New York Real Estate Lawyers Blog

September 11, 2019

Pumpkins, Changing Leaves and the Fall Real Estate Market in New York

The prevalence of pumpkin flavored products and the approach of colorful leaves signals that we have entered the Fall real estate market in New York. This post will address the implications of the change of seasons and how that affects real estate transactions. For the purposes of this discussion, single family homes are being analyzed because apartments and townhouses sell more easily during all times of the year.

Negotiation strategies employed by your attorney may change once the Spring market has passed. In the area served by our attorneys , many single family homes are listed in the late Winter or early Spring, are in contract by June and close in August. This typical schedule follows the needs of those purchasers who wish to have their children start school in early September in their new home.

A seller’s situation will depend upon whether her home was listed since the Spring and did not sell or is a new listing as of the Fall. A new listing may receive more attention from buyers because inventory is typically lower in the Fall and older listings have already been evaluated by buyers. Sellers who have listed their home for several months may already need to consider price reductions and other concessions in order to sell the property. It should be noted that reducing the price will potentially allow the property to more readily appraise to the figure indicated in the contract.

August 30, 2019

Happy Labor Day from Weiss & Weiss

By Weiss & Weiss

August 23, 2019

Jeffrey Epstein’s Departure Desires

By Weiss & Weiss

Most of the press concerning Jeffrey Epstein concerns the despicable crimes of which he is accused. Of interest to this author is the Will and other estate documents signed by Epstein merely two days before his death by suicide. There are legitimate reasons why a person in prison or in the hospital may have an experienced attorney prepare documents such as a Will, power of attorney and health care proxy evidencing their last wishes with the anticipation of impending death. If a person is in prison for a long time and even has children, his legal affairs need to be in order should he suffer death as a result of another inmate or from other causes. However, Epstein seems to have fashioned a scheme to shield his assets and possibly defraud creditors of his estate, most notably his victims.

Apparently Epstein’s estate plan included a “pourover” Will that dictated that his assets would be left to a trust. His executors then filed the Will in the U.S. Virgin Islands, rather than in New York State. The possible explanations for this strategy will be discussed in this post. We may advise our estate clientele to have such an estate structure, although not for such nefarious purposes. As we have explained in prior posts, a trust can be a valuable tool in estate planning for certain persons. In the event of a potential Will contest, trust provisions typically are more difficult to be challenged. Further, in the case of famous people who may not want specifics of their assets and beneficiaries made public in a Surrogate’s Court filing , trusts afford the opportunity to keep such matters private because they are not filed with the Court.

Venue, the location of the probate Court filing, is an interesting issue in this case as well. Typically, a Will should be filed in the state where the deceased maintained his primary residence. However, Epstein had multiple residences around the world and seems to have selected the U.S. Virgin Islands as the location to probate his Will because he owned at least one island in the territory. It is possible that the Court will decline venue and move the probate proceeding to New York, where Epstein seems to have spent the majority of his time. In any case, ancillary probate proceedings will be required to determine the disposition of properties in each location.

August 7, 2019

Recent Developments in New York State Religious Corporation Law

By Weiss & Weiss

Recently in the news is an Appellate Court decision regarding a Lutheran Church located in Staten Island, New York City’s “forgotten” borough. This case involved a lawsuit brought by the Eltingville Lutheran Church against its parent organization, the Metropolitan New York Synod of the Evangelical Lutheran Church of America (the “Synod”). This case applies many of the legal principles discussed in prior blog posts regarding religious institutions and the application of both the New York Religious Corporations Law, as well as the Establishment Clause contained in the First Amendment of the United States Constitution.

The lawsuit arose when the Synod, which was the parent organization of the Church, issued a ruling that the Synod would permanently take over all management operations of the Church, including the ownership of all Church property and the real property on which the Church was located. They also declared their intention to close the Church, and to seize its property and assets following its application of permanent Synod administration.

The Church objected to such a takeover, arguing that it was solvent, had Congregants who worshipped at the Church on a regular basis, and that there was no reason for the Synod to take over the Church, or to close its doors.

