New York Real Estate Lawyer Blog

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.

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Posted In: General Interest , Real Estate Hints and Help , Real Estate Litigation

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As a result of recent Court of Appeals and Statutory Changes in New York, litigation and law suits relating to adverse possession are wending their way through trial and appellate courts throughout the state.

Adverse possession is a method of gaining title to property. Although not the favored means to procure land, 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. 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. Recent decisions in New York have included:

In Walling v. Przybylo, the plaintiffs deposited fill and topsoil, dug a trench, installed drainage pipes, and an underground dog fence and a bird house on a disputed parcel of land. The court ruled that the plaintiffs were adverse possessors because they had actually, openly and notoriously, exclusively and continuously possessed and ‘cultivated’ the disputed parcel for the ten year required period. Notably, the court held that the plaintiff’s potential knowledge that the parcel was owned by the defendants was inconsequential because adverse possession is fundamentally the defendants’ compliance to the plaintiffs’ open ownership. (2006).

Application of the Walling Decision:

1. First Department: In United Pickle Products v. Prayer Temple Community Church, 843 N.Y.S.2d 1 (N.Y.App. Div. 1st Dept. 2007), the defendant leased the disputed property to the plaintiff since 1979. The plaintiff brought suit to quiet title under the doctrine of adverse possession arguing the defendant had made no claim to be the rightful owner during which the plaintiff’s use of the property was actual, exclusive, open notorious, and continuous for at least ten years. Applying an interpretative analysis of Walling, the court articulated the exclusive access to the disputed lot by the plaintiff amounted to hostile possession, or ‘cultivation.’ This type of ruling applies in New York City and the Bronx Counties.

2. Second Department: In Merget v. Westbury Props., LLC, 885 N.Y.S.2d 347 (N.Y. App. Div. 2nd Dept. 2009), the plaintiffs brought an action to quiet title based on adverse possession alleging they cleared debris to use the disputed parcel of land as duel yard and parking lot as well as maintaining the property by planting trees and shrubbery for the requisite ten year period. As in Walling, the court ruled in favor of the plaintiffs reasoning that there was not only clear and convincing evidence that the plaintiffs’ possession of the property satisfied the elements of adverse possession by being actual, open, notorious, and exclusive, but more importantly, the plaintiff’s had ‘usually cultivated or improved’ the disputed lot during the ten years. This judicial department handles Nassau, Suffolk, Dutchess, Westchester, Rockland Counties.

3. Third Department: In Robinson v. Robsinson,825 N.Y.S.2d 277 (N.Y.App.Div 3rd Dept. 2006), the plaintiff sought title to the property by virtue of adverse possession. The plaintiff stated he had operated a seasonal canoe rental and camping business since 1987, and in doing so he had placed signs on the property, mowed the grass, cleared debris, maintained shrubbery, and blocked the use of the property by trespassers. Similar to Walling, the court articulated that the plaintiff’s cultivation and improvement on the property through maintenance satisfied the elements of adverse possession. This judicial department rules in upstate New York and includes Ulster County.

The bottom line-- you must hire a competent New York State trial and real estate attorney to assess the situation in your specific case. Documents, testimony and actions may change the course of the claim and your right to claim or your defense to adverse possession in New York. At Klose & Associates, we carefully investigate these situations.

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Posted In: Real Estate Litigation

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Last month, the New York Court of Appeals ruled that the state of New York may legally seize private land for private developers use. In the 6-1 decision, the court allowed the seizure of a 22-acre plot located in downtown Brooklyn – effectively allowing the Atlantic Yards Project to proceed – reasoning it would allow for improvements on the “blighted conditions” of the property. The recent ruling falls in line with the 2005 decision by the Supreme Court in Kelo v. City of New London that similarly allowed a corporation to seize private homes and businesses to build a research campus.

