New York Real Estate Lawyers Blog

April 12, 2018

Evictions as a Societal Issue

A 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.

March 29, 2018

Happy Holidays from Weiss & Weiss

By Weiss & Weiss

March 28, 2018

Starting a Foreclosure Action in New York

By Weiss & Weiss

Our 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 counsel. Foreclosure 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.

March 16, 2018

Going Dark

By Weiss & Weiss

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.

March 9, 2018

Reverse Mortgages: What Happens to Those Left Behind?

By Weiss & Weiss

Prior 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.

March 1, 2018

Evictions in Unconventional Situations

By Weiss & Weiss

A 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.

February 15, 2018

Don’t Make Snow and Ice an Olympic Event on Your Property

By Weiss & Weiss

Many 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.

February 8, 2018

Has Your Building Been Sold?

By Weiss & Weiss

A recent article in the New York Times discusses the purchase of the building which currently houses Chelsea Market by Google. Of course, this raises the issue of what becomes of the tenants in the building, including the all-important food vendors. Commercial real estate in New York, whether in the New York City area or its surrounding suburbs, often changes hands. The question then becomes what are the legal responsibilities of the new owner regarding the existing tenants.

In most cases, the property is sold subject to the current tenants’ leases. This means that if the tenants have valid leases, and most commercial tenants would have such leases, then the new owner “steps into the shoes” of the existing landlord, and takes the property subject to the leases. It is important for anyone purchasing such commercial real estate to have experienced counsel review the existing leases, and be aware of the rights and responsibilities of both landlord and tenants. A commercial property such as Chelsea Market may have dozens of commercial tenants, who may have different leases, expiring at different points of time, with potential options to renew. The new owner must analyze the situation prior to purchasing to ensure that the existing rent obligations create sufficient cash flow for their purposes. Also, if the new owner wants the space vacated, an evaluation is needed to determine how long the existing tenants may remain.

Assuming the buyer is obtaining financing for its purchase, the institutional lender will require subordination non-disturbance and attornment agreements from the tenant. This is an acknowledgement from the tenant of the status of the lease, such as term, security deposit held, rent due and whether either party is in default, and that it will pay the lender if the buyer does not make payments on their mortgage loan. In exchange, the tenant should obtain an estoppel certificate, which is a document confirming their tenancy, and stating that they will not be evicted assuming they continue to meet their obligations under their existing leases.

February 1, 2018

Recent Tax Overhall and Deducting New York Real Estate Taxes

By Weiss & Weiss

In December, 2017 a new federal tax bill was enacted. Such legislation has a profound effect on relatively high tax states such as New York. This has resulted in a lawsuit filed by the State of New York as well as other regional high tax jurisdictions. Previously, there was no limitation on deducting real estate taxes and mortgage interest paid. With the new tax legislation, state and local tax (“SALT”) deductions are limited to $10,000. Real estate taxes due for properties owned by clients represented by this firm typically exceed this $10,000 limitation. As such, panic sweep homeowners before the end of 2017. These people tried to pay their property taxes for 2018 while it was still 2017, so that they could deduct as much as possible. This post will address if this strategy was effective and discuss the means by which real estate taxes are paid in New York.

Apparently paying taxes in advance may not be effective for the following reasons. Let’s assume that the property taxes on a home in Scarsdale are $24,000 in 2017. The homeowner wanted to pay an extra $25,000 in 2017 to cover anticipated 2018 taxes. Such a strategy is ineffective because taxes are levied as a result of a budget and warrant resulting in a tax bill to the homeowner. If the taxing authority has not completed this process, paying an estimated amount would not allow such payment to be deducted.

Further, many homeowners with mortgages have a tax escrow associated with their mortgage. This means that every payment will include mortgage interest and principal, as well as an amount determined by the lender that is sufficient for the lender to pay real estate taxes on behalf of the homeowner once they are due. The lender sends an annual statement to the homeowner and the IRS stating the taxes paid on the account. If the homeowner pays taxes on her own, it will not match the amounts reported to the IRS, potentially subjecting her to a tax audit. Thus, any homeowner who has her taxes escrowed should not pay real estate taxes on her own outside of her ordinary loan payment.

January 25, 2018

You Belong With Me: Disclosing Reasons Behind Coop Rejections

By Weiss & Weiss

Consider the following scenario. A shareholder in a cooperative has been trying to sell her apartment because circumstances have resulted in her opportunity to buy a house in a sunny location out of town. Her buyer is a young professional gentleman who wants to own, rather than rent, and build equity to trade up to another home in the future. Their real estate agents make the deal. All parties look forward to closing. Of course, such a transaction requires approval not only of the lender making the purchase loan but of the cooperative board. Once the buyer obtained his loan commitment, after having submitted numerous financial documents and information, he finds out that either the board will not even interview him or has declined to approve the purchase after the interview was held.

It has been longstanding practice in New York that a board does not have to disclose the reasons why it is declining an applicant. The board is governed by the “business judgment rule” , allowing it broad latitude for its decisions, assuming that most decisions are made for the benefit of the cooperative as a whole. The board’s decision is only subject to being overturned if the parties can prove that the decision was made for an illegal reason, such as discrimination. Let’s say that the proposed buyer is a homosexual, which became obvious by information contained on the board application as to affiliations or as discussed in the interview. Should that have been the reason why the declination was issued and the applicant was able to prove same, the decision could be overturned and subject the board to potential damages because homosexuals are a legally protected group.

It has recently been proposed in the Westchester County Legislature that cooperative boards should be legally required to disclose their reasons for rejection. Those advocating for the rule suggest that it will prevent discrimination and is helpful to “protected classes”. This author feels that the law already protects applicants against boards that discriminate. However, the proposed law would be helpful for other reasons. It contains specific timeframes for the review of applications. Should a board decide not to interview during the summer so that its members can travel, the law would prevent a three month delay in the review of an application. Our readers should be aware that if a person’s loan is declined, reasons will be stated in a letter, allowing the applicant to improve his submission in the future. However, without any stated reason for a board declination, the seller and the real estate listing broker will have no information as to the type of buyer sought by the board. What if the board now prefers that applicants earn more than $100,000 annually, but it has not communicated this information to shareholders? With free disclosure of information, the broker will know how important it is to verify income and will not suggest a buyer who cannot meet the criteria.