Articles Posted in Landlord and Tenant

rent-300x200Recently in the news is that state representatives in Albany are considering sweeping changes to New York State’s regulations for rental units. Prior blog posts have discussed past revisions to the rent regulations.  While some of the changes only affect apartments in New York City, others may apply to apartments statewide.  As of this writing, Governor Cuomo has stated that he will sign any bill that the lawmakers pass.

As most New Yorkers are aware, rental prices in New York City are among the highest in the nation.  Whether having the government attempt to control the prices of rental units will result in lower rents overall remains to be seen.  Rent regulation by the government has existed in some form since the World War II years, and keeping rental prices low has not been achieved.  While some regulated tenants benefit, others, whose units are unregulated, may see larger increases. In addition, forcing landlords to charge regulated rents may discourage both the building of new units and investment by landlords in improving existing apartments.  Why spend money on repairs or renovations if rent rates remain fixed by regulation?  Obviously, our representatives do not think that this is a factor.

Of course, not all apartments are subject to rent stabilization.  In Westchester County, where our offices are located, each municipality has the option of adopting the Emergency Tenant Protection Act (ETPA).  A list of these villages, cities, and towns can be found here.  If the units are in a village, city or town which has not adopted the ETPA, then the units are not rent regulated.  In addition, the law only applies to buildings of six or more units.  Therefore, if one owns a three unit apartment building in Westchester, it would not be subject to rent regulations.

apartment-300x150Prior blog posts have discussed the difference between the two types of landlord-tenant eviction proceedings.  To summarize, non-payment proceedings occur when a tenant fails to pay rent or other charges due to the landlord.  Holdover proceedings, which will be discussed in this post, happen when a tenant’s lease term has expired, or, in certain situations, when a tenant does not have a written lease.

First, let’s discuss situations when a tenant’s lease term has expired.  Most, if not all, written leases, contain a specific lease term.  It may be expressed in terms of a set period, such as one year, and can also give the specific date that the lease will expire.  What happens when the lease term expires, but the tenant remains in possession?  Under New York law, the tenant now becomes a month-to-month tenant.  This means that the lease terms remain in effect, but the lease has been extended for an additional monthly period, assuming that the tenant continues to pay the rent due, and continues to comply with the other lease terms.

By accepting the rent for an additional month, the landlord is agreeing to an extension of the lease for that additional month.  Let’s say the lease expires on March 31.  On April 1, the tenant pays an additional month’s rent check to his landlord, and the landlord accepts the rent, by depositing the check.  Under the law, the parties now have a month-to-month tenancy, which either party can terminate on thirty day’s notice.

rentown-300x171There are many opinions regarding whether being a renter or owner of one’s residence is the correct decision in New York.  Many factors, including one’s economic situation, must be considered in whether to rent or buy real property.  One additional possibility is renting the property with an option to buy.  This post will discuss the legal issues related in entering into such an agreement.

Initially, there must be an agreement with the owner of the property regarding the terms of the rental.  This is commonly documented in the form of a lease.  The lease will delineate the monthly rental amount as well as the lease term and other provisions.  If the parties agree, an option to buy the property can be included in the lease, or as a separate agreement.

The most common arrangement is to provide the renter with the option to purchase the premises at a set price during the rental term, or at the expiration of the rental term.  If the renter exercises her option to buy, then the attorney for the property owner should prepare a contract of sale to be executed by all parties.  The signed contract of sale is necessary should the potential purchaser need to apply for a mortgage loan to purchase the premises.  Any institutional lender will need a copy of the fully executed sale contract in order to process a standard loan application.  In addition, a down payment, typically in the amount of ten percent (10%) of the purchase price is usually also necessary to obtain a traditional bank loan.  The lending institution requires proof of the down payment deposit into the escrow account of the seller’s attorney.

flipMany of our readers are familiar with television programs where people purchase properties in terrible condition, conduct renovations and then sell at a handsome price at the end of the show.  While some New Yorkers may be inspired by these programs, reality often differs from the outcome as depicted on television.  This post will examine some of the pitfalls in “flip” transactions and methods to alleviate some of the legal issues that arise.

