know-the-rules-300x167Our firm is called upon to both defend and prosecute mortgage foreclosure actions.  One of the first questions that should to be asked is who holds the mortgage loan, meaning the party who is entitled to bring the action.  In most cases, it is an “institutional lender,” such as a bank or a credit union.  However, there may be situations where the lender, or the note holder, is not an institutional lender.  This can occur in several ways.  Often, the institutional lender sells the mortgage and note to a third party.  This purchaser can be a company or a private individual.  The third party takes an assignment of the note and mortgage, and “steps into the shoes” of the institutional lender.  They pay a fixed amount to the original lender, and hope to make a profit by foreclosing the property and selling it for a greater sum than they paid for the loan.

There can also be situations where the loan originator is a private individual.  This can occur when a family member loans another family member funds to purchase a house or apartment, and takes back a note and mortgage, to be repaid over time.  Another possibility is that the seller of the property loans the funds to the buyer, and a purchase money mortgage is used to secure the debt of the buyer.

A person who may be in foreclosure may now ask, what’s the difference whether the holder of a mortgage and note is an institutional lender or a private individual?  Our experience has shown that the identity of the lender can make for quite a variation in the litigation and resolution of a foreclosure case.

532Now that many of our clients are participating in the Spring housing market , repair issues have developed in several transactions handled by our attorneys .  This post will address the manner in which such issues should be addressed in a contract.

Most buyers will have a professional engineer inspect the premises prior to signing a contract.  Inspections serve several purposes.  They may illuminate a condition so severe that the buyer decides not to proceed.  An example may be a cracked foundation requiring costly repairs.  Inspections also show conditions that a seller may be willing to address, given the circumstances of the transaction, such as electrical repairs needed for immediate safety concerns.  Also, inspections show conditions that are for the buyer’s information as a potential homeowner, including ongoing maintenance issues such as clearing the gutters on a seasonal basis.  Conditions in this category should not be raised with the seller.  In any event, rest assured that the inspector will find conditions requiring repairs because most homes that are inspected are not newly built and not in perfect condition.

Let’s consider those conditions that should be addressed.  Buyers need to be aware that our current local real estate market is afflicted with low inventory.  This means that many sellers are weighing multiple offers that vary as to terms such as price and whether the buyer needs to obtain a mortgage.  Offers also vary as to whether a particular buyer appears to be pleasant and will easily close the transaction.  With this in mind, a buyer may lose the deal if she asks the seller to repair a large number of items, many of which are relatively simple such as unclogging the hall tub drain.  Unfortunately many first time purchasers  are anxious, desire a house with no issues, and are unfamiliar with the area, so they may not know who to call to repair the tub.  These people are better served by hiring their own plumber after the closing for a few hundred dollars, rather than making it an issue with the seller who may have other options.

lowSome of our clients have recently inquired as to whether their cooperative board may have been declined their proposed sale because the proposed purchase price is too low.  As we have indicated in previous posts , cooperative boards can decline a purchase for any or no reason so long as such reason does not discriminate against protected classes.  Once a seller hears that their well-qualified purchaser has been declined, sometimes they suspect that it is because they accepted a price that was too low.  Should a cooperative board be willing to disclose this possibility, there are steps that the seller can take to keep the deal alive.

Let’s explore the rationale for a cooperative board declining a sale because the price is too low.  The board is likely concerned that a sale price significantly lower than others in the building may adversely affect valuations of other apartments, so that all units for sale in the future may be potentially valued at a lower price as a result.  The board, as a fiduciary for all shareholders, wishes to maintain elevated apartment prices for the benefit of all shareholders.  As such, declining a purchase because the price is too low is perfectly legal.

