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We  have posted previously about the change of use of properties in the region served by this law firm.  Real estate developers may be interested in such properties because they envision a potentially new profitable use for the property, especially if the use changes.  For instance, an existing swim club has a dwindling membership base or a nursery business is no longer viable.  These obsolete properties have large acreage and could be used for assisted living facilities or multi-family housing.  Let’s imagine that an owner of a single-family house is next door or overlooks such a site.  It is not hard to believe that the homeowner would not want to live through the rock blasting and noise created by bulldozers and years of construction.  Also, the assisted living facility or multi-family housing may change the character of the neighborhood or make it otherwise undesirable to the homeowner.  This post will address the options available to such a homeowner.

Usually a developer in this scenario needs to apply to the applicable municipality to request the change of use for the property.  There may be valid objections that the neighbors can raise, such as increased traffic and roads that do not accommodate those who will visit and use the facility.  If the homeowner does not believe that objecting to zoning changes and the like would be successful or if the homeowner merely wishes to negotiate a deal for himself, there are other options available.  One option may be to sell the house to another individual who may not be aware of the potential development of the neighboring property.

Developers who want a particular building site are financially well equipped.  If it makes monetary sense, a developer may consider buying the single-family home that stands in the way of his development.  If the homeowner is willing to leave his house, he should hire an experienced attorney  to negotiate the most favorable terms.  The best deal for the homeowner may be to sell the house  and to have a qualified attorney  include certain provisions in the contract.  All seller expenses should also be paid by the developer.  These expenses include payment of the seller’s transfer taxes, attorney fee , broker commission and any other costs of the sellers.  In addition, the negotiated price should also be high enough to pay off the seller’s mortgage so that the seller is not out-of-pocket at the closing.

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evict-300x200Most eviction matters handled by our firm involve conventional landlord-tenant relationships.  Either in a residential or commercial context, a property owner rents property to a tenant, who pays rent to the landlord on a monthly basis.  Usually, there is a written lease between the parties that delineates their rights and responsibilities to each other.  When one party violates the lease, an action can be brought in the appropriate Court.  For example, if the tenant fails to pay the rent due, a non-payment proceeding can be brought.  If the lease has expired by its terms, and the tenant refuses to vacate, a holdover proceeding should be brought to evict the tenant.

However, there are two common situations in which the ordinary landlord-tenant relationship does not apply, which will be discussed in this blog post.  The first is when a property is sold at foreclosure.  The purchaser of the property at the foreclosure sale generally buys the property “as is”, which may mean that the original owners of the property still occupy the premises.  The former owners are not “tenants” in the traditional sense, as they do not have a lease with the new owner and are not paying rent to the new owner.  How do the Courts handle this situation?

New York Real Property Actions and Proceedings Law, Section 713 provides the “ground rules” for eviction where no landlord-tenant relationship exists.  Subsection 5 of this law relates to situations where the property has been sold in foreclosure, and there are still occupants at the premises.  In this situation, the new owner of the property must first serve a ten-day notice to quit on the occupant or occupants.  This is a legal notice, usually prepared by the attorneys for the new owners.  It states that the occupant must vacate within ten days, or an eviction action will be brought.  If the former owner refuses to vacate the premises after receiving the notice to quit, then counsel will commence an eviction action in the appropriate landlord-tenant court.  The Notice to Quit must also include a certified copy of the Referee’s Deed in Foreclosure to prove the new owner’s ownership.

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exitThe region served by this law firm certainly has its share of vacant commercial spaces.  An unproductive business environment at times leads to the consideration of closure by other businesses.  When a commercial lease ends prior to its termination date, it is know in the industry as “going dark”.  It is not unusual for commercial lease terms to extend for anywhere from five to twenty years.  Of course, during such a lengthy timeframe, business conditions can change drastically, making the continued conduct of business to be impractical and not profitable.  There may have even been a lease modification between the landlord and tenant which has still not assisted the tenant in the successful conduct of its business at the premises.  Perhaps the business involves a particular food or fitness craze that is no longer desired by potential customers.  When this occurs, experienced legal counsel  should be consulted to develop the optimal strategy for the tenant’s early exit.