Traditionally, a flip transaction takes place as follows.  A purchaser locates a property that is a “good deal”.  Perhaps it is purchased at foreclosure auction , without the opportunity to view the interior of the property or to determine whether tenants occupy the property.  The property is a “good deal” because it is priced below other properties in the area, and is perceived by the purchaser as being in a prosperous area in which their ultimate purchaser will want to live.  Once the property is purchased, the owner will renovate the property and market it for sale.  The flipping purchaser does not intend to use the property for his own occupancy and therefore needs to sell the property as quickly as reasonable.

As most flippers ultimately realize, there is no such thing as a “good deal”.  These transactions are often too good to be true, as these properties are acquired “warts and all”.  Often the flip properties are acquired from foreclosing lenders whose attorneys present contracts that are allegedly nonnegotiable, “need” to be signed immediately and contain unduly harsh closing deadlines that could result in the loss of the downpayment or other penalties.  Flippers should not cave to pressure to sign such contracts without attorney review.  An experienced attorney will inform flippers that they are most likely purchasing the property subject to existing property violations, past due real estate taxes, unpaid water bills, another mortgage that may not have been removed by the foreclosure proceeding, occupants that may need to be evicted and the like.  It may be prudent to order a title search prior to signing such a contract and to resist pressure from the seller to use the title company that it recommends.

fancyacuppa-300x158The New York Times recently published an article concerning the beloved business Tea & Sympathy, a British-themed store and restaurant located in Manhattan’s Greenwich Village, and the difficulty that it has encountered meeting its lease obligations.  Closure of this business may occur  unless the landlord is willing to amend the lease terms.  Loyal customers of Tea & Sympathy have rallied in support of the business by contributing to a “Go Fund Me” page to assist the business in meeting its expenses.  This post will examine legal strategies to be employed when a tenant foresees difficulty in meeting its lease obligations.

Some of our clients with commercial leases have contacted us when they have encountered difficulty in meeting their lease obligations.  The cause of such inability can arise from various factors.  Perhaps the tenant did not engage the services of an experienced attorney when the lease was negotiated and inadvertently agreed to terms that were not advisable for a tenant.  Unanticipated factors may have come into play that increased tenant obligations beyond those that may be comfortable,  such as increased fees and real estate tax escalations of the municipality where the leased premises is located, or a major capital improvement conducted by the landlord for which the tenant agreed to pay a percentage of the cost.  Although the tenant agreed to the rent increases when the lease was signed, the tenant may have eventually become unable to sustain the rent increases once other business expenses also increased.  The business climate may have changed since the lease was signed.  For instance, the product or service offered by the tenant may also no longer be desired or is now being offered online at a lower price.  Given that most commercial leases are long-term arrangements, many of these factors can cause a tenant to be unable to meet its lease obligations.

Your attorney should first determine whether the tenant wishes to continue to conduct business at the leased premises.  If not, a lease surrender should be negotiated prior to “going dark”.  Should the tenant wish to continue at the premises and even be fortunate enough to have sympathetic customers (like those of Tea & Sympathy) who would be disappointed if the business closes, attorneys for the tenant should conduct a negotiation with the landlord towards the goal of modifying the lease so that the current terms are consistent with the tenant’s current abilities and the landlord’s current needs to cover property expenses.  Negotiation of a lease modification avoids yet another vacancy for the landlord and maintains the landlord’s cash flow.

family-296x300Our firm often fields inquiries from clients regarding successor rights in New York residential rental apartments.  The first issue which needs to be determined is whether the premises in question are subject to rent regulation.  Rent regulation in New York State applies to many, but not all, residential units.  It is more prevalent in New York City than in its surrounding suburbs.  However, it does also cover many rental units in Westchester and Nassau Counties.

Whether an apartment is subject to rent regulation depends on many factors.  Defining these factors is beyond the scope of this blog post.  It may depend on the number of units in the building, the age and history of the building, and whether the owner accepted certain government benefits or loans.  A rent regulated unit will generally be subject to the rent stabilization laws of New York State or the local municipality in which the unit is located.  Generally, only cities with large populations will have apartment units subject to rent regulation.

