New York Real Estate Lawyers Blog

July 10, 2014

Buyouts Between Landlords and Tenants in New York

A recent article in the New York Times discusses the issue of landlords making cash offers to “buy out” tenants of their rent regulated tenancies. Our firm has handled these situations, representing both landlords and tenants in different transactions regarding such buyouts.

The reason behind such offers is the rent regulation system currently in place in New York City. Many, but not all, apartments in New York are subject to rent regulation. Rent regulation applies to apartments renting below a certain amount, but does not apply to rentals of a condominium or cooperative unit by its owner. Whether an apartment may be subject to rent regulation is a complicated issue and can be the subject of additional legal proceedings, with which our firm also has extensive experience.

Once an apartment is subject to rent regulation, a tenant residing therein has certain legal rights regarding their tenancy. The first right is the amount of the rent paid by the tenant. This amount is determined by an extremely complicated formula, in which the following factors are taken into account: the rent paid by the prior tenant, increased by a “vacancy allowance,” plus increases may be allowed for improvements made by the landlord to the apartment, such as the installation of new appliances, new windows, and so forth. Renewal leases are subject to particular limited on rent increases determined annually by the Rent Guidelines Board.

July 4, 2014

Wishing Our Readers a Happy 4th of July

By Weiss & Weiss

June 19, 2014

Trademarks and the Washington Redskins Decision

By Weiss & Weiss

Recently in the news is a decision by the United States Trademark Trial and Appeal Board concerning the registration of the trademark for the Washington Redskins football team. Longtime readers of this blog will recall that a prior post explained the difference between copyrights and trademarks. To summarize, a trademark is legal protection for a trade or business name used to identify goods and services in interstate commerce. To obtain such protection, one generally applies to the United States Patent and Trademark Office in Washington, D.C. The applicable procedure is one which can be done online. Our attorneys are familiar with the application process and can assist potential applicants.

Once the application is submitted, an examiner at the United States Patent and Trademark Office will review the proposed trademark. They will check as to whether the proposed mark is “confusingly similar” to any prior registered mark, and may deny the application if it is. Other technical issues may also be raised by the trademark examiner.

If the applicant has an issue with the decision of the trademark examiner, then the trademark examiner’s decision can be appealed to the United States Trademark Trial and Appeal Board (TTAB). Any such appeal would be heard by a panel of three Administrative Trademark Judges. Each Judge will then vote on the appeal, with the majority becoming the decision of the TTAB in a particular case.

May 30, 2014

Our Guide on How to Conduct Cooperative Board of Directors Meetings

By Weiss & Weiss

coop board meeting.jpg In a prior blog post , we described how annual cooperative shareholder meetings should be conducted. Now that the cooperative’s Board of Directors is properly elected and in place, the business of the cooperative should begin with the holding of a meeting of the Board and electing officers. This blog post will describe how to conduct regular Board of Director meetings in a cooperative.

It is not unusual for By-Laws to require a newly elected Board to meet immediately after the annual shareholders meeting, even if such a meeting has not been noticed. Otherwise, By-Laws may require advance notice of the Board meeting. While Board meeting notices usually do not need to specify an agenda, we recommend that an agenda be circulated prior to the meeting so that those in attendance are prepared for the discussion of cooperative business and are not surprised by any of the topics.

At the first Board meeting, it is prudent to elect the officers, such as the President, Vice-President, Secretary and Treasurer. The By-Laws will identify those officers to be elected for a particular cooperative as well as their roles. Review of the By-Laws must be made to confirm the quorum (the minimum number required to hold a valid meeting) required for the Board meeting, whether a majority or other percentage of directors. Once it is determined that there is a quorum present at the Board meeting, the By-Laws should be consulted to note voting requirements. Does a mere majority vote or a higher percentage allow for the passage of resolutions discussed? Particular matters, such as enacting additional fees like a flip tax, may require a vote of more than a majority, such as two-thirds. A flip tax is a fee paid to the cooperative at a closing by the seller and may be calculated as a flat amount, a percentage of the sales price, a percentage of the net profit of the sale, or by assigning a particular number of dollars per share owned by the seller. A flip tax is intended to enhance the account balance of the cooperative and share some of the seller’s sales proceeds with the building. Since flip taxes comprise an additional fee, it is not unusual for voting to require more than a majority or for such a matter to be considered by all shareholders, instead of merely the Board.

May 22, 2014

Enjoy Your Vacation Home this Memorial Day Weekend

By Weiss & Weiss

Memorial Day weekend is eagerly anticipated by many of our readers, especially this year after the harsh winter that we endured. Fortunate travelers expect to enjoy their vacation homes this weekend. As you head out for the weekend, we wish to remind you of certain legal issues pertaining to vacation homes.

