New York Real Estate Lawyers Blog

July 14, 2017

Just Short of a “Short Sale” – What are Your Options?

Our firm frequently has clients who own property that is in foreclosure. Often, these parties wish to sell their property and move on from the situation. Once a sales price is agreed upon, the important question to be asked is whether the proceeds from the sale are sufficient to pay off the debt on the property, or, if not, what the expected deficiency will be. As attorneys for the person selling a property in foreclosure, we would calculate the amount of all liens and judgments on the property, including the mortgage or mortgages in default, the costs and expenses of the sale, including New York State transfer tax and any local transfer tax, as well as the agreed upon broker’s commission for the sale.

This figure is then compared to the negotiated sales price for the property, as per the Contract of Sale. In many situations, the proceeds may comfortably exceed the debts on the property and the expenses of sale. For example, the total debt and expenses of sale may total $400,000.00, and the sales price may be $500,000.00. In this case, the seller may move ahead with the closing and expect to walk away with some additional funds after all costs and expenses of the sale are paid, including the broker’s commission and transfer taxes associated with the transaction.

But what happens if there are insufficient funds from the sales price to cover the debts and expenses encumbering the property? Let’s say the debt and expenses of sale are $400,000,00, and the sales price is only $375,000.00. In that situation, the person selling the property has several options, which will be discussed in this blog post.

June 30, 2017

Weiss & Weiss Wishes You a Happy July 4th!

By Weiss & Weiss

June 22, 2017

Property Sales and Bankruptcy in New York

By Weiss & Weiss

Prior blog posts have discussed the effect of filing for bankruptcy on properties which may be in foreclosure. This post will explain what may happen to the property after a bankruptcy filing; namely, can the property still be sold to a third party, and under what circumstances.

Once a party to a foreclosure action files for federal bankruptcy protection, the Bankruptcy Court issues a stay on all pending legal proceedings. A stay means that all pending legal proceedings must cease, and no new proceedings can be commenced. This often occurs when the property in question is on the verge of being sold in a foreclosure auction. Once a creditor has obtained a foreclosure judgment, and complies with all preliminary requirements (such as public advertising) for a public sale, in general, the only way to stop such a sale is for the debtor to file for bankruptcy.

The bankruptcy filing can even happen on the day before the scheduled auction sale. Once the filing is made, notice is given to all creditors, who must cease all litigation and post-judgment proceedings, including a scheduled foreclosure auction. If the creditor wants to proceed with the sale, it must file a motion with the Bankruptcy Court to lift the automatic stay of all proceedings. This may take several months. In addition, they are only permitted to proceed against the property in question, and not against the individual filing for bankruptcy.

June 15, 2017

“Legal” Gift Ideas for Dad on Father’s Day

By Weiss & Weiss

Our firm wants to extend its best wishes to all Dads for a happy Father’s Day. We would like to mention some gift ideas of a legal nature that cannot be purchased in an ordinary department store.

Your Father may be on the verge of retirement. As such, he may be in the market for a qualified attorney who will negotiate and document the terms of his business sale. Such a sale may involve preparation of a contract of sale, coordination of the payoff of a business or equipment loan, closing document drafting and the like. Once the transaction is complete, your Dad can enjoy a care-free retirement.

If your Father is not ready to retire, he may have an ongoing business in the process of relocation. Our attorneys would welcome the opportunity to negotiate the commercial lease for the new space. We would negotiate its terms in a manner most favorable to dear old Dad.

June 2, 2017

Should I Stay or Should I Go? Evictions After Foreclosure

By Weiss & Weiss

Prior blog posts have discussed eviction actions after foreclosures in New York State. Recently, due to the increased number of cases going to a final judgment of foreclosure and sale, and then being sold, there is an increased amount of tenants in foreclosed properties. This post will discuss the legal status of these tenants and the possibility of eviction.

A fast summary of the legal foreclosure proceedings is in order at this point. Once a Court issues a final judgment of foreclosure and sale, the property in question is then sold at public auction. The highest bidder then pays the amount bid to the court-appointed Referee, and receives a Referee’s Deed, which is evidence of their ownership of the property. The former owner’s interest is extinguished, together with the interest of any of the former owner’s judgment creditors.

Of course, the former owner may never vacate the premises. Once their ownership interest is extinguished, they are subject to eviction by the new owner (the successful bidder at the foreclosure auction). This may be the original lending institution, or an individual or corporate third party who purchases the property as an investment. If the former owner is still occupying the premises, they are considered a holdover tenant. Under the law, they must receive proper notice prior to an eviction proceeding being brought. If they do not vacate within a particular period of time, the new owner can then commence a holdover eviction proceeding in the appropriate local court having jurisdiction over landlord-tenant matters. For example, if the property was located in White Plains, then a holdover proceeding would be brought in White Plains City Court.

May 24, 2017

Memorial Day Greetings from Weiss & Weiss

By Weiss & Weiss

May 19, 2017

Up on the Roof

By Weiss & Weiss

Now that the weather has finally improved in the New York metropolitan area and Memorial Day weekend is fast approaching, many of our readers may want to consider whether their cooperative building provides access to their rooftop. Carole King and Gerry Goffin , and later James Taylor , have sung these words while imagining their roof decks: “I climb way up to the top of the stairs and all my cares just drift right into space.” Our readers must wonder is such a “…paradise…trouble proof?” This post will examine the legal issues to consider when converting an ordinary roof of a cooperative building into a recreational roof deck.