However, the seller may be willing to accept what appears to be a low price for the following reasons.  Perhaps he is in financial distress, owes maintenance arrears and cannot cover the past due charges without selling the unit.  In this case, it is better for the cooperative as a whole if this person sells so that a financially secure buyer owns the unit instead and is current in her maintenance payments.  Also, the shareholder may be getting divorced or has been relocated in his job, making it necessary to sell.

landlord-tenant-disputes-300x194A recent article in the New York Times discusses a large-scale study of evictions in the United States.  More than 83 million records were studied, and the impact on the our society as a whole was further examined.  Our law firm is a rarity in that we represent both landlords as well as tenants in eviction matters (of course, not in the same case!).  Most private law firms specialize in representing only landlords.  As a result, their clients tend to be owners of large properties, or corporations who own many buildings.  They do their work in bulk, often bringing many cases at once, and seeking to resolve them during court appearances en masse with the tenants who appear.

Tenants seeking proper legal representation may have fewer options.  They will have to seek out private law firms, such as ours, which represents both landlords and tenants.  As the New York Times article discusses, many tenants do not have the means to obtain legal representation in eviction cases.  They are faced with the prospect of a Court appearance where the landlord is often represented by experienced counsel who knows all the aspects of the legal system.

As a result of this imbalance, many Courts attempt to assist the tenants during their appearances.  Of course, legally, Judges must be neutral in their application of justice.  They may advise unrepresented tenants to obtain legal counsel and allow the appearance to be adjourned in order for the tenant to retain an attorney.  They may also ask the tenants whether they understand the legal proceedings, and review with the parties the details of any settlement agreement entered into between themselves and counsel for the landlord.  Our experience has been that the Judges, especially those in Westchester County, have on the whole been fair and impartial to both sides in these cases.

forecloseOur firm is often retained to defend property owners whose home is in foreclosure.  Most often, the entity bringing the foreclosure proceeding is a major lending institution, such as a national bank or credit union.  However, there are two sides to every story.  Some of our clients are individuals who have loaned money and taken back a note and mortgage on another’s real property.  The borrower has defaulted on his payments, and the lender does not know what to do.  This blog post will discuss how an individual lender can proceed with their own foreclosure action.

Our recommendation is to hire experienced counselForeclosure is a very complicated and detailed procedure under New York law.  If the action is not brought correctly, it may be dismissed by the Court.  Moreover, even if no opposition to the action is received, it may later be overturned, or a title company may refuse to insure the title of the property after the foreclosure process is complete, because of possible procedural irregularities in the foreclosure proceeding.

The first step in commencing a foreclosure proceeding would be for counsel to thoroughly review the note and mortgage documents.  These are the documents signed by the borrower, and are important to ascertain the legal requirements for a specific foreclosure.  For example, the note may call for monthly payments in a certain amount on certain dates.  If these payments are not received, it would constitute a default under the note.

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News outlets recently reported on the demise of retailer Toys R Us in bankruptcy.  Initially, it was thought that the famous chain toy store would continue operations under its bankruptcy plan.  Then, those in charge of the company found that it was necessary to close all locations.  Such a decision has profound ramifications on the commercial property and leasing market throughout the United States.  This post will address the legal issues raised by the closure of Toys R Us locations.

Most likely, the locations occupied by the stores were not owned by Toys R Us, but were leased under long term leases. Commercial leases typically are long term arrangements, for about ten years with potential options to renew.  Of course, during such leases, the economy or style of doing business may change, leading to a lease arrangement that is no longer viable or sensible for the tenant.  For instance, with the rise of online shopping in recent years, the need for tenants to have large locations in relative proximity to one another no longer makes sense.  It may become necessary for the tenant to renegotiate a lease when times change and the business model along with it.   Experienced counsel should be involved in any such lease renegotiation for a modification or amendment as the case may be.  In exchange for an amendment or modification, the landlord may ask for concessions from the tenant.

