New York Real Estate Lawyers Blog

May 13, 2016

New York State Landlord Prosecuted – Does this Sound Familiar?

Recently in the news is the story regarding New York City landlord Steve Croman. Mr. Croman was arrested for allegedly harassing rent-stabilized tenants into leaving their apartments so that he could increase the rent for new tenants. Longtime readers of our blog will recall other posts which relate to the right to renew a lease, as well as illegal acts and evictions in New York State.

Unfortunately, the current rent system in New York State, and, more specifically, mostly in New York City, gives landlords an incentive to remove tenants, especially long-time tenants, who are paying artificially low rents due to the rent stabilization laws. Of course, this does not excuse harassing and threatening tenants, but it explains why a landlord may resort to these tactics to attempt to remove tenants.

The current rent stabilization system allows the landlord to increase the rent by a certain percentage when a tenant vacates. Although this percentage may vary, it is usually a twenty percent (20%) increase over the prior regulated rent. For example, if a tenant was paying $1,000.00 per month, and vacates, the new tenant may be charged $1,200.00. There may also be additional increases depending on the amount of time which has passed since the last vacancy, as well as increases if the landlord renovates the apartment in question. For buildings that contain more than 35 apartments, the landlord may collect a permanent rent increase equal to 1/60^th of the cost of the apartment improvement. If there are fewer than 35 apartments, the landlord may collect an increase of 1/40^th of the cost.

May 6, 2016

House Rentals in New York- Legal Issues to Consider

By Weiss & Weiss

Some of our clients have a reason why they will not live in their house in New York for a particular period of time. Perhaps an employment assignment in another location has caused the homeowner to leave the area for a set period of time and the homeowner intends to return to the house. Maybe the homeowner is downsizing, but the sale market is not strong enough to command the price sought by the homeowner. For those intending to rent their home, we wish to convey the following advice.

We suggest that you have professionals involved. Engage the service of a licensed real estate broker. The fee, usually one to two months’ rent, is a relatively modest amount to pay to insure that a professional locates a reliable tenant. If you decide to forego the services of a real estate agent , make sure that you carefully evaluate the proposed tenant by obtaining references from prior landlords and perform a credit check. Whether the tenant is located by a real estate broker or by your own efforts, trust your instinct if the tenant raises any concerns whatsoever and do not rent the house to such a person. Prior to the delivery of possession, walk through the house with the tenant, in order to show how appliances work and to document conditions together.

We also recommend that you engage the services of an attorney to have a lease drafted by a professional. A professionally drafted lease is important to have for several reasons. It will clearly identify the appropriate provisions, even if the relationship with the tenant ends up going smoothly. Your attorney will be prepared to cover changes in the law that the landlord may not be familiar with, such as the requirement to advise the tenant whether an automatic sprinkler system is present at the premises. In the event that a legal proceeding is required against the tenant for non-payment and other matters, having a professionally prepared lease will most likely cover items that protect the landlord in such a proceeding. If you intend to rent the house repeatedly, you may want to ask your attorney to also provide a form that can be used by you in the future as your needs warrant.

April 28, 2016

What Will Happen to Prince’s Little Red Corvette? Dying Without a Will

By Weiss & Weiss

Fans of the musician Prince were distressed to learn of his untimely passing last week. News reports now circulating have noted that Prince died without a Will. This post will address the implications of dying without a Will. As this firm is located in New York State, this post will address this issue from the standpoint of the law in New York.

When a person dies without a Will, an Administration proceeding is conducted. Such a proceeding is undertaken in Surrogate’s Court. The attorney for the surviving relative files a Petition in the proceeding. The surviving relative of the closest relationship will apply to be Administrator of the estate. In Prince’s case, we have heard that he was not survived by a spouse, children, or parents, making his sister the first person to be qualified to be Administrator of the estate. Both New York and Minnesota provide that half-siblings are ranked in a similar fashion, so that half-siblings may potentially share in the administration duties of the sister who filed the Petition. When significant sums of money are at stake, a kinship proceeding may also be filed to determine whether other relatives should be given the opportunity to share in the estate. Once the proper fiduciary is appointed by the Court, particular duties need to be undertaken.

