New York Real Estate Lawyer Blog

There are many attorneys in New York, but when it comes to buying your home, a commercial business, or other transaction involving New York State real estate, you really should hire an attorney that handles real estate transactions. Real estate transactions can get complex. Hiring a real estate attorney has the practical advantage of simplifying the process.

How do you identify a real estate lawyer you want to work with?

One way to find a real estate lawyer is through referrals from family or friends. Ask your family or friends whether the real estate attorney was attentive to their questions, available by telephone, took their calls personally. Personal attention and attentiveness deserves a premium when you are purchasing what will likely be your most expensive asset.

What about finding an attorney on the internet. As you can see, at Klose & Associates, we believe that the internet and e-mail are essential tools in a real estate attorney's arsenal. We handle most of our transactions by constant electronic contact with real estate brokers, clients, title agents, banks and mortgage brokers. You get prompt service, prompt response to your questions, and all parties are privy to the major steps to a real estate transaction. Make sure that the real estate lawyer you hire will meet your particular needs.

Beware, not all real estate transactional attorneys also know how to deal with real estate litigation. Litigation real estate lawyers handle lawsuits involving adverse possession, zoning and planning (Article 78), and other types of litigated issues. The morass of real estate law means that a litigation attorney needs to know how and where to look for cases that are similar to the ones involving yours.

Bottom Line-- understand that different real estate attorneys bring different skills and knowledge to a transaction or litigated matter. You should call several to be sure that they have the experience you need for your matter. Ask questions regarding your concerns, including billing rates, whether there is a flat fee, hourly fee, or contingency basis. While estimated costs in litigation are hard, they may not be in a transactional situation.

As simple and obvious as it sounds, don’t hire a lawyer for your real estate case that does not practice real estate

As our society and the pressures of urbanized living change the face of the Hudson Valley, many land owners are contemplating Conservation Easements to protect, preserve, or otherwise maintain local farmland.

Conservation easements are land preservation agreements (easements) where the landowner agrees to limit the use of her land for purposes of "conservation." Voluntarily entered and legally binding, these easements often restrict commercial, real estate, and industrial development. Indeed, many communities across New York State have actually passed zoning designed to encourage the creation of conservation easements to ‘run with the land.’ These often complex agreements and statutes mean that the use "limitations" that an owner agrees to will be binding on future owners of the land.

In New York, there are several requirements for a land preservation agreement to qualify as a "conservation easement." First, the agreement must be perpetual and permanent. Second, the land subject to the easement must be physically located in the state of New York. Third, the easement must be held by a conservation agency which may include any federal, state, or local government agency or non-profit land trust. Fourth, the easement must protect open space, biodiversity, or natural resources by restricting commercial, real estate, and/or industrial development. And lastly, the agreement must be filed with the State Department of Environmental Conservation. Since most "conservation agencies" are non-profit, the sale or gift of such conservation easements often is a charitable donation and potentially limits taxes.

Conservation obviously touches a nerve and fosters a debate among residents, politicians, land owners, farmers and developers as to the efficacy of such agreements. If you are contemplating such an easement, you should definitely hire a real estate attorney capable of explaning the issues to you.

I just noticed this recent post in the NYTimes about more modest weekend homes and retreats in the Hudson Valley.

When purchasing a second home we recommend hiring a local real estate attorney to give you the "lay of the land," to direct you as to issues that arise in "upstate" real estate transactions, and to help you avoid the pitfalls. In the past three years, as second home prices have fallen in the region, distressed real estate has become a haven for problems caused by neglect, economic desperation and ignorance. Leaking oil tanks, failed septics, contaminated water, even leaky roofs have caused problems.

Planning Boards play an important role in shaping how our community will look, feel, act and react. In a very real sense, the Planning Board is charged with overseeing the “orderly” development of real property, and in the process shaping the “public” face. Developers want the best return on their “investment,” homeowners want to protect what they know, and the Planning Board must implement the laws as enacted by the Village, Town, County and State, a difficult tight rope for a Board comprised of local volunteers and neighbors.

The process begins with an application to the Building Inspector. The homeowner (we’ll call her the “Applicant”) completes an application with the Building Inspector, who reviews the proposal (or “Site Plan”) to see if it meets various code requirements– is the lot large enough to support the planned structure, is drainage adequately directed to prevent run off, are the plans professionally drawn and contain all of the technical data required by New York State’s building code. The Building Inspector next refers the Applicant to the Planning Board with instructions to “post” notice of a “public hearing.” In Nyack, we meet the first Monday of every month to hear these applications.

The Planning Board receives the Site Plan and the Building Inspector’s opinion, and we review against our local Zoning Code and Comprehensive Master Plan. In Nyack, our Comprehensive Master Plan was adopted by the Village Board on January 11, 2007 (a process that took many years of hard work by various civic minded volunteers). Our Comprehensive Master Plan (available on line or at the Village Hall) sets the tone from its first sentence, “The Village of Nyack is a special place, proud of its historic, scenic and socially heterogeneous character– quite unlike the suburbs to the west.”

The Planning Board is granted limited rights to review the Site Plans for (1) traffic access on and near the site; (2) circulation and parking; (3) landscaping and screening; (4) underground utilities (5) and to be sure that the plans “reasonably preserve and maintain view corridors and sight lines (particularly Hudson River views) throughout the commercial zones in the Village of Nyack. Broadly speaking, the law permits the Planning Board to consider the public health, safety and general welfare, the comfort and convenience of the public in general and of the residents of the immediate neighborhood, in particular.

In conducing the public hearing, local residents, the Applicant, and the Planning Board learn what might be acceptable, negotiate various ways to mitigate the effects of various design elements, and impose “reasonable conditions and safeguards” to further the general purpose and intent of the Comprehensive Master Plan. During the process (or negotiation), the Planning Board can only apply the law enacted by the Village Board, the Town Board or the New York State Legislature. The Planning Board does not have the legal power to simply deny a Site Plan that otherwise complies with such laws. Stated differently, if the law permits a twenty (20) story apartment complex, the Planning Board may not deny the application because it requests a twenty story apartment building.

From my perspective as a lawyer and as a member of the local Planning Board, it is safe to say that when the community shows up to air its concerns at a public hearing, everyone (including the applicant) is benefitted. The moral of the story is to participate in the process, don’t simply agitate about the change that is forecast for your neighbor.

Fire quickly causes tragedy, but don't let the aftermath cause further tragedy. All of us have been touched by the trauma and tragedy of a structure burning, all of our life long possessions up in smoke. If the house has a mortgage, chances are, there is insurance to protect those assets.

Unfortunately, the fire often causes insurance problems because homeowners don't know or understand the type of insurance they have. Was it a replacement policy, are there limits to such replacement; what about the contents of the house? These are all questions that a homeowner has immediately.

Following the fire, the insurance company typically sends an independent company to investigate and to assess the damage to the structure and to the contents. There is another type of insurance adjuster that operates in a parallel insurance universe called "Public Adjusters."

Public adjusters are licensed claims adjusters hired by the homeowner to "adjust" or "negotiate" the sometimes complex world of insurance and fire insurance. Most public adjusters argue that they can better navigate complicated insurance policies, netting the homeowner a higher settlement.

Beware-- Public insurance adjusters are independent from the government and work for their own financial benefit. They are looking to earn a percentage of any recovery. Sometimes, that recovery is exactly what the homeowner would have received in the first place.

Sometimes, these public adjusters take their jobs a little too seriously, and have been known to overstep their authority.

Bottom line-- be careful, take a deep breath, and assess what you need and when. If needed, consult with a local New York State lawyer versed in insurance issues.

For years most attorneys representing sellers of real estate in New York State have been counseling not to complete a Property Disclosure Statement. This recent case is an example of why, in New York, the Property Condition Disclosure Statements (PCDS) can cause trouble.

Sellers in New York are required to either "disclose" what they know on a 32 question Property Disclosure Statement, or give the buyers a $500 credit in lieu of such disclosure. The problem, however, is that these property "disclosures" are mini-representations, which can lead to all sorts of claims for misrepresentation, fraud, or concealment. The question for the disgruntled buyer is always whether, when completed and delivered, the owners-sellers may be liable for buyer actual damages stemming from any willful failure to describe the property conditions asked about on the "form."