July 18, 2019

The Constitution and Rent Regulations in New York State

By Weiss & Weiss

A recent blog post discussed sweeping changes to New York State’s regulations for rental units. These changes were recently passed by the state legislature, and signed into law by Governor Cuomo. While a full discussion of the new law is beyond the scope of this post, suffice it to say that the law makes it more difficult for landlords to remove apartments from rent stabilization, as well as removing the right of a landlord to increase the regulated rent after a tenant vacates and a new tenant moves into the unit.

One effect of this change is to remove the incentive for a landlord to “buy out” a rent regulated tenant. Prior blog posts have discussed transactions where a landlord would pay a tenant a significant sum of money to vacate a rent regulated apartment. The reason for these transactions is that the landlord would then be permitted to significantly increase the rent for a new tenant, once the last tenant vacated. Under the new regulations, the landlord would not be permitted the large “vacancy increase” that was allowed previously. Therefore, landlords no longer would have an incentive to pay an existing tenant to move out, because the regulated rent would remain the same for a new tenant.

Landlords were not expecting the new regulations, as they were introduced very late in the legislative session. The new regulations also make it more difficult to evict tenants who do not pay their rent. As tenant-favorable laws will always be easier to pass in large cities, due to the simple fact that many tenants vote, and they are always more numerous than landlords, the question becomes whether these rent regulations can pass muster under the United States Constitution.

July 11, 2019

Rent Payments and Holdover Proceedings in New York State

By Weiss & Weiss

Prior blog posts have discussed the operational aspects of a holdover landlord-tenant eviction proceeding. Holdover proceedings, unlike non-payment proceedings, occur when a tenant’s lease term has expired, or when a tenant does not have a lease, and either party decides to terminate the tenancy on thirty day’s notice, which is their legal right. This is in contrast to a non-payment proceeding, which is when a tenant with a valid lease fails to make his rent payments.

For example, a tenant has a lease with a term that ends on December 31. On January 1, the tenant remains in the premises. If they make a rent payment for January, they are now considered a month-to-month tenant for as long as the landlord continues to accept the monthly rent under the same terms as the expired lease. The lease is now considered to be extended on a month-to-month basis as long as the parties agree.

But what happens if the landlord does not want the tenant to remain after the expiration of the lease, even if the tenant continues to pay rent? The landlord must terminate the month-to-month tenancy by serving a “Notice to Quit” on the tenant. The Notice to Quit must state that the tenancy will be terminated on no less than thirty days notice. New York law has held that the termination date should follow the end of the lease term date contained in the original lease. If the original lease term occurred on the last day of the month, the termination date in the Notice to Quit should also be on the last day of the month. This may result in the tenant receiving slightly more than thirty days notice, for example, if the Notice to Quit is served on February 15, and the lease term ended on December 31 of the prior year, the Notice will have a termination date of March 31, which is at least thirty days notice, but at the end of the month as legally required, mirroring the original lease term.

July 3, 2019

Happy 4th of July from Weiss & Weiss

By Weiss & Weiss

June 20, 2019

Poor Little Rich Girl

By Weiss & Weiss

Our readers may be aware of the recent death of fashion icon Gloria Vanderbilt. Having died at the ripe old age of 95, Ms. Vanderbilt’s life had many interesting dimensions. From a legal perspective, Vanderbilt experienced a Court proceeding as a young child that is instructive to our clientele. The Vanderbilt family is one of the historically ultra wealthy families in the United States. Gloria’s father died when she was an infant, leaving her substantial share of his Estate in trust to be managed by her mother as trustee. Instead of using the trust as intended, for the care and support of Gloria, the trust was used for her mother’s lavish excursions to Europe and the like. Fortunately, Gloria’s Aunt observed her mother’s behavior and brought a successful Court action, known as “the trial of the century”, to remove her mother as trustee and obtain custody of Gloria.

