New York Real Estate Lawyers Blog

May 10, 2013

Out-of-State Judgments and their Collection in New York State

Our firm is often asked to enter judgments on behalf of creditors. A judgment can be obtained in several ways. If a lawsuit is brought, and the defendant does not respond, a default judgment may be obtained. A case may also go to trial, and, if successful, a judgment may result. In addition, other situation can arise where a client obtains a judgment in another state, other than New York. These are known as “foreign” judgments, even though they are still obtained within the United States.

Article IV, Section 1 of the Constitution says that “[F]ull Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State.” This means that if a lawsuit is brought in another state, goes to trial, and a judgment is obtained, then every state in the U.S. must consider that judgment valid, and allow it to be entered in their own state. The main reason that one would want a foreign judgment entered in New York is because the debtor has assets within New York. Collecting such a judgment will be addressed in the second part of this blog post.

New York Civil Practice Law and Rules Article 54 regulates the entry of foreign judgments in New York State. It allows foreign judgments which were not obtained by default or confession of judgment to be entered in New York. In order to enter such a judgment, the original judgment must be authenticated. This generally means that an official, such as a Judge, in the state where the original judgment was entered, must provide an affidavit that the judgment is currently valid. The original judgment must usually contain a raised seal from the originating state. In addition, the judgment creditor must provide an affidavit stating that the judgment was not entered by default, that it has not been paid, and provide the name and last known address of the judgment debtor. Our firm has extensive experience in preparing such affidavits and entering foreign judgments in New York State.

May 3, 2013

Bundled Services For Real Estate Purchases- Do They Benefit Purchasers?

By Weiss & Weiss

Bundled services have commonly been offered to purchasers of real estate in New York. For example, a real estate broker, wishing to enhance an affiliated title insurance company, has a program that encourages attorneys to refer their title business to the title company. A title agent provides tax reduction services as a benefit to its title customers. Mortgage providers may have an affiliation with a real estate broker. Purchasers may consider bundled services to be convenient and beneficial. They may be unfamiliar with the community in which they are purchasing or new to the process, giving them the tendency to trust recommendations of professionals that they have already selected. However, in some cases, bundled services predominantly benefit those entities to which the referral is made and do not necessarily result in better or less expensive service for the customer.

Title insurance companies are highly competitive entities that have fewer transactions to close since the “Great Recession”. In an effort to stand out among their competitors, it is not unusual for a title company to have an affiliated mortgage loan provider or title insurance company. They argue that closing issues can be resolved more readily since the servicers are constantly working with one another. Real estate brokers want to make sure that their purchaser can obtain financing, so referring to their affiliated entity is perceived by some as making the issuance of a loan commitment more likely. In some cases, they attempt to bring attorneys, who they select to be on an “approved list”, into the arrangement. Purchasers should be aware that in order to be on the “approved list”, an attorney may be requested to refer its title business to a particular entity on substantially all of his or her transactions, even those that did not result from the real estate broker with the affiliated title business.

Some title insurance companies that have lost transactions from attorneys on approved lists with other title companies are crying foul to this arrangement. They argue that the deck is stacked against them, in that the title company is in effect selected before the contract is even signed. While the real interest in the complaints may be to stifle the competition, there are legitimate reasons for some of the objections. New York’s Insurance Law provides that those who accept or receive a quid pro quo are subject to financial penalty. Title companies have been forbidden from providing goods of value as an inducement for future business. Expensive gifts and tickets to sporting events are of concern. Financial inducements (kickbacks) are prohibited. Invitations to continuing education events and office supplies are not considered an inducement for business. It is not unusual to refer business in any field to a golfing buddy, but if the service is deficient or too expensive, it only benefits the person who wants to keep playing golf, rather than the purchaser.

April 26, 2013

Latest Developments Relating to Fair Housing in Westchester County, New York

By Weiss & Weiss

A recent article in the New York Times discusses new legal developments relating to the Westchester County, New York fair housing settlement. For those who are unfamiliar with the situation, a lawsuit was brought in 2009 by a public interest group against Westchester County, alleging housing discrimination. In order to settle the lawsuit in 2009, then-County executive Andrew Spano agreed to build at least 750 units of “affordable housing” in Westchester by a Court-approved settlement agreement.

Recent developments in this case involve the federal government threatening to have the County held in contempt of Court for failing to comply with the settlement agreement. In addition, the federal Department of Housing and Urban Development has stated that it will revoke $7.4 million in money awarded to Westchester County if the county does not comply with the terms of the settlement.

More specifically, the settlement agreement required that the county create 750 houses and apartments for moderate-income people in particular Westchester neighborhoods. The County has claimed it is actually ahead of schedule to accomplish this goal. The current County Executive states that the County already has financing for 305 units of affordable housing in place. However, HUD and the housing advocates who brought the original lawsuit claim that the County is not only obligated to build affordable housing, but also to take affirmative steps to prevent housing discrimination within Westchester under the terms of the settlement agreement.