Some vacation homes were financed by the use of reverse mortgages . Once the borrower dies or does not occupy the home for another reason, the lender may seek to collect the remaining unpaid principal balance, require the home to be sold or foreclose on the property. Since vacation homes are secondary homes, obtaining a mortgage modification, if necessary due to the financial circumstances of the borrower, is not a certainty. We are available to assist our clients in foreclosure defense should it become necessary.

Sometimes a vacation home is inherited by more than one adult child. In this case, maybe not all of the record owners contribute to the expenses of the house or even use the house. Our firm has been engaged in partition actions on behalf of its clients to alleviate this situation.

May 16, 2014

‘Tis the Season for the Annual Meeting

By Weiss & Weiss

May and June of each year tend to be “annual meeting season” for our cooperative and condominium clients. At such meetings, the shareholders of cooperatives and unit owners of condominiums elect their board of directors or board of managers. Those who serve on boards are hard working volunteers, participating on a weekly if not daily basis. Those who attend annual meetings may only attend one meeting a year to question and judge those who participate on their behalf on a constant basis. This blog post will address how to properly conduct annual meetings and why smoothly run annual meetings are important. Although our law firm also conducts annual meetings for condominiums and religious corporations, this post will be limited to cooperative corporation annual meetings.

Why do we have annual meetings? Such meetings are necessary to elect directors at regular intervals, so that the same people do not maintain their posts indefinitely contrary to the will of shareholders. An Offering Plan would have been filed by the sponsor of the cooperative with the New York State Attorney General Real Estate Finance Bureau when the building was converted to cooperative ownership. One of the documents contained in such Offering Plan is the By-Laws. As in any corporation, the By-Laws provide the roadmap for the governance of the corporation. It is common for By-Laws to provide that annual meetings for the election of directors are to be held in a particular month of a year. The cooperative need not hold its meetings in the specific month stated in the By-Laws (who wants to meet in January during a blizzard), it merely needs to hold its meetings at regular intervals each year. The By-Laws specify that the notice of annual meeting is to state that the business to be conducted is to elect directors and to conduct other business specifically identified in the notice, should state the time, date and place of the meeting, and who needs to sign the meeting notice. Our attorneys also pay careful attention to each client’s By-Laws provision regarding the number of days required for the advance notice of the meeting. Usually cooperative By-Laws require that written notice of the annual meeting be delivered at least “x” days but no more than “y” days in advance of the meeting. The By-Laws will also indicate how many directors are to be elected and if there are particular disqualifications (such as a director must also be a shareholder).

Once the meeting commences, the first step is to determine if there is a quorum, the proper number of shares represented for the decisions made at the meeting to be legally valid. The By-Laws identify how many shares constitute a quorum, perhaps a majority of shares issued or a majority of units are represented. Usually, shares can be represented by attending in person or by proxy (the delivery of a signed document instructing how one’s shares are to be voted or who may vote one’s shares on her behalf). It should be noted that certain legal acts or acts as identified by the certificate of incorporation may have a more stringent definition of quorum than the standard director election. As it is inconvenient to adjourn the meeting due to failure of quorum requirements, we encourage our clients to collect as many proxies as possible in case a shareholder cannot attend.

May 2, 2014

New Yorkers Will Always Have Death and Taxes

By Weiss & Weiss

New Yorkers seem to be “taxed to death”, paying the highest average property taxes in the country. We are the only state that charges a tax for the making of a mortgage. The tax burden does not end at death, as New York also has its own estate tax. Governor Andrew Cuomo, seeking re-election this year, has been encouraging the state legislature to reduce these burdens.

Estates may be subject to both federal and state estate taxes. During the past thirteen years, the federal estate tax has been modified. The federal taxable exemption now stands at a generous amount of $5,340,000.00 per person. This generally means that estates that do not exceed this amount are not subject to federal estate taxes. As many people do not have estates that exceed such amount, federal estate tax is not a concern for most families. However, New York State has levied an estate tax on estates exceeding $1,000,000.00 until a revision to the law was passed in April of this year. Since many New Yorkers could easily have assets exceeding $1,000,000.00, considering high property values, many of our residents have been subject to state estate tax.

The revision to New York’s estate tax law now provides that the exemption will immediately rise to $2,062,500.00, so that only estates valued above that amount will be subject to New York state estate taxes. Further, each April, the state estate tax exemption is set to rise by $1,062,500.00, until it reaches $5,250,000.00 in 2017, then the exemption will continue to rise to close to $6,000,000.00 on January 1, 2019. Tax liability will certainly be a “moving target” during the next five years.