What if Prince’s doves continue to cry after his death? If he had a Will, his pets could have been provided for in his estate plan. Absent such provisions, any pets would become the property of the person(s) appointed administrators. For pet lovers, this disposition could become a major problem if the person receiving the pets has no interest in taking care of beloved animals. Prince’s Little Red Corvette must also be considered. In New York, personal property could be specifically identified in a Will as a specific bequest, left in the residuary clause for the person intended to inherit all unspecified property or will be left to the person qualifying as Administrator if there is no Will.

April 22, 2016

Happy Passover from Weiss & Weiss

By Weiss & Weiss

April 21, 2016

Is This Your First Time? Property Purchases in New York State

By Weiss & Weiss

It’s that time of year again. This author is not thinking about the chirping birds and blooming trees heralding the beginning of Spring. We are thinking about another sign of the season– the first time home purchaser. This post will address issues pertaining to the person buying a home, whether a house or a cooperative or condominium apartment, for the first time. Even if a person has owned a home in another state, real estate in New York is its own animal.

The most important aspect of our advice is that the first time homebuyer should surround himself with seasoned experts throughout the process. In addition, let the experts do their work without your interference. It is usually better for a first time homebuyer to work with a licensed real estate agent and to buy a property that is listed with a real estate agent, as opposed to buying a home that is listed for sale by owner. That way, the real estate agents will resolve many of the issues that commonly develop in a transaction. If both parties are not represented by real estate agents, then the buyer may not know how to best negotiate a favorable price. Comparable sales should also be evaluated to determine the proper price to be offered by a buyer. A real estate agent knows the area best, but also has the resources to locate the comparable sales data and to evaluate the data properly.

The first time homebuyer should also get his finances in order. He should become acquainted with a potential lender or mortgage broker prior to making offers. His offer is more likely to be accepted if accompanied by a pre-approval letter, so that the seller is comfortable with taking the property off the market for this buyer. In addition, the proposed lender or mortgage broker may note possible deficiencies in the buyer’s potential loan application, such as inaccurate credit concerns, the necessity of reducing debt and the like. Given the amount of the typical downpayment to purchase a property in the New York metropolitan area, first time homebuyers may need a gift from their parents or other relatives to pursue the transaction. The buyer should discuss this with the appropriate person in advance. Further, once the gift is made, the parties need to be prepared to show the source of the gift, such as copies of bank statements before and after the gift, from the parent and the child.

April 14, 2016

Taxable Matters Pertaining to Valuable Personal Property

By Weiss & Weiss

Given that the 2015 tax filing deadline is imminent, taxes and the potential reduction of tax liability are on the minds of many of our clients. Some of our clients are fortunate enough to own collections of valuable personal property, such as artwork, cars and the like. Our estate attorneys are in the position of advising clients how to dispose of such personal property and how to reduce potential tax liability.

For purposes of this post, let us assume that the valuable collection contains artwork. It is prudent for the owner of such a collection to make a detailed catalog of the individual components of the collection. That way, it may be easier to keep track of the possessions. Gift and estate taxes could be due to the extent that an event of a public nature occurs, such as a sale or auction, or museum loan of the artwork. If the owner of the artwork merely decides to give a work of art to his daughter, who will privately display it in her home, then such an act may be unlikely to trigger the interaction of the tax authorities.

If the artwork is given to an institution during one’s lifetime, then the value of such item can be deducted from the donor’s taxes. Should the artwork be given to an individual and be valued at less than $14,000, then the annual gift tax exclusion will apply to make this event not taxable. Once a person passes away, estate taxes may be due, depending on the value of the estate.

April 6, 2016

Assignment of Commercial Leases in New York

By Weiss & Weiss

Our firm is often involved in landlord-tenant situations involving assignments of commercial leases. What this means is that one party to a commercial lease (usually the tenant) wishes to transfer their rights and responsibilities to a third party, either an individual or company who is not a party to the original lease. Most often this occurs when there is a potential sale of the business associated with the lease.

