New York Real Estate Lawyer Blog

A famous former New York City mayor prosecuted “quality of life” crimes to “clean up the streets,” but what if that enforcement mentality came to the streets and sidewalks of Nyack. This month, a local resident saw my article in the Nyack Villager, and asked,

My problem is with property owners that are allowed to grow their hedges and shrubberies well over the edge of the sidewalks. I have found the worst violators are along . . . . . Up to a foot of sidewalk is lost in places because vegetation has grown without proper maintenance. In places, two people who want to walk abreast have to go into single file...or worse, one has to walk in the street. At this point, it is more than just an annoyance, it is a safety issue. . . . .[Name withheld by me].

As someone who commutes by foot, I understand the blight of overgrown hedges, cracked and damaged sidewalks, and icy patches near down spouts pouring onto the sidewalk. What are the rules that govern our sidewalks, and whose responsibility is it to fix the problem? It turns out that the Village of Nyack has very strong sidewalk laws designed to make them clean and safe– the question is whether we as a community are going to enforce those laws.

Let’s start with Village Code § 48-11 (Sidewalks and curbs; curb cuts), which shifts the onus to the landowner, as follows: The maintenance, repair and reconstruction of sidewalks and curbs, including all necessary supports and retaining walls, shall be the responsibility and obligation of the abutting landowners and shall be performed at their sole expense to specifications approved by the Building Inspector. Said owner or occupant shall be liable for any injuries or damage caused by reason of omission, failure or negligence to maintain or repair said sidewalks and curbs, or to keep them free from obstructions. [Amended 12-9-2004 by L.L. No. 10-2004].

If the Building Inspector determines that repairs are necessary, (s)he may issue a Notice of Repair. If the abutting owner fails to cure the problem within sixty (60) days, the Village may repair, adding a ten percent “assessment.” If the assessment is not paid after the Village repairs the sidewalk, it becomes a lien against the property. The Village also has the statutory authority to declare an owner who repeatedly fails to repair or maintain the sidewalk a “disorderly person,” subject to a daily fine of up to $250 per day, and prosecution. Now that’s a powerful law.

When it comes to other annoyances, like litter, the Village Code § 29-3 stipulates that, “Every owner, lessee, tenant, occupant or person in charge of any building or premises shall keep and cause to be kept the sidewalk, flagging and curbstone abutting said building or premises free from obstruction and nuisances of every kind and shall keep said sidewalks, public parking lots, air shafts, areaways, backyards, courts and alleys free from garbage, refuse, rubbish, litter, goods, wares, merchandise or other material.” The same goes for the removal of snow, which under Section 48-10, provides that, “each person shall, by 11:00 a.m., remove the snow and ice from the sidewalks and gutters in front of the premises owned or occupied by him or her.” Fines and prosecution can follow the failure to clear the sidewalks.

Turning to the question of the reader– trees– it turns out that the Village Board is charged with enforcing the trimming of trees, which may or may not include “shrubs” and “bushes.” Village Code § 48-18, provides, “Any tree or trees standing on or along the line of any street, whether upon private property or in the street, shall be kept trimmed by the owner of the property upon which, or in front of whose property it stands, in such a manner as to prevent the limbs or branches thereof from obstructing the sidewalks or street for public use and travel, and all trees and branches overhanging the street or sidewalk that are dead or decayed, or in danger of falling on, or interfering with any light, fixture or other structure, lawfully in and upon said street or along said sidewalk, shall be removed by the owner of the property upon which, or in front of whose property it stands, under a penalty of $100, and in addition thereto, a violation of this section shall constitute disorderly conduct, and the person violating the same shall be deemed a disorderly person.”

The Bottom Line– while the Village of Nyack, New York has powerful and effective tools to “enforce” these quality of sidewalk issues, it is incumbent upon us all to understand that we, as residents, owe it to our neighbors to keep the sidewalk clear of trees, bushes, litter, potholes, snow and ice. We owe it to ourselves to remind our friends (in a neighborly way) to make our community a better place, and not wait for the Village, because it’s not really its legal responsibility. Despite this, the elected officials regularly apply for grants to help improve the sidewalks, and let’s hope they don’t decide to “enforce” these laws to vigorously.