In one recent case, the the buyers purchased a residential property from the defendants in "as is" condition after having been given notice through the form PCDS that the Sellers (defendants) of a previous kerosene leak on the property. Shortly after taking possession of the property, however, the plaintiffs discovered that the septic system had failed, the heating system was inadequately established, debris had been left on the property, kerosene had spilled in the basement, and the house was infested with mice.

Plaintiffs (buyers) filed a suit against the defendants on the grounds that the defects were not disclosed on the Property Condition Disclosure Statement (PCDS) that they had received from the defendants, and that they had purchased the property based on the PCDS.

New York's trial level court (the Supreme Court) ruled the:

That the Defendant's silence about any "knowing of any material defects in the septic system did not provide grounds for a remedy; that PCDS is expressly limited to the seller's actual knowledge, and nothing in the record suggested that Defendant had any actual knowledge or special knowledge of heating systems; the Defendant did NOT make misrepresentations with respect to debris left on the property (because it was there to see); that the Seller's disclosure on the PCDS of a previous kerosene spill effectively put Plaintiffs on notice of this condition; and there was an issue of fact on whether the Defendant had actual knowledge of the mice infestation based on her testimony she had found mouse droppings in the house and used mouse traps prior to the sale.

The bottom line: Sellers-- be careful when you fill out the PCDS; Buyers, your case based upon the PCDS is limited because New York is a caveat emptor (buyer beware) state.

So your thinking of living in Pearl River, Rockland County. Originally called Muddy Brook, the town was renamed in around 1870 after a resident said he had discovered pearls in mussels from the waterway.

The community boasts wonderful people, active community involvement and modestly priced homes. Read a recent Download file">New York Times Article here, and hire the very best real estate attorneys in Rockland County.

As of January 1, 2010, the federal government will enforce rules that require mortgage lenders and brokers to prepare a three-page ‘Good Faith Estimate’ report that provide home loan estimates to consumers. Implemented by the Real Estate Settlement Procedures Act (RESPA), lenders and mortgage brokers must now give consumers standard estimate forms within three days of receiving loan applications. RESPA aims to prevent millions of Americans making poor loan choices particularly those who do not know that the lowest loan rates may not be the most beneficial option. To distinguish and compare plans with different combinations of rates, fees, and other terms, the ‘Good Faith Estimate’ report standardizes lender estimates by requiring lenders to provide an ‘origination fee,’ or payment to establish a bank or broker to handle the loan process, cannot increase. Other charges including title insurance, however, may increase.

Opponents of the new rules argue the new forms will not only add costs to lenders but ultimately make no mark on the shopping choices of consumers who often end up basing loan decisions on the recommendation of a real estate agent or broker.

When will the Banks tell prospective borrowers the true cost of their loan by giving them the Annual Percentage Rate (APR). As many people don't know, the APR is the only true cost comparison when it comes to shopping for a mortgage. The APR is a function of the cost of the money over the entire course of the loan, with the bank fees and costs rolled into the calculation. If each broker and lender confessed how their fees impacted the actual cost of the loan, consumers would be in a position to quickly and easily understand which loan cost more.

Real Property Taxes are at the front of everyone's mind these days because property values in New York have declined so dramatically. Did you know that the tools to grieve your taxes are often right at your finger tips.

For example, in Dutchess County, the Real Property Tax Service Agency’s Parcel Access system provides tax assessment information for your parcel and your neighbor's parcel, including development plans, property tax estimates and other information supplied by local municipal governments. Updated twice a year to coincide with the submission of Tentative Assessment Rolls every May and every July of each year, the Parcel Access allows Search Tools by type of property, name of debtor, and by map.

The website’s main objective is to function as a tool for real estate buyers and sellers to have access to and view assessment information. If a seller disagrees with a listed assessment, however, value the home owner may "grieve" those taxes by seeking a review first by the assessor and then by a formal review with the Board of Assessment Review.

The Dutchess County, New York, GIS, Parcel Access system can be accessed here.

This blog has identified recent legislation in the State of New York discussing adverse possession. Adverse possession is a method of gaining title to property based upon use of the property (not written). Although not a favored means to procure land, depending upon the facts a person may acquire title to land by adverse possession if she holds the property in a manner that conflicts with the rights of the true owner for a period of time.

There are five elements that establish a claim of adverse possession in New York. Possession must be 1) hostile and under claim of right, 2) actual, 3) open and notorious, 4) exclusive, and 5) continue for the specified period as determined by jurisdiction. Adverse possession is generally a question of fact to be decided by a court. Since the enactment of the statute and recent decisions by the Court of Appeals in New York, it is important to consider what judicial department you might be located.

For example, in the First Department, in the case entitled Eller Media Co. v. Bruckner Outdoor Signs, the plaintiffs constructed a billboard on a disputed parcel and surrounded that billboard with a chain-link fence. The defendants appealed the trial court’s summary judgment in favor of the plaintiffs arguing that the disputed parcel was held by a city for a public purpose. The court disagreed and determined that the plaintiffs or claimants had not only satisfied the elements of adverse possession because its use was hostile, open and notorious, exclusive, and continuous for more than the ten year statutory period, but that the parcel was not held for a public purpose and therefore not immune to the plaintiff’s adverse possession claim.

At Klose & Associates, we handle real estate litigation including adverse possession claims in the first department. You should always contact a specialized New York real estate litigation attorney if you have concerns about adverse possession.

Continue reading "Recent Highlights in the Neighbor Wars-Adverse Possession" »

You hear the old adage-- "if its too good to be true . . . . " Homeowners in New York and elsewhere should be on the look out for the newest form of fraud on the rise--“house theft.” Under various permutations of the fraud, con men and thieves conspire to to take ‘ownership’ of a home through various scams and false documents. In one version, the group acquires a house then ‘sells’ it to their associates, who obtain a loan from unsuspecting banks. The fictitious ‘seller,’ gets paid the loan proceeds, and then shares the sale proceeds with the fraudulent ‘buyer.’

The FBI estimates that from 2007 to the 2008, the reported cases of house theft have jumped 36% to an estimated 64,000 incidents. House theft, also known as title theft, most frequently occurs in larger urban areas particularly in cities with many vacant properties such as Detroit and Miami.

In reaction, several new online services offer free help to protect homeowners from house theft. Among its free services, www.ePropertyWatch.com provides informal house appraisals, monitors public real estate documents, and alerts homeowners to possible criminal activity. ePropertyWatch will also provide information on recent sales and foreclosures in the user’s neighborhood and observe long-term changes in the median sale prices relative to a ZIP code.

Bottom line, you can never be too careful in today's world of sophisticated criminals. At Klose & Associates, we take care to assist our clients to thoroughly investigate every real estate transaction.

I get calls every week from family members concerned that another family member might be abusing a power of attorney issued by an elderly or infirm client. We take these concerned calls very seriously, as did the New York State Legislature, who recently amended the General Obligations Law relating to Powers of Attorney. There are some traps for the unwary signer, however.

New York's new power of attorney law contains language that "automatically" revokes old powers of attorney, unless you specifically state that it does NOT. If you are asked to sign a new Power of Attorney in New York after September 2009, think long and hard about the effect of signing such form. For example, if you are a recording artist, did you sign an agency agreement; a real estate partner, a power to the managing partner; a life insurance recipient, a right to such benefits. If so, you should be careful not to revoke any old powers of attorney.

Bottom Line-- You need to be educated to be smart. Ask your attorney what the effect will be if you sign a Power of Attorney.

We recently discussed hidden dangers lurking under the ground with USTs (Underground Storage Tanks-Fuel). A similar problem exists with aging septic tanks and fields in New York State. Who's responsible for finding the problems? What are the problems? How are the problems with septics fixed?

These are all common questions, especially when you are buying a home without municipal sewer and water.

Problems that can arise with septic tanks include tanks which have not been cleaned, cannot be located, or are buried too far underground to inspect. Failures include inability to absorb and disperse water (with dye); failure to remove the bacteria, or backups. Sometimes the septic field is not even located on the property you are buying.

No matter what the problem, you, as a home buyer of an older model home, must investigate the health and safety of the septic because any problems you find will become yours if you do not address them with the current owners/sellers. New York State is a "caveat emptor" or "buyer beware" state, meaning that you will not likely win a case against the seller for a "failed septic system," unless some level of fraud exists.