April 18, 2013

Weiss & Weiss Has Relocated to White Plains, New York

By Weiss & Weiss

We are pleased to announce that as of April 15, 2013, the law firm of Weiss & Weiss has moved to 1 Barker Avenue, Second Floor,White Plains, New York 10601. Our new telephone number is (914) 328-6100 . Our new location enhances our ability to provide high quality professional services to our clients. We are located within walking distance of the White Plains Metro North train station and bus transit center, the Westchester County Courthouse and the Federal Courthouse for the Southern District of New York. Street parking is available by parking meter along the perimeter of our office building. In addition, a parking garage for the use of our visitors is located adjacent to our office building. Our expanded facilities include three conference rooms, a comfortable reception area and modern office equipment. We look forward to continuing to serve the needs of our clients and to welcoming visitors to our new location.

April 12, 2013

Professional Licensing and the Law in New York State

By Weiss & Weiss

Our firm often interacts with other professionals, such as doctors, architects, and accountants, in the course of our practice. This can happen in several ways. The first is when such services are needed by our clients in the course of litigation. For example, an architect may be needed to evaluate whether a property can be divided in separate parcels in a partition action. Courts will consider this separation to be the preferred remedy, so the expertise of an architect is often needed to provide their professional judgment on whether the property can be subdivided.

Another situation which may occur is when a client states that they received professional services which were not satisfactory. One client informed our firm that the person they hired to prepare and file their professional income taxes had done such a poor job that their business was subject to IRS investigations and liens from the government.

When either of these situations occur, our first step is to check the New York State Licensing Division website. This website allows us to determine whether a person holds a professional license in New York State. Examples of such licensed professions are doctors, nurses, architects, certified public accountants, and other financial and health related occupations. If a person practicing such a professional is not listed as licensed, this would raise several “red flags” in our evaluation of the situation. We have had several situations in which a tax preparer was neither a licensed certified public accountant nor a licensed accountant of any kind. At that point, we informed our client and told him not to use such a person in the future.

April 5, 2013

Contested Probate Proceedings- Part II

By Weiss & Weiss

surrogates contest.jpg This blog post contains a description of some of the standard substantive objections that a person may have to the admission of a Will to probate. Estate practitioners deem these objections the “four horsemen”. Due execution, testamentary capacity, undue influence and fraud comprise the four horsemen.

Due execution is known as the Statute of Wills. The proponent of the Will must show by the fair preponderance of the evidence that the Will was signed at its physical end in the presence of at least two disinterested witnesses. At the time of execution, the person making the Will should make it known to the witnesses that he is signing his Will and wants the witnesses to act as witnesses. Due execution is assumed if an attorney supervised the Will execution “ceremony” and if the Will contains the legal attestation clause. Our firm is mindful of New York’s execution requirements and conducts the Will signings that it supervises in accordance with the statute.

Testamentary capacity, the ability to make a Will, is broadly defined as every person over eighteen years of age who is of sound mind and memory. The Court will look to the testator’s capacity at the time that the Will was executed. Elements that the Court will consider include whether the testator understood the meaning of the Will’s provisions, the nature and extent of his property and the “natural objects of his bounty” (the identity of his family members or friends). Old age, dementia, and physical infirmaries such as blindness are not automatic disqualifiers depending upon the condition of the person when he signed his Will.

March 29, 2013

Contested Probate Proceedings- Part I

By Weiss & Weiss

surrogates court.jpeg Inquiries are often made of our firm as to whether a claim can be made which may dispute the terms of another person’s Will and the proper time and legal mechanism for doing so. This post will address the issues that arise in a Will contest. As our readers may know , when a person dies with a Will, the proposed Executor must submit the original Will and other required documents to the Surrogate’s Court in the County in which the deceased resided and request that Letters Testamentary be issued appointing the person as Executor. This process is called probate.

In the probate proceeding, the Surrogate’s Court will require a signed Waiver and Consent from all distributees (those who would inherit if there was no Will) or proof of service of a Citation should these parties be unwilling to sign the Waiver and Consent. The time between the service of the Citation on an objectant and the return date of the Citation (the date scheduled by the Court to hear objections to the admission of the Will to probate or else the proposed Executor will be appointed) is the appropriate time to submit objections to the Will.

New York statute grants broad authority to file objections to the probate of a Will. Essentially, any person who would be adversely affected if the subject Will is admitted to probate may file objections. One exception to this broad rule is that good cause must be shown if the basis of the objectant’s claim is the disqualification from receiving commissions as a fiduciary.