The tenant’s attorney  should first review the fully signed commercial lease to determine the exact date of lease termination.  If the date is far into the future, different advice may be rendered.  The lease may contain a provision as to whether the tenant has the option to terminate the lease prior to its stated termination date.  Potentially a payment will be required by the tenant in order to leave the premises early.  Such a payment may amount to a set number of months and the waiver of the refund of the security deposit.  For instance, if the early termination payment is three months rent and the waiver of the refund of one month’s security deposit, the tenant may be best served to end the lease early rather than continue with the lease that has another four years to run.  In addition, the tenant’s attorney  should make sure that any notice to the landlord regarding early termination is consistent with the notice requirements in the lease, or such notice may not be deemed to be valid.  The notice requirement may be of a certain number of days before it is effective, need to be sent by a certain method such as certified mail and may also need to be delivered to the landlord’s attorney.

Lease guarantors may also need to be considered when early termination is considered by the tenant.  Most tenants sign leases under an entity name such as a limited liability company or corporation.  In such cases, a landlord will typically seek an individual person to guaranty performance by the tenant.  Such an individual may be the principal of the entity or a third party backing the tenant’s business.  In the case of a guarantor who is the principal of the entity, such a guaranty may take the form of a “good guy” guaranty.  This type of guaranty provides that if the tenant leaves the premises in the condition as required at the end of the lease and pays all sums due to the landlord through the vacate date, then the guarantor is released from further obligation to the landlord.  When there is a good guy guaranty, terminating the lease early is low risk to the parties involved.  However, if the guarantor is a third party backing the tenant’s business, such a third party may challenge the tenant’s early vacate because it may have to fulfill the tenant’s obligations after it leaves the premises.  It is prudent to have a separate agreement between the tenant and third party guarantor to define obligations if the lease ends early.

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newlaw-1-300x300A recent article reports on a new law signed by New York Governor Andrew Cuomo which is meant to assist defendants in foreclosure actions.  This article will explain the law, as well as its possible impact on both plaintiffs and defendants in foreclosure lawsuits.

The law amended Article 13 of the New York Real Property Actions and Proceeding Law to allow a defendant to raise the issue of “standing” at any time in the legal proceedings.  A non-attorney may first ask what is the issue of standing and how this change in the law benefits a party being foreclosed.  Standing is a legal defense relating to the plaintiff’s basic right to bring a foreclosure action (or any other type of action).  In order to commence a  foreclosure lawsuit, the lender (usually a bank or loan servicer) must show that it is a corporation licensed to do business in New York State, and also it is the holder of the note and mortgage which is the subject matter of the lawsuit.

Failure to meet these requirements may result in the lawsuit being dismissed due to a lack of standing.  Because many loans are transferred between different lenders and loan servicers on a frequent basis, it is entirely possible that the party bringing the foreclosure action may not have “standing” as the loan may have been sold to another entity prior to the case being filed.  In that case, the plaintiff may lack standing, and the action may be dismissed.

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Recent blog posts have discussed the changes to the New York Landlord-Tenant Law as they relate to holdover proceedings.  Holdover proceedings occur when a tenant’s lease has expired, or when a tenant is operating on a month-to-month basis and never had a written lease for the premises being rented.Under the revised law, also known as the Housing Stability & Tenant Protection Act of 2019, which became fully effective in October, 2019, landlords are required to give notice, under certain circumstances, of more than thirty days prior to commencing a holdover proceeding.  The termination notice, also known as a notice to quit, may require more than thirty day’s notice, which was the rule under the old law.  Experienced counsel should be familiar with the revised law and prepare the notices.

However, a recent article discusses another proposed revision to New York’s laws, which would greatly alter holdover proceedings, or, in some cases, eliminate them altogether. This proposed bill would prohibit landlords from evicting tenants without providing a “good legal reason” when a lease expires.  Under current New York law, when a tenant’s lease expires, the landlord is under no obligation to renew it, unless it is a unit subject to rent regulation.  For example, a tenant signs a one-year lease to rent a house, which is not a multiple dwelling subject to rent regulation.  When the lease expires, the landlord may decide, without providing any reason, not to offer a renewal lease.  If the tenant fails to vacate the premises after receiving the proper notices, they would be subject to a holdover proceeding, and eventual eviction.