In the case of new or custom-built homes, buyers are usually successful in seeking property damages against the owner based on the reasoning that a new home buyer should be able to reasonably expect the house to be an adequate living environment. The courts generally find express warranties as well as implied warranties of habitability in a new home real estate purchase. In fact, New York's General Obligation law makes builders responsible as a matter of statutory law.

Buying a used home, however, commonly invokes the rule of caveat emptor - which in laymen’s language means ‘buyer beware.’ Without an express warranty concerning the septic tank, a buyer will find it more difficult to seek property damages from an owner, but there have been cases where the courts have determined an implied warranty.

Bottom line-- ask the questions, inspect the system, and check building department files to see whether any work has ever been performed and whether the Board of Health has given its seal of approval for the design and installation of the system.

As a corollary, you should also test the water, especially if it is a private well because the evidence of a failed septic sometimes appears as bacteria in the water test.

Have you been sued for foreclosure in New York State, are you ignoring the certified mail or the papers taped to your door. Well, that's not the best response to a foreclosure action, where they want to take your home away. Increasingly, as this mortgage foreclosure debacle ripens, courts, litigants, and attorneys are learning that foreclosure is not always the slam dunk, lock the door, win/win case that it might have been when there were fewer foreclosures. Stand up for yourself, ask an attorney about your rights, read the papers and and fight back if the facts warrant. See my prior New York State Real Estate Lawyer Blog Entry.

In past decades, bankers gave millions of mortgages to entice new homeowners to leverage their dreams, and then repackaged that leverage (loans) to sell to investors, taking their cut, nary a worry for the borrowers or the lenders. As a result of the frenzied repackaging of such loans, it turns out that many of these banks and lenders lost papers, misplaced paperwork, forged signatures, and inaccurately dated documents, creating a messy jumble of paperwork, and making it sometimes impossible to decide who owns the right to commence the foreclosure, which bank owns which mortgage. This is where you might have a chance.

As the wave of the foreclosure crisis deepens, courts are increasingly challenged because homeowners rarely show up to court to fight the process, rarely have the money to hire competent lawyers to sort out the problems. So, increasingly, judges end up examining the banks’ papers, and ruling on the affidavits before them.

Enter Judge M. Schack, 64, of New York City. Increasingly gaining respect for his no-nonsense approach to dealing with foreclosure motions, he has arguably become an exemplar of holding banks to the simple rule, “If you cannot prove ownership, you cannot foreclose.” Schack has tossed out 46 out of 102 foreclosure suits that have come before him in the past two years chastising banks for their sloppy and mistake ridden paperwork. Although a few protests from bank officials who assert Schack is unfairly acting as judge and jury are acknowledged, positive reactions from the legal community for his activism may prove to ring more loudly in the long run if more federal and state judges follow his example.

Bottom Line-- Just because the bank says it wants your house, doesn't mean it is entitled to it. You should hire competent New York legal assistance to sort out the complex and tangled web of ownership. For more on Judge Schack, read here.

The "suburbs" mean "sub-divisions," but do you understand what a "sub-division" is? When you purchase real estate in New York State, you should be sure you understand what it means to be purchasing in a sub-division.

Take the typical scenario-- Developer buys a large tract of land with the idea to break it into smaller portions of land, to build houses. Often, the sub-division of that land requires zoning and planning approval from the local village or town. During the process, the planning agencies and the Developer may draft different agreements or requirements into the "sub-division map" where you are buying your house. Generally, in addition to the local laws, you, as the owner of the smaller parcel are going to be required to abide by the terms of those "declarations of restriction," those "easements," those statements on the "filed sub-division map." They could be as mundane as not permitting chickens in the sub-division, to being as complex as requiring specific types of architecture. Regardless of their content, you, as the owner are responsible to live by them.

A declaration of restrictions is a set of limitations placed on the property rights of an owner. A homeowner in a subdivision, for example, agrees to comply with the declaration of restrictions in a signed agreement with a subdivision or condominium developer. These agreements run with the land and bind your future vendees, heirs and assigns.

Common provisions may include a minimum house size or that a minimum percentage of housing exterior must be brick, or that no home business or occupation be operated out of the house (especially noise producing occupations). If applicable, the owners within the sub-division have legal standing to bring a complaint against you if you fail to comply with any provision of the agreement.

To avoid violating your declaration of restrictions, it’s in your best interest to understand the meaning and scope of the terms by reading all the hard to read attachments to the title inspection provided by your attorney. As a buyer, demand to read the nuances of the title policy, read the "notes" on the map, read the declarations of restriction, understand the easements. Ask your attorney to review them and discuss them with you if you’re unclear or confused.

The Bottom Line-- If you are not careful, you may be buying a house that requires you to fix the road, stop a leak in a dam, or trim your trees. Read the agreements that impact your life in a sub-division.

No matter who your attorney is when buying a parcel of New York State real estate, s/he should ask you whether you have investigated whether there are (or were) Underground Storage Tanks serving the heating needs of the house (or a Phase I search in a commercial transaction).

An underground storage tank is a tank and any underground piping connected to the tank that is at least 10% buried underground. They were very popular during the 1970s as this area increased in population, and oil heat was cheaper than gas. The result, however, is hundreds of USTs rotting and leaking causing much litigation and consternation to buyers and sellers of real estate.

New York State is a "caveat emptor" or "buyer beware" state that requires little by way of disclosure relating to known and unknown problems. USTs are a commonly "unknown" and hard to find because they are literally a ticking time bomb buried under the lawn. If you or your real estate inspector finds an underground oil storage tank (UST) during a real estate purchase, you, as the potential buyer, should take immediate steps to ensure that the tank is sound (through a pressure test) or was legally and properly "abandoned." If there is any suggestion that the tank is not sound, or that it was not officially "abandoned" you should demand that the Seller immediately abandon the UST before the transaction takes place. "Abandonment" involves licensed contractors sealing the tank and verifying that it was not leaking, or removing the problems if they were leaking. Demand that the Seller provide you with a "spill closure" letter proving that the tank was abandoned.

If the oil or fuel tank is found to be leaking, the owner of the property and any licensed contractors have a duty to inform the Department of Environmental Protection about the alleged "spill." You can sometimes locate other homes or businesses that have had "spills" in your neighborhood .

Unfortunately, however, if no one catches the buried tank, any existing contamination will be the new owner's responsibility under the New York State Navigation Law. If, you opt to keep the UST in operation after the sale, liability transfers to you (the buyer) when title is transferred.

The best piece of advice for buyers – particularly for those concerned with the presence of underground oil storage tanks on a piece of land – is to request an investigation of the property.

The bottom line-- any remedial actions required to be performed must be completed before you take possession and title to the property.

By far, the Mortgage Contingency Clause in a New York State Real Estate Contract is the most important, misunderstood, and litigated clause in residential real estate transactions and closings. By this posting, I will try to demystify the clause, and provide a sample of the Rockland County Lawyer's Contract language which addresses the clause.

To begin with, a "contingency" generally means an event which must occur before an obligation becomes final. In New York, a mortgage contingency is a common provision designed to allow the buyer a proscribed period of time to obtain a Mortgage Commitment from a Bank. The clause can elaborately describe the types of lenders, the time frames, the interest rates permitted to finance a certain amount of money needed to purchase a home in Westchester, Rockland, Putnam, Dutchess, Columbia, and all counties of New York. Depending upon the type of loan, the contingency generally permits 30 to 60 days to complete the process of getting a loan commitment.

A mortgage-contingency provides critical protection in today's economy, tight lending world and uncertain economic times because it allows the buyer/borrower to avoid (cancel) the purchase contract without penalty if the buyer cannot obtain financing on the terms specified in the contract.

Tip: The borrower must make a "reasonable" or "good faith" effort to apply for and qualify for the Mortgage sought.

Practice: Real Estate Brokers or Agents in New York often encourage the Buyers to be "pre-qualified," because it gives the seller more confidence that the buyer will earnestly apply for and obtain a Mortgage.

The absence of a mortgage-contingency means that the Buyer has agreed to pay "all cash" for the real estate. Buyers should be very cautious about signing a purchase contract that does not contain a mortgage contingency because the Down Payment or "earnest money" deposit given at the contract signing is "at risk," should the Buyer not have all of the cash needed to close.

We have provided some sample language for New York State purchasers to read and understand.

