Real Estate Litigation

May 30, 2013

Renewal of Residential Leases in New York

Our firm often fields inquiries from clients regarding residential lease situations. One common question relates to the right to renew an existing lease. This blog post will explain certain conditions which may apply to the renewal of a lease after it expires.

We are first assuming that there is a written lease between the landlord and the tenant for the premises in question. If a tenant takes possession of the premises without any written lease whatsoever (this situation arises more than one would expect), then the tenancy is considered a month-to-month tenancy. This means that either party may terminate the tenancy by giving one month’s notice to the other party. For this reason, a written lease will protect both party’s interest in the tenancy.

A written lease between the landlord and tenant will generally be for a specific period of time. Many leases run for multiple years, such as two, three, or even five year terms. Smaller premises or those for cooperative or condominium apartments may rent for only one year. The question we are asked is what rights the tenant may have to a renewal lease after the lease term expires.

May 10, 2013

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

By Weiss & Weiss

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.

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 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.

January 25, 2013

Boundary Issues and Their Influence on Real Estate Transactions in New York

By Weiss & Weiss

A purchaser of real estate in New York State typically has plenty to evaluate in determining whether to buy a property. Usually the evaluation is limited to the four corners enclosed by the property line. This blog post addresses the matters that are beyond the property line that should concern a buyer.

Fences can be seen enclosing many properties in New York State, but are often not within the legal property line. When a fence is erected, a property owner should have a staked survey prepared and the fence installed consistent with the property line as shown on said survey. Of course, many people do not know that surveying is a prudent means by which to install a fence or do not wish to incur this expense. As a result, many fences may be installed over another person’s property line. This may not be discovered until a neighbor attempts to sell his property and the neighbor’s buyer conducts a title search and survey, discovering that the selling party is out of possession as to a portion of his property. If the portion that is out of possession is less than six inches, most title companies will insure such an exception to coverage. If the out of possession portion is more than six inches, the selling party will need to request an affidavit from the encroaching neighbor stating that they know their fence encroaches beyond their property line and that they make no legal claim to the encroaching portion. This affidavit will allow the title company to insure as if the encroachment were less than six inches.

Should the out of possession issue not be discovered for some reason or the encroaching neighbor is not willing to sign such an affidavit, the encroaching neighbor may acquire the strip of land by operation of law under the legal principal known as adverse possession. It is not uncommon for the encroaching neighbor to request a fee to sign such an affidavit or to request an easement (right to use) the strip of land in exchange for signing any agreement. The parties to a transaction will need to determine whether it is worthwhile to agree to such terms in order for the transaction to proceed.

December 7, 2012

Real Estate Legal Issues Relating to “Super-Storm” Sandy

By Weiss & Weiss

Uprooted Tree.jpg Recent extreme weather conditions in the New York metropolitan area have caused great hardship for many of its residents. We hope that those individuals and families who suffered damage or destruction of their residences are in the process of recovery. This blog post will discuss some of the legal issues which may arise from some of the results of the “super-storm.”

The first issue for many homeowners is when there is property damage which may be covered by their homeowner’s insurance. Most standard homeowner’s policies will pay to repair damage to a house and other physical structures located on the property caused by extreme weather conditions, with the exception of flood damage, which is covered under separate insurance policies that a homeowner may obtain. One example of this may be an uprooted tree which fell on a house and caused damage to a roof. If this occurs, the homeowner should contact their insurance agent and notify them immediately of the damage. The insurance company will then send an insurance adjuster to the property. The adjuster will survey the damage and will then estimate the amount it will take to repair the property. Repairs made before the insurance company has inspected the damages and approved of the cost to repair are unlikely to be reimbursed.

The homeowner may receive a check from their insurance company to pay for the repair work in question. However, where the property is mortgaged, the lender usually must be notified. The reason for this is that most loan documents contain clauses requiring the homeowner to keep the property in good repair and to involve the lender in the event of a casualty. If the homeowner receives a large sum of money from an insurance settlement, the lender has a vested interest in making sure these funds are applied to repair the property, and not spent by the homeowner for other purposes. Most lending documents therefore require that any insurance proceeds in excess of $10,000.00 be endorsed by both the homeowner and a representative of the lender. In practical terms, the check from the insurance company in excess of this amount will be issued to both the homeowner and the lending institution as co-payees. The homeowner must then obtain consent and a written endorsement on the check from their mortgage lender in order to deposit these funds, and must show that the funds are being used to repair the property which is the subject of the mortgage.

November 13, 2012

Legal Defenses to Foreclosure Actions in New York State

By Weiss & Weiss

Our firm is often retained to defend, as well as prosecute, foreclosure actions in New York State. When we are representing the defendant in a commercial or residential foreclosure action, we examine many legal issues to determine whether the action can be successfully defended in Court. Often, a defendant is simply seeking a delay in the lawsuit to enable it to attempt to refinance the property and pay off the mortgage, or to negotiate with the lender during the course of the litigation for more favorable loan terms.