Do you remember the 1990 release of Pacific Heights where the young couple renovates their home and takes a nightmare tenant who refuses to leave. Whether you are a tenant or a homeowner, these river village towns in suburban New York incubate potential problems between unrelated families living under the same roof, sharing utilities, driveways, even entrances. What a complex relationship.

At the core is the landlord’s ownership interest in the land, which may be devised, lent or leased to a tenant. In exchange for paying rent, the tenant is supposed to be able to “quietly enjoy” the “demised space” without interference from the landlord, but subject to certain basic written or unwritten rules. Sometimes the tenant fails to pay rent, or the landlord fails to provide a clean, safe, warm place to live. Both parties jealously guard their rights (their castle), and feel indignant when the other fails to live up to their end of the “bargain.”

That bargain generally comes in two forms, either with a written lease or a “month to month” tenancy. Generally, a written lease has well developed language setting forth in plain language the rent, security, term, location, and the nuances of daily living by which the landlord expects the tenant to abide. Two rules of thumb for landlords: the security should be sequestered in a separate bank account even for a two family house; and the right to retain it at the end of the lease is not a given, meaning you have to follow the rules if there is damage.

The tenant is assured the right to live at the location so long as (s)he pays rent. Two rules of thumb for the tenant: respect the property you live in; and the security is NOT the last month’s rent. Note: while written leases often obligate the tenant to pay the entire term of the lease in the even she has defaulted in paying the rent; the landlord has a responsibility to “mitigate” her losses by finding and re-letting the apartment.

When the rent goes missing, the landlord has a problem: how to get the tenant (now interloper) out from under the same roof through an “eviction.” There are two main points in any eviction– the right to recover and secure the property; and the right for a money judgment for past due (and sometimes future or “accelerated”) rent. In New York, if the tenant fails to pay rent, the landlord may evict by sending a three (3) day notice of non-payment, and commencing a non-payment proceeding in the local Justice Court (Nyack, Upper Nyack, South Nyack), or the Town of Clarkstown. The Justice Court has the power to hear any amount of damages and consider the eviction issues. A tenant may be entitled to cure the default by paying the rent and stopping the eviction.

Alternatively, assuming non-payment, or other material breach of the lease, the landlord could send a thirty (30) day notice to surrender the apartment, and may commence an eviction within very specific time frames. Assuming that the tenant has been personally served (process server) with notice (summoned) to the court, the court may issue two types of relief: a warrant of eviction; and a money judgment, plus attorneys fees and other court costs. The charges add up quickly especially if the lease permits attorneys fees, and a sheriff actually has to perform the eviction. At the end of the eviction there are two separate documents, one, a warrant, demands that the sheriff evict; and a money judgment which is subject to collection.

Sometimes tenants counter-claim or defend their obligation to pay by arguing that the landlord “constructively” evicted them by interfering with the “habitability” or quiet enjoyment of the apartment– i.e., the roof leaks, mold exists, floods prevented safe and habitable space. Generally, these issues do not rise to the level where the tenant avoids the entire lease (or obligation to pay).

The Bottom Line–pay your rent, live in harmony; avoid your rent, cause problems. The nuances of the battle become more piqued if you are also living under the same roof. Good luck.

Almost universally as a house closing or refinance closing approaches, I am asked why the itemized cost for “title insurance” is so high. Sometimes, clients even tell me that they do not have to pay for “title insurance” because they are putting more than twenty percent down, but have confused Private Mortgage Insurance (PMI) with “title insurance.” So, what is title insurance and why do you need it?

To begin with, PMI is insurance designed to protect lenders against losses should the borrower default, and is required by lenders for virtually all borrowers who put less than twenty percent (20%) down. It has nothing to do with who owns or has “title” to the property, and who insures that no one is going to claim against it.

Title insurance is a contract where an insurer guarantees a lender or a home owner that there are no known claims or defects in title caused by past events such as mortgages, liens, or possession of property by another person not the owner. Title insurance companies search public records to develop and document the chain of title and to detect known claims (defects) in the title. For example, the title search may identify an old home equity loan that is still outstanding or that a contracting firm filed a mechanics lien against the owner years before. If they missed those defects, then the title insurance company would pay to have them fixed, even if it meant litigation.

