in this Agreement, and that the terms of this Agreement cannot be changed verbally.

Defendants also argue that the persons who signed the RRA on behalf of the defendant HDFCs did so under duress at the closings. Counsel for 100 HDFC, C. Jaye Berger, Esq., argues that "[a]sking to have the [RRA and Mortgage Enforcement Agreement] at the closing was like holding a gun tot heir heads, because if the shareholders did not sign, they would all be forced out of the homes they had been living in for 20 years."

Plaintiffs maintain that the defendant HDFCs were always aware of that the City's conveyance of the buildings to the defendant HDFCs was conditioned upon the RRA.

The City points to a report prepared by UHAB Advisor Jay Crespo after a meeting held on May 7, 2002 at HPD between the officers of the Tenants' Association at the building which is now 72 HDFC, TIL officials and UHAB representatives. According to this report, Mr. Crespo wrote:In a previous meeting we discussed the possibility of HPD creating a regulatory agreement that would require the former Mutual Housing Association buildings with commercial units to deposit 85% of their commercial rents in a special fund. This fund will only be used, to fund future capital improvements projects in all of the participating former MHA buildings that were not fortunate enough to have commercial spaces of their own. During the meeting, HPD wanted the officers to work with UHAB in creating a budget for the building to determine if the proposed plan would be feasible. This follow-up meeting with the officers was arranged as a result of that HPD meeting. I met with the officers in reference to creating a budget for their building and to discuss their feelings in reference to the proposed special capital improvement fund. In my discussion with the officers the feeling of disappointment and outrage that they are being forced to consider the proposed HPD plan or face possible termination from this program, prevailed.

Further, according to the minutes of a Community Board 7 meeting held in February 2004, Rafael Arias, then President of the Tenants' Association for 72 HDFC, "noted concerns with distribution of rent from commercial spaces." Community Board 7 then adopted the following resolution:WHEREAS, Community Board 7 endorses the intent of [72 HDFC] to purchase the above-mentioned property, providing 12 cooperative units for sale to the current tenants and storefront commercial space under the [TIL] program; andWHEREAS, a list of incomplete work including floor repairs and boiler and roof maintenance must be completed before the purchase and the choice of a management company reviewed;BE IT RESOLVED Community Board 7/Manhattan encourages the City Council to approve the sale pending completion of all repairs.

In a meeting held on June 22, 2004 between Mr. Crespo on behalf of UHAB, HPD representatives and residents of 72 HDFC, Mr. Crespo reported the following:I attended a meeting ... to discuss with the resident (sic) the benefits of buying their building. According to HPD the tenants have shown some reluctance over several issues. They are concerned about building repairs, choice of management company, the mandated commercial rent sharing plan with other former MHA buildings in the area, the basement entrance area and building exterior improvements. The residents decided to take 2 days to think about it and will inform HPD by Friday as to when they want to purchase their building.Note: On Friday, I was informed by the buildings treasurer that the residents voted to purchase their apartments and was in the process of scheduling a date for closing which will occur before June 30th.

On August 18, 2008, more than four years after the conversion, UHAB made a demand for payment under the RRA. 72 HDFC's counsel, Jonathan Altschuler, Esq., responded:Nowhere in the Cooperative Conversion materials for the tenants of 72 West 88th Street was there any [*4]mention that there would have to be an execution of the [RRA] whereby the HDFC would have to contribute or pay into a Replacement Reserve Account a percentage of the income from commercial tenants in the building to support a Capital Reserve Fund for other buildings in which it had no ownership as part of the Conversion Agreement.

Attorney Altschuler points to various documents by and between HPD and UHAB that "appear to agree that the [RRA] is not enforceable against 72 HDFC."Facts and arguments pertaining to 100 HDFC

Similarly, the City has provided a copy of the Site Visit Report for the meeting on May 16, 2002 between Alex Cruz on behalf of UHAB and Norma DeJesus, and Carmen Burgos who was then Secretary of the Tenants' Association and is now the President of 100 HDFC. Mr. Cruz writes in his report:

We have reviewed the budget and projected expenses. I indicated that changes would have to be sent back to HPD for approval. The budget the officers wanted to know if the US Corporation Tax would be a major difference in the make up of the budget. This building has four commercials that would be included in a Funding & Disbursement agreement. However, this revenue sharing agreement does not include a stipulation for the sharing of corporation tax expense that this building would be solely responsible for. The officers had decided that this should be built into this agreement throughout the thirty year span of their revenue sharing. I suggested that they bring the issue to HPDs attention for further review. Another category that the officers were concerned about was water and sewage charges that their commercial could potentially consume. I also suggested that they consider the option of pre-metering, where a set of separate meters can be installed so that the commercial would be responsible for paying a separate water bill.