The bottom line: If you need bank financing to purchase your new home, you need to carefully understand how a mortgage contingency works. If you or your new york real estate attorney fail to comprehend the risks associated with the transaction and your credit, you are at risk of losing your down payment should you not qualify for the Mortgage.

Continue reading "What is a Mortgage Contingency in a New York State Real Estate Contract" »

In a transparent effort to raise fees, the New York State Legislature has instituted a fee hike on real property transfers, by increasing the filing fees for the RP-5217 Property Transfer Report. [See Real Property Law § 333(3), amended by L.2009, c.56, Pt. JJ, approved 4/7/2009].

The new fees increased most deed filing fees from $165 to $250, (for deeds submitted for recording after June 1, 2009). For questions on the new filing fee or other transfer report related matters, contact the Rockland County Clerk's Office or the ORPS' Data Management Unit at 518-473-7222.

Bottom Line, they have to make up the budget shortfalls somewhere.

There are various standard inspections that buyers of New York State real estate customarily order in their inspection process to buying a home. According to the pest control experts, there should be another-- an inspection for Climex Lectularius or "common bed bug."

Everyone's worst nightmare is a hotel room infected with those tiny nocturnal insects that hide in nooks, crannies, and crevices during the day, but feed on humans (blood) at night. The nightmare scenario of oval flattent and wingless bodies which are a light to reddish-brown and 1/4 to 3/8 inch long (think apple seed). The welts take a day or two to develop and not all bed bug sufferers react to their bites, which delays detection and action.

Buyer beware if you're buying a house or looking for a new condo or apartment because you may be moving into a home or apartment invaded by bed bugs. New York State law provides you no protection from such pest infestations because most sellers do not complete the Property Disclosure Statements choosing instead to pay a $500 penalty for not completing it before making the sale. Indeed, real estate disclosure laws often don't apply to co-op and condo owners or lessors.

Bottom line-- before you buy or rent under the doctrine of caveat emptor — let the buyer beware — the seller has no affirmative obligation to reveal circumstances about the apartment to the buyer. That means buyers must rely on the integrity of sellers and landlords anxious to make a sale.

Many people are now hiring a pest control company to check termites, carpenter ants, and bed bugs. For more on this interesting phenomenon, read this bed bug and real estate article.

As the distress in the real estate market continues in New York, more and more people are turning to their lawyers to carefully review and consider their real estate sales contracts for any "loop holes" available to justify the cancellation of a contract and to win the return of a down payment.

The scenario in a New York City Condo purchase goes something like this. The buyer puts down a boat load of money as a down payment to secure an apartment in the hottest building in Manhattan, or any of the five boroughs. The developer starts having financial difficulties or can't meet originally intended construction deadlines, and, in the intervening months (or years), the buyer loses interest or a job and can no longer afford the price (which has also declined). As the New York real estate market crumbles, so do these deals, and the buyer wants out.

Recently, some bright and creative New York Real Estate litigators have turned to an ancient, but potentially useful, statute passed in 1968 and known as the Interstate Land Sales Full Disclosure Act, to argue that the down payments should be returned and the contracts voided because the Developer did not comply with the provisions. The Interstate Land Sales Disclosure Act generally applies to developers selling or leasing--through interstate commerce.

Under the Act, if the Developer is marketing in interstate commerce (generally the case with these fancy luxury buildings and the Internet), then they must register the project on a national scale with HUD, and give consumers (buyers) a summary of that registration in a disclosure statement called a Property Report BEFORE THE CONTRACT or agreement is signed. Hence the utility in a litigation situation if the Developer did not follow the regulations.

BEWARE: The Act does not apply to all transactions, or all buildings, so buyers looking to cancel their New York State real estate contract with a developer had better seek counsel versed in the actual contract and the Interstate Land Sales Disclosure Act.

Bottom line-- it's always best to hire local New York State real estate attorneys.

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

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.

Is the price of re-financing worth the expense in New York? Well, as you can imagine, that depends.

As a recent NYTimes article points out, as the prices for mortgages drop, consumer interest perks up, and we all go around wondering whether it makes sense to re-finance again!!

Here's the rub-- typical real estate mortgages last for about five to seven years before the mortgagor (homeowner) sells or refinances, but lenders compensate for such fluctuation by collecting much of the mortgage interest up front. So, if you are in your home for the long term, and have paid off more than five to seven years worth of debt, you are watching your equity grow and the overall debt drop more quickly-- a nice thought in today's market. But, now the banks are offering very low interest rates (less than five percent in some cases). Now what?

Bite the bullet and re-finance if you are in it for the long haul, but read the article, and consider a CEMA-- discussed here.

How do you sell your distressed home or refinance your real estate if you have a federal or state tax lien?

Well, WSJournal.com reports that the IRS is trying to help themselves get paid for their tax liens more quickly, thereby speeding up relief to distressed homeowners trying to re-finance.

Under the new “expedited process,” the refinancing and sellers can find out more “quickly” how much they owe on a federal tax lien, so the lien does not delay or prohibit the transaction.

According to the article, there are more than one million federal tax liens against real estate or personal property, and IRS issues 600,000 fresh federal tax lien a year. That means that the federal government is making a formal claim against the property, and such claim needs to be resolved prior to closing, and before other creditors, even foreclosing banks.

The goal: the IRS will respond more quickly, thereby clearing the liens and allowing homeowners to proceed with refinancing or sales. Although it is unclear how much faster the new plan will make the process (or if it is just a public relations stunt), the IRS says they typically respond within thirty (30) days. What’s a bailout if the IRS can’t help distressed home owners directly.

Typically, the requests to the IRS take two forms in a distressed situation: First, you could ask the IRS to make its lien “secondary” or “subordinate” to the claim of the lender willing to refinance the distressed real estate. Or, if you are “upside down” and selling your home for less its value, the IRS might agree to “discharge” or “forebear” all or part of the claim for back taxes. That does not mean, necessarily that the tax debt is erased, but it does clear the distressed real estate and allow the sale or refinance.

Some states are taking the initiative also. For example, in some cases States are offering “amnesty” (not to prosecuting or penalizing) to those who voluntarily, before officials ask, pay what they owe, or agree to pay (offering reduced interest penalties).

The New York State Tax Department has launched a “voluntary disclosure” plan , which offers protection from criminal and civil penalties to all eligible taxpayers who voluntarily disclose and "correct" their "delinquent tax liabilities," or who agree to obey the law. Under the plan, New York has raised approximately $12 million in one year, and are expecting a total of somewhere near $25 million from delinquent tax payers.

The bottom line: There are more options to settling your debts in Dutchess, Westchester, Rockland, Ulster and beyond because the government realizes that a dollar in the hand is better than 10 dollars in the bush.

It appears that the Federal Government is getting a little more needy, because it is now going to collect more capital gains taxes on the sales of residential real estate property in New York.

As discussed in other posts, under the "The Housing Assistance Tax Act of 2008," homeowners no longer are simply allowed to exclude $250,000 of capital gains ($500K if filing jointly). Indeed, the calculation becomes more difficult because the gain will now be taxed on the percentage of time you used the home as your "primary residence."

Yes, now for the "jargon." Capital gains must now be divided between "qualifying" and "non-qualifying" uses, and potentially cutting the amount of capital gain which might previously have been "excluded" from your income tax.

To earn the "exclusion" you must own and live in the property as your primary residence for at least two years out of the five years ending on the date of sale. If the real estate was not used as a "primary residence" during the entire five-years prior to the sale, (used as a rental house or a vacation home) then you would have to reduce the amount of the capital gains tax exclusion by allocating the gain to the percentages.

A "qualifying Use" means the property must be used as a primary residence, whereas, a non-qualifying use (taxable) means the property is not being used as a "primary residence" by either the homeowner or the home owner's spouse.

Example

The gain from the sale needs to be allocated between what gain is excluded as "qualifying" and what gain is not excluded (because it is "non-qualifying"). Divide the period of non-qualifying use by the period of ownership. Period of non-qualifying use/Period of ownership= a percentage.

Contact your trusty tax advisor on this because I do not offer tax advice. Taxpayers owning second homes, vacation homes, and rental properties will need to revise their capital gains strategy to account the implementation of the rules (January 1, 2009).

Bottom line-- Be careful, understand the rules and ask you accountant or tax professional when buying a second home in Dutchess, Rockland, Westchester, Putnam or Ulster County.

