When There’s a Will There’s a Way
As our political landscape is more uncertain than ever after this week’s election results, our readers cannot be certain that estate tax repeal is on the horizon. Also, most people do not own substantial assets so that estate taxes may apply to their estates. However, most of our clients could benefit from the drafting of a Will and other estate documents by a skilled attorney. This post will address the benefits of engaging a qualified attorney to draft your estate documents.
Without a Will, one’s property will be left according to the laws of intestacy. Intestacy distribution through an administration proceeding may serve most people well enough. For instance, if one’s closest surviving relative is a daughter with whom there is a good relationship, the parent would have no problem with the daughter inheriting her entire estate. However, if there is also a son with whom the parent has an estranged relationship, intestacy would result in both children sharing in the estate equally. Since this is not a result favored by the parent, the drafting of a Will is essential so that the parent’s wishes that only the daughter inherit will be honored. Also, should the parent wish for both children to inherit, but in unequal portions, a Will would be needed to address this desire. Likewise, a Will can allocate responsibility for the payment of estate taxes between beneficiaries and may direct that only certain assets be liquidated in order to pay estate taxes.
When working with an attorney to draft estate documents, the opportunity to select an executor to manage the estate is also available. Otherwise, with intestacy, the person who inherits the estate also is appointed to serve as administrator to manage the estate. This may not be a favorable result if this person is not as prudent in managing money as another person that may be selected by the decedent.
Outstanding Judgments – Their Effect on Real Estate Transactions
In the course of an ordinary real estate transaction, our firm orders a title report on the property being sold. Contained in the title report is a judgment and lien search, which shows any outstanding judgments against the seller and liens against the property. Why is this important? In New York State, a money judgment, when filed in the Supreme Court of a county in which a debtor owns real property, become a lien on property for a period of ten (10) years. Furthermore, a judgment creditor may file a motion at the end of the ten year period to extend the lien for an additional ten years. After twenty years, the judgment is no longer a lien on the property.
Therefore, when a seller of real property has a recorded judgment less than ten years old, it becomes an issue which must be cleared prior to closing. The reason for this is that the contract most likely provides that the property will be conveyed free of judgments and liens, and, in addition, a mortgage lender will not approve a loan to close without resolution of an outstanding judgment or lien. If the judgment remains as a lien on the property, the new owner may find himself subject to a foreclosure proceeding against his newly-purchased property, even though the judgment was not incurred by him.
Since most standard Contracts of Sale in New York contain a clause that the property must be conveyed free of all outstanding liens and judgments, it is the seller’s responsibility to ensure that there are no judgments against the property. Failure to do so would give the potential buyer grounds to have the contract cancelled and receive a refund of their downpayment. Obviously a seller does not want that to happen. What does a seller do when there are outstanding judgments of record?
Changing Fashion in New York Commercial Real Estate
Our readers may have seen the recent report in The New York Times pertaining to the sale of Lord & Taylor’s flagship location in Manhattan to a co-working space company called WeWork. This seismic change in the use of “America’s Dress Address” is quite significant. Lord & Taylor realized that its huge location in Manhattan was out of fashion and much more valuable when considered as a real estate asset only, rather than the proceeds generated by mostly clothing sales. WeWork is a company most identifiable with the revolutionary means in which millennials are choosing to work. Many millennials tend to be self-employed, but may prefer to work away from home. They demand temporary and flexible work quarters. WeWork allows such people to select a location for the short or long term at a price to be determined, without a long term commitment. The worker or user has a professional location in which to engage in his occupation.
This post will address this transaction from a commercial leasing perspective. The purchaser will use the Lord & Taylor property as its headquarters, through which it will presumably enter other commercial leasing transactions for other properties, and for shared work quarters in this property. When entering commercial lease transactions for other properties, this author would suggest attempting to obtain the following provisions in such commercial leases.
Commercial leases typically identify the permitted use, such as real estate office, medical office and the like. However, in this case, the tenant will want the use to be as broad as possible. For instance, general office use, including co-working space and ancillary use may be suitable for this tenant. That way, when multiple parties occupy and leave the premises and use the space for varied purposes, it will not be a lease violation. Co-working spaces could be shared by diverse parties such as writers, day traders, salesmen as well as those who want to host conferences and meetings and the like.
Religious Corporation Law – Who Reigns?
A recently reported case in New York State Supreme Court (Nassau County) addresses issues covered in prior blog posts as they relate to the New York Religious Corporation Law. Kelley v. Garuda (Index No. 7016/2004) is a case involving a dispute regarding the International Society for Kirshna Consciousness and a temple located in Freeport, New York.
The International Society for Krishna Consciousness is known by the acronym “ISKCON”. In this case, the Krishna temple had been “taken over” by certain individuals who were espousing a religious doctrine contrary to that being promulgated by ISKCON. They were running the Temple and were not being answerable to ISKCON, who claimed the authority to own and run the temple in question.
This dispute left the Court with a tricky legal situation. The First Amendment to the United States Constitution states, in pertinent part, that Congress shall “make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” This puts Courts in a difficult position when a dispute arises within a religious institution. As in the ISKCON case, our firm has handled many cases in which there may be conflicts between different factions in a religious institution. These cases may involve any religion. The question then arises whether a Court can get involved in deciding such disputes without running afoul of the First Amendment.