The Vanderbilt matter demonstrates that the Surrogate’s Court will certainly intervene when trustee abuse occurs and when the trustee is not managing the trust assets for the benefit of the beneficiary. There are additional reasons why a petition to remove or replace a trustee will be entertained by the Surrogate’s Court. For instance, a trustee was named in a document drafted thirty-five years ago when the intended trustee was fifty years old. Now the trustee expected to serve is eighty-five years old and is not enjoying good health. An expert draftsman will anticipate this potential issue when drafting a will or trust and will suggest that the named trustee may not be practical. Also, a will or trust can be subsequently amended by codicil or trust amendment should the client note changes in the named trustee that make such person unfit to serve. Codicils and trust amendments are less time consuming than engaging in Court intervention at a future time. Another potential safeguard is to name a corporate trustee (such as a bank) to serve, in order to avoid trustee abuse as well as the possible aging or death of the proposed trustee.

As in the case of Whitney Houston’s executor , there are certain roles that are appropriate for a trustee. A trustee should be financially savvy and is required to invest assets prudently. Income and principal of the trust is to be distributed for the purposes named in the trust. Such purposes may be to maintain the lifestyle to which the beneficiary is accustomed, pay for education, fund enriching travel, cover healthcare costs, and the like. Your attorney will ask you to consider a responsible and honest person to serve as your trustee. It is also preferable to consider a trustee who has a good relationship with the beneficiary, as there will be significant interaction between them in the future.

June 13, 2019

New Rent Regulations in New York State – What is Changing?

By Weiss & Weiss

Recently in the news is that state representatives in Albany are considering sweeping changes to New York State’s regulations for rental units. Prior blog posts have discussed past revisions to the rent regulations. While some of the changes only affect apartments in New York City, others may apply to apartments statewide. As of this writing, Governor Cuomo has stated that he will sign any bill that the lawmakers pass.

As most New Yorkers are aware, rental prices in New York City are among the highest in the nation. Whether having the government attempt to control the prices of rental units will result in lower rents overall remains to be seen. Rent regulation by the government has existed in some form since the World War II years, and keeping rental prices low has not been achieved. While some regulated tenants benefit, others, whose units are unregulated, may see larger increases. In addition, forcing landlords to charge regulated rents may discourage both the building of new units and investment by landlords in improving existing apartments. Why spend money on repairs or renovations if rent rates remain fixed by regulation? Obviously, our representatives do not think that this is a factor.

Of course, not all apartments are subject to rent stabilization. In Westchester County, where our offices are located, each municipality has the option of adopting the Emergency Tenant Protection Act (ETPA). A list of these villages, cities, and towns can be found here. If the units are in a village, city or town which has not adopted the ETPA, then the units are not rent regulated. In addition, the law only applies to buildings of six or more units. Therefore, if one owns a three unit apartment building in Westchester, it would not be subject to rent regulations.

May 30, 2019

Considerations for Buying a Business in New York

By Weiss & Weiss

We often have inquiries from clients considering the purchase of a business. An experienced attorney should be consulted when commencing this process. Initially, the seller’s attorney will deliver the contract to the buyer’s attorney for negotiation. Should the business being sold be a franchise, the final contract should be conditioned on approval of the franchisor to the buyer conducting business under the franchise name.

After consulting an accountant to confirm that the business to be purchased is financially viable for the buyer’s future income needs, the financial terms of the deal are to be structured. There may be a broker who has negotiated the initial terms, which may be modified during the contract negotiation process. Usually the payments required of the buyer are the delivery of the downpayment to the seller’s attorney to be held in escrow until closing and another payment at closing. The payment at closing may be the last payment to be made or the buyer may sign a promissory note for subsequent payments to be made after the purchase.

Particular protections need to be in place on behalf of the buyer. A lien search should be obtained prior to closing, so that the seller obtains lien releases for equipment and tax matters that may have an effect on the buyer. For example, if a freezer is to be conveyed and the seller has a business loan on such equipment, a UCC Financing Statement is likely to be filed evidencing the loan. If the loan is not paid at the closing and the UCC remains, the buyer is acquiring the freezer subject to the seller’s loan and will not own it outright.