Beware of what you are signing in an upstate New York real estate transaction. The problems and perils of non-lawyers having contracts signed prior to attorney review.

New York State's highest court, the Court of Appeals, recently considered a frightening set of facts and protected the attorney-client relationship. But, beware.

In this case, the defendants signed a real estate contract to purchase the home of plaintiffs. The contract contained a rider with an "attorney approval contingency" stating as follows:

"This Contract is contingent upon approval by attorneys for Seller and Purchaser by the third business day following each party's attorney's receipt of a copy of the fully executed Contract (the "Approval Period"). . . . If either party's attorney disapproves this Contract before the end of the Approval Period, it is void and the entire deposit shall be returned."

Both the contract and the rider were form documents copyrighted and approved by the Greater Buffalo Association of Realtors, Inc. and the Bar Association of Erie County. After signing the contract, the defendants developed qualms about purchasing the plaintiffs' house, and instructed their attorney to disapprove the contract within the three-day period for invoking the attorney approval contingency.

Three years later, the Plaintiffs finally sold the house at a loss and sued for breach of contract and the "covenant of good faith and fair dealing." Both the trial court and the mid-level appellate court entered judgment against the defendants finding, in essence, that they had negotiated in "bad faith" by cancelling the contract within the three day right of attorney review.

In reversing, and dismissing the complaint, the Court of Appeals found two reasons to dismiss the complaint:

First, the plain language of the contract in this case makes clear that any "fruits" of the contract were contingent on attorney approval, as any reasonable person in the defendants' position should have understood that they could cancel for attorney review.

Second, the court held

any inquiry into whether a particular attorney disapproval was motivated by bad faith will likely require factual examination of communications between the disapproving attorney and that attorney's client (see e.g. McKenna, 123 AD2d at 517 ["defendant acted in bad faith by instructing his attorney to disapprove the contract"] [emphasis added]; Moran v Erk, 45 AD3d 1329, 1329 [2007] ["the evidence supports the court's determination that defendants acted in bad faith by instructing their attorney to disapprove the contract"] [emphasis added]). That is, the disapproving attorney will be subpoenaed to testify about communications the disclosure of which might be detrimental to that attorney's client -- a direct conflict with an attorney's duty to preserve a client's confidences and secrets (see 22 NYCRR 1200.19[a] [defining "secret" as "information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would be likely to be detrimental to the client"]).

Stated simply, if the attorney has to testify as to the reasons for disapproval, then it chills the right of the client to speak, and for the attorney to listen.

The bottom line-- the Court of Appeals held that where a real estate contract contains an attorney approval contingency providing that the contract is "subject to" or "contingent upon" attorney approval within a specified time period, and no further limitations on approval appear in the contract's language, an attorney for either party may timely disapprove the contract for any reason or for no stated reason.

Peter's bottom line-- Don't sign a contract until you have reviewed it with your New York State real estate attorney. Here's the full case.--Case-Attorney Contingency Clause.

“CEMA” stands for Consolidation, Extension and Modification Agreement, and is used to save mortgage tax in certain situations.

Sellers sometimes use this process and procedure to refinance real estate located in New York State because, when recording a New York Consolidation, Extension and Modification Agreement, they pay only the mortgage tax on the difference of the new money and old. The idea behind a CEMA is to renew the terms of an existing mortgage by re-financing an existing note and mortgage. The CEMA is the actual legal document which combines into one set of rights and obligations all the promises and agreements stated in existing Notes and Mortgages secured by the property being re-financed.

If the new Consolidated Note and Mortgage includes additional monies (or funds), the Borrower pays only the Mortgage Tax on such “new funds.” In counties such as Dutchess, Rockland, Westchester, Ulster this process can save thousands of dollars because the mortgage tax is paid (over one percent) on the difference between the old money and the new funds.

If you are refinancing a Mortgage secured by property located in New York State for delivery to Freddie Mac, your attorney or mortgage professional should use the most current version of the New York Consolidation, Extension and Modification Agreement Single-Family Fannie Mae/Freddie Mac Uniform Instrument (Form 3172).

The NY CEMA is utilized for refinances in lieu of the traditional cancellation (satisfaction) of the old Mortgage Note and release of the lien. The NYCEMA enables Borrowers with Mortgages secured by property located in New York to reduce the amount of the Mortgage recording tax paid in connection with the refinance. Tax on the outstanding Mortgage balance has already been paid, so the Mortgage tax is waived on that amount

Sometimes the process takes a long time because the original lender must locate the original note and mortgage and deliver to the Refinancing agent.

The bottom line– look into the process because it may save you closing costs in a New York State refinance.

You have relatives in Greece, but need them to sign a deed in a form recordable with the New York State courts. How, in today’s age, where people move, fly and otherwise re-locate, do we get them to sign a deed without coming back to Rockland County?

How do we prove that a document signed in Russia is authentic and should be given the full faith and credit of our local laws in Dutchess County? What if your wife died in England, but you need to sign a document for American Surrogate court. All of these questions are becoming increasingly common, and increasingly easy to solve.

In October 1981, the United States joined as a signatory to the 1961 Hague Convention. For most of us, that means that we can now follow the “simplified certification” process whereby public documents (including notarized deeds) will be universally admissible in America and abroad. For a list of signatories to the Convention go here.

Countries that recognize the Convention agree to recognize public documents issued by other signatory countries if those public documents are authenticated by the attachment of an internationally recognized form of authentication known as an “apostille.” The function of the apostille is to certify that the signature on the document is authentic; identify the title or capacity in which that person signed; and the identity of any stamp or seal affixed to the document.

When the document is used in a foreign country, it may be necessary to authenticate the notarization or certification. Foreign countries often require documents to be authenticated before the documents will be accepted in the foreign jurisdiction. Be sure you follow those guidelines, or your document may not be acceptable.

An “authentication” certifies that the signature and the position of the official who has executed, issued or certified a copy of a document.

In New York, an apostille takes the form of a one page document issued by the New York State Secretary of State and embossed with the Great Seal of the State of New York, and includes the facsimile signature of the individual issuing the certificate. You may need to go to the nearest American Consulate office to finalize the process.

Speak to a New York Real Estate Attorney.

If anyone has ever closed on a HUD inspired (guaranteed) loan, you know that there are millions of forms that are designed to provide notice of the borrowers’ rights and responsibilities. The prevailing view of policy makers was let the borrower beware, give them notice, and then let them make the mortgage– move the closing along.

The present housing crisis, however, has everyone re-thinking whether the borrowers are really getting well advised about the meaning of all these lending terms, prices, fees, etc. Hardly surprising given American’s thirst for debt and former “equity” in their homes.

The problem, however, should not be so prevalent in New York, where attorneys are still largely responsible for closing with clients and, presumably, advising them of the mortgage process.

Nevertheless, the policy makers don’t want anyone looking at them for the blame. So, the Department of Housing and Urban Development recently released a new set of rules designed to help homeowners understand the products they are borrowing against. The update modifies the Real Estate Settlement Procedures Act, known as RESPA (enacted 1974).

Various industry lobbyists, lenders and others involved in mortgage transactions opposed the new rules, but HUD pressed them through anyway. Note, however, that HUD officials still have no enforcement mechanisms to require or penalize non-compliance, but state and federal regulators could insist on “compliance” with the federal rules. Indeed, the threats of class actions may also “encourage” lenders to comply.

Now, in addition to the standard HUD form signed at closing, the revised “good-faith estimate” for borrowers will explain rates, fees, any prepayment penalties and the possibility of later increases in monthly payments. Fortunately, closing attorneys avoided having to orally read the disclosures to the closing participants!!

The new HUD-1 form (January 1, 2010) is designed to help consumers before they sign so that they can compare the promises made by the lender with what they are actually being charged at the closing. Again, borrowers will not have the opportunity to review the new forms at the comfort of their home kitchen, because they will only be given the HUD-1 form shortly before the closing. Why can’t we just get the Truth in Lending Document from all prospective Lenders so we can compare the Annual Percentage Rates for each particular loan.

The new form should also help consumers understand that the broker is being paid in fees, often called “yield spread premiums.”

The bottom line-- hire competent New York real estate attorneys to represent you at your mortgage closing, or get a competent mortgage broker to explain the different products. Then, if you cannot pay the mortgage, expect to be foreclosed upon.