Attorneys universally recommend that their clients get title insurance (“owners policies”), and banks require owners to pay for insurance (“mortgage policies”) to prevent prior owners from interfering with their ownership and lien rights in the property. In most purchase situations in New York the attorney will order the title insurance policy, while banks will likely order the search in a refinance. These one time fees are really insurance premiums paid at the closing.

The importance of title insurance is often maligned but is becoming increasingly clear in this era of post-foreclosure investments in previously “foreclosed” properties. As the media reports lenders halting their foreclosure proceedings in the wake of sloppy foreclosure paperwork, the issue for the new owners becomes– what would happen if people who lost their homes to foreclosure somehow persuaded a judge to overturn the proceeding after the bank turned around and sold some of those foreclosed homes to new families. Title insurance is designed to protect the new owner from this sort of claim. Obviously, its importance cannot be understated. After accepting that premise, the next is to hire a local real estate attorney who can review that title insurance policy to determine whether there might be hidden exclusions in such title policies that might create problems after you close.

The Bottom Line– if you are purchasing a home, and sinking all that you have into your “investment,” whether that is for your own residence or because it is a “hot deal” in foreclosure, purchase title insurance. In some cases, especially if you expect to see immediate gains in the market value, you may want to purchase an additional “market value rider,” which insures the title to the property above and beyond the price you paid to purchase.

I own a small business, and am proud of it. In fact, I “know it all,” and, better yet I “can do it all,” because “Paying professionals a waste of money.” So, why should I need a lawyer when I buy, sell or even operate a business.

Since the bottom line is key, most small business owners I encounter genuinely think that hiring a lawyer is akin to turning on the water faucet, and getting little in return but a hefty water bill. I assure you that such rationale is flawed.

Take for example the client who was operating a thriving New York City diner. The business flourished, because it had a ten (10) year lease with options to renew; or so they thought. Then, the building was sold. Deep in the “standard form” lease agreement signed ten years earlier was the barely legible clause, “Upon sale, the incoming owner may cancel and terminate this Lease on ten (10) day notice,” and that’s what happened.

As an attorney, that is my nightmare, and it happens with alarming frequency. Some friend, business owner, client, or interested person says, “just take a quick look, its one of those forms I found on the internet.” As I take up my pen to fix what’s broken, I should respond by saying, “my, it’s a good thing that the internet went to law school, because this is a humdinger of a contract.” Kidding aside, legal advice and guidance is absolutely vital to any small business, and yes, it costs money, but it can be both valuable and not a financial drain.

When is an attorney best suited to helping you and your business?

1. Startup. Review the potential business structure, legal ramifications and other elements designed to protect you, your business, and your family. An accountant can help ameliorate some of the tax issues that might arise.

2. Check your contracts. As life and a business evolves, relationships, methods of payment, operations, and other needs might change the way your existing contracts operate. That handshake may not cut it when you have a ten thousand dollar account receivable. Get your attorney to review every contract you use in your business, both with customers and suppliers. Without a writing, we cannot sort out the problems.

3. Review your exit strategy. Someday, you might become disabled by Lyme disease, want to retire, or want to turn over the business to your kids, but you have a partner with a different agenda. Worse yet, if your business is failing, how do you identify and protect your assets. Plan ahead for the problems.

4. Check your debt collection. Attorneys can advise you on suitable collection methods. resources, and help your cash flow without overstepping the lines.

5. Plan for the Wealth. Experienced estate attorney can help you transfer some of that to your spouse and other family members, but it takes, time patience, and ingenuity. Thinking about retirement in your forties and earlier can make it attainable.

6. Succeed. Establishing procedures and guidelines to transfer ownership your business takes time and care, you need your attorney to understand the nuances, and no internet form can do that.

7. Resolve a business dispute. Once you reach this reason for hiring a lawyer, you will understand why you should have hired one before– to avoid the problem before you had the dispute. Clearly, no small business should litigate a business dispute without a lawyer and it pays to have something prepared by a lawyer to rely upon.

