Can a New York cemetery corporation sell multiple plots in bulk to a religious or ethnic burial society for resale to that society's members?

Plain-English summary

The Secretary of State asked the AG whether a cemetery corporation could sell multiple plots in bulk to a burial society (a religious corporation, membership corporation, or unincorporated society that provides burial benefits to its members) when the society's purpose is to resell those plots to members.

The general rule of Not-for-Profit Corporation Law § 1513(a) is that it is "unlawful for any person, firm or corporation to purchase or for a cemetery corporation to sell a lot, plot or part thereof for the purpose of resale." That was the legislative response to a 1949 AG report (the "Treadwell Report") finding rampant abuses in the cemetery business: bulk sales to speculators, pressure resales at inflated prices, kickback arrangements.

But § 1513(a)(2) has a specific carve-out. The general ban "shall not prohibit the sale to its members of lots, plots or parts thereof, or the right to use any lot, plot or part thereof, by a membership or religious corporation or unincorporated association or society which provides burial benefits for its members." The Secretary's counsel wanted to know whether that language was an open-ended permission or just a grandfather clause limited to plots a society already owned in 1949.

The AG read the carve-out as a permanent exception. Three reasons. First, the statutory text says what it says. The carve-out is not bracketed by date language, and the Legislature knew how to write grandfather clauses when it wanted to (the AG cited examples in Environmental Conservation Law § 23-1301(3) and Navigation Law § 91-b(2)). Second, the legislative history pointed to the abuses by for-profit-style cemetery operators, not to burial societies that operate for member benefit only. The AG quoted the original AG investigation report and the Governor's message describing cemeteries operated by religious organizations as outside the abuse pattern. Third, the practical operation of burial societies (a Jewish landsmanshaft, a Catholic parish burial society, or a similar group) requires them to acquire plots in segregated sections for their members, which they could not do under a strict reading.

The AG's bottom line: a cemetery corporation may sell multiple plots to such a society for the purpose of resale to its members. The AG declined to opine on the rate at which the society may charge for those plots, deferring that to the State Cemetery Board.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What is a "burial society" in this context?

A membership organization, religious corporation, or unincorporated association whose purpose includes providing burial benefits to its members. Classic examples are Jewish landsmanshaftn (mutual aid societies organized by town of origin in Eastern Europe), Catholic parish burial associations, and fraternal-order burial funds. The defining feature is that the entity exists to serve a defined member community, not to make money on the resale.

Why does this exception exist if New York's general policy is anti-resale?

Because the policy concern in 1949 was for-profit-style cemetery operators making big margins on plot resales to the general public. Burial societies do something different: they buy in bulk so that their members can be buried together (a religious or cultural priority) and they typically resell at or near cost. The Legislature decided the abuse rationale did not apply to that model, and the AG read the statute consistently with that legislative intent.

Can a brand-new burial society take advantage of the exception, or only those that existed in 1949?

A brand-new one can. The AG rejected the grandfather-clause reading. Any membership or religious corporation or unincorporated society that genuinely provides burial benefits to its members may purchase plots in bulk from a cemetery corporation for resale to those members.

What governs the price a burial society can charge its members?

Not this opinion. The AG explicitly deferred the rate question to the State Cemetery Board, which oversees cemetery pricing under the broader Not-for-Profit Corporation Law Article 15 framework.

Could a for-profit company set itself up as a burial society to take advantage of the exception?

The opinion frames the carve-out as applying to entities that "provide burial benefits to their members." A sham organization formed to evade the resale ban would not actually provide such benefits, and a court asked to enforce the statute would likely look through the form. The Cemetery Board has supervisory authority and could refuse to recognize a sham as a genuine burial society.

Background and statutory framework

The 1949 reform. L 1949, Ch 533 enacted the predecessor of N-PCL § 1513 in response to an extensive AG investigation that documented cemetery industry abuses (Treadwell Report). The reform's centerpiece was the ban on plot resale.

Not-for-Profit Corporation Law § 1513. Subdivision (a)(1) reserves to cemetery corporations the right to convey plots. Subdivision (a)(2) is the general resale ban and the burial-society exception.

Not-for-Profit Corporation Law § 1503. Provides that religious-corporation cemeteries are outside the scope of the broader cemetery-regulation regime, on the rationale that they do not divert funds to private gain.

Case law. Diamant v Mount Pleasant Westchester Cemetery Corp., 10 AD2d 404 (2d Dept 1960), is the Appellate Division decision interpreting the resale ban and noting the burial-society exception.

Statutory drafting comparison. The AG cited Environmental Conservation Law § 23-1301(3) (explicit grandfather language for pre-1963 underground storage reservoirs) and Navigation Law § 91-b(2) (explicit grandfather language for then-active pilots) as examples of how the Legislature writes grandfather clauses when it wants to, contrasting them with the timeless language in § 1513(a)(2).

