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FSBO.jpgOur attorneys handle many real estate transactions on behalf of our clients each year. Most clients selling their houses, cooperative or condominium units use the services of a licensed real estate agent. Other sellers chose to sell without the use of such a professional. These transactions are known as for sale by owner (“FSBO”). While we interact with real estate agents on a regular basis, it is not the purpose of this blog post to argue for the use of a real estate agent in your transaction. Our purpose is to distinguish the nature of our legal representation in transactions with and without real estate agents.

The sales price matters to the seller, but has no bearing on our legal work. The preparation of the contract will just involve the insertion of the agreed offer price. However, if a seller retains the services of an experienced real estate agent, he will potentially avoid two situations regarding the price. First, a seller may list the property at too high a price, which would impede viable offers being made. The real estate agent will know the market and be aware of the realistic price at which the property is to be offered. Second, the real estate agent may also ensure that the property is not offered at a price that is lower than the seller should receive in this market.

Sellers do not want to experience the delay of their transaction due to a property or title defect that could have been resolved. For instance, it is not unusual for a seasoned real estate agent to view the applicable municipal records to confirm that all improvements have been properly permitted and that a Certificate of Occupancy has been issued for the premises. Of course, there is nothing to prevent the homeowner for conducting such a search. Whether the real estate agent or the homeowner conducts such a search is immaterial. However, it is important to be aware as early in the process as to whether such issues exist, so that they are resolved to allow for the timely closing anticipated by the parties.

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sublease.jpg First, we would like to wish all followers of our blog a happy and healthy 2015. We look forward to continued successful legal outcomes for all of our clients in the New Year.

Our copy of Black’s law dictionary defines a subtenant as “one who leases all or part of the rented premises from the original lessee for a term less than that held by the latter.” What this means is that, ordinarily, a tenant rents premises from a landlord, who is usually the owner of the property. The tenant may, in turn, rent her interest as a lessee to another party. That other party is generally known as a subtenant.

Of course, subletting a property to a subtenant creates many legal issues relating to the landlord-tenant relationship, which we will address in this post. The first issue is whether the tenant has the legal right to sublet the space to a subtenant. The answer to this question is usually found in the lease between the landlord and the over-tenant. The lease may expressly forbid subletting. In that case, the over-tenant is in breach of the lease if they sublet the space. In the alternative, the lease may allow subletting, but only with the permission of the landlord. Some leases will state that such permission is “not to be unreasonably withheld.” In such situations, we recommend obtaining the landlord’s consent in writing. That way, there can be no misunderstanding regarding whether the landlord has consented to a subtenant. Finally, the lease may be silent as to subletting. In such instances, courts have generally held that the subletting is not a breach of the lease and can be allowed.

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sendak.jpgMaurice Sendak was a beloved children’s book author and illustrator whose death two years ago has raised multiple issues to be discussed in this blog post. During his life, he had a close professional affiliation with the Rosenbach Museum and Library in Philadelphia, whereby he lent a vast majority of his books and illustrations for viewing by the general public. He also had a caretaker who managed his personal affairs for decades and was very knowledgeable about his preferences. Mr. Sendak’s Will provided that his caretaker would be one of three executors. It also left some valuable original book manuscripts to the Rosenbach and established a foundation. It was his expressed wish in the Will that the foundation retrieve the works that were on loan to the Rosenbach and display them in the house in which he lived for many decades. The house was to be developed as a study center. We have written another blog post concerning stipulations on bequests that is reminiscent of this situation. After his death, the three executors sought to retrieve the works on loan to the Rosenbach in accordance with Mr. Sendak’s wishes. The Rosenbach objected and commenced litigation against the estate on several grounds to be discussed.

The Rosenbach’s attorneys objected to the caretaker serving as executor. Mr. Sendak had the foresight to appoint two other people to serve jointly as executor, although this was not legally necessary. Testators have wide latitude in the appointment of executors. Generally, even an estate beneficiary does not have cause to object to the testator’s designation of executor. Although some executors may have had a “confidential relationship” with the deceased, such as a clergyman or doctor, a confidential relationship does not on its own disqualify an executor. In this instance, the caretaker had a long standing relationship with the deceased, making her a natural choice to serve. Another objection was that she was unsophisticated in business matters and not suited to her position. In having two other individuals serve jointly, Mr. Sendak may have considered that the caretaker was best to dispose of works due to her personal knowledge while the other executors may have been better suited to the business matters to be confronted by the estate.

Although these factors do not seem to be present in this case, executors can be disqualified for particular reasons. Executors are fiduciaries who owe a duty to preserve estate assets and not engage in self-dealing. For instance, if the caretaker was found to have taken the artwork for her own use and sale for her own benefit, estate beneficiaries could approach the Court and make a formal legal request for her removal as executor. Further, an accounting procedure could be commenced to require the executor to demonstrate the proper collection and disbursement of estate assets.

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buddha.jpg A recent case decided by a New York Appellate Court relates to a dispute over governing and control of a Buddhist Temple. To summarize, the Master of the Temple, Mew Fung Chen, excommunicated 517 members over a dispute relating to control of the Temple, which had locations in both Brooklyn and Manhattan. At a special meeting, the Board of the Temple voted to close the Manhattan Temple and excommunicate the followers of an alleged “rogue monk,” Master Ming Tung. Ming Tung’s followers constituted a majority of the congregation at the time of the excommunication.

Ming Tung filed a lawsuit in Supreme Court, New York County seeking to invalidate the results of the special meeting. The lawsuit also sought to have a Court-ordered new meeting, which would be monitored by a Court-appointed official. Obviously, with a majority of the membership, Ming Tung’s followers would likely have taken control of the Buddhist Temple had such a new meeting been ordered.

The Supreme Court (in New York State, this is the trial court, or lowest level of Court) initially granted the motion of Ming Tung and his followers for injunctive relief. This relief stayed the excommunication and ordered that an annual membership meeting be held, at which all members, including the excommunicated members, could be present and vote on the future of the Temple. However, the defendant, the China Buddhist Association, appealed the decision to the Appellate Division of the Supreme Court, and the First Judicial Department reversed the trial Court’s decision.

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coup.jpgBoard 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.

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hauntedhouse.jpgEven 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.

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surr.jpgQuite 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.

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buildingpermit.jpgOften 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.

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pets.pngOur 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.

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92614post.jpgAttorneys 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.

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