The Bottom line– Lawyers can help you to avoid some pitfalls in life and in business by planning ahead. They are no different from accountants, pharmacists, financial planners, even secretaries because they fulfill a valuable function for business and society. Experts cost money, so hire the experts– be that a real estate attorney, a bankruptcy attorney, a litigator. Solid legal advice is not dirt cheap, but it need not be prohibitively expensive. So, go ask your lawyer to help you today, and don’t be shy about dickering over price, payment arrangements, and timing. The world is full of creative, flexible, energetic and smart attorneys who can thrive with you.

The Hudson River villages are full of talented people who are looking to protect the fruit of their creativity. Many times, however, people are confused by the different types of “intellectual property” that exist, which laws apply, and whether they can actually protect their creative ideas, designs, or other work. What are the differences between trademarks, copyrights and patents, and how can you protect them.

A trademark is identifies the source of a particular “good or service.” Most often, a trademark is a word (or a series of words), a logo or picture, but trademarks can also be sounds, colors, devices or even the way something appears. For example, a restaurant can have a trademark for the way it decorates or individual features of how it presents its food. Trademarks are geographic in nature, meaning that someone with protection in the United States may not have the same trademark in Canada, China, or elsewhere. Trademarks result from the of use (or intended use) of the mark in commerce and does not necessarily need to be registered with the U.S. Patent & Trademark Office to have enforceable trademark rights. As with any legal right, legal protection and filing brings certain rights and obligations, like statutory damages or the obligation to chase after infringing products.

A servicemark is simply a trademark that is used in connection with services instead of goods. If you wish to use a particular trademark, it is wise to conduct a trademark search prior to beginning such use. The search will enable you to determine whether someone else is using a similar mark for similar goods and services to ensure that you do not infringe someone else’s mark once you begin your use. In today’s market, where goods and services are hawked on line, on the street corner, and almost everywhere, there are millions of potential conflicts, which require careful legal analysis. It is advisable to have an attorney assist you to conduct the trademark search and to handle the application process with the US Trademark Office if you (and your attorney) decide to file. A trademark will not expire if the owner continues to use the mark in commerce in connection with the goods or services specified. Once a mark is registered, however, it does periodically need to be renewed.

A copyright provides protection for original creative works. Examples of copyrightable works include literary, dramatic, musical, architectural and a variety of other works. Copyright gives the owner the exclusive right to reproduce the copyrighted work, to prepare derivative works of the copyrighted work (derivative works are works that are based on the original), to distribute copies and to perform or display the copyrighted work. As with trademarks, a copyright registration certificate is not necessary in order to have copyright protection in a particular work, but it can be helpful. Copyright registration is simpler than trademark registration and generally can be done without an attorney (visit the Copyright Office website at www.copyright.gov ). Unlike trademarks, copyright protection expires. The exact term of copyright protection depends on when the work was created and by whom (individual verses corporation).

A patent is a form of intellectual property protection for an invention. A patent is issued by the Patent and Trademark Office. A term for a new patent is 20 years commencing on the date that the application for the patent was filed. A patent gives its owner “the right to exclude others from making, using, offering for sale or selling” the invention in the United States or importing the invention into the United States. A patent attorney can assist an inventor to apply for patent protection in the United States. The engineering, science, and legal intricacies even require the patent attorney to take a separate bar exam, being licensed differently from other attorneys.

Ideas for the next great invention, the next great tag line, the next great business venture are not generally enforceable unless reduced to one of the forms mentioned above. That said, depending upon your intellectual property, there may be a way to “protect” it for your own personal commercial gain.

Do you hire a doctor or a lawyer without checking their licenses, their pedigree, and their referrals? So, why is it that when it comes to investing in their greatest asset (the home), so many people become victims of dishonest contractors who demand large advance payments for projects, and then fail to complete the work fully or competently. What are your rights.

In Rockland County, there are several resources designed to protect us from unscrupulous home improvement contractors. The first, Rockland County Code, Section 286, empowers the Office of Consumer Protection to license and regulate nearly all home improvement contractors and transactions. [Rockland County Law can be found at http://www.ecode360.com/?custId=RO1021, Chapter 286].