April 24, 2014

“Self-Help” and Legal Representation in Foreclosure and Landlord-Tenant Matters

By Weiss & Weiss

Our firm often receives inquiries from potential clients, many related to foreclosure and landlord-tenant matters. Often, an individual will inform us that they have been representing themselves in a Court proceeding, or are considering doing so, and will question us as to whether an attorney is necessary.

In New York State, individuals are generally permitted to represent themselves in Court proceedings, without an attorney. One exception to this is a corporation. Even if an individual is the sole owner of a corporation, corporations must generally be represented by counsel when they are a party to a litigation proceeding.

However, simply because an individual may representative herself in Court, does not mean that this is the best decision when confronted with an adversarial proceeding concerning potentially sophisticated legal issues, such as a foreclosure proceeding, or landlord-tenant matter. Many of the people who make inquiries to our firm will ask what benefit is gained from hiring an attorney, especially since there is an increased cost involved when attorney’s fees are incurred.

March 28, 2014

Defending Reverse Mortgage Foreclosures

By Weiss & Weiss

A recent article in the New York Times discusses the pitfalls of reverse mortgages, including the effect such a mortgage may have on the heirs of the borrowers in question. A recent blog post also examined the possible negative legal ramifications of reverse mortgages on seniors and their surviving spouses. This article will discuss possible legal defenses when a reverse mortgage is being foreclosed, or threatened to be foreclosed, by a lending institution.

The first person to be impacted by a reverse mortgage default is usually the surviving spouse of the borrower. This situation can occur when only one spouse is obligated under the reverse note and mortgage. There are several reasons why this can happen. It is possible that one spouse has poor credit, and cannot qualify for a loan. In addition, in order to qualify for a reverse mortgage, the borrower must be at least 62 years old. A couple may own a property jointly, where one spouse is over 62, and the other is younger. In that case, the reverse mortgage may be made to only the older of the owners. In this example, the lender will often force the non-borrowing spouse to remove their name from the title of the property being borrowed against as a condition to making the loan. This may cause additional legal problems if the non-titled spouse survives the borrowing titled spouse.

If the borrowing spouse passes away, the terms of the reverse mortgage usually call for the entire sum that was borrowed to be immediately paid in full. The surviving spouse may receive collection letters from the lender, demanding that the mortgage be repaid in full. This obviously comes at a time when the surviving spouse is probably undergoing emotional and financial stress.

March 21, 2014

Marital Rights in a New York Estate

By Weiss & Weiss

Our clients have inquired as to the consequences of the termination of a martial relationship upon rights in a New York estate. The resolution to this issue depends upon whether the relationship was legally terminated through a divorce and whether the estate is being conducted as an administration or a probate proceeding. Many of us are familiar with those whose relationships end, but who do not legally end the relationship by applying for and obtaining a legally binding divorce decree. In some cases, one of the partners relocates and is estranged to such a degree that they are unable to be found. In order to complete the estate proceedings, private detectives may be needed to determine if the relocating spouse predeceased, making them unqualified to inherit, or to ensure that notice as required by the Surrogate’s Court is effectuated. In other cases, the parties have a cordial breakup and interact often. However, in either case, the spouse is entitled to inherit from the deceased party’s estate, unless a judgment of divorce was obtained during the lifetime of both parties. The Surrogate’s Court will often request a copy of the judgment of divorce, so it is important for parties to maintain such significant documents in an accessible location.

In the instances when a divorce was not obtained, this blog post will analyze the distinctions between an administration and a probate proceeding. This blog has discussed in general terms an estate administration proceeding, which is appropriate when a person dies without a will (intestate). New York’s Estates Powers and Trusts Law provides that the spouse receives the entire estate if there are no children. If there are children, the spouse will still receive $50,000.00 plus one-half of the rest of the estate. Certainly, a separated person would not wish for his spouse to receive the bulk of his estate, but this would be the result in an administration proceeding.

Should such a separated person not wish to divorce, he should have a will that is consistent with his wishes prepared by legal counsel in order to attempt to prevent this result. One should be mindful that in New York State, a spouse cannot be disinherited under most circumstances. A spouse has the right to her “elective share”, which is that amount that would have been inherited in the event of intestacy. An exception to this concept is obtaining a proper waiver of elective share document, wherein the party waives her right to her elective share in the spouse’s will. This document may be appropriate even when a relationship has not dissolved. For instance, one spouse may be independently wealthy and be willing to waive her elective share so that the children of the deceased receive the bulk of the estate. The waiving spouse may also be duly provided for by other assets such as life insurance.