At her deposition, Ms. Burgos admitted that she first learned HPD would require commercial rent be shared before the closing, sometime in 2002 or 2003. The City has also provided a copy of a letter dated August 27, 2002 sent from Mildred Velez, Director of Operations for HPD, addressed to Norma DeJesus, which provides in pertinent part as follows:Re: Funding & Disbursement AgreementDear Tenants:I am writing in response to your written points of concern regarding the Funding and Disbursement Agreement.1. With respect to your initial position that the commercial rents form all buildings should be pooled and individual building percentages distributed equally among the fourteen buildings, HPD is completely in agreement. 3. The expenses incurred by the storefront, for exmple: water & sewer, insurance, commercial taxes is not to be carried by the building. The only issue that has not been resolved yet is that of the individual water meters to the commercials. 4. While I understand your concerns regarding the 20% in years 6 to 30, please be informed that [*5]HPD has made every effort to provide you with a workable budget that is affordable and fair to all parties concerned. Therefore your request to increase the retainage at year 6 and onward to 25% has been denied. The projected operating cost analysis demonstrates that there will be adequate resources available in the account to cover all of your expenses. 6. The commercial rent is to be paid directly to the HDFC and thereafter the corresponding percentage is deposited into the capital replacement reserve account which will be administered by [UHAB].Facts and arguments pertaining to 67 HDFCMr. Crespo also met with Mr. Vera on behalf of 67 HDFC on May 6, 2002. In his report, Mr. Crespo writes;In a previous meeting, at HPD between the officers, TIL officials and UHAB representatives, which discussed the possibility of HPD creating a regulatory agreement that would require the former Mutual Housing Association buildings with commercial units to donate their anticipated excess commercial rents (about 85% collected) into a special fund. This fund will only be used, to fund future capital improvement projects throughout all the former MHA buildings, that did/didn't have any commercial units. During the meeting, HPD wanted the officers to work with UHAB in creating a budget for the building so they can review to determine if the proposed plan would be feasible. This follow-up meeting with the officers was arranged as a result of that HPD meeting. I met with the officers in reference to creating a budget for their building and to discuss their feelings in reference to the proposed special capital improvement fund. During the discussion, the officers voiced their disappointment and feelings that they are being forced to either consider doing this or face the possibility that their building would be sold to a 3rd party.

During his deposition, Mr. Vera admitted that he recalled HPD asking "[his] building and other buildings to share commercial rent" sometime before the closing. Mr. Vera explained that during those meetings "discussions were made in which [the building's officers] strongly rejected the notion that such a high percentage would be deducted from the commercial rents."The City has provided minutes from a meeting held by the Housing Committee of Community Board 7 where "[c]ommercial income to be divided by 14 buildings (sic)" was listed as a topic for the future 67 HDFC.

The City has also provided a letter dated June 12, 2003, sent from Gloria Goldenberg, Esq., approximately a week before the closing to John Musco, Director at HPD. Attorney Goldenberg represented 67 HDFC at the closing and continues to represent 67 HDFC now. In this letter, Attorney Goldenberg offers three different proposals regarding the distribution of the balance in the Replacement Reserve Fund at the end of the 30 year term. Attorney Goldenberg also sent a letter to Millie Velez, which is dated June 13, 2003, discussing separate water meters for the commercial space and a countersigned letter agreement dated June 16, 2003 between 67 HDFC and Mr. Musco on behalf of HPD which provides for the final distribution of money remaining in the Replacement Reserve Fund at the end of the 30 year term. Mr. Vera signed the June 16 letter agreement on behalf of 67 HDFC.

In opposition to plaintiffs' motion, Attorney Goldenberg argues that the RRA: [1] violates [*6]the certificate of incorporation for 67 HDFC; [2] violates Private Housing Finance Law § 573; [3] that the tax implications of the RRA "were never disclosed to the plaintiff HDFCs"; [4] that HPD exceeded its authority in creating the RRA; and finally [5] that the $5,000 check to UHAB was not authorized nor signed by an officer of 67 HDFC.

Granting a motion for summary judgment is the functional equivalent of a trial, therefore it is a drastic remedy that should not be granted where there is any doubt as to the existence of a triable issue (Rotuba Extruders v. Ceppos, 46 NY2d 223 [1977]). The court's function on these motions is limited to "issue finding," not "issue determination" (Sillman v. Twentieth Century Fox Film, 3 NY2d 395 [1957]). When only issues of law are raised in connection with a motion for summary judgment, the court may and should resolve them without the need for a testimonial hearing (Hindes v. Weisz, 303 AD2d 459 [2d Dept 2003]).

Here, although defendants argue that the RRA was signed under duress, the court finds the record devoid of any proof to support such a claim. Whether duress was even pleaded as defense, the defendants have not established that any of the plaintiffs or even other non-parties exerted such pressure which would void a heavily negotiated agreement made in the context of an arms-length transaction. Defendants' arguments concerning the failure of the Subscription Agreement to refer to the RRA is of no moment. Indeed, the Subscription Agreement provides that purchasers are only relying on the representations made by HPD to them which are contained in the Subscription Agreement and in the TIL Conversion Information and Documents. Moreover, the court agrees with plaintiffs that even if there were no prior disclosure (and here there was prior disclosure with all of the persons who entered into the RRA on behalf of the defendants), the sharing of commercial rent would not be a material fact to the shareholder's purchase decision in light of the fact that the purchase price was only $250. This case is analogous to the facts presented in State of New York v. Rachmani Corp., 71 NY2d 718 [1988], where the Court of Appeals held that the materiality of an omission is based on whether there was "a substantial likelihood that, under all the circumstances, the omitted fact would have assumed actual significance in the deliberations of the reasonable shareholder." Here, there has not been any showing that a reasonable tenant would not have gone forward with the cooperative conversion if he or she knew about the RRA.

