convent-300x223Recently in the news is a decision in a lawsuit regarding the potential eviction of a defrocked nun in a Russian Orthodox convent located in Nanuet, New York.  This case is an interesting intersection of two areas of the law that our firm practices; namely, how the decisions of a religious organization can affect the disposition of real property, as well as the residents of said real property.

Prior blog posts have discussed how religious corporations must obtain approval from the New York State Attorney General in order to sell, lease, or mortgage real estate owned by the religious organization.  This often causes disputes where there are different factions within the religious organization, and these factions cannot agree on whether to sell real estate in order to relocate the place of worship.  As prior posts have discussed, courts are reluctant to intervene in disputes which are solely the result of disputes over religious doctrine.  However, disputes over control of a religious organization which can be resolved on the basis of neutral principles, that is, without second-guessing decisions made solely on the basis of theological grounds, may be resolved by the court.

The First Amendment to the United States Constitution generally forbids government involvement in religious disputes.  This principle also applies to the Courts, which are, in essence, instruments of the government, whether state or federal.  The lawsuit under discussion involves attempts to allow an ejectment action against a nun who was defrocked by her parent religious organization, the Russian Orthodox Convent Novo-Diveevo.  Our blog has previously discussed evictions against certain “non-traditional” tenants, such as licensees and invitees, who usually do not have written leases, but reside at certain properties.  The usual course of action in such matters is to serve a Notice to Quit, giving the tenant (often referred to as a licensee or invitee, depending on the specific situation) thirty days in which to vacate the premises.  If they do not vacate, the owner of the property can then either bring a petition for eviction in the local landlord-tenant court, or, in cases involving more complex issues, a civil action for ejectment in the Supreme Court in which the property is located.

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We have advised our readers of the process for bidding at a foreclosure auction sale in New York.  Perhaps you have attended the auction, participated and made the highest, winning bid.  This post will address what happens next.

Upon making the highest bid, the participant will need to make an immediate payment of ten (10%) percent of the bid price.  The auctioneer will provide a written receipt and the parties will sign the receipt.  The successful bidder should contact an experienced attorney  and provide the Notice of Sale, Terms of Sale and Receipt to his attorney.  Your attorney should review these documents to ensure compliance by the successful bidder as well as the party auctioning the property.

Typically, Terms of Sale provide for the bidder to close and receive the Referee’s Deed to the property within thirty (30) days of the auction sale.  Failure to do so may result in the loss of the deposit and the auctioning party offering the property to the next highest bidder or holding a second auction.  Therefore, the successful bidder should be prepared to pay the balance with readily available liquid funds, without the need to apply for a mortgage.  The attorney should order a title report, which will be bound in a title policy at closing, so that no other liens will encumber the property and the status of real estate tax payments is known for adjustment purposes.  Then, the successful bidder will have the benefit of title insurance.

auction-300x200Our firm receives many inquiries from parties who intend to bid at a foreclosure sale.  Foreclosure sales most often occur when a party is unable to pay a mortgage encumbering a property, and a foreclosure judgment is obtained by the lender.  What happens next?  A foreclosure sale, or auction, is scheduled by the lender.  This must be properly noticed by having all parties served with the Notice of Sale, as well as having the Notice published in a general circulation publication, which the Court will order, such as the Journal News in Westchester.

Once all notices have been given, the sale is usually held in the lobby of the Courthouse of the Supreme Court in the County in which the foreclosed property is located.  Most courthouses in New York State set aside a specific area or room in their building to hold such auctions, which are open to all members of the public.  Prior to the auction date, it is wise for potential bidders to have experienced counsel review the terms of sale.

The sale is then conducted by the Referee for the foreclosed property.  The Referee is an individual, usually an attorney, who has been appointed by the Court to conduct the auction and transfer the property after a judgment of foreclosure has been obtained by the lender, who is the plaintiff in the foreclosure lawsuit.  The Referee’s role is to prepare all documents, conduct the auction sale, and then prepare the property transfer documents and convey all funds to the lender after the auction.

temple-228x300Recently in the news is the filing of a lawsuit relating to the alleged mismanagement of a New York synagogue located in the Chelsea section of Manhattan for almost 100 years.  The lawsuit alleges that an individual hired as a Rabbi for the temple has breached his contact by removing the antique pews in the synagogue, and then renting the space out for large and raucous parties.  It also alleges that the Rabbi may not even be a properly ordained Rabbi, and has committed many other acts in violation of his contact, as well as violating the Sabbath and Kosher laws governing the synagogue.

While evaluating the merits of this new case is beyond the scope of this post, many of these general issues often come up when our firm is consulted in matters relating to disputes regarding religious institutions.  Prior blog posts have discussed employment issues as well as disputes between different “factions” in a religious institution, be it a synagogue, mosque, temple, or other place of worship.

When our firm is consulted on such a matter, the first question is whether there is a written contract with the individual in question.  Most clergy have a written agreement with the congregation that delineates the rights and responsibilities of all parties.  The specific duties of the individual should be explained in detail.  For example, the number of services to be held, the frequency of such services (weekly, monthly), and the important religious holidays for which services are expected to held on an annual basis.  As with any employment contract, the compensation should also be detailed.  There should be a specific term of employment, such as five years.  It is possible that there could be a renewal clause which gives the congregation an option to renew the contract after its expiration for a set period of time.

eviction-300x220Our firm frequently handles eviction actions on behalf of both landlords and tenants.  In order to commence an eviction action, the tenant is served with a Notice of Petition and Petition.  These documents state the date, time and location of the Court in which to appear. One common occurrence is when a tenant fails to appear in Court for a scheduled hearing.  This post will address how such a situation is resolved.