Property Surveys- Why New Yorkers Need Them
Our clients often inquire as to the relevance of surveys in their real estate transactions. This post will discuss what a survey accomplishes and why our attorneys recommend that their purchasing clients obtain one, even if they are not obtaining a loan. In this context, we will be discussing the standard land survey, one that identifies such items as structures, fences and easements.
A survey is prepared by a licensed surveyor who will visit the property under contract with documents provided such as a prior survey, deed and the like. The surveyor will have special instruments that are installed on a tripod, measuring tape and other types of equipment. The goal is to measure and describe precisely the property to be conveyed in the intended transaction. In Westchester County, New York , property deeds are indexed and recorded primarily by previously assigned block and lot numbers with a property description (known as Schedule A) attached to the Deed. Our readers may be familiar with the standard Schedule A language, beginning at the point of x, continuing a particular number of feet to y and ending at z. In order to accurately draft the property description for current conditions, the surveyor needs to visit the property and take measurements of the property lines as exists today. As such, an old property description may potentially be inaccurate. An experienced attorney representing a buyer will want a survey to be done to make sure that the description is accurate on the deed being conveyed.
Surveyors also identify any structure built on or within the property lines. A buyer’s attorney should make sure that any structure is properly permitted, if required by the relevant municipality. For instance, a house should have a certificate of occupancy or a “pre-date” letter confirming that the town did not require such a document when it was built. Is a shed or deck on the property? If so, this may also require a permit in order to be legal. A buyer’s attorney will want to make sure that the seller has obtained any necessary documents for these structures. Surveys give clues that permits may be needed.
Tiny Homes = Big Problems?
“Tiny homes” have become popular among those who want their possessions pared down to the necessities so that they can save what may be a large mortgage payment on a large home and enjoy experiences such as adventurous travel in its place. We have reported on what we call the clutter reduction program . Limiting excessive possessions has assisted in the development of the tiny homes movement. However, tiny homes are not without big problems. The New York Times recently reported about the difficulty that tiny home owners have in what should be an obvious issue: where are you permitted to place your tiny home? Individuals spend hours upon hours designing such homes, with innovative space saving techniques and environmentally friendly building systems, only to neglect the need to determine the proper legal placement of such tiny home.
Tiny homes, as any other structure, require the legal right to use any particular parcel of land. Perhaps a particular municipality requires that structures be of at least a certain square footage or that lots be of a certain minimum size, in order to discourage the placement of less aesthetically pleasing mobile homes. Zoning laws could be violated. For instance, the zoning for a property location may allow for vacant land or commercial use only and the tiny homeowner will be living there. Likewise, the zoning regulation may allow single family home use only on a lot and a conventional homeowner allowing another residential structure is in effect using the lot for multifamily use. Also, linkage to municipal sewer systems and electrical grids may be desired.
Now that the tiny home owner has decided that acquiring the legal right to land use is required, this author will render advice on the means to such acquisition. Parking your tiny home in a public parking lot is not an answer, as many commercial property owners have posted notices in their parking lots to the effect that no vehicles are permitted during certain hours. Vacant land owners may post no trespassing signs for the same reason.
Eviction of Family Members in New York
Our firm receives many inquiries regarding property disputes among family members. Often, several relatives may inherit property from a deceased relative, and cannot agree on how the property is to be maintained, whether the property should be sold, and who should live at the property.
Prior blog posts have discussed the possibility of a partition action when the owners cannot agree on the disposition of the property. An additional question often raised, in several different contexts, is whether a family member, living at the premises, can be legally evicted. The answer to this question involves delving into the situation in further detail, and is far from simple.
The first question to be asked is whether the person sought to be evicted is an owner of the property, whether through inheritance or other type of transfer. If that family member is a legal owner of the property, the general answer is that person cannot be legally evicted. In general, any owner of a property, even a partial owner, has a right to reside at the premises. Let’s assume two brothers inherit a house from their parents. Both brothers now own 50% of the house, and both have a legal right to reside at the house without paying rent to the other. However, they are both legally obligated to equally share the costs of the upkeep of the house, such as routine maintenance and real estate taxes. Neither would have the legal right to bring an eviction action against the other. The situation could be resolved by one of the brothers buying the other’s interest, or selling the property to a third party, and splitting the net proceeds.
Who’s the Dictator?
The New York Post recently reported a news story wherein a condominium property manager “decorated” the common areas of the building with Nazi and other historic propaganda relating to dictators. Residents of the building felt threatened and intimidated by other activities of the property manager, including alleged physical threats. This story is an exaggerated version of many tales told by clients of this firm . In this post, we will discuss suggestions for managing abusive employees of cooperative and condominium buildings as well as hostile environments created by certain board members.
The cooperative or condominium building is legally responsible for the acts of its employees. The exception to this rule is criminal activity, with which the perpetrator bears responsibility. If an employee is abusive to unit owners or denying services to particular shareholders, the board has an obligation to discipline or remove the offending employee. Boards should consult with a qualified attorney in the event that the employee is a union member in order to strategically handle the employment situation, so that the building is not subject to a grievance filed with the union.
If the board is not responsive to shareholder complaints, it may be appropriate to seek an election to replace current board members with those more in keeping with unit owner sentiment. First, one should request that an experienced attorney review the governing documents to determine how to legally hold a special or general election to replace the board. Then, all procedures outlined in the governing documents should be followed so that the election is not subject to being overturned. Hopefully, this will result in a new board being installed that will manage the offending situation by suitable means.