New York Real Estate Lawyers Blog

June 6, 2012

Credit Card and other Collection Lawsuits

As the reader of this blog is probably aware, there has been a large increase in personal debt in the United States over the past decade. As credit cards, credit lines, and other non-secured loans have become more easily available, and the stigma against being in debt greatly diminished, the result is that many more people are in debt, and for larger amounts, than at any time in our country’s history.

This post will explore the general legal issues associated with debt collection in New York State. When a consumer defaults on credit card debt, generally, the credit card company will sell or assign the debt to another company after it has engaged in minimal preliminary collection efforts. The bank which issued the credit card is therefore often not involved in collecting the unpaid balance from the delinquent credit card holder. Instead, the debt is sold or assigned to a collection agency. A collection agency usually attempts to collect the debt in exchange for a percentage of the amount collected. The collection agency may also buy the debt for less than its face value, and then attempt to make a profit on any amount collected.

For example, a consumer incurs a $15,000.00 credit card debt. The credit card company may sell the debt to a collection agency for ten cents on the dollar ($1,500.00). The collection agency now owns the right to collect on the obligation. Any amount that it can collect from the debtor in excess of $1,500.00 will be a profit to the collection agency. The original creditor will then write off the debt and may no longer be involved in its collection.

June 1, 2012

Regulation of Smoking in Cooperative and Condominium Apartments in New York

By Weiss & Weiss

The regulation of smoking by cooperative and condominium owners in New York has become increasingly contentious in recent years. The New York Post recently reported that a condominium owner in New York could not be forbidden from smoking in his apartment. While this particular case was decided based upon the specific facts presented, smokers should not assume that buildings in New York will leave their behavior unregulated. As reported by the New York Times , it is becoming increasingly difficult for a smoker to locate an apartment that explicitly “welcomes” smokers.

Michael Bloomberg, the current Mayor of New York City, has proposed legislation that would require buildings to disclose their smoking policies to potential residents. The policy is meant to encourage people to match their lifestyle to the building in which they intend to live. While most people do not appreciate having their lifestyle policed by the government, people who feel strongly about either side of the issue may find it appealing to reside in a building suiting their lifestyle.

Some residents feel that if they own the apartment that they can smoke in their own home if they so desire. Smokers resent that their behavior is regulated in public and want at the very least to be able to smoke within the confines of their own cooperative or condominium apartment. Other residents, claiming to be disturbed by the smoke and fumes traveling through shared ductwork into their apartment, have demanded that their building enact regulations prohibiting smoking and enhancing their health concerns. In particular, smoky fumes travel readily through the ductwork of newly constructed buildings. In a communal living situation, cooperative and condominium boards are confronted with requests to enact building rules.

April 30, 2012

Property Partition Actions in New York State

By Weiss & Weiss

Often in New York, property is jointly owned by two or more individuals or legal entities, such as corporations. This can happen with both residential property and commercial property. One of the major causes of joint ownership of property can occur when the original owner passes away and leaves the property in their will to their children, or other multiple owners. In addition, there can be situations where two or more individuals buy property jointly, and then one of those individuals transfers their interest in the property to another person.

In the case of residential property, conflicts can arise when there are multiple owners of property. It may be that one of the joint co-owners lives at the property, and the other does not. In that case, the person who lives at the property is usually responsible for the upkeep of the property, including routine maintenance, as well as paying the costs and expenses of the property. These costs and expenses can include property insurance, utilities such as electricity and heating, and property taxes. However, the person living at the property also derives the benefit of living at the property without paying rent. The non-occupying party may not agree to be financially responsible for a property in which he does not live. Having co-owners who do not both live at the property can be an inherent source of conflict.

Where the property is commercial in nature, there can be similar conflicts, although of course no one is living at the premises. If the property was purchased as an investment, the joint owners may not agree on the proper time, if at all, to sell the property. There can also be disagreements as to the type of commercial tenants to seek for rental of the property, the length of the lease to offer to potential tenants, as well as other lease terms.

April 17, 2012

Landlord-Tenant Actions in Westchester County, New York

By Weiss & Weiss

When a tenant fails to pay their rent, or remains in a property after the expiration of their lease, legal action is often required. Smaller landlords, such as individuals owning a few properties, or people renting out a house, will consult our firm in order to use the proper legal procedures for the removal of a tenant.

The first question to be resolved is whether the action against a tenant would be a “holdover” or a “non-payment.” A holdover proceeding is where a tenant has stayed at the premises beyond the expiration date of their lease. If the tenant continues to pay their rent after a lease term has expired, it creates a month-to-month tenancy with the landlord. This means that as long as the tenant continues to pay monthly rent (usually in the same amount as they were paying at the end of the actual lease term) and the landlord chooses to deposit same, the tenancy is extended, one month at a time. If the landlord wishes to end the tenancy, he must reject all additional rent payments, and give the tenant one month’s written notice to vacate the premises. After the month has expired, if the tenant has failed to vacate, then the landlord should commence a holdover proceeding in the appropriate court. This Court is usually the local court of the town where the property is located.

A non-payment proceeding is appropriate when the tenant fails to pay rent due under a lease. When this happens, the lease should be checked for notice provisions. Notice should be given to the tenant in the manner prescribed under the lease. After written notice has been given, if the tenant has still not paid the rent in question, a non-payment proceeding should be brought in the appropriate local Court.

March 27, 2012

Foreclosure Actions and Professional Responsibility

By Weiss & Weiss

Recently, the New York State law firm of Steven J. Baum P.C. agreed to pay $4 million in fines and penalties after admitting that it failed to verify the accuracy of court documents filed by their firm in foreclosure matters.