In several cases litigated by our firm, the lender’s attorney used a basic “foreclosure form” lawsuit for the complaint against our client. However, the basic facts as alleged in the lawsuit may not match the actual facts of the individual case. Many foreclosure specialty firms operate on a volume basis, and there is not always complete and thorough review of the contents of the pleadings. In those situations, we have been able to have the lawsuit dismissed or delayed, allowing our clients time to obtain additional funding for the property or to remain as occupants of the property.

Another important defense available to a potential foreclosure defendant involves the legal owner of the mortgage and note at issue. Many loans are sold from the original lender to a servicing company. The servicing company may also sell the loan to another company during the loan period in question. By the time there is an alleged default, the borrower may be dealing with a different company than the original lender.

October 18, 2012

Constructive Trusts and Real Estate in New York State

By Weiss & Weiss

A constructive trust is a legal concept which may occur in the ownership of real property in New York State. It can be imposed by a Court in New York State when there is evidence that the actual ownership of property is not accurately reflected in the deed to the property in question.

To give an example, two siblings agree to purchase a property, such as a house. They both agree to contribute the same amount of money to the purchase of the house. However, only one sibling can qualify for a mortgage, as the other has bad credit. In order to obtain a mortgage and purchase the property, the two parties agree that the property shall be purchased in the name of the sibling with good credit, and the deed and mortgage shall also be only in that sibling’s name.

After the property is purchased, both siblings contribute to the upkeep of the house and to the payment of the mortgage. After several years, the sibling who is not the record owner passes away. The surviving owner then claims that, because he is the only person on the recorded deed and the sole obligor on the mortgage, that he is the sole owner of the property. Of course, the heirs of the other sibling object and claim a fifty-percent share in the property.

October 5, 2012

Examining Potential Personal Liability for Corporate Obligations in New York State

By Weiss & Weiss

One of the main purposes behind the formation of a corporation in New York State is to insulate the principals of the corporation from personal liability for the corporation’s debts and obligations. The general law is that once a corporate is legally formed, and the business observes the specific requirements for corporate formation and structure, such as the filing with the New York Secretary of State of a certificate of incorporation, the officers and directors of the corporation are not personally liable for the obligations of the corporation.

Of course, as with any general principle of law, there are always exceptions. Some of these exceptions include a situation where it can be shown in Court that the corporation was formed fraudulently, and is serving as a mere “alter ego” of an individual. Proving this can be difficult, and would depend on the individual circumstances of the corporation’s day-to-day operations. This legal concept is known as “piercing the corporate veil,” and is applied very rarely to assign personal liability to a corporation’s officers and directors.

A more common situation, and one which will be examined in more detail in this blog post, is where a corporate officer or director personally guarantees the obligations of the corporation. One example is where the corporation seeks a commercial lease for office space or a retail store. A landlord may demand that a corporate officer personally guarantee the corporation’s obligations under the lease. If the corporation then defaults under the lease, the individual who guaranteed the lease may find himself personally liable for the corporate obligations under the lease.

September 27, 2012

Lawsuits Concerning Conditions in New York City Cooperative Buildings

By Weiss & Weiss

The Wall Street Journal recently reported the filing of a lawsuit by “Law & Order” actress S. Epatha Merkerson concerning conditions in her New York City cooperative apartment. While the lawsuit has gained the attention of the press because it involves a celebrity, the conditions described in the lawsuit are commonly experienced by numerous New Yorkers.

The lawsuit alleges that the condition of the building’s roof caused leaks and mold conditions to the cooperative apartment owned by the actress. After the purchase of the cooperative apartment, the cooperative made repairs to the roof over the plaintiff’s apartment. Said repairs are alleged to have been insufficient, causing continued water leaks and mold to develop. The actress claimed that she was unable to live in the cooperative apartment, as well as being unable to sell the apartment or sublet it at market value.

Most of the claims in the lawsuit involve the statute known as New York State’s Warranty of Habitability Law. This law requires that residential premises be fit for human habitation and that residents not be subjected to conditions that are dangerous, hazardous or detrimental to their life, health or safety. The Warranty of Habitability Law is most commonly applied to rental apartments in New York State. Nonetheless, it is longstanding caselaw in New York State that the Warranty of Habitability Law also applies to cooperative apartments. The application of the Warranty of Habitability differs depending on the type of housing to which it is applied. For instance, if a condition is solely within the walls of the apartment and was not caused by an external factor, it is the responsibility of a cooperative shareholder individually. In a rental unit, the same condition would be the responsibility of the landlord, but not the tenant.