The New York court’s ruling has raised arguments from opponents that ownership rights amount to being worthless if a government deems private land for the ‘public good.’ The Atlantic Yards Project, headed by Forest City Ratner Cos., seeks to develop office towers, apartments, and most notably an $900 million arena for the NBA’s New Jersey Nets. The only dissenter on the court’s bench stated, “It might be possible to debate whether a sport stadium open to the public is a ‘public use’ in the traditional sense, but the renting of commercial and residential space by a private developer clearly is not.” The New York Court of Appeals, however, ultimately ruled that the definition of ‘blight’ is a matter for the legislature, not the courts, to change.

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Posted In: General Interest , Legislation-Regulation , Real Estate Litigation

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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" »

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Posted In: Real Estate Hints and Help , Real Estate Litigation

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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.

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Posted In: General Interest , Real Estate Hints and Help , Real Estate Litigation

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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.

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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.

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It's not often that our New York City judiciary goes out of its way to investigate, report and do the right thing. But, that's what the Kings County, Supreme Court, (LAURA L. JACOBSON, J) just did in a mortgage foreclosure matter that crossed her desk.

After noting that the foreclosure papers were served on a "live in" nurse, the Judge took the unprecedented action of requiring the Plaintiff (Argent Mortgage) to provide proof that they were entitled to foreclosure. Even though the Debtor had not responded to the court action, she ordered the mortgage company to supply copies of the loan documents used to secure the mortgage; she required an actual loan officer to appear at a hearing and supply evidence and testimony as to why the Mortgage Company would underwrite a loan in the amount of $315,000, even though there was evidence that the borrower (a taxi driver) earned $69,900 per year, and showed total debts of $91,807, against assets of only $58,119.30. In other words, there was no chance that the Mortgage would be re-paid, and the borrower made no payments toward the Mortgage.

Incensed by the clear fraud, the Judge ordered that the Bank pay for a Special Referee and a Guardian Ad Litem to investigate the situation. It didn't get any better for the bank. In denying the referral to a Referee and foreclosure she said,

The Courts have a responsibility to society as a whole to not allow the perpetuation of a fraud. If this Court grants the application of the plaintiff, it will be giving the imprimatur of approval to a scenario as fraught with fraud as any of the worst Ponzi schemes. . . . .

Perhaps if more of the people charged with overseeing our financial institutions had focused on the improprieties being performed in the financial arenas, our economy might not have imploded as ferociously as it did.

In this matter, plaintiff as the mortgagee was initially in a position to ascertain the credit status of defendant Mentesana.FN3Plaintiff abrogated that responsibility. Defendant Mentesana acknowledged his part in the fraudulent transaction in which several people appear to have participated. Accordingly, I am not only denying the relief sought, I am referring this matter to the Office of the District Attorney; to the Attorney General's office, Fraud Division and to the Banking Department, Criminal Investigation Bureau.

Bottom Line-- Thank you Madam Justice Jacobson for taking a stand (however small) to assign the blame where it is due. . . . Make your own conclusions, but why should any bank making these "type" of loans be entitled to take taxpayer dollars to "bail them out."

May the Brooklyn District Attorneys' office secure the appropriate resolutions.

If you would like to read the entire decision, click Download file here.

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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

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Posted In: General Interest , Real Estate Hints and Help , Real Estate Litigation

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Eastchester, New York, homeonwers are at the end of their proverbial rope. When the Town of Eastchester failed to address the flooding and sewer backups in their Westchester County home, they took the only possible next step-- they filed suit.

Here's the link to the article.

We cannot comment on this pending litigation, but it is one example of how homeowners can take some control over their own destiny by commencing litigation in New York.

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According to an American Bar Association, real estate lawyers are being sued more often for bad advice arising from real estate transactions According to a recent study of various insurance companies, and their claims between 2004 and 2007, malpractice claims against lawyers related to real estate transactions climbed four percentage points to 20 percent of all such malpractice cases between 2003 and 2007, a four percent jump.

