New York Real Estate Lawyer Blog

In this era of distressed real estate, and even more distressed home owners, there are several life rings being thrown around including "sale-lease back" options. Under a typical "sale and lease back" situation an "investor" buys a person's home and leases it back to them. The practice is both common and legal in real estate, and is intended to raise cash for short-term needs or to secure tax benefits. Sometimes, the leaseback agreements permit the sellers the right to repurchase the property after some prescribed period and that is often a benefit to the investor in an inclining real estate market.

In residential real estate, the sale-leaseback allows financially strapped homeowners in financial trouble to stay in their homes and pay their debts, but the practice is susceptible to fraud when investors don't give homeowners the promised money. For example, some "investors" pocket the mortgages they obtain from banks or strip equity from the homes rather than letting owners get back on their feet.

The WSJournal had an interesting article which explained the potential pitfalls of such a relationship.

Bottom Line-- contact your New York Real Estate Attorney before entering or considering a sale and lease back option for your home in Dutchess, Rockland, Westchester, Putnam, Ulster or any other County.

How much litigation is spawned by incomplete or suspicious powers of attorney issued to people in confidential or, at least, close personal relationships to the person giving the power to the agent. The opportunities for undue influence are unbelievable, and have lead to sweeping changes in the New York State laws.

By signature on January 27, 2009, New York's Governor Paterson signed into law revisions to sections of the NYS General Obligations Law which governs short form of powers of attorney. Although it is unclear whether the enactment date of March 1, 2009 will be extended, the comprehensive revisions will result in a completely new form, and, in some cases, along with a separate formal rider required when the the Agent makes significant gifts using the Power of Attorney.

One change will require the agent to have his signature "acknowledged" (with the formality of a deed) on the power of attorney giving the agent the right to do the transaction. The power will not be effective unless the acknowledged (and notarized) signature of both the Agent and the person giving the power appears on the form. For further safeguarding, statutorily defined "major gifts" will have to be separately executed as a rider (SMGR rider), with two disinterested witnesses attesting to the signature. New York title companies may refuse to write title if the form is not followed particularly.

The bills (A4392 and S1728) were referred to the Judiciary Committees of the Assembly, and are expected to move quickly through the legislature. The delay has been requested to give additional time for the legal community to become fully educated about the required changes.

Perhaps now we can avoid the familial conflicts that often arise as our older generation needs the assistance of sometimes unscrupulous caregivers.

Did you know that New York State has in the past, and continues to, sell, give, and transfer portions of navigable waters to interested upland owners. What does that mean?

Ever wonder who owns the lands under the Hudson River? In river communities where water front property is valuable for its view, the land can also be valuable for land you cannot see-- the land under water.

“Land under water”' is land submerged by water, and includes that land below the high water mark in navicable waters (rivers), tidal water (estuaries), lakes and ponds, and, at times, can appear to be dry land (perhaps it was previously filled naturally by development). The owner of property on “dry land” is referred to as the “Upland Owner,” and is often benefited by actually owning the rights to the land under water. Generally speaking, New York State owns the land under all navigable lakes, streams, and rivers.

The State, however, does sell, give, transfer and alienate certain parcels of the mud under the Hudson River, Long Island Sound, and other larger fresh water lakes, ponds, etc. Often the ownership of this land underwater helps the upland owner install wharfs, docks, piers, and to fill the land where other owners (with no rights to the land under water) could not so improve their land.

The Public Lands Law contains a number of factors affecting who may apply for and receive interests in such lands. A distinction is made between an application for a beneficial grant for private use and a commerce grant for the public benefit.

Generally, grants for "purpose of commerce" are of limited character and subject to legislative control. The grant for commerce purposes specifies the nature of the use and is conditioned on the completion of the proposed improvements. Grants for purposes of commerce are strictly construed meaning that the owner of such right owns nothing more than what is specified in the grant as necessary to the purposes of it. Because it is limited, the State has the right to regulate the use of the granted property in the interest of the public and for the protection of commerce and navigation.

The type which grants "beneficial enjoyment" means that the owner has unencumbered fee ownership, and the land granted was not otherwise necessary for purposes of commerce. Once a grantee acquires title to the land under the water (e.g., Hudson River) soil, New York State cannot take away the grant, and the owner may exclude any other person from the land granted.

Obviously, the grant for "beneficial enjoyment" is broader and therefore more valuable to the upland owner.

The bottom line-- if you are considering the purchase of a waterfront home in Long Island, the Hudson River Valley, and particularly the river towns of Sparkill, Sneden's Landing, Piermont, Nyack, Stony Point, Haverstraw, Irvington, Tarrytown, Newburgh, Poughkeepsie, Saugerties, Hudson or anywhere else in New York State, including along any of the Finger Lakes; you should consult with your title company and real estate lawyer to understand whether and to what extent the property may come with underwater land.

The Appellate Division, Second Department, has issued a recent ruling dismissing claims for adverse possession in a case involving neighboring residential lots in Brooklyn.

Klose & Associates' clients purchased several lots in Kings County and commenced construction on a multifamily dwelling. As construction proceeded, the clients had to litigate over an eight inch strip of land lying on the other side of a fence which had, for more than 10 years, separated the driveways between their parcel and the adjoining neighbor (claimant).

According to the claimant's own testimony, the fence was installed (2001) jointly by the claimants and our clients' predecessors in title, and was positioned in the same place as the old fence. In dismissing the claims, the Court recognized that

A party seeking to obtain title by adverse possession must prove by clear and convincing evidence the following common-law requirements of adverse possession: (1) that the possession was hostile and under claim of right; (2) that it was actual; (3) that it was open and notorious, (4) that it was exclusive; (5) and that it was continuous for the statutory period of 10 years

Here, after close of discovery, we presented evidence establishing that the claimants cold not prevail on their adverse possession claims because they admitted cooperating with their former neighbor in constructing and maintaining the fence separating the driveway. Thus, the "possession" of the strip of land was not "hostile," because the consensual use of the area in question did not constitute an actual invasion of or infringement on our client's right to the strip of land on the other side of the fence. The court cited a long line of cases holding that, "When permission can be implied from the beginning, adverse possession will not arise until there is a distinct assertion of a right hostile to the owner."

Bottom line-- the term "adverse possession" is not simply-- I own the strip of land because I drive on it. The party claiming possession must show acts divesting the other of ownership rights. Do you homework, don't capitulate.Download file">View Case Here