Sometimes the tenant fails to appear at the hearing.  Whether it is because they did not actually receive the notice, cannot get to Court for health reasons, a failure to understand the nature of the proceedings, or otherwise, the Court will enter a default against the tenant.  What this means is that by failing to appear and present a defense, the landlord is entitled to receive the relief requested in their Petition.  Depending on the type of eviction proceeding, this relief will usually consist of a money judgment (in a non-payment proceeding) for the amount of rent claimed to be owed by the tenant, as well as a warrant of eviction.  The warrant is a legal document that allows the property owner to enlist a City Marshal or Sheriff (depending on where the property is located) to physically evict the tenant and remove his belongings from the premises.

Depending on the particular local court in which the action is brought, the Judge may sign these documents immediately or they may be submitted to the Court Clerk for the Judge’s signature at a future date.  Once the warrant is signed, the landlord will send it to the City Marshal or Sheriff to proceed with the eviction.   The tenant will then be served with a 72 hour notice, which states that the eviction will proceed in three days.

anchorNews outlets have recently reported that numerous Sears locations will be imminently closingOur readers are most likely aware that Toys R Us has closed all of its locations due to its bankruptcy filing.  Both Sears and Toys R Us would be considered anchor tenants by commercial landlords.  An anchor tenant leases a large square footage space or is of the nature of a large and influential company such as Starbucks or Apple.  Anchor tenants such as department stores and movie theaters draw customers to the mall or shopping center, so that the same customer continues to shop at the premises and patronize its other businesses.  Once an anchor tenant closes, the landlord should seek to locate another anchor tenant to fill the vacant space, so that the shopping mall will draw customers to the anchor location and benefit the other businesses in the mall by drawing shoppers.  This post will examine the provisions that a potential anchor tenant will ask its attorney  to have included in a lease.

Exclusive use can often be demanded by an anchor tenant.  Should Bed Bath and Beyond be the proposed tenant, it may require in its lease that the landlord may not lease another space in the shopping center to a tenant that sells home décor, bedding, kitchen equipment and the like, so as to minimize competition that may hinder its business.  Should the landlord violate such an exclusive use provision, the tenant’s lawyer may have negotiated a rent abatement and right to terminate the lease.  In addition, many anchor tenants present their own form of lease to the landlord, rather than sign the landlord’s version of the lease.

Signage is very important to anchor tenants.  Anchor tenant leases may include a provision that the anchor tenant must always be the first name on mall signage and be of the largest font size.  Visibility of signage is also important, so that the anchor store’s name is listed on internal building directories, directional signs throughout the mall and the like.

deli-300x200Recently, New York City Council Speaker Corey Johnson proposed a new law called the “Small Business Jobs Survival Act.”  The Mayor of New York City, Bill de Blasio, has questioned the legal underpinnings of the proposed law.  The law has also been described as legalizing commercial rent control in New York City.  What are the legal issues involved in commercial rent control, and how will it affect small business owners with commercial leases in New York?  This blog post will address these questions.

Currently, unlike certain residential properties, commercial properties are not subject to rent regulation such as rent control and rent stabilization.  Many residential apartments in New York City, as well as Westchester County, are subject to rent regulation under the rent control and rent stabilization statutes.  What this means is that tenants living in apartments subject to these regulations, under certain conditions, are entitled to perpetual renewal leases which cannot increase rent more than a certain percentage as set by the New York City Rent Guidelines Board.

However, these regulations do not currently apply to commercial properties.  If a store is being rented to a tenant, only the free market regulates the amount of rent to be paid, and whether the lease will be renewed.  Let’s give an example.  A grocery store signs a commercial lease for 5 years with the rent set at $4,000.00 per month.  At the end of the lease term, if the parties have not signed a new lease, the tenant would be considered a holdover and subject to eviction.  Absent any specific provisions in the current lease relating to a lease renewal, the landlord is under no legal obligation to offer a new lease to the tenant.  The landlord is also free, at the end of the lease term, to request a rent increase to $7,000.00 per month.  If the tenant does not agree to the new rental rate, again, they would have to vacate the premises or be subject to eviction.

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Landlords who lease commercial space typically concern themselves with the quality of a proposed tenant so that such character is consistent with that of other tenants occupying the property.  Such concern is reflected in particular provisions found in a commercial lease.  This post will discuss some of the more common tenant “character” provisions.

Signage is important to commercial tenants so that the store’s location is visible and identifiable to potential customers.  Because landlords are concerned that certain signage may look physically unpleasing or be harmful to the reputation of the property, landlords typically specify signage requirements in the lease.  The landlord will reserve the right to approve the signage sought to be used by the tenant and will usually not allow a sign that appears to be too large or has too much neon compared to other signs already used at the property.  Of course, signs containing vulgar words will not be permitted.  When negotiating your lease, your attorney  should also negotiate an exhibit to the lease which will contain a drawing of exactly how your sign will look with specific dimensions referenced.  That way, the parties will have already decided on the approved signage before the lease is signed.

Landlords also want to control store hours.  Many leases have provisions to that effect.  In a shopping mall environment, most leases will require stores to be open for the same number of hours.  Such a provision benefits all tenants, as the mall is more likely to be a thriving place in which to do business if shoppers can visit more than one store.  On the flip side, landlords may demand that a public storefront be closed after a certain hour so that visitors do not “hang out”, impairing the reputation of the property or creating too much noise, impacting neighbors of the property.