There are local government offices, known as the Division of Housing and Community Renewal (DHCR) which maintain databases allowing for a tenant to determine if their unit is rent regulated.

bucket1So long as one is alive and mentally capable, one is in control of her own financial and legal affairs.  Once a person passes away, a fiduciary needs to be appointed by the Surrogate’s Court  to determine and pay estate debts , collect and distribute assets, file relevant tax returns and pay taxes, vacate a rental property used by the deceased or sell a property owned by the deceased.  Also, if the deceased left minor children surviving, a guardian needs to be appointed to care for the children on a daily basis.  This post will explore the types of fiduciaries that may be involved after a person’s death and how they are appointed.

If a person dies without a will (intestate), the Court will appoint an Administrator to serve.  The Administrator to be appointed will be the same person who will inherit according to the intestacy statute.  For instance, if the closest survivor is a sister, such person will inherit the deceased’s assets and serve as the estate administrator.  Guardians for minor children (under 18 years of age) will need to be appointed by the Court in the event that the person dies intestate.  Since a parent should not leave it to the Court to appoint a guardian for her children, it is prudent for such person to engage the services of a qualified professional to draft a will containing her wishes relative to fiduciaries.

We  have posted previously about the merits of having a will and/or trust.  In either case, fiduciaries are selected by the person making the will or trust.  Executors are formally nominated in wills.  They are charge of paying valid financial obligations and distributing assets that are collected.  The testator (person making the Will) can select the best person in her life for the position of executor.  Perhaps she is estranged from family and would prefer not to have the Court appoint the surviving relative according to statute in the case of intestacy.  Also, the testator may have a friend who is sophisticated with respect to financial matters and is best suited to act as executor.  Trustees of trusts take on similar roles as executors.  Of course, selecting a guardian to raise one’s children in the event of death is a highly personal and important choice to be exercised.

super-bowl-betting-300x180Scheduled for this Sunday is the Super Bowl between the New England Patriots and the Los Angeles Rams for the championship of the NFL.  Recent news stories in the New York metropolitan area involve the possibility of making legal sports bets on the “big game” at casinos or racetracks located in New Jersey.  The reason for this development is a recent decision by the United States Supreme Court which invalidated a federal law prohibiting individual states from making sports betting legal, with limited exceptions.

The Supreme Court, by a seven to two vote, held that it was a violation of the Constitution to prohibit states from making their own decision regarding the legalization of sports betting.  The result is that every one of the fifty states can now legalize sports betting (or decide not to legalize sports betting), and may determine where, when, and how such bets will be made within their state.  The details of such legalization are left up to each state, including whether to allow online betting.

New Jersey, which brought the case before the Supreme Court, has already passed legislation permitting sports betting in racetracks and casinos, such as the Meadowlands Racetrack located just a few miles from New York City.  New York State has lagged behind, and has not yet legalized sports betting or decided on a structure for such potential legalization.  For the time being, New York State residents who wish to bet against the Patriots in the Super Bowl must travel to New Jersey, or to another state such as Nevada, which has authorized legal sports betting.

defense-300x281Prior blog posts have discussed the legal steps required to foreclose property in New York State.  Often, our firm will encounter a foreclosure case that has been in litigation for many years.  In fact, it is entirely possible for a foreclosure matter in New York to take between five and ten years from the commencement of an action to the final sale of the property at auction.  Even after the final sale, there may be additional landlord-tenant litigation involving the owner or tenant being evicted from the foreclosed property.

This post will discuss the legal ramifications of a delay in a foreclosure procedure. Foreclosure cases can be delayed for many reasons.  Common reasons are court backlog, which may involve a Judge taking up to a year to render a decision on a motion, or simply failure of the lender or their attorneys to expeditiously file the various necessary motions in order to advance the case.  Experienced counsel for the defendant may also further delay the case’s progress by interposing legitimate defenses to the action, such as a lender’s failure to provide the correct notices to the borrower as required by law.

As a result, the case may take years to resolve itself.  What is the effect of such a delay?  The first effect is that if the borrower is residing at the property, it allows her time to arrange for new living arrangements.  If there is insufficient equity in the property, and the borrower feels that ultimately, it will be sold at an auction, any delay will allow her to continue living at the premises while the case plays out in Court.  Even after the property is sold, the new owner must bring separate legal proceedings in order to evict any persons living at the premises.   Our attorneys may be able to negotiate with the new owner to give the former owner sufficient time to obtain a new residence and arrange for movers.  We have even successfully negotiated for the new owner to pay the prior owner’s moving expenses in order to have the property vacated.

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.