The comprehensive law covers everything from licensing individual contractors; (286-7) the contents of home improvement contracts (286-12); the prohibited acts (286-10); the penalties for not complying with the law (286-21); and the powers of the Board. While the nuances of such law are complex, the goal is to provide minimum standards to avoid the main problems that homeowners have with contractors.

Among various prohibited activities, the law prohibits the “willful failure to perform;” “misrepresentation;” fraud in the execution of or in the material alteration of any contract; failure to pay any owner, supplier, vendor, subcontractor, independent contractor, employee, or other person arising out of any home improvement contract. While all of these activities cause problems, the failure to pay others exposes the home owner to liens from others, including a mechanic’s lien. The failure to comply with the law exposes the errant home improvement contractor to loss of their license, civil and criminal fines, criminal prosecution, and various other stiff penalties.

To avoid these problems, Section 286-12, requires a panoply of provisions to be incorporated into the home improvement contract, including: approximate dates when the work will begin and on which all construction is to be completed; a description of all work to be done, the materials or material allowances and equipment to be used; limitation on the size of the down payment (shall not exceed $1,000 or 15% of the contract price); a schedule of payments showing the amount of each payment (contractor not permitted to receive more than 100% of the value of the work performed on the project at any time); a full and unconditional release from any claim of a mechanic's lien by the contractor upon completion of any payment or stage; a required one-year warranty guaranteeing the quality of workmanship and a three (3) day right of rescission.

Not all counties in New York have such comprehensive consumer protection laws. As a result, New York’s Attorney General set up a second comprehensive location to assist homeowners and contractors wend their way to a successful relationship– www.nyknowyourcontractor.com.

Among the common sense, but oft overlooked tips: know what work you want done; know what permits are needed, look at multiple contractors; figure a proposed time line for when each phase of work will be done and paid for; get references, and check them; get proof of insurance (including builders risk and workers compensation); check licenses; pay incremental payments until the work is completed; and withhold final payment until all the work is completed and certificates of occupancy are finalized. Like attorneys, contractors are required to put your incremental payments into an escrow account and use it only for your job until it is substantially complete. Ask whether the Contractor is bonded.

Bottom line– While not every home improvement contract and project warrants such careful analysis, our government has enacted laws protect homeowners from themselves. If a contractor is unwilling to abide by the minimum protections set forth in the law, or is on the list of “bad” contractors on line, have the sense to move on. Check the Attorney General’s web site for a listing of contractors with judgments or substantiated complaints against them.

The economy is topsy turvy, the job unrewarding, the grass always greener . . . . . so why not start a business. America runs on . . . small business (and the coffee), so let’s consider the basics. While insurance will protect your assets sometimes, starting a separate entity helps to shield yourself from liabilities.

A Name to Call Thyself. Not all names are created equal. Take a name, say, "The Chocolate Library," creative, descriptive, perfect. Turns out that under the New York State Business Corporation Law, “Libraries” are generally known as a collection of books and other materials for reading and study. So, New York bans the use of school-related words such as 'library,' 'school,' academy,' 'institute,' and 'kindergarten,' in a certificate of incorporation by any New York business is barred unless there is prior consent from the education commissioner.

A Form to Fill. Now that we have a name, what “type” of entity for liability and tax purposes. New York State recognizes various corporate structures, but why choose one over another. While your attorney and accountant are best prepared to advise you for your particular situation, but here are some of the more identifiable structures:

Sole Proprietorship. The simplest form of ownership, where all liability passes through to you personally. Generally, this is used by very small businesses without a physical location and other significant liabilities.

Limited Liability Company. This entity enjoys “passthrough taxation” which allows the “member(s)” to pass the income or losses through their personal returns (i.e., no double taxation), but owners may owe “self-employment” tax on income. Members are protected from liability for acts and debts of the LLC, and can elect to be taxed as a sole proprietor, partnership, S-corp or corporation, providing much flexibility, with even just one natural person (not partnership). These are enduring legal business entities, which, with proper planning, may avoid business termination issues, including those caused by death. An LLC is considered a “partnership” for Federal income tax purposes, so (a) if more than fifty (50%) percent of the capital or profit interests are sold or exchanged within a 12-month period, the LLC may terminate for federal tax purposes; (b) there may be no ability to offer incentive stock options, and no tax free reorganizations. If more than thirty (35%) of losses can be allocated to non-managers, the limited liability company may lose its ability to use the cash method of accounting. Overall a very flexible entity. The business files income through Schedule C of the personal income tax return as a sole proprietor unless it elects to file as a corporation.

