Weiss & Weiss would like to wish all a great Labor Day weekend!
Sweeping Changes to Real Estate Agent Commission Rules are Now in Effect
We previously posted about significant changes to the rules concerning real estate agents’ commissions. These changes became effective in recent days. Previously, sellers paid a commission to the buyer’s agent in the amount indicated in the listing in the multiple listing service (“MLS”), the primary source of real estate listings. The recent changes state that the seller is no longer permitted to offer a commission on MLS and is not required to pay the buyer’s agent at the sale. This post will examine the effect that this drastic change will have upon buyers.
With the exception of “open houses,” where any buyer can arrive and tour the property, buyers who make appointments to view properties are required to sign a compensation agreement with the buyer’s agent who shows the property to them. In particular, inexperienced first time homebuyers are at a disadvantage. The agreement may contain terms that may be unacceptable to a buyer, such as exclusivity (agent is paid even if she did not show the property eventually being purchased to a buyer), length of time (buyers should not be tied to an agent for long time periods), conditions to be met before the commission is to be paid and price (lower percentage, flat fee or hourly fee). In a tough real estate market with elevated interest rates, it may be counterproductive for a buyer to be responsible for the additional costs of his real estate agent as well.
It should be noted that sellers still have the option to pay the buyer’s agent’s commission, which counteracts a buyer’s agent’s inclination to steer a buyer away from a property for which she will not be compensated. This increases the visibility of a property to buyers.
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News outlets recently reported the tragic death of Shannen Doherty at the young age of 53. Ms. Doherty was best known for playing “Brenda Walsh” in the series “Beverly Hills, 90210.” She was diagnosed with cancer in 2015 and bravely fought against the disease until her death. The actress was survived by her mother, brother and estranged third husband, as well as her dog. She did not have children. Knowing that she was terminally ill allowed her to make appropriate personal and legal plans.
It has been reported that Ms. Doherty made her funeral wishes and preference for the disposal of her remains known to those close to her. The actress handled these aspects properly. It is not preferable to request that your attorney include these preferences in a Will for the following reasons. The survivors are most likely to have the funeral conducted and the remains disposed of before locating a Will or other written directions from the deceased or her attorneys. Then, it may be discovered too late that these activities were conducted in a fashion contrary to the desires of the deceased.
Ms. Doherty had an extensive furniture collection and more personal belongings than she needed. She wanted to make things “easier for her Mom” by selling her belongings as she prepared to pass away. Also, if her personal property in effect was converted to cash through sale, arguments over who would receive her personal property could be avoided.
Happy Fourth of July
Weiss & Weiss would like to wish everyone a happy Indpendence Day!
Memorial Day
Weiss & Weiss would like to wish all a Happy Memorial Day and remember those who served to protect us.
Breaking News: “Transfer on Death” Deeds Become Option in New York
We would like to inform our readers that Transfer on Death Deeds (“TOD”) will become an option for property transfers in New York as of July 19, 2024. Real property such as a house, condominium unit or vacant land is currently transferred by deed. There are currently various types of deeds available for property transfers in New York State. A Referee’s Deed applies to the transfer of property by the Court appointed Referee after a foreclosure sale. An Administrator’s or Executor’s Deed is used by the fiduciary appointed by the Surrogate’s Court in an estate matter to transfer property to the proper person designated by the Will or who is entitled to the property according to intestacy. A seller in a standard real estate transaction will deliver a deed based on the level of quality of title promised to the buyer. Such deeds may be either a quitclaim or warranty deed, or a bargain and sale deed with or without covenants.
Our readers may be familiar with transfer on death designations on bank accounts whereby the account will automatically go to the designee upon the account owner’s death. Changes to the beneficiary can also be made during the account owner’s lifetime. TOD deeds will operate in much the same fashion. Such deeds will need to be signed before two witnesses and notarized before they are recorded before the owner’s death in the clerk’s office in the county in which the property is located. Similar to the standards in making a Will, the property owner needs to have capacity, not be under fraud or duress, or unduly influenced. The property owner retains control over the property and can sell or encumber the property with a mortgage. The designee of the property takes it subject to any liens or mortgages to which the property is subject at the property owner’s death. The transfer lapses if the beneficiary does not survive the owner, so it is necessary to provide for such a potential event by designating an alternate beneficiary in the TOD deed or by having a qualified attorney provide for such an occurrence in other estate planning documents. Further, if two joint owners transfer property by TOD deed, the transfer to the beneficiary is not effective until both joint owners pass away.
The property owner can revoke a TOD deed by a properly notarized and recorded document and make a new beneficiary designation on another TOD deed, providing more control than a deed reserving a life estate. It is important to note that a TOD deed cannot be revoked by a provision in a Will. Transfer on death allows for the avoidance of a probate or administration proceeding as to that asset, which could prevent the delay and expense of an estate proceeding and avoid a contested estate to the extent that particular assets already have ironclad beneficiaries. With all transfer on death designations, the property needs to be owned at death for the transfer to the beneficiary to be effective.
New York Eviction Law – Anti-Squatter Law Passed
Recently in the news are stories about squatters taking over properties in New York. A recent blog post addressed the question of who is legally defined as a squatter, and how such a person could be evicted. The reason for this prior analysis is that, under then-current New York law, anyone occupying a property for at least thirty days was legally considered a “tenant” and had to be evicted through the Court system, most often in the local landlord-tenant Court.
Allowing such persons the same protections under the law as actual tenants (generally meaning those who had a lease and were paying rent to the owner) caused property owners serious problems. Under the prior law, a person could enter the premises without the consent of the owner, remain there for at least thirty days, and be considered a tenant for the purposes of eviction law. The owner would then have to hire experienced counsel to first issue a termination notice to the “tenant” who entered the property without his consent. After the expiration of the termination notice, if the occupant failed to vacate, an action in landlord-tenant Court would have to be commenced. Such an action, under the law, requires approximately two weeks prior notice to the “tenant.” Once in Court, a tenant is allowed an adjournment to obtain counsel if requested. Further adjournments, depending on the Court’s caseload, would be likely. As a result, the “tenant,” who entered without the owner’s consent, and was not paying rent to the owner, could stay for quite some time before the Court finally allowed an eviction to occur. The expenses of such legal proceedings, as well as the actual eviction conducted by the Marshal, would have to be paid by the owner, with little chance of recovering such sums from the squatter.
In light of these unjust outcomes, New York has now passed a new law that excludes squatters from the protections of the landlord-tenant laws. The law now defines a squatter as someone staying at a property without permission from the owner or a representative for the owner. It states that a squatter is not to be considered a tenant, and is not entitled to the legal protections of a tenant. As a result, if someone is illegally occupying property, the owner can contact the police to remove the squatter, rather than having to evict him through the Court system.