New York Real Estate Lawyer Blog

In today's real estate market of short sales, mortgages underwater, depressed prices and a buyer's market, where financing can be a tricky and arduous journey there is one contingency that may protect the buyer-- the appraisal contingency, often negotiated by attorneys for real estate buyers.

Stated simply, the appraisal contingency is designed to give a buyer the right to cancel the contract if the home does not appraise for the price the buyer agreed to pay. Take the case of a Florida couple who contracted to buy a house from for $620,000. The purchase and sale contract provided that the sale was "contingent upon this property appraising for no less than $620,000." The purchasers commissioned an appraisal which apparently came in at $560,000, and refused to close.

In response, the Sellers secured an appraisal which valued the real estate at $635,000. The sellers sued for breach of contract, arguing that any appraisal of $620,000 or more obligated the purchasers to buy the house. The purchasers argued that since it appraised for less (by their appraiser) they could terminate. The Florida appellate court favored the buyers, ruling: "In our view, 'appraising for no less than $620,000' means that no appraisal may be less than $620,000," the court ruled.

The Bottom Line-- contingencies should be written in full sentences. For example, this is a common contingency in a New York Residential Real Estate purchase:

Purchaser's obligations hereunder are contingent upon the appraisal of the premises conducted on the behalf of the Purchaser, being in an amount equal to or greater than the purchase price set forth herein. In the event the appraised value is lower than the said purchase price, purchaser shall have the option of canceling this contract on written notice to seller’s attorney.

So, you want to buy a house, condominium, cooperative apartment or vacant land with your significant other in New York. You have been serious about this life partner for years, but you aren't bound by the typical bonds of legal matrimony.

Did you consult with your real estate attorney, did you ask that attorney about a partnership or "co-habitation" agreement? What are you going to do if you are no longer interested in "cohabiting?" Too many times, people don't ask these questions, and get burned later. Take for instance the common predicament of this individual.

As a real estate lawyer, I always ask unmarried couples whether they want a basic partnership agreement about what happens when they dissolve their relationship from a real estate perspective. In addition to a real estate partnership agreement, non-married couples should consider a cohabitation agreement, which is a contract that includes provisions about each partner's separate property, debts and financial responsibilities and spells out the division of goods, property and responsibilities should the relationship dissolve.

Bottom Line-- as a lawyer, we get paid to think about the solutions to common problems that might arise from your legal status. You should not ignore the advice of your attorney, and you should proactively seek this information. Which you did by reading this blog.

Should a lawyer be granted a continuance of a trial because his wife is expecting a baby?

Unfortunately, some lawyers didn't think so, and the expectant father was required to make a motion to federal court to adjourn a trial. The Court, much to its credit, granted the adjournment with a dose of reality, morality and compassion rarely seen. Read the decision here. Read the decision here.

Bottom line-- we are all part of the human condition, even if we are litigators.