New York Real Estate Lawyers Blog

November 7, 2014

How to Stage a Takeover of Your Coop or Condo Board

Board members of cooperative and condominium buildings are hard working volunteers who are subject to what may be undeserved criticism. In other cases, a board may be treating a particular unit owner unfairly or there may be a general sense among neighbors that the board is doing a poor job. Our firm receives inquiries from such unit owners, either on their own behalf or as representatives of a group of unit owners that are “out of power,” as to our recommendations.

If efforts to influence existing board members continue to be unsuccessful, our attorneys will discuss the consideration of a “takeover” of the board. This strategy works best when more than one unit owner is interested in this project. It is prudent for our attorneys to review your building’s governing documents, such as the By-Laws and Proprietary Lease in a cooperative, in order to determine the rules for conducting annual shareholders meetings in your building. It should be noted that, in some cases, the existing board has even failed to call annual meetings for several years, leaving the existing board in power. In such a situation, we will review the governing documents for the procedure for the calling of an annual meeting to determine and follow the procedure required.

Once the existing board has legally noticed the annual meeting or the insurgent group has legally demanded an annual meeting, campaigning can begin. Although feelings can be hurt, it is not improper to approach unit owners in person or in writing to represent the position of the person running for office and to request attendance at the meeting or the delivery of a proxy to the soliciting person containing the vote requested. Our attorneys also advise on the particulars of proxies being solicited. For instance, the incumbent board may only list their suggested candidates, as is legally permitted. However, unit owners may be advised that other candidates may be indicated on the proxy and information may be provided as to whether all votes can be allocated for only one candidate if desired, depending upon the specific wording of your building’s By-Laws. It is a matter of style as to whether names are to be included on written materials, as we are prepared to advise our clients of this issue for their particular circumstances. Those campaigning should be wary about potential libel and slander claims, which could give rise to a lawsuit if written or verbal statements are inaccurate.

October 31, 2014

Happy Halloween: Haunted Houses, Zombie Houses, Ghosts and Other Scary Things

By Weiss & Weiss

Even Halloween gives rise to legal issues that may pertain to our blog readers. This blog post will address haunted houses, zombie houses, ghosts and other scary situations from a legal perspective.

Unfortunately, a crime, suicide or other unpleasant event may have happened in a house prior to sale. Such a house may be considered to be “haunted”. Does New York law require disclosure that the house is haunted to a potential buyer? The answer is no. New York is a caveat emptor state, meaning “let the buyer beware”. Psychological issues do not require disclosure. It is the buyer’s responsibility to conduct inspections, ask questions and develop her own opinion about the neighborhood, school district and conditions in the house. Once the buyer has accepted delivery of the Deed at the closing, she has no claim against the seller for property conditions except those that specifically survive the closing according to the contract between the parties.

The only exception to this concept is New York’s Property Disclosure Law . This requires the seller to complete an extensive list of questions detailing property condition, such as has there ever been an oil tank at the property, is the electrical system original and the like. If a seller does not provide the completed Property Disclosure form, a $500.00 credit is to be provided to the buyer at closing. Interestingly enough, in upstate New York, most sellers complete the Property Disclosure form, while in downstate counties typically served by our firm, most sellers opt to credit the buyer at closing rather than complete said form.

October 24, 2014

Surrender of Lease Agreements in New York

By Weiss & Weiss

Quite often, our firm is consulted by both landlords and tenants regarding the termination of a lease prior to its legal end date. For example, a lease may have a term which runs through December 31, 2020. In certain situations, the parties may agree to terminate the lease prior to this date. This can happen for several reasons. A tenant may need to move out for personal reasons, or because conditions at the premises are not acceptable. A landlord may decide not to hold a tenant to a lease term if they believe they can re-rent the premises at a higher rent. In commercial lease situations, a business renting a store or other commercial space may decide it needs to close for financial reasons, and wants to return the space to the landlord without a legal conflict.

