(Nyack, New York- April 3, 2020) We all hear the horrible, and getting worse, stories of loved ones sick, suddenly finding themselves in the hospital, incapacitated, and no longer in touch with their family members, unable to pay their own bills, manage assets, or even make medical decisions. With the outbreak of Coronavirus (COVID-19), this scenario is a growing concern, and unfortunately, a growing reality for many.
What are common issues families face when a loved one is incapacitated and what Estate Planning documents might give all a piece of mind:
* No power to make medical decisions if you are unable to communicate your medical wishes;
With all of the “fake news” making history in our world, it is important to remember that, as ubiquitous as Facebook may be, what you post may not be so “fake” when it comes to your personal litigation position. If you have a lawsuit, whether it involves claims for personal injuries, or adverse possession, your postings on Facebook may become more public than you think.
Many social media users change their Facebook to “private,” in the erroneous attempt to remain “private,” assuming that their posts are private, viewable by themselves and selected “friends.” The same goes for “private” messages shared over Facebook messenger and their selected recipient.
In today’s social media frenzied world, however, Facebook posts and messages may not be so “private” if they tend to prove or disprove claims you make in a court case. In that regard, New York State’s highest appellate court recently ruled that “private” social media posts, particularly Facebook posts can be requested and made available to a court in “discovery,” the pre-trial procedure where each party requests evidence from the other.
With the rise of the so-called “sharing economy,” more homeowners have been looking to rent out their properties in the short term on websites such as Airbnb to earn extra cash. However, as short term rentals have increased in popularity, municipalities across the United States have begun considering legislation and instituting stringent regulations or outright bans, often with hefty fines for violators.
Following the law is critical to listing on Airbnb, because you (and not Airbnb) can be held solely liable for the illegal listing. Many cities have taken to scouring the website to track down listings that are unapproved, and a new law signed by Gov. Andrew Cuomo in 2016 imposed fines of up to $7,500 on those caught illegally listing on the site. Critics of Airbnb argue that by making it easier to rent out apartment units for short terms, less units are available on the wider market which drives costs higher. Since 2010, it has been illegal in New York to rent out a whole apartment for less than thirty days (although the law makes an exception for when you are staying on the property for the duration of the stay). State lawmakers saw Airbnb as a tool to evade this law, and argued that stricter fines were necessary in order to stop the illegal rentals.
If you would like to rent a house on Airbnb outside of New York City, the laws are different than those for apartments. Your municipality could have an ordinance banning Airbnb already on the books (often rules prohibiting bed and breakfasts apply to Airbnb too), unbeknownst to you. One local resident of Grand-View-on-Hudson, in Rockland County, rented his home on Airbnb for New Years Eve. Not only did he return to over $100,000 in damage from the previous night’s party, the village’s mayor later told Lohud.com that Airbnb listings were in fact prohibited under local rules. (Not necessarily accurate)!
Most homebuyers and sellers are accustomed to the usual model of agency: the seller and buyer each have a real estate “agent” representing them during the showing, negotiation and final closing of a real estate transaction. Typically, the realtor is an “agent” who works on behalf of a buyer or seller with “fiduciary” responsibility to act in their best interest. Wikipedia defines “fiduciary” as “a person who holds a legal or ethical relationship of trust with one or more other parties . . . and . . . entrusted” to act with loyalty to their principal- either the buyer or the seller.
But, what happens when the buyer and seller are both represented by the same agent, and that agent is typically being paid by the Seller under a multiple listing agreement? Say one agent has a listing, a prospective buyer calls the number on the web-site and gets that agent on the telephone, and then shows that house to the caller. In New York, most real estate brokers who represent sellers have a written agreement to be paid a commission at the time of closing. When the prospective purchaser calls about the house they want to purchase, they don’t contemplate that the agent is working for the seller.