Lawyers are getting sued for errors in real estate transactions with alarming frequency, and were second only to attorneys handling personal injury claims, which also rose in frequency.

Real estate transactions apparently went bad in a variety of ways for the lawyers. Such claims stemmed from conflicts of interest, closing and contract-drafting errors, and problems linked to zoning and escrow issues.

The study results are based on a survey of insurance companies that provide legal malpractice coverage in the United States and Canada, with 18 U.S. and six Canadian companies responding to the investigation.

Finding lawyers willing to take New York State legal malpractice claims against other lawyers can often be difficult.

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Posted In: General Interest , Lawyers and Legal Malpractice , Real Estate Litigation

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When commission disputes arise, how do you handle them in New York?

Real Estate brokers, realtors, and other real estate professionals who depend upon a commission to be paid will now have a clearer path to address their commission disputes. Under the recently amended NY Real Property Law ("RPL"), Section 294-b, ("Recording brokers affidavit of entitlement to commission for completed brokerage services"), a duly licensed real estate broker may undertake a special procedure to protect their right to an earned real estate commission. (Effective January 1, 2009).

Under the "Commission Escrow Act," a licensed real estate professional may claim entitlement to a brokerage commission for sales and leaseholds by filing an affidavit stating the right to such commission with the recording officer of the county in which the real property is located.

While the filing of the affidavit does not invalidate the transfer or lease of real property, and does not create a lien, it requires the Seller to establish an escrow of monies to "protect" the brokerage commission.

Under the amendment, the so called "Notice of Entitlement" to the commission has been expanded to include claims for transfers of cooperative units; and will be now be recorded upon the "lien docket."

If the property is a one-to-four family dwelling, condominium unit or cooperative apartment, used as a residence and there is a brokerage dispute where the Notice of Entitlement has been filed; the seller shall establish an escrow fund, as follows,

"the lesser of the net proceeds of the sale or the amount of the unpaid portion of the compensation agreed to in such written contract [the brokerage agreement] shall be deposited by the seller… with the recording officer in whose office the affidavit was recorded…until the rights of the seller and broker to such monies has been determined by order of a court of competent jurisdiction…",

Real estate professionals should understand that there are very specific procedures that must be provided, including (i) the brokerage contract includes a notice, as required by the law, (ii) the Notice of Entitlement and affidavit has been recorded, and (iii) the broker serves a copy of the affidavit on the seller prior to closing.

Because the law is still new, it is unclear what will occur if the seller fails to deposit monies into the escrow account since the law does not "create a lien or encumbrance against any real property" and does not invalidate "any transfer of real property".

The term escrow generally means a pool of money held by a third party until the matter can be adjudged by some court or other tribunal. Here, the idea is that buyers and sellers of real estate can deposit the money into a fund and fight over it knowing that there is a pool of money at the end of the dispute. The measure does not pre-judge who is guilty and who is innocent, but provides the outline of a process for keeping the funds available in New York State.

The bottom line-- how often does your attorney tell you,"the cost of fighting is going to be more than the cost of recovery, just settle or give up?" Now, the money will be tied up, offering more of an incentive to capture that money. Call your new york state real estate litigation lawyer if you are uncertain.

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You would think that paying $53.5 million for two separate penthouse apartments in New York's famed Plaza Hotel would get you what you paid for. Not always! According to published reports about one recent real estate transaction, Andrei Vavilov, hedge fund financier, has sued the hotel developers El-Ad Properties and real estate brokers Stribling & Associates for breach of contract, fraud, deceptive trade practices and negligence, demanding return of his $10.7 million deposit and $30 million in damages because the Penthouse was "attic-like."

Another story of buyer beware-- sometimes very aware. Vavilov reportedly made the luxury purchase after watching a video- shot, produced and directed by the sellers. Apparently, the video didn't do the small windows, low ceilings, obstructed views and ugly drainage grates justice. According to the lawsuit and published reports, every time the buyer tried to investigate and inspect the apartments (four times), they were "denied access" to the units.

