New York Real Estate Lawyers Blog

March 10, 2016

Preserving Real Estate Assets for the Defaulting New York Homeowner

It is not unusual for some of our clients to be presented with the following scenario. An owner of a single family house or apartment falls behind on his mortgage and his lender commences a foreclosure proceeding while a sale is pending. In an apartment scenario, the cooperative board pursues a maintenance default matter while a cooperative unit owner is actively attempting to sell the unit. These are not situations where a short sale is sought. Rather, significant equity exists. The anticipated sales proceeds will allow for the full payment of the balance of the mortgage loan or maintenance arrears due to the cooperative.

Another common component of these situations is that the lender or cooperative board is aggressively pursuing their claim, jeopardizing the owner’s ownership of the asset. For instance, if the lender forecloses on the mortgage, the homeowner will lose title to the property and have nothing to sell. If the cooperative default goes to its final conclusion, an auction of the unit (and eviction of the occupant) , the unit owner will likewise lose her ownership interest. These results should be avoided when the closing proceeds are more than sufficient to pay any outstanding amounts due. The goal of the attorney representing the homeowner is to encourage the lender or the cooperative board to delay its proceeding pending the sale of the property , at which time the lender or the cooperative will be paid in full for the monies owed. When a homeowner falls behind in payments due, he may claim to a creditor that he is trying to sell the home in an effort to stall proceedings. While it may be true that the homeowner is trying to sell the home, the following suggestions may make such a claim more credible to the creditor and convince them to delay the proceedings.

First, it is helpful to have a skilled attorney present this information to the creditor. Second, for sale by owner scenerios should not be used. Having a licensed real estate agent involved who has an active listing that can be shown to the creditor is convincing evidence that the home is actively for sale. Third, if there is a signed contract of sale with downpayment monies on deposit and also a loan commitment letter from the purchaser to deliver to the lender or cooperative’s attorney, such documents will show that the means to pay the past due balance will be imminently available. A new loan may be sought by the homeowner as another means to resolve the default. If these strategies are not effective, our attorneys may file an Order to Show Cause with the applicable Court, seeking a temporary restraining order curtailing the creditor’s right to pursue the activity until the sale occurs.

March 4, 2016

Can a Promise to Make a Will Be Enforced in New York?

By Weiss & Weiss

From time to time our firm is asked if a promise to make a Will leaving one’s inheritance to a particular person is enforceable. Such promises occur in the following situations. A relative spends a lot of time with another, perhaps even doing substantial favors for the person, who repeatedly says “I won’t forget about you in my Will.” A person may have intended to revise his Will to include someone, told that person of such intent, but never got around to making the revision. Such a suggestion may also be part of a resolution of a marital dispute wherein the spouse agrees to provide for a child in his Will. Our basic answer is that such promises are not enforceable in New York.

Even if a particular disposition is made in a Will favoring a particular person, such a provision could be removed upon the execution of a Codicil (amendment to a Will) or in an entirely new Will. Since Wills are organic documents that can be changed as the Testator (the legal term for the person who makes a Will) desires, obtaining assets through a lifetime gift or having a dispute settled by the payment of funds during lifetime is the only way to make sure that such assets are left as desired by the recipient. The testator can leave his assets to any person or charity that he wishes.

Our readers may have heard of the term intestacy, which is the legal term for passing away without a Will. In such a situation, New York State’s statute determines who will inherit a person’s assets, which is dependent upon such person’s relationship to the deceased. If the closest surviving person to the deceased is his daughter, then she would inherit the assets. Should the deceased have a surviving spouse and children, then spouse receives $50,000.00 plus half of the assets and the children divide the other half of the assets.

February 25, 2016

Mortgage Modifications in New York State

By Weiss & Weiss

Our firm is often called on to assist homeowners whose properties may be in foreclosure. This can occur when a person falls behind in their mortgage payments to a bank or other lending institution. Because of the high volume of such foreclosures in New York State over the past several years, additional safeguards have been added to the judicial process to protect people from losing their primary residence in a foreclosure case.

Prior blog posts have explained how New York State requires a mandatory settlement conference in most residential foreclosure matters. The main exceptions are cases involving a reverse mortgage, or situations in which the homeowner does not reside at the property being foreclosed, such as a second home or vacation house. Our attorneys will attend settlement conferences in Court to attempt to resolve outstanding foreclosures. Court referees, who meet with the parties in an attempt to resolve these cases, encourage lending institutions to offer mortgage modifications. The first step in the process is that the borrower must provide complete financial information to the lender (or, in most cases, their attorneys). This information usually consists of a standard Request for Mortgage Modification Form (RMA), copies of state and federal tax returns for the last several years, a hardship letter from the borrower explaining why they fell behind on their mortgage, proof of income, bank statements, and other financial records as the lender may request.