As the credit markets continue to shrink, and access to credit tightens up further, some of our clients are turning to seller financing, which is sometimes acceptable in small real-estate transactions. Indeed, the WSJournal reports that large commercial real estate transactions are also including seller financing as an option.

According to the commercial real estate brokerage firm Marcus & Millichap estimates that as many of six (6%) of the deals it tracked this year involved seller financing to the buyer. [See article].

Seller financing is not for the weak of heart or slight of pocket book, however, because mom and pop real estate seller (now lender) will be in the position of the bank and have to shell out money to foreclose should the purchaser not pay the mortgage.

There are ways to mitigate such non-payment situation, not all good, but speak to a real estate attorney in Dutchess, Rockland, Westchester, Putnam or Ulster.

For example, you could do partial seller financing, but you would be second in line or “subordinate” in a liquidation to any primary lender the buyer enlists. That means that if the property must be sold in a bankruptcy or some other workout situation, the primary lender must be fully paid off with the proceeds of the sale before the seller gets anything for the financing it provided. Be sure the property appraisals are adequate before you take that risk.

You could consider holding a deed in lieu of foreclosure to secure your repayment and retake the property.

You could consider leasing the land with an option to buy.

But think about it, if the buyer isn’t credit worthy for a bank, why is the buyer credit worthy for mom and pop seller.

The bottom line– hire competent local New York real estate counsel if you are considering a seller financed deal and be aware of the risks involved.

That is the question that many home owners, politicians, and policy makers are worried about these days.

With various federally guaranteed and initiated plans designed to help homeowners in this time of falling home values and prices, how are we going to decide which homeowners should get assistance, and which sellers are just savvy enough to ask for such assistance?

Here's a recent article from the WSJ, but there are many recent articles identifying the rub-- which home owners should get the help.

On commentator recognized that Fannie Mae recently changed their rules for borrowers who do a short sale. Instead of having to wait five years to qualify for a new Fannie Mae loan, and to encourage short sale, Fannie Mae is now requiring only a two year wait. [See Announcement 08-16 published on June 25, 2008].

Bottom Line-- Realtors and Brokers and New York Real Estate Lawyers and Sellers-- Go for the Short Sale in New York, but beware of the situation.

To follow up my prior article on reverse mortgages, you should be aware of this interesting and informative article from the NYTimes., which gives you an interesting view of the types of products, the costs and risks associated with such investment stategies.

Good luck.

To follow up on other stories in this blog, Short Sales gets very complicated and uncertain if there is more than one lender involved. Be sure that you are negotiating with the primary lender because junior lenders often absorb most of the loss, but you will need their approval too. Beware, sometimes the actual mortgage was sold to another entity, and you may also need approval from that company. To alleviate those problems, do a title search to verify the lien position of the lender you plan to contact.

One way to encourage a seller to participate with you is to advise them that the Mortgage Forgiveness Debt Relief Act of 2007 gives short sellers a tax break by changing the way the forgiven amount was viewed for tax purposes. The new law removed income tax liability for the “income” realized by not having to repay the entire loan– sellers get a tax break.

You must keep pestering the lender because time is of the essence. Shorte sales fall apart because the lender moves too slowly and fails to complete the deal before the property goes to auction.

Buyer can sometimes sweeten the deal for sellers by negotiating how the sale is reported to minimize the damage to the seller’s credit rating. While the lender has no obligation to agree to this in writing, it will give the seller a head start in rebuilding their financial lives. If the loan shows up on a credit report as “paid,” but “settled for less than originally owed,” the seller is much better off than if it is reported as “foreclosure.”

Bottom line– until this market bottoms out, we need to work hard to get that short sale completed by competent real estate attorneys, especially in Dutchess, Putnam, Rockland, Ulster and Columbia Counties, New York.

So, your attorney has indicated that the Seller of a parcel of real property has an "old survey" and that you could get around the cost of a new survey with a survey inspection. What's the difference?

Survey: A licensed professional surveyor investigates the deed transfers into the owners of the parcel of property, and all of the surrounding parcels. Upon locating the various deeds, the surveyor then goes to the field with his sophisticated equipment to confirm that the metes and bounds description of the property is the same as those described by the various deeds into the owner and the neighbors. In addition to locating the boundaries, the surveyor actually investigates whether there are encroachments by fences, plantings, or other items on the property lines by physically locating such encroachments on the map. The result: you have a present day confirmation as to the boundary lines, possible encroachments, possible claims for adverse possession and an understanding what the status of "ownership" might be to that parcel of real property. The survey drawing delineates the position and boundaries the parcel.

Survey Inspection: If the seller obtained a survey, or there is an older version from the seller's seller, a title company might avoid the cost of a "new survey" by performing a visual inspection of the property, in a layman's attempt to identify "changes" to the property since the date of the last survey. Did the owners put up fences, buildings, or other items that might change the landscape and title to the property. Sometimes, the survey inspection will identify additions to the home, screened porches being converted to enclosed porches, and things that might give the buyer and her attorney pause to consider whether certificates of occupancy might be necessary.

Survey Endorsements: Are issued only to the buyer's mortgage lender., The title company assures (insures) the lender that the foundations do not encroach onto any easements referred to in the policy. The endorsement may be issued provided: (1) a physical inspection or survey discloses there are no encroachments onto any easements; and (2) the location of the foundations does not violate the covenants, conditions and restrictions of any other provisions of the title insurance policy.

Obviously, the best level of protection is the Survey because it gives you an understanding what the licensed surveyor is willing to certify as your actual boundary lines, and whether there might be any trouble brewing with the neighbors who might be claiming "adverse possession" of a portion of your property. The survey inspection is unscientific and merely provides you with an understanding of what might have changed-- did the owners add a pool which needs a fence to be "legal." You as the buyer get no protection from a survey endorsement. It simply protects your lender.

Bottom line-- To reduce the risk of real estate litigation in New York, get a survey, or risk objection and confusion about your property lines.

With all the negative press that the real estate market has been suffering lately, you are ready to look for homes in Dutchess, Rockland, Westchester, Putnam or Ulster County. You have that money burning the proverbial hole in your pocket seeking to purchase a foreclosed home for investment. Do you even know what you are talking about?

What is a Foreclosure Sale?

Foreclosure is the legal proceeding brought by a Lender acts to recover the “security” represented in a home for an overdue loan. Since banks don’t really do a good job or want to own real estate, they often want to unload the distressed property just get the bad loan off their books. In this politically charged landscape, and election years, the rules are constantly changing. Government is increasingly intervening on the behalf of the “consumer,” meaning that a foreclosure sale is not as simple as making the winning bid at auction.

In New York State, it is no longer as simple as taking several certified checks to the foreclosure auction because there are various statutory protections that give the original homeowner a second chance (and possibly third) chance to rectify the defaulted loan. Even then, after the gavel drops, you, as the foreclosure buyer might get stuck paying back taxes, transfer taxes, and rectifying various liens taking other risks that might not have occurred had you purchased the home through more conventional channels. You are not an investor unless you have done your homework and understand the substantial risks attendant to foreclosure auctions.

In short, a foreclosure sale is risky business if you don’t know what you are doing, or have competent legal counsel to wend your way through the process. Without proper legal advice, you could end up paying thousands of dollars for a house you'll never own.

Short Sales, Another Alternative?

A “short sale” as the term has come to be known involves a distressed homeowner whose real property is valued less than the mortgage amount. To avoid walking away from the debt, the owner, brokers, and bank team up to identify a “way out” of the disaster for all through the short sale. For a bank, the cost to foreclose, and then sell the property, may exceed the expense of just letting the homeowner sell the home for less than the mortgage amount. The process works out more like a cross between a normal house sale and a foreclosure, where the auction buyer has to clean up the problems without help.

With the assistance of an attorney and a broker, the homeowner can usually pick a real estate agent and market the home, but the bank negotiates the real terms of the deal by dictating the prices, and many of the terms of the contract. If the bank refuses, the buyer loses, which is often frustrating to buyers. A “short sale” may look like a great buy, but you are at the mercy of the Seller’s banks whims, even though they know nothing about the house or local market conditions.

In a short sale, the multiple listing service (MRIS) must disclose that the property is subject to a short sale. From the buyers’ perspective, you have a right to know this because, regardless of the owner's good faith and intent to sell you the property, the bank (a third party) might be controlling the final decision as to whether the house closes. Only patient buyers can withstand that waiting. The busted deals and additional paperwork of short sales also lead to increased costs for buyers.