In such situations, we recommend that all parties engage legal counsel to draft a Surrender of Lease agreement. A Surrender of Lease Agreement is a document negotiated between a landlord and a tenant through their legal counsel. It amends the original lease agreement so that the lease term can end at an earlier date than initially contemplated by the parties. There are several important issues which must be negotiated and delineated in such an agreement, which will be discussed in this blog post.

The first issue is the date of the surrender. This is the date that the tenant agrees to vacate the premises and return the keys to the landlord. It is standard that the tenant also agrees to leave the premises in “broom clean” condition and without any major damage, just as it had agreed in the original lease. Our firm often recommends that a tenant hire a professional cleaning service to ensure that there are no issues with the condition of the premises after move-out.

October 17, 2014

Have Your Home Improvements Been Properly Permitted?

By Weiss & Weiss

Often in a residential real estate transaction, unpermitted improvements to a house are present. The seller may find that purchasers are unwilling to enter a transaction with these conditions. The buyer may not want the responsibility for obtaining permits for work done by others. Our clients who are parties to residential real estate transactions often encounter legal issues when home improvements are not properly documented by the municipality where the property is located.

When a renovation is conducted, an inquiry should be made of the municipality as to whether a building permit is needed and application should be made for such a permit if required. The building inspector should review the work in progress to confirm that it is conducted according to the permit and once completed will issue a certificate of compliance or completion. This process insures that all work is done according to current building code and that licensed professionals conduct the work. Building permits and documents evidencing completed construction in accordance with the building permit, as memorialized in a Certificate of Occupancy or Certificate of Compliance, are necessary to protect both parties to transactions in New York State for the reasons to be discussed in this blog post.

A great deal of the housing stock in New York is aged, being originally constructed several decades ago. If a house was constructed eighty (80) years ago, a certificate of occupancy would have been issued authorizing the home’s use as a one or two family house. There is also the possibility that the house is so old that it pre-dated the requirements for the issuance of a certificate of occupancy. In that case, the town will issue a letter that there is no certificate of occupancy on file because the construction pre-dated the requirement.

October 3, 2014

Landlords, Tenants, and Pets in New York

By Weiss & Weiss

Our firm is often involved in disputes over pets in rental properties. We have represented tenants who have dogs or cats in their rented apartment or house, and whose landlords claim that this is a violation of their lease. We have also represented landlords who are concerned about potential damage which may be done to their property due to an authorized pet, or who are concerned that renting their condominium or cooperative unit to a pet owner may be a violation of the house rules, subjecting them to penalties. This blog post will discuss the legal issues relating to a pet’s presence in a rental unit, whether an apartment or a private house.

The first issue relates to a pet in a privately owned apartment or house (not a cooperative or condominium unit). In this situation, the lease between the landlord and the tenant usually controls whether a pet is permitted. If the landlord does not want pets present at the property, our attorneys will draft and include lease provisions which will forbid the tenant to have a pet at the premises. A tenant who wishes to have a pet at the premises should make sure that the lease includes a provision in which it specifically states that pets are allowed.

Even if the lease in question does not allow pets, there may be legal loopholes and exceptions to this “pet ban.” The first such exception relates to pets which provide services to individuals with disabilities. New York and federal law prohibits discrimination against people with disabilities. Courts have ruled that such protection would apply where an individual with a disability has a companion service animal, such as a seeing-eye dog, at their property. Therefore, such individuals have the right to have an animal, such as a seeing eye dog, at their property, even if their lease prohibits pets.

September 26, 2014

How Your Cooperative or Condominium Board Benefits from Hiring an Attorney

By Weiss & Weiss

Attorneys provide valuable legal services on behalf of cooperative and condominium boards. Some buildings with fewer than ten units and without disputes have managed without an attorney representing the board. Other buildings may continue with the attorney who originally represented the sponsor. The purpose of this blog post is to describe the services that can be provided by an attorney representing a cooperative or condominium board.