Counsel for 100 HDFC argues that "[c]o-op's fears were real that if they did not sign the [RRA], they would not be able to buy the co-op apartments and they would revert to being rentals with a developer as the owner." While this may be true, the fact remains that the defendants were beneficiaries of a comprehensive low-income housing program which permitted them to purchase their apartments for an amount far below market value. This was an arms-length transaction, and not a gift or the product of a right or privilege. Indeed, much of the [*7]hearsay deposition testimony concerning whether the RRA was the result of a deal brokered by then-councilwoman Gale Brewer underscores the record here which reveals that defendants' representatives knew about the agreement to share commercial rental income with the plaintiff HDFCs and non-party HDFC for a period of 30 years. As such, defendants' shareholders knew or should have known about this agreement as well. At the closings, each representative of the defendants who had the benefit of counsel signed the RRA without objection. Indeed, a check for $5,000 was sent to UHAB by 67 HDFC. On this record, defendants have failed to demonstrate any basis from which the court could reasonably conclude that the RRA is not enforceable.

Defendants make much ado about the fact that no other HDFCs have been "compelled to relinquish 80% of their commercial income to another building converted by HPD." However, whether there is another agreement like the RRA is of no moment to its enforceability.

67 HDFC makes a number of arguments which fail for the reasons that follow. First, whether the $5,000 check to UHAB was authorized or signed by an officer of 67 HDFC is of no moment. 67 HDFC alludes to the theory that the managing agent for the building, Del-Mar Manaagement, might have colluded with someone on behalf of 67 HDFC or outright forged the seocnd signature on the check which Attorney Goldenberg states "is illegible and does not belong to any prior or current officer" of 67 HDFC. Yet 67 HDFC did not challenge the check when it noticed that $5,000 was deducted from its bank account. The court discredits this theory as speculative.

67 HDFC's next arguments, that the RRA violates the certificate of incorporation for 67 HDFC and violates Private Housing Finance Law § 573, also fail. 67 HDFC's certificate of incorporation provides that "[a]ll income and earnings of the Corporation shall be used exclusively for corporate purposes, and no part of the net income or net earnings of the corporation shall inure to the benefit or profit of any private individual, firm, corporation or association." The language of Private Housing Finance Law § 573 essentially tracks the certificate of incorporation. The court rejects Attorney Goldenberg's argument that the HDFC's payment of a portion of its commercial rental income into the reserve fund would inure to the benefit of the other HDFCs. Indeed, in order to side with 67 HDFC, the Court would have to find that the portions of commercial rent income the defendants are required to pay under the RRA is the same as net income or net earnings. It is not. The relevant provisions of the certificate of incorporation and PFH § 573 were intended to prohibit HDFCs which provide housing for low income families from distributing its net income to a private individual or corporation. Here, net income would be the HDFCs gross income minus its expenses, taxes, etc.; defendants' required payments to the reserve fund are part of the defendant HDFCs expenses. Otherwise, the court finds that payment of portions of commercial rent income in the reserve fund pursuant to the RRA is consistent with the defendant HDFCs corporate purpose.

67 HDFC also argues that the tax implications of the RRA "were never disclosed to the plaintiff HDFCs". This argument is rejected outright since Attorney Goldenberg is not representing the plaintiff HDFCs and does not have standing to raise arguments on their behalf.

67 HDFC argues that the HPD exceeded its authority in creating the RRA. The only way to challenge an administrative agency's actions is through an Article 78 after exhausting administrative remedies. Therefore, this arguments also fails.

Based on the foregoing, plaintiffs have established entitlement to summary judgment on the issue of each defendants' liability for breach of the RRA (the third COA). Plaintiffs' remaining request for relief, for further discovery concerning the commercial rents collected and plaintiffs' damages, should also be granted as follows.

72 HDFC is directed to produce a witness to testify as to 72 HDFC's finances within 90 days from the date of entry of this order and to provide documents in response to plaintiffs' post-deposition requests within 45 days from the date of entry of this order. 100 HDFC is directed to produce Velia Figueroa, 100 HDFC's Treasurer, within 90 days from the date of entry of this order and to provide documents in response to plaintiffs' post-deposition requests within 45 days from the date of entry of this order. Finally, 67 HDFC is directed to produce a witness to testify as to 67 HDFC's finances within 90 days from the date of entry of this order and to provide documents in response to plaintiffs' post-deposition requests within 45 days from the date of entry of this order. The court rejects 67 HDFC's argument that discovery concerning defendants' finances is over-broad, since plaintiffs correctly point out that the RRA contains a provision which would limit defendants' required payments to the reserve fund based on insufficient operating income.