New York Real Estate Lawyers Blog

September 7, 2017

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.

September 1, 2017

Happy Labor Day from Weiss & Weiss

By Weiss & Weiss

August 25, 2017

Divorce and Foreclosure – What are Your Rights?

By Weiss & Weiss

Financial troubles can be the cause of much stress for married couples. Often, these stresses lead to a couple separating, and ultimately, divorcing. In such situations, there will always almost be issues regarding the marital residence, be it a house or an apartment. Due to the financial issues, the property may already be in foreclosure. This blog post will explore the legal issues relating to married couples who own property which may be in foreclosure, and the issues that arise if a divorce proceeding occurs.

The first assumption is that the property in question is owned by both parties. The legal term for such ownership is tenants by the entirety. This means that the property is jointly owned by a married couple, and if either party passes away, their ownership share automatically passes to the surviving spouse. It should be noted that tenants by the entirety only applies to married couples. Once a divorce is finalized, the ownership interest changes to tenants in common, which means that the interest does not automatically transfer upon death to the survivor, but remains as part of the estate of the deceased.

Of course, when the parties are divorcing, the ownership of the martial residence is usually a major issue. If the property is in foreclosure, or is likely to become the subject of a foreclosure case in the near future, such issues must be addressed as part of the divorce proceedings. There are several possibilities in this situation. First, if there is equity in the property, and neither party wants to remain in the marital residence, the property may be sold, with the couple sharing the proceeds as per their divorce agreement. In the course of such a sale, any outstanding mortgage would be paid off, and any foreclosure proceedings would be discontinued as a result of such a sale. This is probably the easiest solution, although not always possible.

August 9, 2017

An Update on Reverse Mortgages

By Weiss & Weiss

A recent New York Times article concerns possible changes to the enforcement of reverse mortgages against surviving spouses. To those unfamiliar with reverse mortgages, they are a type of mortgage loan which allows elderly borrowers (usually over 62 years old) with sufficient equity in their primary residences to borrow against that equity. Generally, the sums borrowed do not have to be repaid until after the death of the borrower. Therefore, the heirs of the borrower, after their death, have the option of repaying the sums due, or selling the property and then paying off the amount of the reverse mortgage, plus any interest accrued.

Other blog posts have discussed the possible pitfalls of reverse mortgages. The New York Times article concerns a specific problem with many reverse mortgages, that of a surviving spouse. The issue raised is this: what happens when the home is owned only in the name of the borrower, the borrower has a (usually) younger spouse, and then the borrower passes away, leaving an unpaid reverse mortgage? Is the surviving spouse forced to sell the property in order to pay off the reverse mortgage, even though they may have lived there for many years with their spouse?

This situation arises in only a small amount of reverse mortgages. Most couples own property jointly, and may take out a reverse mortgage in both of their names. In this situation, where both borrowers qualify by meeting the age requirement, the mortgage is not due until the last of the borrowers passes away. Therefore, the “surviving spouse” situation does not apply where both borrowers are record owners and borrowers. However, there are situations, often involving a second marriage, where one borrower may qualify by age, and the other “half” is too young and will not qualify as a borrower. Reverse mortgage companies may require that the property be put in the qualifying buyer’s name alone in order to approve and close a reverse mortgage. This creates the situation discussed, where the older borrower then dies and the younger spouse, who may have inherited the property is faced with the reverse mortgage lender demanding payment in full while she does not have the assets to pay the mortgage without selling the property in question.

July 20, 2017

Commercial Properties and Local Regulations – What are Your Rights?

By Weiss & Weiss

News outlets have recently reported a conflict between local business Ralph’s Italian Ices in Mamaroneck and local officials, who are seeking to close the business due to noise and parking issues. While we do not know how this specific situation will resolve itself, many of our firm’s clients are small businesses who may find themselves in similar situations. This post will discuss the legal issues involved when a commercially leased property has issues relating to compliance with local regulations.

A business owner seeking to lease commercial property should first have counsel research the property in question. Issues such as allocation of parking spaces, permitted hours of operation, and legal as-of-right zoning of the proposed location must be thoroughly vetted prior to signing any commercial lease. Zoning is particularly important. If the property being leased is not zoned for the proposed tenant’s use, a special use permit must be obtained from the locality in which the premises are located. A special use permit allows the property to be used for a non-conforming use outside the legal as-of-right zoning.

When such a permit is necessary, the tenant’s attorney should make sure that a contingency clause is inserted in the commercial lease to allow for the obtaining of such a permit. Obtaining such a permit requires a detailed application, formal notification of adjacent property owners of the pending application, and, usually, attendance at a zoning board hearing to explain the situation at a hearing before the town zoning board. Therefore, the lease should contain a clause that the proposed tenant will make a good faith application to the zoning board for a special use permit, and, if such application is rejected, that the tenant would have the option to terminate the lease in question. Otherwise, a tenant may lease a property, and discover that they cannot open their business due to not being in compliance with zoning regulations. A contingency clause allows the tenant to apply for a special use permit without the risk that they may be committed to a long-term lease without the ability to legally operate their business.

July 14, 2017

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

By Weiss & Weiss

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.