New York Real Estate Lawyer Blog

When you are buying your house did you consider whether you can have a professional office, whether you can add an addition to the north side, whether you can live in the third floor attic? These are all questions relating to the building and zoning laws both of New York State and the local town, county or village where you are buying. So what questions should you ask your real estate broker, your building inspector, your lawyer.

Here’s a quick list of some of the issues you should consider when you look at the property, whether it is residential real estate or a New York City building.

Does the property have a certificate of occupancy?

If it does have a certificate of occupancy, can you use the property for the current purpose, or can you use it for the use you intend? If the answer is that the current use does not fit the current certificate of occupancy, the issue is what does local zoning say about the past use, and any intended future use?

For example, there is an old cottage on the property, which houses a tenant, but the house and cottage pre-date the zoning code. What happens when you buy the property? Is the tenancy “grand-fathered” as a non-conforming use under the zoning code? What happens if you seek to change the use, will it require some sort of variance? These are intensive factual questions which require significant inquiry.

Generally, as towns and villages develop into zoning districts, the various uses are separated into commercial, residential and mixed uses. Often parking requirements limit or change the scope or use of a property. Sometimes individual communities or owners seek “landmark” or “agricultural” or other special designation and require special approval by architectural, agricultural, or other landmark preservation commissions.

If you are consider a sub-division of the lot, the right to sub-divide is often dictated by local law, prior sub-division restrictions on the maps, and other state or local rules, which must be followed. You must know these before you buy because ignorance of the laws or rules or restrictions is not a defense (excuse).

Sometimes, in New York City there are unused “air rights” or “ development rights,” which can be bought and sold just like property. In various agricultural areas and rural zones of New York there are laws which permit owners to transfer unused development rights to adjacent properties.

The bottom line– all towns, counties, villages and other city government planning rules and regulations dictate, through zoning, how a property can be used. Your local land use attorney should be familiar with the codes and should be able to advise you as to the use of your property. Be warned and ask the questions.

When there's distress, there's fraud, scams and victims, especially in New York.

Distressed homeowners beware-- no equity, no plan, no defense to scammers. The NYTimes reports about a new breed of scammer, one who takes your payments, fails to deal with the debt they promised to consolidate or "solve," and stands idly by as the bank forecloses.

You see the commercial, hear the radio blasts-- there are all sorts of companies out there touting themselves as “foreclosure rescue companies.” Typically, these companies charge an upfront fee to help you "modify loans," but often do nothing to prevent foreclosure.

According to the article, the FTC (Federal Trade Commission) brought lawsuits last year against five companies representing 20,000 customers, and state and local prosecutors have brought dozens more to stop the unethical and improper upfront fee to help borrowers get lower rates on their mortgages from their lenders. Despite the fact that these borrowers often cannot afford the fees, the "debt reduction" services are often bogus and sometimes cause homeowners to lose their chance to renegotiate or to file for bankruptcy protection while the debt reduction company is not doing anything.

Bottom line-- you had better investigate your debt reduction company, because many, though looking official, are simply scams waiting to rip you off, further harming your chances at correcting the problem.

How was it that during the “heyday” of the credit spigot the “lender’s” appraisal for real property in New York always ended up at or close to the exorbitant purchase price and inflated mortgage sought by the purchaser. That is the question that New York’s Attorney General threatened to investigate, leading to immediate guidelines seeking to revamp how appraisers are getting paid by the lenders who hire them.

The problem– often the lender was charging borrowers $300 to $600 for an “appraisal,” but paying the appraiser only half of the fee, leading to inferior and suspect appraisal. Obviously, the most inexperienced an morally susceptible appraisers conducted millions of these “appraisals” during the height of the real estate market, “hitting the numbers” sought by the lenders.

Often the appraiser (who was not getting paid very much to work on the valuation) would be pushed to value the property quickly, even overnight. The low pay resulted in improper inspections and inaccurate evaluation of comparable properties, and missed comparisons to pending sales contracts and local market trends.

So, how is the industry going to address this rampant problem, which in some measure caused the crisis we face? Fannie Mae and Freddie Mac, the giant mortgage investors, have now pushed a “home valuation code of conduct.” The code, scheduled to take effect May 1, 2009, was instigated by a settlement involving New York Attorney General Andrew M. Cuomo, the Federal Housing Finance Agency and the Congressionally chartered mortgage companies.

As part of the agreement between New York’s Attorney General, the agencies, and the regulators agreed to create standards designed to ensure accurate, independent appraisals, insulated from pressure (from lenders, mortgage brokers, real estate agents) to hit the numbers.

For example, the new code prohibits brokers who originate a share of new mortgages from selecting appraisers.

Bottom Line–this matters to you because quick, slipshod appraisals severely undervalue some properties, forcing buyers to come up with larger down payments, prevent refinancings, and overvalue houses causing loss in equity. Sound familiar.

Your home is your sanctuary, your largest investment, and possibly your largest headache if you are not careful about who you hire. So, it pays to be careful when hiring home improvement contractors, whether for a small construction project or a huge renovation, you need to know that your contractor is reputable, reliable and not a cheat. Here are some helpful hints in selecting a home improvement contractor in New York.

According to a recent article in the Poughkeepsie Journal, the New York State Attorney General's office has mediated more than 1,550 complaints against home improvement contractors since January 2007, and recovered more than $800,000 in restitution, settlements, or other discounts for consumers. So, how do you avoid becoming the next victim of home improvement contractor problems?

With the Internet, you have valuable resources at your fingertips allowing you to research your selection of a reputable contractor, with know your contractor links to NY state and local county agencies offering consumer assistance and information as to status of a contractor’s license (if required), and any complaints.

The AG's web-site lists about 200 complaints, judgments, and information against home improvement contractors who are reportedly doing shoddy or incomplete work, or who take people's down payments without finishing the job. That is a violation of New York State Lien Law, and can subject the contractor to significant penalties.

The names and identities of the contractors posted on this infamous list is too great to list here, but you should spend the time researching your contractor in Ulster, Dutchess and Columbia County. In New York State, home improvement contractors must be licensed to work on your home in New York City, Suffolk, Nassau, Westchester, Putnam, and Rockland counties.

The bottom line-- be willing to investigate the person who works on your home. It's customary and expected.