The Sellers have counter-claimed in New York State Supreme Court, accusing the buyer of libel and filing a "sham" lawsuit-- seeking $36 million in damages.

Apparently the advertised penthouses are not the "one of a kind" oases, perched on top of one of the city's most magnificent addresses, which originally induced Vavilov to risk $10.3 million down.

The bottom line-- be sure you have your house inspected before you plunk down your life savings to buy that fixer-upper, even if it does cost $55 million.

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Should we go to trial, or take the money? According to a recent study, the "right" answer generally depends upon whether you are a plaintiff or a defendant in the civil lawsuit.

According to the study, in a full sixty-one (61%) percent of cases analyzed, plaintiffs who failed to settle the case prior to trial often received less at trial (approximately $43,000 less). To the contrary, defendants who refused to settle and made the "wrong" decision, were wrong in only twenty-four (24%) percent of cases analyzed, but paid a much higher price for being wrong ($1.1 million). So, should you listen to your attorney?

The study looked at 2,054 cases that went to trial from 2002 to 2005, and tried to account a number of different factors relating to the lawyers, the case and the court. [See, September 2008 issue of the Journal of Empirical Legal Studies–co-authored by Blakeley B. McShane, a graduate student at the Wharton School of the University of Pennsylvania, Martin A. Asher, an economist at the University of Pennsylvania, and Randall L. Kiser principal analyst at DecisionSet, a consulting firm that advises clients on litigation decisions, found at http://www3.interscience.wiley.com/cgi-bin/fulltext/121400491/HTMLSTART]. While there are many different variables to consider, the study raises provocative questions about legal advice to go to trial, and the debate rages whether the lawyers are giving impartial advice when their pocketbook is part of the equation. While most cases settle, critics of the profession have long argued that lawyers have an incentive to recommend trial to collect fees.because of contingency fees or because they would be paid large fees to ready the case for trial.

Critics of the study note that cold hard statistics mean nothing when contemplating settlement of a particular case because each case rises and falls on specific facts, under laws which are decided by different judges. The study tried to account for those possibilities, however, finding that factors such as years of experience, the lawyer’s law school, and the size of the firm did not really impact whether the parties made the right decision to go to trial.

The bottom line– A good lawyer has to be able to tell clients that a judge or jury might see the case differently, and they might lose at trial– settle, don’t gamble. For the client and the attorney making the decision-- remember, there are many factors -- fees included.

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Remember the old adage-- good fences make good neighbors? Well that's not always the case, especially as neighbors get closer and closer to each other.

In this litigagion, the Defendants owned three residential parcels which adjoined property owned by the Plaintiffs. The offending fence was located three (3) feet within the boundary lines of the Plaintiffs’ parcel and extended the length of the Defendants’ property.

The Plaintiffs notified the Defendants that the Plaintiffs were going to replace the fence with a new fence and were going to re-locate it to their property line. That should clarify things for each of the parties-- or so they thought.

The Defendants did not want to see the fence moved so they objected, and the Plaintiffs commenced action to quiet title and "eject" the Defendants from the use of the land lying between the fence and the actual property line. The Defendants counterclaimed that they owned the three foot sliver of land by "adverse possession."

The Supreme Court, Nassau County, granted the Plaintiffs’ motion for summary judgment and dismissed the adverse possession claim because there was no proof that the land between the fence and the property line was “usually cultivated or improved” by the Defendants or “protected by a substantial inclosure”, as required by Real Property Actions and Proceedings Law, Section 522 (“Essentials of adverse possession under claim of title not written”). Contrary to the Defendants' arguments, the fence was not theirs.