Transfers of apartments will occur at some point. It is not unusual for the building’s managing agent to conduct closings. While many managing agents conduct a variety of tasks and are indispensible to the building, their knowledge is largely operational and particularly relevant to the physical plant of the building. Attorneys are properly situated to evaluate legal situations presented before and during a closing. For instance, after a shareholder dies, the family may wish to transfer the apartment to a family member or sell the apartment to a third party. A managing agent is not the best person to evaluate whether the seller/transferor has delivered the proper documents. Does a managing agent know to ask for a Will to make sure that the deceased did not bequeath the apartment to a friend? It may be a mistake with potential legal liability to the cooperative if the apartment is transferred to a purchaser rather than to the friend. Can the managing agent properly review the Letters Testamentary or Letters of Administration to confirm that they are valid to pass the apartment in question? Sometimes estate documents could even be presented from other jurisdictions, requiring a trained legal practitioner to evaluate. The managing agent may mistakenly approve a power of attorney or affidavit of lost stock certificate and proprietary lease that is invalid for some reason, fail to obtain original documents that are necessary for the cooperative to hold, or fail to collect fees on behalf of the building. A variety of issues may be encountered by a transfer agent at a closing which require the judgment and discretion of the building’s attorneys. In this instance, our firm charges the parties to the transaction only, so that engaging our services to be the transfer agent for closings does not cost the building as a whole and potentially benefits the building as a whole by avoiding legal liability.

Cooperatives and condominiums should also engage an attorney for occasional but significant legal events, such as the refinance of the underlying mortgage of a cooperative or the negotiation of a major contract. Such a major contract could pertain to the replacement of windows, renovation of the elevator, or installation of a new roof. Vendor contracts, such as for the laundry room equipment or oil delivery company require review by the building’s attorney because they will contain provisions that are only favorable to the vendor. Since managing agents may have professional relationships with some of these vendors, it may be prudent for “checks and balances” purposes for the building attorney to review these vendor contracts. Certainly an experienced attorney will be in the position of offering terms that are beneficial to the building that an untrained eye may miss.

September 12, 2014

Estate Proceedings for Property Located “Elsewhere”

By Weiss & Weiss

People are leading increasingly complicated lives, in that they spend their time in several locales, some of which may not be their place of residence. If a person is fortunate, they may develop an affection for a particular area and buy a second home in such area. Likewise, they may inherit a beloved family home in a location where they do not live. When such a person passes away, the disposition of all of their property, no matter where located, must be addressed. The question to be explored in this blog post is which Court has jurisdiction over which property.

If a person dies with a Will, the legal proceeding would be entitled a Probate proceeding. If there is no Will, the legal proceeding is called an Administration proceeding. How does a person know where a Probate or Administration proceeding should be brought if a person owned property and even lived in several locations?

Venue is the legal term for the proper location of a legal proceeding. The Surrogate’s Court Procedure Act defines venue as the county of domicile at the time of death. Generally, proper venue for an estate proceeding will be the county identified as the residence of the deceased on the death certificate. Common sense rules also dictate. If a person owned a home, worked, socialized, or paid taxes in a particular area, then venue would be proper in that county and the estate proceeding should be filed in the same county.

September 5, 2014

Standards for Purchasers of New York Cooperative Apartments

By Weiss & Weiss

Our readers may be familiar with a cooperative apartment building located in Manhattan by the name of River House. This building is known not only for its distinctive classic architecture and regal location, but also by its stringent admissions standards for purchasers. It has been well known throughout the New York real estate community that the River House has declined the purchase applications of numerous famous people and persons with seemingly substantial assets. This culture has resulted in apartments being listed for sale for years, because potential purchasers cannot get approved by the board. Overly rigorous standards hurt all residents, as apartments will not sell as readily. The New York Times reported that the River House has recently relaxed some of its admissions standards.

As we have discussed in a previous blog post , a purchase of a cooperative apartment in New York is subject to the approval of the board of directors. If the board declines the purchase, it will not proceed. Legally, a board can reject a purchaser for any reason, so long as the denial is not for discriminatory reasons. In another blog post , we advise cooperative clients to treat all shareholders equally.