For example, a commercial tenant operates a car repair business and has a lease for the business for a period of five years. A third party approaches the business owner and offers to buy the business. As part of the purchase, the lease needs to be assigned from the current tenant to the purchaser of the business.

The main legal issue relates to the lease itself. Most, but not all, commercial leases contain a clause allowing assignment of the lease to a third party with the consent of the landlord. They may also state that such consent is not to be unreasonably withheld or delayed. Some leases will further delineate what “unreasonable” may entail. For example, it may state that it is not reasonable to refuse consent to a purchaser who intends to operate the same type of business as the current tenant, assuming they have the financial standing to assume the lease.

March 25, 2016

Happy Easter from Weiss & Weiss

By Weiss & Weiss

March 17, 2016

Fraudulent Conveyances of Real Estate in New York

By Weiss & Weiss

Occasionally, our clients inquire as to whether a real estate transaction could be considered a fraudulent conveyance. This situation can occur when an individual or entity transfers property due to a judgment or pending judgment, in an attempt to evade creditors. In New York, a judgment is a lien on real property for a period of ten years. After ten years, the creditor can move to have the lien extended for an additional ten years. Therefore, those who own real estate may have an incentive to transfer such property to prevent a lien from being placed on it, possibly for a twenty-year period.

New York Debtor and Creditor Law, Article 10, is the state law governing fraudulent transfers. It states that, first, when any defendant transfers property in an attempt to evade a judgment creditor, that transfer is considered fraudulent and may be rescinded in a court action. An important consideration in this evaluation is whether the transfer is made for consideration, that is, whether the person transferring the property received value in exchange for the transfer.

Let’s give a hypothetical situation to help clarify the law. A husband and wife own a house jointly. The husband alone is sued individually for a business debt, and a judgment is obtained against him. Before the judgment is entered by the Court, the husband transfers his one-half interest in his house to his wife, so that the house is solely in his wife’s name. The husband receives no compensation for this transfer.

March 10, 2016

Preserving Real Estate Assets for the Defaulting New York Homeowner

By Weiss & Weiss

It is not unusual for some of our clients to be presented with the following scenario. An owner of a single family house or apartment falls behind on his mortgage and his lender commences a foreclosure proceeding while a sale is pending. In an apartment scenario, the cooperative board pursues a maintenance default matter while a cooperative unit owner is actively attempting to sell the unit. These are not situations where a short sale is sought. Rather, significant equity exists. The anticipated sales proceeds will allow for the full payment of the balance of the mortgage loan or maintenance arrears due to the cooperative.

Another common component of these situations is that the lender or cooperative board is aggressively pursuing their claim, jeopardizing the owner’s ownership of the asset. For instance, if the lender forecloses on the mortgage, the homeowner will lose title to the property and have nothing to sell. If the cooperative default goes to its final conclusion, an auction of the unit (and eviction of the occupant) , the unit owner will likewise lose her ownership interest. These results should be avoided when the closing proceeds are more than sufficient to pay any outstanding amounts due. The goal of the attorney representing the homeowner is to encourage the lender or the cooperative board to delay its proceeding pending the sale of the property , at which time the lender or the cooperative will be paid in full for the monies owed. When a homeowner falls behind in payments due, he may claim to a creditor that he is trying to sell the home in an effort to stall proceedings. While it may be true that the homeowner is trying to sell the home, the following suggestions may make such a claim more credible to the creditor and convince them to delay the proceedings.

First, it is helpful to have a skilled attorney present this information to the creditor. Second, for sale by owner scenerios should not be used. Having a licensed real estate agent involved who has an active listing that can be shown to the creditor is convincing evidence that the home is actively for sale. Third, if there is a signed contract of sale with downpayment monies on deposit and also a loan commitment letter from the purchaser to deliver to the lender or cooperative’s attorney, such documents will show that the means to pay the past due balance will be imminently available. A new loan may be sought by the homeowner as another means to resolve the default. If these strategies are not effective, our attorneys may file an Order to Show Cause with the applicable Court, seeking a temporary restraining order curtailing the creditor’s right to pursue the activity until the sale occurs.