From the seller’s perspective, make sure that you know your rights under current law. Although your mortgage contract says, "If you pay, you stay, if you don't, you won't;" the Legislature may have offered you a handy life line. Sometimes, despite the emotions, sale is the only rational way to protect your situation.

Either way, whenever you contemplate a foreclosure or short sale, be open, honest and candid with your real estate professional, whether that be the agent, broker, attorney or bank. To conceal your condition will do nothing but make it worse for everyone involved.

The bottom line, be sure that you know what you are doing when you contemplate investing in this world we live in. Oh, and hire local New York real estate counsel to help you wend your way through the morass.

Are you buying a house in New York, but forgetting to calculate your full monthly nut? Mortgage payments are not the only bite out of the monthly payments that New York Homeowners and buyers make every month. Aside from the principle and interest payments, mortgage holders must pay real estate taxes and homeowners insurance, thereby increasing the monthly nut.

Among the assessments that new homeowners forget about are unanticipated reassessments or rate hikes, supplemental bills where there were “exemptions” for the prior owner, and significantly higher taxes because of such re-apportionment. When considering the purchase of any home, you should contact the local building inspector and the local tax assessor’s office to find out and research the current issues that might effect future taxes and the assessments of the home you are buying.

Property Taxes

Property taxes are almost always based on the value (assessment) of the home, and such value can go up and down, but does not typically fluctuate.

Beyond that, each state or locality typically uses its own peculiar formula to calculate property taxes. These formulae introduce a certain amount of complexity and unpredictability into property taxes.

Ask your attorney or the assessor, how property tax is calculated; whether the home will be reassessed upon transfer to you; when the next scheduled reassessment will occur in the town, county or village you are buying in; whether the current owner has any “exemptions” or rebates that might limit their tax bills (or increase yours); whether you might qualify for tax relief of some type.

Bottom line: the real estate broker's estimate of the tax may not be completely accurate because the current owner may have taxes that will be lower than yours after the transfer. While the tax bill might provide information, you should check with the assessor to find out hidden post-sale reassessments, which might result in a substantially higher tax. For example, sometimes, there may be several property tax authorities seeking payment, including counties, cities and special districts, such as local water, sewer or school authorities.

The transfer itself, or prior unauthorized remodeling of the home may not be contained within the present tax picture and can trigger a reassessment because additional bathrooms, central heating, ventilation and air-conditioning and other capital improvements can increase the assessment.

Tax and Insurance Escrows.

As a matter of course, most lenders require new home owners to establish an escrow account, setting aside monies to cover the taxes and insurance when due. The escrow is established by estimating the amounts due annually, then dividing it by 12 monthly installments, and then banks pay the property taxes and insurance directly.

Many New York State taxing authorities are now required to provide homeowners notice that their taxes have been paid. Alternatively, it is important to keep a close watch over the disbursements, because loan servicers sometimes fail to make the payments.

Assessments

Tax assessments on residential property is usually a function of recent assessed value or sales price of the home; value of comparable homes; improvements; exemptions for which the home, home buyer, or homeowner qualifies; and property tax rates. If one of those is incorrect or improper, there is generally an appeals or “grievance” process by which the homeowner can appeal the assessment. In New York, the date is generally the third Tuesday in May, but you should check with your attorney to be sure you file your grievance timely.

The bottom line–Property taxes are unpopular but the revenue generated pays for schools, libraries, fire departments, police officers, street lights and many other public benefits– they are part of life in Dutchess, Rockland, Westchester and Columbia County. Learn to plan for them, and fight them if they are wrong.

Upstate towns are jumping on the conservation band wagon. The most recent is the Town Board of the Town of North East in Dutchess County.

New York State has authorized the Town Board of the Town of Northeast in Dutchess County to establish a Community Preservation Fund by referendum. The goal of the fund is to provide a source of revenue for the Fund, and adds Article 31-A-3 ("Tax on Real Estate Transfers in the Town of Northeast") to the Tax Law.

Provided the Town approves a referendum to adopt a Local Law, transferees may be subject to a new transfer tax of up to two percent (2%) of consideration, payable by the grantee, on the conveyance of real property in the Town. Other Towns, including the Town of Red Hook has asdded, "[a]n exemption from the tax which is equal to the median sales price of residential real property within the applicable county, as determined by the Office of Real Property Services pursuant to Section 425 of the Real Property Tax Law…"

If you are transferring in the Town of North East, ask your Dutchess County real estate professional whether a transfer tax return will be required for the Town.

Sellers of homes in Hudson, Germantown, Chatham and all of the other towns in Columbia County, New York, can expect to pay a transfer tax on the transaction.

Beginning December 1, 2007, title agents will collect the Columbia County Real Estate Transfer Tax of $2.00 for each $1,000.00 of the consideration (money) paid for all conveyances of real property located in Columbia County, New York. That means more transfer forms, and more headaches for “grantors,” who are also known as sellers. [Chapter 556 of the Laws of 2007, Columbia County].

The Columbia County Tax law exempts the first $150,000 of sales price (consideration) in connection with the sale of a one family residence, and is collected in addition to the New York State Real Estate Transfer Tax. Not to over-stress the orderly real estate closing, the County uses a tax return which must accompany the payment of the Columbia County Transfer Tax which is essentially a photocopy or carbon copy of the TP-584 (New York State Transfer Tax Form).

This Tax is codified in new Article 31-A-2 (Sections 1439-a through 1439-o) of the New York State Tax Law, which allows Columbia County to pass such law imposing the transfer tax. The Act authorizing the Columbia County Transfer Tax shall expire and be deemed repealed on December 31, 2009.

The bottom line-- Sellers or real estate in Columbia County-- your taxes just went up.

If you are lucky enough to afford a home valued at over a million dollars, you should be aware that New York Tax Law, Section 1402-a, imposes a 1% tax upon the buyer in the purchase of residential one, two or three family homes (including condominium or cooperative units).

In the boom years, and in New York City, the “Mansion Tax” as it is popularly known, adds a fixed amount to your closing costs, but almost seems outdated today, where homes routinely change hands for more than a million dollars. Promulgated in 1989 when the average price of a New York City apartment was far less than a million dollars, units are routinely more expensive in today’s market, moving the tax from the rich, to a tax on the average home buyer in New York City, the Hamptons, and Westchester County. As credit gets tight, buyers and sellers of million dollar residential real estate may have to consider creative (and legal) solutions to help facilitate the transaction.

When griping about the Mansion Tax, however, consider that it increases the final “tax basis” in the property, and will reduce your capital gain when you sell. So much for the short term solution or salve. More upsetting is that such “mansion taxes,” whether imposed by New York or by another state, are not deductible on the buyers' federal income tax returns.

Creative real estate brokers, lawyers and their clients might benefit from remembering that the mansion tax is not applicable to vacant land, is reduced in the case of a legal mixed-use property, and is paid on the commercial aspects of the transaction (if applicable). Contract provisions may also ameliorate the effect on the transaction because, while the law provides that the buyer pays the tax, the parties can agree (contract) otherwise. Recall too that the Mansion Tax is not applicable to the sale of personal property.

Bottom line-- when you are reaching to buy that million dollar home in Westchester, Rockland or New York City, you should talk with your New York real estate professional or lawyer about ways to legally reduce your obligation.

Did you know that there is a way to avoid mortgage taxes that increase the cost of re-finances? The technique known as a “consolidation, modification and extension agreement” (CEMA), and helps a refinancer to pay only the cost of the "new money" being borrowed.

To accomplish a CEMA, the borrower, the borrower's attorney, and the lender prepare new documents which consolidate the old mortgage with the new mortgage. In the process, the old mortgage is assigned to the new lender, and the borrower pays mortgage tax on the "new money." The original mortgage is not “discharged of record,” because the borrower arranges to keep the existing mortgage on the books and then assigns it to the new lender.

The new lender requires a new mortgage for the closing costs and new money, while the new lender and the old lender execute an agreement assigning the old mortgage to the new lender; and all of the debt is consolidated.

Beware, however, the process is complex and sometimes causes considerable time and expense to complete. Consult your local real estate attorney before undertaking a CEMA.