First, we will examine this situation assuming that the roof deck amenity is to be shared by all residents of the cooperative. A qualified attorney should review the cooperative’s governing documents to determine whether the Board of Directors or all shareholders are required to approve this project. If a building-wide assessment needs to be implemented to fund the project, the governing documents may also advise your attorney whether a Board resolution or a vote of the shareholders at an annual or special shareholders meeting is required to authorize the assessment.

Next, let’s consider another situation, where the roof deck amenity is to be used exclusively by only one shareholder, usually the resident on the top floor. The shareholder has agreed to buy this common area space, thus enhancing the cooperative’s coffers. Prior to the project, the roof is common space owned by the cooperative. For any particular shareholder to purchase this space, shares of stock need to be allocated to the space. Unissued stock is called treasury stock. Hopefully, the cooperative at issue has not already issued all of its stock. A specialized real estate broker needs to determine that the number of shares to be issued to this area bear a reasonable relationship to the proportion of shares already issued for apartments in the building. For instance, the broker will consider that 100 shares are issued for apartment 5A with 1,000 square feet and likewise for other apartments. From that data, the broker will determine how many shares should be issued for the roof deck and the resulting purchase price. Also, the cooperative attorney will need to obtain a “no-action letter’ from the Attorney General of the State of New York authorizing that a certain number of shares be issued for the space and that the cooperative is legally authorized to sell it to the shareholder.

May 11, 2017

Commercial Lease Guaranties- Legal Issues to Consider

By Weiss & Weiss

Many landlords of commercial property require that the obligations of the tenant be guaranteed by an individual or affiliated entity. Most tenants of commercial leases are an entity, such as a corporation or limited liability company, whose only asset is the business engaged in the leased premises. If the entity tenant cannot perform its lease obligations or leaves before the end of the lease, the landlord has no remedy besides renting the premises to a new tenant. For this reason, most landlords require that an individual or entity closely affiliated with the tenant guaranty the tenant’s requirements. That way, other assets of the guarantor may be available to the landlord if the tenant defaults under the lease. This post will examine the various types of guaranties that may be requested by a landlord.

A full guaranty is the most broad, wherein the guarantor covers all of the tenant’s obligations under the lease. Such obligations would include paying rent, real estate tax escalations, utility payments, common area maintenance payments, maintaining proper insurance, repair obligations and the like. Landlords prefer this type of guaranty because there is no limit on the amount or extent of the obligation covered. Also, the landlord does not need to meet any condition before enforcing the guaranty against the guarantor.

A partial guaranty is more limited. Perhaps the obligations covered are only those that are monetary in nature or up to a certain amount. Other limited guaranties may cover lease obligations such as keeping up with maintenance and repair obligations. Partial guaranties could also “burn down” or “sunset” over time. For instance, after a certain period of perfect performance by the tenant, the amount guaranteed reduces or the partial guaranty terminates entirely. In partial guaranties, the landlord may need to meet certain conditions before it is enforced against the guarantor.

May 3, 2017

Coming of Age- Do You Know Someone Turning 18?

By Weiss & Weiss

If you are like this author , someone close to you may be about to turn eighteen years of age. This post will discuss the legal ramifications of turning eighteen. Additional rights and privileges as well as legal responsibilities occur once a “child” becomes eighteen. Such a person can now vote, run for office, legally support oneself, and be employed full-time. An eighteen year old male will be penalized if he does not register for the military draft. All eighteen year olds are treated as adults if they commit a crime. Since we practice particular areas of law, this author will address the implications of turning eighteen as they apply to those areas of law. Also, rights and obligations vary by state, so this post will only address these matters as they relate to New York.

Eighteen year olds have the right to enter a contract and to apply for credit. Therefore, our soon-to-be eighteen year old can apply for a mortgage and sign a contract to buy a house. Contracts involving real estate, whether for sale or for a lease of more than one year must be in writing.

Once a person is eighteen, he can make a Will and other estate documents. While we do not want to consider that someone so young may pass away, without a Will, his assets will be distributed according to New York’s intestacy law. Also, an eighteen year old can inherit from someone who named him in a Will or in an Administration proceeding if he is of the proper degree of relation according to the New York statute. Since many eighteen year olds may not be sophisticated enough to inherit substantial assets, those drafting Wills may decide to leave such assets to the child in trust until such age as they anticipate that the child will be mature enough to manage the assets.

April 26, 2017

Post Foreclosure Repurchases – After “The End”

By Weiss & Weiss

Prior blog posts have discussed foreclosure proceedings, from the commencement of a foreclosure case to the entry of a Judgment of Sale and the public auction of the property. Many clients then ask, what happens next? Is it possible for the owner who has been foreclosed already to recover the property after it has been sold at a foreclosure sale? The answer to this question is a definite yes.

A public auction of foreclosed property will generally have two outcomes. In the first, the bank or other lending institution which brought the foreclosure case will acquire title to the property. This usually happens when either no one bids for the property, or when no bid exceeds the amount owned to the lender under the judgment of foreclosure. The other outcome is when a third party bids over the amount of the judgment, then obtains title, while paying the lender the full amount of its judgment (or a smaller amount negotiated with the lender).

In such cases, the original owner of the property may retain legal possession of the property. Although he may no longer be the legal owner, he maintains a right of possession, until an eviction action is brought against him. Sometimes, the owner’s financial circumstances may have improved and he may be in a position to repurchase the property from the successful bidder. The successful bidder may consider this a positive outcome as he would not have to bring an eviction case to obtain legal possession, and the occupant will pay him more than he paid to acquire the property, ensuring a profit.