“S” Corporation. After paying a salary to the shareholders working, income can be passed through as “distributions of profits,” and may not be subject to self-employment taxes. As the company grows, if it needs to restructure, there are none of the issues that arise in an LLC. S corporations can have one shareholder. The tax ramifications of an “S” Corporation are varied and complex as to what gain or loss or tax basis may be used on death, transfer or termination. If the company plans to own real estate, consult with an accountant and a lawyer if choosing this form of ownership.

“C” Corporation. This is the father of the “S” Corporation, where there are more formalized accounting procedures and paperwork, double taxation at the corporate and individual level, however, no restrictions on the number of shareholders, the types of investments available; or the nature of the entity to add or subtract shareholders. Generally, these are managed by a Board of Directors, which may have too much power over the day to day operations.

Other Types. The remaining types include Limited Partnerships, where some partners are responsible for the acts of the Partnership only to the level of their investment; General Partnerships where all partners are fully liable for all debts; Limited Liability Partnerships where professionals agree to work together under this umbrella.

Organize or Die (Lose the Protection of the Entity). I say this with tongue in cheek, but if you go through the process of setting up an organization to run your business, use it to run your business. Do not, under any circumstance, be disorganized with your books and records, especially the money and checks. Pay yourself as recommended by the accountant, do not mingle your personal funds (assets) with the business, get a bookkeeper or a program to track your finances, and hold meetings for large decisions, so that you can avoid the appearance that this new corporate entity is really just you in disguise.

The Bottom Line– lawyers and accountants can help you to avoid some pitfalls by incorporating properly. Then, it’s up to you to run the business as a business.

What happens at your death is psychologically difficult for many of us to deal with. There are almost always more pressing issues than planning for what will happen when you die. A majority of people die without a will. This means that there is no clear message to the family about what a person’s assets are, where those assets are located, what should happen them, and what arrangements that person has made for his or her body or funeral.

In New York State, a will is a legal document witnessed by at least two people who are not “interested” in the assets of the person who is signing the will. The will sets forth how the assets (no matter how small) will be distributed by the person designated to gather and distribute them (the Executor) upon death. If you do not have a will when you die then you allow New York State to decide who gets what, without regard to your wishes or your heirs' needs, through the laws of “intestacy.” In today’s world of blended families, long lost cousins, and global assets, it is advisable to think about, organize and have an attorney draw up your will.

Making a will is especially important if you are parents of young children because you will want to designate who will have guardianship of the children. You may consider separating the physical guardianship of the children from the guardianship of the money intended for those children. Obviously, depending upon your assets, you can make many different provisions for your family, including attempting to protect your assets from Medicaid and estate tax.

You may amend your will at any time, and should review it periodically, especially when your family changes (divorce, marriage, death, birth of children, etc.). At the same time, you should review the beneficiary designations for your 401(k), IRA, pension and life insurance policies, which automatically transfer to your beneficiaries when you die. You will even need a will if you have a lifetime trust in place to hold most of your assets as the will ensures that any property you failed to transfer to the trust during your life is properly dealt with when you die.

What else do you need? Two other documents, the Health Care Proxy and Living Will are also documents that are generally drafted at the time you execute your will.

The New York Health Care Proxy Law allows you to appoint someone you trust to make health care decisions for you if you lose the ability to make decisions yourself. By appointing a health care agent, you can make sure that health care providers follow your wishes. You can appoint one for temporary inability to make health care decisions or in the event of permanent inability to make health care decisions.

The New York State Department of State form which is located here:

A Living Will is a legal document that provides a doctor, hospital, family member and healthcare proxy direction, preferences and wishes as to particular life prolonging medical treatments, where you either suffer from a terminal illness or are in a permanent vegetative state. Here is an example from the New York State Bar Association:

The bottom line is that it may be time to do some spring cleaning and prepare for the inevitable.