Citations

• Not-for-Profit Corporation Law § 1513(a)(1)-(2) (cemetery corporation conveyance; resale ban with burial society exception).
• Not-for-Profit Corporation Law § 1503 (religious-corporation cemeteries outside general regulation).
• L 1949, Ch 533 (1949 cemetery reform statute).
• Environmental Conservation Law § 23-1301(3) (example of explicit grandfather clause).
• Navigation Law § 91-b(2) (example of explicit grandfather clause).
• Diamant v Mount Pleasant Westchester Cemetery Corp., 10 AD2d 404 (2d Dept 1960) (interpretation of resale ban and burial-society exception).
• Treadwell Report (Legislative Document No. 7, Report on the Investigation into the Operation of Cemeteries, Feb 11, 1949).

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/98-F9_pw.pdf

Original opinion text

OPINIONS OF THE ATTORNEY GENERAL

Page 1 of 3

Opn. No. 98-F9
ENVIRONMENTAL CONSERVATION LAW § 23-1301; NAVIGATION LAW § 91-b(2); NOT-FOR-PROFIT CORPORATION LAW §§ 1503, 1513; L 1949, CH 533.
A cemetery corporation may sell cemetery plots, for the purpose of resale, to a membership or religious
corporation or unincorporated association or society which provides burial benefits for its members.
July 30, 1998
Hon. Alexander F. Treadwell
Secretary of State
Department of State
41 State Street
Albany, New York 12231-0001
Dear Secretary of State Treadwell:
Your counsel has requested an opinion regarding whether a cemetery corporation may sell multiple
plots, for the purpose of resale, to membership or religious corporations or unincorporated associations
or societies which provide burial benefits for their members [hereinafter collectively referred to as burial
societies].
Not-for-Profit Corporation Law § 1513 provides, in pertinent part, as follows:
(a) Conveyance of lots. (1) Except as otherwise provided in this subdivision the right to use any lot, plot
or part thereof may be sold or conveyed only by the cemetery corporation. (2) It shall be unlawful for
any person, firm or corporation to purchase or for a cemetery corporation to sell a lot, plot or part
thereof for the purpose of resale. This provision, however, shall not prohibit the sale to its members of
lots, plots or parts thereof, or the right to use any lot, plot or part thereof, by a membership or religious
corporation or unincorporated association or society which provides burial benefits for its members.
Not-For-Profit Corporation Law § 1513(a)(1) - (2) (emphasis added).
Clearly, the statute permits burial societies to sell plots to their members. The question raised is whether
this language authorizes burial societies to purchase multiple plots for resale to their members or only
permits burial societies to sell plots acquired prior to the effective date of the statute.
One interpretation, which we ultimately reject, is that the statutory language in issue was intended to
operate as a grandfather clause, only permitting burial societies to sell to their members plots that were
acquired prior to the effective date of the statute in 1949. L 1949, Ch 533. However, neither the statutory
language nor the legislative history reflects that intent. If the Legislature intended to limit the sale of
plots by burial societies to those that were acquired prior to the statute's effective date, presumably it
would have added language to that effect. Typically, explicit language is used by the Legislature to
create grandfather clauses. See, e.g., Environmental Conservation Law § 23-1301(3) ("Subdivisions 1
and 2 of this section shall not apply to underground storage reservoirs or the storage of gas therein
provided that such reservoirs had been placed in operation prior to October 1, 1963 and as long as such
operation is not abandoned"); Navigation Law § 91-b(2) ("Upon the taking effect of this chapter, all
pilots who are then, and have been for the two years immediately prior thereto, actively engaged, as a
regular occupation, in piloting seagoing vessels through the waters specified in this chapter shall, upon
application, be licensed as full branch Long Island-Block Island Sound pilots for the waters covered by