A "closing" is a "closing." When people say they are going to their real estate closing, they are talking about accepting their most expensive investment, fleas and all. If you have a problem with the home before the closing, you should bring it up before the closing, otherwise you are fore-closed from complaining.

This is illustrated by a recent case where the contract of sale provided that the property “will be delivered vacant and clean” at closing. The Seller failed to deliver the property clean, and the Purchaser had to spend $17,000 to remove storage bins, a container and other items, which should have been removed at closing.

To recover his costs, the Purchaser commenced action claiming that the contract required the Seller to deliver the property clean. The Supreme Court, Queens County, did not immediately dismiss the contract claim, but the appeals court (Second Department) reversed and dismissed the contract cause of action. Under the law of New York, the seller’s obligation to deliver the premises “vacant and clean” did not survive the closing of title because it was "merged" in the deed. By accepting the deed, the purchaser forfeited his right to enforce the contract provision--an elementary rule of law. The collateral obligation to deliver the property clean was "extraneous" to the sale of real estate and did not "survive" the delivery of title. Novelty Crystal Corp. v. PSA International Partners, L.P., decided January 15, 2008, is reported at 2008 WL 141502.

The moral of the story-- communicate with your New York real estate lawyer or other professional, especially the closing attorney because you are the ears and eyes of the transaction. Your real estate atttorney does not know the condition of the property unless you discuss it with them ahead of the Closing.

Well, that really depends upon where your "stoop" is sitatuated and whether the police officer thinks you have an open container.

In Brooklyn New York a Prospect Heights man was issued a ticket for drinking beer on his front "stoop," which was several feet from the public sidewalk and not enclosed by a fence. The man was checking his email and drinking a beer at 11:52 pm when a police officer drove up and handed him a summons for drinking in public.

The issue for the court will be whether the "stoop" in front of his four (4) story, twenty (20) unit cooperative building is "public" or "private" property? The man stated that he and his fellow apartment dwellers had been doing this for years without incident, but that's for the court to decide.

In areas like Brooklyn, where apartment dwellers do not necessarily have their own private outdoor spaces, congregating on the stoop is a way to enjoy the outdoors and to watch the goings on of their own neighborhood. Whether a police officer can issue a summons for drinking in public under such circumstances will be decided shortly. In the meantime, the man plans to contest the ticket.

The moral of the story-- be careful where you drink your Brooklyn Lager, or be sure to enjoy one with your friendly New York real estate litigator!!

http://www.kloselaw.com/lawyer-attorney-1336884.htmlDid you know that your septic system needs periodic maintenance and occasional pumping? Westchester County did not believe that enough homeowners understood this, and is obligated by New York State to protect the drinking water supply; so it is going to reimburse homeowners who have septic systems and pay taxes to sewer districts if they pump their septic systems regularly.

According to local officials, there are an estimated 40 - 45,000 septic systems in Westchester County, New York, with approximately 30,000 of those in the Croton Watershed (which supplies fresh water to an estimated 80,000 Westchester County residents). Obviously, the issue of septic management is a significant issue if the County is going to preserve the fresh water supply.

This year Westchester County implemented a law requiring septic pumpers to report data to a centralized reporting system detailing conditions of each pump out. If the conditions warrant, the County Health Department dispatches trained sanitarians for further inspection and remediation.

To encourage homeowners to help the County meet New York State guidelines, the County also passed legislation to reimburse homeowners with septic systems who are paying taxes to the County sewer districts, and who must pump their septic systems to protect their safe operation.

To protect real estate purchasers, Westchester County passed well testing laws requiring sellers to disclose testing results upon transfer of real estate.

The bottom line-- when moving to a home with a septic system in Westchester County, you should test both the water supply and the septic system to be sure that both are working and safe. Consult with your local Westchester real estate attorney.

New home buyers of one of the 20,000 homes in Westchester County served by a private well are protected by Westchester’s Private Well Water Testing Law, which states:

§ 707.03. Water Testing Requirements Upon Sale of Real Property.

Upon the signing of a contract of sale for any property within Westchester County served by a private well, the seller of such property shall cause a water test to be conducted in the manner established, and for at least the parameters required, in this Chapter. The seller shall arrange and pay for the cost of this testing, and, within ten (10) days of the execution of the contract, provide the purchaser of the property with confirmation that the test has been ordered.

The law (effective 2007) requires that a water test be conducted upon signing a contract of sale for any property served by a private drinking water well. The test will ensure that the well water is safe for human consumption through analysis for the presence of coliform bacteria and chemical contaminants, including: bacteria (total coliform); either fecal coliform or Eschericia coli (e-coli) if the sample tests positive for total bacteria; chloride; nitrate, pH, arsenic; iron; manganese; sodium; lead; all primary organic contaminants (POCs) included in Part 5 of the New York State Sanitary Code; vinyl chloride; methyl-tertiary-butyl-ether (MTBE); and any additional parameters required by Westchester County Department of Health rule and regulation.

Under the law, only certified laboratories are authorized to collect and test the water samples, and all tests and results must be submitted to the Westchester County Health Department The law also establishes the responsibilities of home sellers and buyers requiring that any drinking water quality problems are corrected

Westchester County Private Well Water Testing Legislation, Local Law 7 of 2007, was adopted on May 23, 2007, and became effective November 19, 2007. A copy of the Local Law, including the Westchester County Health Department Rules & Regulations which supplement the Local Law, as well as additional information regarding the law, may be obtained on the Westchester County Department of Health's website at http://www.westchestergov.com/health/ .

The moral of the story-- if you are buying a new home served by a private well, you are well served to investigate the water quality through the mandated testing. Ask your New York real estate professional or attorney.

Are you looking to purchase real estate in New York? Whether the real estate is your first house in Westchester, your vacation property in Dutchess, or your flat in Brooklyn, one common question that arises is how should you take ownership, especially if you are buying with your spouse, your life partner, or just your “friend.” There are many different forms and types of ownership, but they all start with what’s called ownership in what’s called “fee simple absolute.”

Fee Simple

When you own real estate outright, holding and controlling the entire bundle of sticks, we call it owning it in “fee simple absolute.” That is, as the title holder you, as the individual have the full absolute possessory right to the property, now and in the future, for an infinite duration, with no limitations on its inheritability (right to be transferred to others through death). The holder of the real estate owns entire estate (or bundle of sticks), and has the absolute and unfettered legal right to dispose of it without permission or consent by anyone else.

If you are buying a condominium or townhouse, you typically purchase the residential unit in fee simple, but have a right, in common, with others to use the common areas. Each unit has its own tax bill, deed, mortgage and ownership rights but shares in the maintenance of the common areas.

Joint Tenancy with Right of Survivorship

If you take title with another individual, you no longer own the property in “fee simple.” One common way to own property with others is as Joint Tenants with Rights of Survivorship. That means each titled owner holds an undivided share of the real estate, which, upon death of one partner, the surviving owner or owners retain an undivided right to the entire estate. The heirs of the dead person have no individual claim to the property, which transfers, as a matter of law, to the remaining people listed on the title to the property. That is, the partner has the “right of survivorship.”

If the partners are unmarried, the deed to the property should specifically state that you are taking with rights of survivorship, otherwise, in New York, you are presumed to be taking as tenants in common (see next definition).

This method of ownership sometimes creates issues for children of divorced couples, where the children of unmarried divorced couples, erroneously, that they will inherit one party’s share of the house purchased after the divorce, when, in fact, the house transfers without further court intervention to the surviving divorced partner.

Tenancy in Common

In New York State, In a title held as a tenancy in common, each owner has an undivided interest in the entire property. Each tenant has the right to possession of the whole property. There is no right of survivorship. Each tenant has a distinct proportionate interest in the property, which passes by succession. There is a presumption that a conveyance to two or more persons is a tenancy in common.

Tenancy in the Entirety

This is a marital estate, which can only be created between a husband and wife. It is similar to a joint tenancy except that the right of survivorship cannot be destroyed, since severance by one tenant is not possible. An existing marriage is requisite for a tenancy by the entirety. In many states there is a presumption that a tenancy by the entirety is created in any conveyance to a husband and wife. This type of title is considered somewhat archaic and the majority of states have abolished this type of tenancy, favoring instead that the couple take title to the property as joint tenants with right of survivorship.

If you need more information, call your lNew York real estate lawyer.