Once this information is provided, the lending institution will consider whether a modification is possible. Based on the borrower’s income and assets, as well as the value of the property in question, as well as the mortgage amount, the lender may offer a trial modification. The trial modification may reduce the interest rate on the original mortgage, and may also shift the past due payments to the end of the loan term, allowing a delinquent borrower to resume payments and have the property removed from the foreclosure process. In certain instances, the lender may even reduce the actual amount of principal owed on the mortgage.

February 11, 2016

Getting Engaged this Valentine’s Day?

By Weiss & Weiss

Are you planning to get engaged this Valentine’s Day? While legal concerns may not be particularly romantic, our firm offers the following legal advice pertaining to issues that arise upon marriage in this post. Legal issues arise whether it is a first or second marriage and may become more complicated if there are children from a prior marriage.

Estate planning matters should be considered. If you do not have Wills, it is prudent to consult an estate attorney to develop the appropriate estate planning documents. Wills, trusts, and health care directive documents may be drafted on your behalf. Even if you already have estate documents in place, the beneficiaries and fiduciaries could be different now that you’re engaged. The persons that you select to make health care decisions for you are also likely to change.

If you have children from a prior marriage, provisions should be included in your Will to include a testamentary trust . Your new spouse would be afforded the opportunity to use some of the assets during her life, with the balance left to your children from your prior marriage. Without such a trust, your spouse could remarry and leave monies that you intended for your children to someone else. Also, consider how your estate plan should address personal property. If there are family heirlooms that you would want your children to inherit, rather than your spouse, you should have your attorney specify the particular items in your Will.

January 28, 2016

New Yorkers Need Estate Plans for Their Disabled Children

By Weiss & Weiss

Some of our trust and estate clients have adult children who are disabled. The child may have been born with a disability, such as cerebral palsy, making the parents accustomed to allowing for the disability while knowing that such disability will never go away. In the alternative, the disability may have occurred later in the child’s life, such as drug or alcohol addiction or mental illness. The parents of these children need to acknowledge the limited capabilities of their children while also providing for the possibility that the child could be self-sufficient if the underlying condition is abated. In either case, parents need to provide for the possibility that the child could outlive both parents or the parents could become ill and unable to care for the child. This post will address the legal issues to be considered for disabled children.

As discussed in our prior post pertaining to providing for pets in one’s estate plan , parents should write a detailed letter to caretakers and trustees specifying care for the child, such as favorite foods and activities, details of relationships with relatives and friends and medical care history and details. Practical matters should be considered such as selecting housing, like a licensed group home or assisted living facility, for the disabled child. This should be done prior to the decline of the parents.

It is crucial that potential access to government benefits be preserved for a disabled child. These government benefits may pay for health care and community services. In order to preserve access to government benefits, refraining from titling assets in the child’s name outright is crucial. As such, there should not be a bequest in the parent’s Will in the name of the child. Instead, the Will should leave assets to the child by means of a Special Needs Trust . The Special Needs trust needs to specifically state that it is not to be applied in such a fashion that access to government benefits would be denied. As such, the government benefits will be used to pay for the child’s basic needs and the Special Needs Trust will be used to pay for the extras that would assist the child.

January 22, 2016

Unlivable Conditions in New York Coops

By Weiss & Weiss

Many legal issues arise in New York relating to rental apartments. Disputes between landlords and tenants are extremely common, and have been discussed in many posts on this blog. Extremely prevalent are situations in which the living conditions of the apartment have deteriorated to the point where the apartment may not be suitable for an individual or family to reside at the premises.

When this occurs, legally, it is considered a breach of the “warranty of habitability.” Whether or not it is explicitly stated in a lease or other document, every dwelling place has an implied warranty of habitability, meaning that the responsible party must insure that the space is livable. Certain conditions which may cause an apartment to be unlivable are lack of heat (especially during the winter), water leaks causing flooding conditions, roaches and other vermin, and excessive noise. This is not an exclusive list, and other conditions may arise which could cause a landlord to be in breach of the warranty of habitability.

However, a question arises when the apartment in question is a cooperative unit. In such situations, the owner of the shares allocated to the apartment unit is usually the same person residing at the premises. In essence, they are both landlord and tenant. What happens legally when such a unit has severe problems which cause them to be unfit for human habitation? Our firm has been consulted by many clients in such situations. The first issue to be resolved is the responsible party for the conditions. Every cooperative has a proprietary lease, which is a document that defines whether the cooperative corporation or the unit owner is responsible to correct certain conditions. For example, a cooperative apartment may have windows which have deteriorated to the point that they no longer seal and keep cold air out of the apartment. The proprietary lease needs to be examined to determine whether the cooperative corporation is responsible for replacing such windows. Other conditions, such as excessive noise, or poor sanitary conditions at the building, may also be the responsibility of the cooperative corporation, rather than the individual owner.

January 14, 2016

Have You Included Your Pet in Your Estate Plan?