According to the article, many have criticized the settlement as being too lenient. Baum’s office was the major law firm in New York State in representing banks and other institutional lenders in foreclosure actions. They filed more than 4,000 foreclosure cases in Westchester, Rockland, and Putnam Counties since 1999 and more than 100,000 cases statewide between 2007 and 2010. Clearly, the sheer volume of cases filed by a single law firm should have raised a red flag with the Courts or the clients at issue over that firm’s ability to properly handle such a large number of foreclosure cases, which require a large amount of detail-oriented paperwork, and, in the case of residential foreclosures, many Court appearances.

This author’s own experiences with the Baum Law Firm were that their attorneys were almost impossible to reach by telephone, making it difficult to resolve matters without the need for unnecessary Court appearances. When in Court, Baum’s office often sent attorneys who lacked authority to resolve matters on behalf of the bank clients, which further delayed cases.

March 19, 2012

Borrowers Ask: Will My Lender Modify My Mortgage?

By Weiss & Weiss

Borrowers have both applauded and also sharply criticized the recent mortgage settlement reached by the attorneys general of all fifty states with our country’s five major loan servicers. In response to alleged mortgage abuses engaged in by lenders, an agreement was reached to reduce the principal balance of some mortgages or to grant interest rate reductions.

Bank of America in particular has agreed to reduce the principal balances for approximately two hundred thousand homeowners by as much as $100,000.00. The typical homeowner who will benefit has a mortgage with a principal balance that is more than the home is currently worth, the so-called “underwater” mortgage. Further, homeowners with mortgages held by the major lenders such as Bank of America, JP Morgan Chase, Citibank, Wells Fargo and Ally are also covered by the agreement.

Other homeowners who believe that they were more prudent by remaining current on their mortgage payments or not borrowing against virtually all of the equity in their home, resent that other homeowners are benefitting from their missteps. The mortgage settlement is also controversial because it does not apply to mortgages with lenders besides the major five lenders, to loans insured by the Federal Housing Administration, or those loans owned by Fannie Mae or Freddie Mac. If a loan was sold to one of these entities, it may not be eligible for modification, even though the borrower had no choice or involvement in the loan sale process. Many borrowers have rightfully asked: What about me?

March 1, 2012

Foreclosure Settlement Conferences in New York State

By Weiss & Weiss

A recent article in the New York Times discusses efforts on the part of the New York State Court system to resolve foreclosure cases through settlement conferences. As discussed in a prior blog post, these settlement conferences are mandatory for residential foreclosure cases in New York State.

Despite the best intentions of the legislature and the Court system, it has proven difficult for the system to work as well in practice as it is meant to in theory. Having represented both mortgage holders and creditors at these conferences, I will discuss the situations which are most likely to arise during these meetings.

After a residential foreclosure case is filed with the Court, the Court must schedule a mandatory settlement conference within sixty days. At this conference, both the plaintiff (usually an institutional lender) and the defendant (the person who owns the property being foreclosed) are required to attend. It is highly recommended that the defendants appear in person together with their attorneys and that the lender has an attorney attend who has decision-making authority.

February 9, 2012

New York Condominium’s Pet Rules Result in Suicide for Building Resident

By Weiss & Weiss

The New York Post recently reported the tragic story of a soap opera actor who was so despondent over his building’s pet regulations that he took his own life. The New York condominium building in which he resided enacted rules pertaining to pets that forbid pit bull breeds in the condominium building. Reluctant to send his dog to a shelter, the New York resident had the dog euthanized. In a further dramatic turn, the actor committed suicide, citing his unwillingness to continue life without his best friend.

When living in multi-family housing, New Yorkers often face regulations concerning allowance of pets. If you are not an animal lover, it may be prudent to ask your real estate broker to target buildings that prohibit pets. Then, you avoid the perceived annoyance of having your neighbor’s large dog crowd the elevator and sniff you on the way upstairs after a long day at work.

On the other hand, there are many New York residents who consider pets to be part of their family and do not wish to live without them, such as our soap opera actor. While many buildings may allow cats, presuming that a resident does not have an undue number of them, dogs and more exotic animals can be an issue.

February 2, 2012

Comparing Residential Foreclosure to Commercial Foreclosure in New York State

By Weiss & Weiss

When a person or company pledges real property they own as security for a loan or debt, it is known as a mortgage. A mortgage loan generally consists of a Note, a document in which the borrower promises to pay a sum of money to the lender (usually a bank, but sometimes a private individual), and a Mortgage, a document in which the borrower pledges their ownership interest in real property as security for the mortgage.

Unfortunately, there are times when the borrower is unable to meet its legal obligations under the Note and Mortgage. When this happens, the lender has two options. The first is to bring a lawsuit on the Note alone, and, if successful, obtain a money judgment against the borrower which can be enforced for collection. The second is to bring a foreclosure proceeding against the borrower, in which the Court is asked to foreclose the real property in question. The two options are mutually exclusive; that is, the lender must choose one of the two options, and not both.

This blog entry will discuss the procedure when a foreclosure action is brought by the lender. In a foreclosure action in New York State, the end result of the proceeding is that the property being secured by the Mortgage and Note is sold at public auction to the highest bidder. If the lender is the highest bidder, it takes title to the property in question and may then obtain a money judgment against the debtor for the difference between their successful bid and the amount due on the Note, plus costs and expenses. If a third party is the highest bidder, the amount of the successful bid, up to the amount due, is paid to the lender. The third party then takes title to the property.