March 22, 2013

Corporations and Partnerships: Their Legal Effects

By Weiss & Weiss

Our firm is often asked by clients who are purchasing real estate or starting a business what type of legal entity, if any, they should form to protect their interests. In order to insulate an individual from personal liability, a corporate or partnership should be formed. In addition, within these categories, there are subcategories, such as limited liability companies (“LLC”) and limited liability partnerships (“LLP”). This post will discuss the basic qualities of such entities, as well as the legal effect that they have on their individual shareholders and partners.

According to New York State, a limited liability company (LLC) is an unincorporated business organization of one or more persons who have limited liability for the contractual obligations and other liabilities of the business. It combines corporation-style limited liability with partnership-style flexibility. The owners of an LLC are called “members” rather than shareholders or partners. A member may be an individual, a corporation, a partnership, another limited liability company, or any other legal entity. A managing member is to be designated when this type of entity is formed.

Forming an LLC will generally be more expensive than forming a New York corporation. This is because an LLC, upon formation, has a legal obligation to publish a statement of its formation in a publication ordered by the New York Department of State. The cost of such advertisement usually makes the cost of forming an LLC greater than the cost of forming a standard business corporation. An LLC has no restrictions on what it may own, so it can hold legal title to real estate or any other type of property. The members of an LLC are not personally liable for the debts and obligations of the LLC.

March 8, 2013

Estate Administration Proceedings: Legal Resolutions When a Person Dies Without a Will

By Weiss & Weiss

For various reasons, not everyone dies has a Will that disposes of their property and identifies the person authorized to manage such distribution. In such a case, the surviving heirs should engage the services of an attorney to submit a Petition to the Surrogate’s Court in the County in which the deceased resided for Letters of Administration. Once duly appointed by the Court, the Administrator has similar powers to an executor for an estate. The Administrator locates, collects and distributes assets and settles claims and liabilities against the estate.

When a person dies without a Will (legally known as “intestate”), their assets will be distributed to particular classes of relatives, in the order prescribed by Estates Powers and Trusts Law Section 4-1.1 . For instance, if a person left no surviving spouse, children, or parents, his assets would be inherited by his sister. The common perception that the assets of a person dying without a Will “go to the state” is a myth when a relative in the proper class has survived the deceased. In an administration proceeding, the person who will inherit the assets is the proper person to act as petitioner and commence the proceeding. Survivors who have superior or equal rights to be appointed Administrator (such as siblings of the proposed Administrator) are to submit a Waiver, Renunciation and Consent to the appointment of the Administrator along with the Petition.

The petitioner is required to confirm that she conducted a diligent search in the deceased’s personal papers and safe deposit box, but did not find a Will. Such a diligent search should also include the Surrogate’s Court record retention files, in the event that the deceased filed her Will with the Court.

March 1, 2013

Beware of Persons Engaging in the Unauthorized Practice of Law

By Weiss & Weiss

Our readers should be wary of persons who may be engaging in the unauthorized practice of law. This issue is defined as a non-lawyer rendering legal advice or drafting legal documents. Section 478 of New York’s Judiciary Law declares that it is unlawful to practice or appear as an attorney for another person, to render legal services or hold oneself out to the public as entitled to practice law, without being duly licensed and admitted to practice law. This blog post will define the unauthorized practice of law, discuss New York laws pertaining to same and describe situations that our readers should avoid.

Common situations comprising the unauthorized practice of law include the following. A real estate broker drafts a contract, lease or mortgage. A “loan modification expert,” claiming to be an attorney, negotiates with a lender and then advises the borrower to enter into a loan modification. A client or customer dealing with such persons should be especially concerned if they are told that the transaction is on the “fast track,” that there is “no time” to consult an attorney and that they are advising them as an attorney. Another red flag is the person’s self- interest. A real estate broker wants to get the deal done to earn his commission and will encourage a simple contract to be signed without attorney objections, which objections may be validly protective of the client.

Real estate brokers and agents are subject to the loss of their license for the unauthorized practice of law. Article 12-A of New York’s Real Property Law governs the licensing requirements of real estate brokers and salespersons. This Article contains the provision requiring real estate brokers and agents to be licensed and the procedure for the potential revocation of their license. The New York Attorney General’s Office prosecutes criminal actions for violations of said Article. In addition, the New York Department of State accepts complaints against licensed brokers and conducts investigations accordingly. Brokers are vulnerable to claims involving the unauthorized practice of law if they draft any document pertaining to real estate such as a contract, lease, mortgage or deed, especially if they are paid to do so. However, if they use one of the forms approved by the bar association or local brokerage association in the county in which they are located, including only ministerial terms such as name, date, property address, they will not be subject to claims of unauthorized practice of law; particularly if they note in boldface type that the document is subject to review by each party’s attorney.