By Weiss & Weiss

Some of our trust and estate clients have asked us how to best protect their beloved pet in the event of their disability or demise. Pets can be just as important as children when planning one’s estate. These family members can be adequately provided for in a legal fashion. Traditionally, pets have been considered to be personal property, being no different than a car, furniture and the like. Our post addresses how personal property is typically distributed after someone dies. Some pet owners consult us to have their pets treated in a more personal fashion in their legal documents.

Practical matters should be considered such as selecting a potential caretaker and confirming with such person that they are willing to serve. The caretaker should be informed about the pet’s habits and preferences, such as how often and where the dog likes to be walked and pet food preferred. Contact information for the veterinarian, medical conditions and medications taken should be indicated. Funeral arrangements should also be made known, such as whether a cemetery plot has been purchased and whether funeral expenses have been prepaid. These practical matters are particularly important because the pet is unable to communicate, as a child may.

From a legal perspective, persons interested in legally protecting their pets should consult the attorney who is drafting their overall estate plan. Financial consideration to the caretaker needs to be arranged, while at the same time requiring the caretaker to perform certain duties on behalf of the pet in order to be compensated. A pet trust is a legally appropriate means to accomplish this goal. Such a document (or provision within a Will) would provide that a certain sum of money is to be set aside for the care of the pet by a particular person, which sum is to be released in particular intervals provided that the caretaker is assuming the duties expected or upon delivery of proof of payment of expenses on behalf of the pet.

January 7, 2016

Legal Issues Relating to Private House Rentals in New York

By Weiss & Weiss

Many of our firm’s clients own private houses in Westchester County, in Brooklyn (Kings County), the Bronx, and Queens County. These may be one or two family houses, and many of these houses are part of the rental market, rather than owner-occupied. Renting a private house involves many legal issues that may not occur in an apartment rental. These issues will the subject of this blog post.

The first issue relates to a written lease. Many apartment rentals use a standard form lease (which may be a rent-regulated form lease), or no lease at all. It is important when renting a private house to have a qualified attorney prepare a written lease specific to the property to be reviewed and executed by the tenant. The reason for this is that while there are standard Court practices for apartment rentals (particularly if the apartment is rent-regulated) house rentals are more specific and unique. Therefore, it is important for anyone renting a house to have a lease which will incorporate the specific requirements for the rental, as there are fewer standard terms. Some of the issues to look at are the length of the lease term, whether the lease can be renewed after it expires (as opposed to rent-regulated apartments, in which a renewal right already exists), the amount of the security deposit, responsibility for maintaining the property, and other terms which are specific to the house being rented.

For example, many houses have older appliances. The written lease needs to state who is responsible for maintaining the appliances, and who will incur the expense of replacing a major appliance which no longer works. Further, a landlord may specify who needs to have the appliance serviced and the allocation of repair expenses should be negotiated. Many landlord-tenant disputes in private house rentals relate to the condition of the appliances, as well as heat and air conditioning systems. The lease should specifically delineate each party’s rights and responsibilities for these conditions.

December 22, 2015

Happy Holidays from Weiss & Weiss

By Weiss & Weiss

December 11, 2015

Let’s Adjust: Calculating Amounts Due at New York Real Estate Closings

By Weiss & Weiss

Those people who are new to the real estate closing process in New York may not be aware that the amount delivered by the purchaser at closing is not as simple as the amount of the downpayment as subtracted from the purchase price. Adjustments are to be made for real estate taxes, vendors serving the property, and potentially remediating a seller-caused situation. Our real estate attorneys are experienced in making such calculations and in delivering the information to the parties in a timely fashion in order to prepare for closing.

The first adjustment to be made involves a credit to the purchaser for the amount of the downpayment. Another common adjustment is a $500.00 credit to the purchaser for the property disclosure statement. New York State law mandates that a seller complete a detailed questionnaire and deliver same to the purchaser. In the absence of the completion of such questionnaire, the purchaser is given a credit of $500.00 against the purchase price at closing. Certain sellers, such as estates, are exempt from the requirement to deliver a property disclosure statement and are not required to apply a credit at closing. Interestingly enough, it has become the custom for sellers to complete the disclosure questionnaire in upstate New York, while most sellers in the downstate area served by this firm typically do not produce such a statement. Our attorneys advise sellers concerning whether they should deliver such a disclosure in their specific situation.

Real estate taxes are another common source of adjustments between the parties to a transaction. In Westchester County, New York, the area in which our firm is located, there are two or three different types of real estate taxes, all of which cover different periods of time in the calendar year. For instance, County taxes cover the calendar year, January 1-December 31. School taxes cover the dates July 1-June 30. In those jurisdictions subject to Village taxes, the year is calculated from June 1-May 31. Even though the various real estate taxes cover particular periods of time, the taxes are not necessarily due on these specific dates. County taxes are due on April 1, with penalty for late payment being applied on April 30.