The new proposal has been called “good cause eviction,” but it has implications beyond what it states.  Requiring a property owner to provide “good cause” when they decide not to renew a lease would in effect subject every property in New York to some type of rent regulation.  It is unclear what “good cause” would mean under this proposal.  The owner of property may simply decide that she wants to use her property for her own use, or rent to a friend or relative.  She may want to raise the rent beyond what the current tenant is willing to pay.  A landlord may simply decide it is too much trouble to have a tenant, and may simply want to keep the rental property vacant.  Under this proposal, these reasons may not be considered “good cause”, forcing an owner to continue renting to a tenant, and then being forced to offer renewal leases to that tenant in perpetuity.  “Good cause” may not be explicitly defined by the revised law, causing courts to entertain lengthy litigation to determine whether a landlord has shown “good cause” when he decides not to renew a residential lease.  As with many well-meaning proposals, the full implication of the change in the law is not being considered.

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statute-300x140Prior blog posts have discussed the operational aspects of holdover landlord-tenant eviction proceedings.  Holdover proceedings, unlike non-payment proceedings, occur when a tenant’s lease term has expired, or when a tenant has never had a lease, and either party exercises their legal prerogative to terminate the tenancy.  This is in contrast to a non-payment proceeding, which is when a tenant with a valid lease fails to make his rent payments.

Recently, the New York State Legislature passed the Housing Stability & Tenant Protection Act of 2019, which became fully effective in October, 2019.  This legislation comprises multiple amendments to the Real Property Actions and Procedure Law and the Real Property Law of New York State and has a significant effect on holdover proceedings.  This blog post will explore the changes created by the new law.

The first important revision relates to the notice period prior to commencing a Court proceeding in a holdover action.  Under the previous law, either party had the right to terminate a month-to-month tenancy upon thirty day’s notice.  This notice period applied in two situations – if the tenant had an existing lease which expired by its term, or if the tenant never had a lease.  Once the lease expires, or, after a month for which the tenant paid rent, the party seeking termination would serve a “Notice to Quit” upon the other party.  This Notice would state that the month-to-month tenancy would terminate in thirty days.  If the tenant had paid rent for the month, the termination notice would have to be dated at least thirty days after the month for which rent was paid.  For example, the month-to-month tenant has paid rent for the month of October.  This covers the period from October 1st through October 31st.  The thirty-day termination notice would have to terminate the lease as of the end of the month after October, so it would state that the tenancy would terminate as of November 30th.  In addition, once the notice was served, but prior to a Court action being commenced, the landlord would not be allowed to collect rent for the following month (in our example, November), as it would make the termination notice ineffective, and subject any Court action to being dismissed on that basis.

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cars-300x156News outlets have recently reported  the death of an eighties icon, the “Cars” lead singer Rick Ocasek.  When he passed away, he was in the process of divorcing his wife of several decades who was “…dancing ‘neath the starry sky…”.  The Will filed for his estate  stated that although his divorce may not be final at his death, his wife is to be denied her elective share because she abandoned him.  This post will discuss the legal concepts involved in such an estate structure and whether Ocasek’s wishes are likely to be implemented.

We  have previously evaluated marital rights in a New York estates.  If a person dies without a Will, an estate administration would be conducted and the intestacy statute dictates the persons who will inherit.  In the case when a spouse and children survive, the surviving spouse would receive Fifty Thousand Dollars and one-half of the balance of the estate.  When there is a Will, a probate proceeding will be necessary.  New York’s elective share statute provides in effect that a spouse cannot be disinherited.  Even if the Will does not provide for the spouse to inherit, the surviving spouse can take her elective share, which is one-third of the value of the estate in most cases.

It is necessary to consult with skilled estate practitioners  when experiencing significant life events such as divorce.  As the “…good times…” may no longer “…roll…”, one’s documents should be reflective of current relationships.  Perhaps Ocasek told his estranged wife that “…you can’t go on thinking nothing’s wrong, who’s going to drive you home tonight?”  Further, it may be helpful in the case of a famous person who may not wish for his Will to be available for viewing by the general public to create a Trust.

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