According to the Court,

“substantial and obvious alteration is required” to establish that the land was “usually cultivated or improved … Even the placement of a structure, such as a garage, is not enough to establish hostile possession by improvement if that structure lies mainly on the claiming party’s land and the encroachment on the disputed property is slight”. In addition, “the mere presence of a fence is insufficient [to show a ‘substantial inclosure’].

The morale of the story according to the Court was that there must be a showing that it was a substantial barrier erected by the party claiming adverse possession, without the consent of the owner”. RSVL Inc. v. Portillo, decided September 11, 2007, is reported at 16 Misc.3d 1137 and 2007 WL 2669463.

In any adverse possession claim, as with any factual dispute that reachs the level of litigation, minute and often overlooked facts play a role in the court's determination. You, as a good neighbor, should contact experienced real estate litigation counsel to consider how the facts of your case might change the outcome.

Bottom line: hire a surveyor to place your fence properly, and get competent legal advice from a New York real estate litigator or civil trial attorney.

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Mortgages/Predatory Lending. A New York court recently denied foreclosure and stayed the proceeding seeking to take back the home finding that the original lender violated New York ’s “predatory lending” statue, Banking Law, Section 6-L (“High-cost home loans”).

The Court scheduled a hearing to determine damages incurred by the homeowner and indicated that the relief may actually include the voiding of the mortgage, return of all mortgage payments, return of the expenses of obtaining the loans and attorneys’ fees.

While it is still early in this mortgage crises, and the effects remain to be seen, the lender's conduct in question included (i) lending in excess of the purchase price to enable payment of
points and closing fees, leaving the borrowers with negative equity in the property; (ii) financing
of fees and points in excess of three per cent of the principal amount of the loan; (iii) the failure
to undertake the “due diligence” required regarding the borrower’s ability to pay a “high cost
home loan”; and (iv) not issuing to the borrower a required “Consumer Caution and Home Ownership Counseling Notice”.

Continue reading "Predatory Lending Practices May Defeat Your Foreclosure in New York" »

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That is the question in a recent lawsuit filed in Rockland County Supreme Court.

Most real estate attorneys would say that closing with out a certificate of occupancy on a newly constructed house is not a good idea, even a departure from accepted standards.

A certificate of occupancy is the legal notice by the municipality that the house is habitable and constructed in accordance with the building permit. Accordingly, when purchasing a residential piece of real property to be occupied as a dwelling, the attorney should recommend a certificate of occupancy. The failure to have a c/o means that occupancy of the premises "illegal," and the failure to have that document means that any occupancy violates the law.

Although we cannot comment on pending lawsuits, here are the contentions of the parties.

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As we reference on our web-site (above), the New York State Property Condition Disclosure Act requires sellers to complete the state mandated form or offer the buyers a $500.00 credit at closing for failure to complete and provide such form in the real estate transaction. Many sellers attorneys recommend that sellers simply provide the credit because you risk litigation over "latent defects" after the real esate closing.

For example, in one recent case the Seller-Defendants answered “No” to certain questions on the New York State Form, and the Plaintiff-Buyer’s home inspector did not report that the property had any material defects. After closing, however, the Buyer allegedly discovered material defects in the property, and commenced suit against the old sellers. The litigation asserted causes of action in fraud and for breach of contract stemming from the allegedly defective conditions

The Supreme Court (trial court) permitted the suit to proceed on the issue of breach of contract and fraud. The Appellate Division, Second Department (appeals court) reversed in part, and dismissed the cause of action for breach of contract because the contract provided that the premises had been inspected and was being sold “as is”.

The appeals court, however, permitted the cause of action alleging fraudulent concealment to proceed against the sellers,

the alleged false representations in the Disclosure Statement support a cause of action alleging fraudulent misrepresentation in that such false representations may be proof of active concealment”.

See Simone v. Homecheck Real Estate Services, Inc., decided July 24, 2007, is reported at 2007 WL2127261.Real

The attorney representing you in the sale will have an opinion as to the property disclosure statement, ask the attorney.

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