The governing case on the matter of decisions by cooperative boards is Levandusky v. One Fifth Avenue Apartment Corp. This case stands for the principle that cooperative boards, like corporations, are governed by the business judgment rule. So long as there is a legitimate purpose to the decision of a cooperative board and such decision is beneficial to the shareholders as a whole, the decision of the board will stand and will not be subject to judicial review. Boards acting in good faith and in the exercise of their honest judgment are insulated from judicial review of their decision. The business judgment rule is limited by arbitrary or malicious acts of board members, favoritism and discrimination. For instance, a board can legally decline a purchaser if it does not like the person, but cannot legally decline the applicant because they want to retaliate against a seller that they do not like, or because the candidate happens to be Hispanic. Of course, proving that the denial was based predominantly upon an illegal reason may be difficult.

August 11, 2014

Beware the Evil Stepmother

By Weiss & Weiss

Evil stepmothers are not only found in popular culture, as epitomized in Cinderella . Such persons are commonly the subject of events reported by the New York press. Estate conflicts often arise between children of a prior marriage and a more current spouse. Such persons inherently have potentially differing interests. The new spouse may have been attracted to the parent because of the parent’s financial success. The child may be resentful that their parent has decided to remarry.

For instance, Casey Kasem was a beloved radio personality whose end of life was dominated by a battle between his children from a prior marriage and his second wife. Most of the disputes between the parties involved end of life care as well as an unsavory argument over burial arrangements. Mr. Kasem did the prudent thing and had the equivalent of a living will and health care proxy prepared for him, instructing his caretakers to remove life support mechanisms if his prognosis was such that he would not survive on his own. Because his second wife refused to follow his written instructions, his daughters had to petition to a Court for an order requiring the medical facility to respect his wishes. In order to make the best effort to allow for last wishes to be observed, we suggest that our clients allow us to prepare a living will and health care proxy for them and to make same available to medical providers. These documents can instruct that life sustaining mechanisms be left on or terminated, as our client desires. Further, making funeral arrangements and pre-paying for same is another way to make sure that one’s end of life wishes will be respected.

The New York Post also recently reported a dispute between a famous Broadway producer’s son from a prior marriage, his grandchildren, and his fifth wife. The fifth wife allegedly depleted the estate by spending large sums on herself and for purposes that suited her prior to her husband’s death. If the money was held in a joint account with her husband, this spending, even if excessive by some standards, is legal. The Broadway producer should not have had joint assets with his fifth wife. Another method to be used to protect and preserve the assets for the intended beneficiaries would have been to establish a trust, preferably an inter vivos trust in this instance, with anyone besides the stepmother being the trustee. We have written extensively on trusts in prior blog posts . Certainly, one of these types of trusts would have protected assets for the grandchildren.

August 4, 2014

Elmo (and others) in Times Square: The Legal Issues

By Weiss & Weiss

In the news are stories concerning costumed characters in Times Square. For those who have not visited the center of New York City lately, individuals dressed up as Elmo, Super Mario, and Spider-Man, and others have been congregating in Times Square. They entertain tourists, and many people like to have their pictures taken with them. Unfortunately, some of these “characters” have become aggressive, demanding money from tourists for having their photos taken, and recently, “Spider-Man” has been arrested for an altercation with a New York City police officer.

New York City officials are now considering their options regarding licensing these individuals and imposing other legal restrictions on them. Legally, there are several issues in play. The right of any individual to congregate in a public place and to ask others for money may be protected by the First Amendment to the United States Constitution, which protects freedom of speech and freedom of assembly from governmental restriction. Of course, there may be reasonable limitations placed on such freedoms, especially where it may interfere with the safety of others. Previous court decisions in New York have ruled that the right to ask others for money in a public place constitutes freedom of speech and cannot be considered criminal behavior.

Another legal issue is the whether the right to appear in public as certain characters from fiction is an infringement upon the owners of those characters. The legal rights to both the names and appearances of many of the characters appearing in Times Square, such as Elmo and Spider-Man, are owned by large corporations. The costumes, names, and persona of these characters are protected by legal trademarks. This means that no one can generally use these characters for commercial purposes without the consent of the trademark holder. Such consent usually also involves payment of royalties to the trademark owner.