In considering Toys R Us in the area served by our firm , one may be familiar with a location on Central Avenue that was built specifically for the store.  The owner of the property may have issues with the store abandoning the property, as it may be suited only to this tenant.  The landlord may need to become creative in considering the future use of the space, as did the owner of Lord & Taylor’s flagship location.

reverse-300x206Prior blog posts have discussed the legal ramifications of reverse mortgages, which are becoming more common, and, with this, have become the subject of more court actions, including foreclosure cases.  Reverse mortgages allow a person to borrow against the equity in their home, and are limited to those homeowners older than age 62.  The sums borrowed against a person’s primary residence are usually not legally required to be repaid until after the borrower’s death.

Of course, no one lives forever, and, eventually, all things must pass.  At that point, the legal heirs of the borrower will often receive collection notices from the reverse mortgage lender, demanding repayment of the loan.  This post will discuss the legal options available to the heirs when a reverse mortgage has become due as a result of the borrower’s death.

The first recommendation is that the heirs retain experienced legal counsel to represent their interests.  Counsel should examine the documents underpinning the reverse mortgage, and check to ensure that the borrower actually took out the loan, and understood the ramifications of the transaction.  Unscrupulous lenders may take advantage of our senior citizens, some of whom may not be in top shape physically or mentally.  If a surviving heir suspects this to be the case, the reverse mortgage may be challenged in Court, depending on the overall circumstances of the transaction.

squatter-300x200A recent article in the New York Post discusses a 61 year old man who had refused to move out of his Hunter College dorm room, where he had lived for the past 38 years.  Obviously, this is not the ordinary landlord-tenant matter, in which a tenant has a written lease with their landlord, and the rights and obligations of the parties are clearly defined.  Although most eviction matters involve a landlord-tenant relationship, there are certain situations which involve a different legal framework, which will be discussed in this blog post.

The first type of unconventional situation is that of a licensee.  A licensee is a person who is given permission to live at the premises by the owner of the premises.  Usually, the licensee is not paying rent.  One example would be an unmarried couple, where one person is the sole owner of the property.  The other person moves into the premises with the consent and permission of the owner.  After some time passes, the couple may develop relationship problems, and decide to split up.  What happens if the licensee refuses to move out of the premises at that point?

In order to evict the licensee, a special proceeding must be commenced, usually in the local landlord-tenant Court, under Real Action Property and Proceedings Law, Section 713(7).  This section of the law covers eviction proceedings where no landlord-tenant relationship exists.  The first step would be for the property owner to revoke their permission for the licensee to live at the premises.  We would recommend this be done in writing, with experienced counsel preparing the necessary documents.  Once the notice of termination has been given, the licensee has ten days to vacate the premises.  If they fail to do so, an eviction proceeding can be brought in the appropriate forum.

pondMany of us have recently enjoyed watching the Winter Olympics.  The competitive spirit of the athletes is enhanced by the beauty of the snow and ice and the vistas in South Korea.  Back in our region, snow and ice can be dangerous for homeowners and subject them to damages for injury to person and property.  Of course, young children are most susceptible to injury and tragic consequences are sought to be avoided.  Homeowners should take reasonable measures to avoid dangerous conditions caused by ice and in warmer times, swimming pools.

Let’s imagine that a young couple purchases a lovely home overlooking a lake.  What a wonderful lifestyle to be enjoyed.  Skating on the frozen lake in the winter and swimming in it in the summer.  However, should the lake not be sufficiently frozen, and a person falls in as a result and drowns, the homeowner could be subject to a claim for personal injury if he did not take adequate measures to protect against harm.  Some of these measures are limiting access by fencing or a gate with a key and posting signs in multiple languages advising of the danger.

Swimming pools are also what can be termed as an attractive nuisance.  Using them is appealing to neighbors, even if not invited by the homeowner.  Those who are unable to swim or are impaired by drugs or alcohol can be injured if they have easy access to the swimming pool.  As with the lake, it is essential that a locked gate or fence surround the pool.  Also, potentially a pool alarm should be installed to alert the homeowner to unauthorized use.  These measures are important even if the properties are spaced far apart, as in some areas served by our firm.