this chapter if found by the commissioners to be qualified in accordance with their regulations in effect
on March seventeenth, nineteen hundred seventy-one, except that any person who is found to be so
qualified who has reached his sixtieth birthday prior to the effective date of this act shall be eligible to
renew his license until age seventy"). Regarding burial societies, if the Legislature had intended to create
a grandfather clause, permitting burial societies to sell only those plots acquired prior to the effective
date of the statute, it would have been easy for it to have added language to that effect, e.g., "plots
acquired prior to the effective date of this statute."
Absent such language, and without any legislative history indicating that a grandfather clause was
intended, in our view the statute has only one conceivable meaning. By allowing burial societies to sell
plots to their members, the Legislature created an exception to the prohibition against the purchase of
plots for the purpose of resale. It was unnecessary for the Legislature also to except specifically the
purchase of plots by burial societies from the prohibition. By its terms, the statute excepts a
"membership or religious corporation or unincorporated association or society which provides burial
benefits for its members" (emphasis added). As a corporate or association purpose, these entities sell
plots to their members. The plain language of the statute is intended to allow these entities to continue
performing this purpose through acquisition of plots. See, Percival E. Jackson, The Law of Cadavers, at
531 & n 103 (2d ed 1950) (noting that the "evident intent of this ambiguous subdivision" is to provide a
complete exception for burial societies).
This interpretation is consistent with the legislative history. In 1949, the Attorney General issued a
report to the Governor on the nature and operation of cemeteries throughout the State. Legislative
Document, No. 7, Report on the Investigation into the Operation of Cemeteries (Feb 11, 1949)
[hereinafter Report]. In this report, the Attorney General noted that although public cemetery
corporations were supposed to operate on a non-profit basis, many were "run as lucrative commercial
ventures. Indeed, they have been cynically developed into devices for profiteering on the widest possible
scale." Report, supra, at 6.
There is shameful neglect of grounds; rates and charges are geared for extravagant profit without
relation to cost; trust moneys are diverted; unconscionable commissions are paid to boost sales; middle-men are given free reign to mark-up prices; tie-in schemes link cemetery and monument dealer; controls
are perpetuated and handed down in families from generation to generation like heirlooms; bulk sales of
plots are made to favored individuals for re-sale at pressure prices; plot owners are subjected to arrogant
treatment by officers and trustees; supervision of care is peddled on a concession basis to the highest
bidder; and, inevitably, certificates of indebtedness, which are in effect mortgages on cemeteries, are
sold and traded by speculators. Report, supra, at 6 (emphasis added).
Based on this report, it is clear that the legislation proposed by the Attorney General, and enacted by the
Legislature, was intended to put an end to the operation of cemeteries as lucrative commercial ventures,
specifically, the sale of plots at extravagant prices without relation to cost and the bulk sale of plots to
favored individuals for resale at pressure prices. See, Diamant v Mount Pleasant Westchester Cemetery
Corp., 10 AD2d 404, 409 (2d Dept 1960). Additionally, "[t]he enactment . . . was designed to remove
private individuals from the business . . . ." Id., at 411.
In contrast, burial societies are formed for the purpose of ensuring that persons with common bonds can
be buried together. Burial societies "acquire burial rights in gross in established cemeteries where they
segregate and separately maintain sections thereof for the burial and more intimate segregation of the
dead of their members." Jackson, The Law of Cadavers, supra, at 286. If burial societies are prohibited
from purchasing plots for resale to their members, they can no longer carry out this central purpose.
Neither the statutory language nor the Attorney General's report suggests any intent to prohibit the
continued operation of burial societies, including their ability to purchase plots for their members.
The Attorney General's report specifically noted that the proposed legislation regulating cemeteries
would not apply to "cemeteries belonging to or operated by religious corporations [see, Not-For-Profit
Corporation Law § 1503] . . . since it is patent that moneys paid by the public to these are never diverted
to private gain." Report, supra, at 8. Additionally, in his message to the Legislature, the Governor noted
that cemeteries operated by religious organizations "have not been diverted to the extortionate and
exorbitant gain of private individuals." Legislative Document, No. 7, Governor's Message to the
Legislature (Feb 14, 1949). Similarly, burial societies operate for the benefit of their members and
provide burial services only to their members. Indeed, the provision under review relating to resale
includes within its exception "religious corporations" and other burial societies. Not-For-Profit
Corporation Law § 1513(a)(2). Accordingly, because burial societies operate for the benefit of their
members, we believe that the statute should be construed to except completely burial societies from the
prohibition against the purchase of lots for the purpose of resale. The intent, in our view, was to allow
burial societies to continue fulfilling this central purpose for their members.
Moreover, since the enactment of this statute in 1949, burial societies have continued to exist and carry
out their institutional purpose. If the Legislature's intent was to create a grandfather clause, it could have
clarified the statute during this lengthy time period and limited the sale of plots by burial societies to
those that were purchased prior to the effective date of the statute.
Therefore, in our opinion, a cemetery corporation may sell multiple plots to burial societies for the
purpose of resale to their members.
Very truly yours,
DENNIS C. VACCO
Attorney General

1. The Appellate Division in Diamant v Mount Pleasant Westchester Cemetery Corp., 10 AD2d 404,
   408 (2d Dept 1960), held that the resale restrictions in the predecessor of the current statute were not
   only prospective. The court prefaced its analysis with a discussion of the legislative history and central
   provisions of section 85(1) and (2) of the Membership Corporations Law (predecessor of Not-For-Profit
   Corporation Law § 1513[a][1] and [2]). Under section 85:
   [T]here are, aside from the public interest represented by the Cemetery Board, only two parties
   interested in a specific plot or parcel lying in a cemetery--the corporation which owns the fee and the
   owner of the right of interment. With the exception of religious or membership corporations, or
   unincorporated associations or societies which provide burial benefits for their members, only the
   cemetery corporation has the unrestricted power to sell burial rights.
   The legislative history indicates that the purpose of this and other provisions of the statute was to further
   the public policy that cemeteries "be conducted on a non-profit basis for the mutual benefit of plot
   owners therein." Id.
2. Please note that we do not address the rate at which burial societies may resell such plots to their
   members. Burial societies should contact the State Cemetery Board for guidance on this issue.