In New York, that listing agent can show the house to the buyer, but must disclose that they will then be working both for the seller and the buyer, a “dual agent.” This arrangement is more common in small real estate markets with fewer properties and firms, but can also occur at a large real estate brokerage firms, where buyers and sellers have different real estate agents licensed by the same company. Dual agency is legal in New York State (but not all states) so-long as conditions for written disclosure are met. New York requires all real estate agents and brokers to specifically disclose their relationship to the transaction, buyer or seller or both.
Title insurance is a must for all home buyers in New York. A title company searches the public record to identify potential issues with the title. Common problems include things like old liens, judgments, encroachments, survey overlaps, outstanding mortgages or unpaid taxes against the property being purchased. Title companies play an important role in real estate transactions because they act as a “risk mitigater” because they verify that the piece of property is unburdened by title issues and “indemnify” the owner and lender for such problems.
There are two types of title insurance; owner title insurance and lender title insurance, both of which you pay for at the closing if you are mortgaging your home. If a person emerged to claim that they were the rightful owner of the house, or had a judgment or lien against the house, then there might be title “claim” to the applicable insurer. Assuming the title insurance company agreed, and had not excepted coverage in the original policy, lender title insurance would reimburse the lender the amount they lent to purchase the home (or your title was damaged), or might hire title attorneys to repair the problem. If you had owner title insurance policy, you would be paid for the value of the loss, or the title insurance company would work to sort out the title claim (indemnify you for your losses, including attorneys fees to repair the title issue).
Either way, title companies are integral to the home buying process protecting consumers from purchasing a home that could present headaches down the road. But how do we choose a title company and how much will the buyer and seller pay at the time of closing?
I wanted to add an update to this Blog post for a recent litigation commenced in the Hudson Valley arising from a transaction in Dutchess County. Buyers need an appraisal contingency– even the famous Steve Miller. It will be interesting to see how this plays out. Here’s another Article about the dispute.
Updated Post from 2017- Peter Klose.
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.
Technology has revolutionized our lives, from the way we communicate with each other to the way we conduct business, it permeates our lives at home, in the car, everywhere. With the advent of smartphones , personal computing technology has is faster, smarter, and more pervasive than you think. From black boxes in cars, tracking software in phones, technology firms incorporate privacy invaders in cars, weather stations, and now homes. With the huge popularity of Google Home and Amazon Echo, devices that engage with users to do tasks at their bidding, many aspects of our daily lives are being recorded for various benign and, less than benign reasons. Simple tasks like checking the weather, turning on and off lights, or locking your car, speeding down the local street, all leave electronic trails, some more clear than others. According to the Seattle Times, “in a bid to spread the gospel of home automation, Amazon.com has rolled out free consultations from in-house experts that help customers build out a connected home. The Smart Home Consultation advisers come to consumers’ homes to demonstrate smart home products, and make personalized recommendations on what gadgets to buy.” The “smart home” sales grew 57% from 2015 to 2016, showing the explosive popularity, but how often do you consider the other side of the data– the intrusion into your personal space. These machines, particularly Google Home, know everything about you.
For example, in homes, control panels regulate shade controls, televisions, temperature, security systems, lighting, speakers, music, and countless other functions. The control panel collects data which may actually track the occupant’s comings and goings, especially if the smart appliances are activated by voice control. Much of the time the automation of daily life functions means that homes are more efficient and cheaper to manage, energy-wise, because it’s easier to quantify and control your usage.
But, have you considered the impact of this data on insurance claims? According to the Claims Journal, data collected from smart devices will improve first notice of loss, settlement and subrogation – several steps of claims processing. Yes, at some level, an insurance company for a smart home equipped property, could look at each stage of the insurance value chain, beginning with customer engagement all the way through pricing and underwriting, and ultimately, claim settlement, the data from connected home devices has the potential to improve each stage.
Property ownership comes in all shapes and sizes. An interesting and seldom discussed form of ownership is the idea of “tenancy by the entirety.” In the 1940s, many states abolished tenancy by the entirety, viewing it as unequal in terms of women’s rights. In England, tenancy by the entirety was outlawed by the Married Women’s Property Act of 1882 because “the English judges held that the statute abolished this estate in conveyances executed subsequent to its effective date.” An article by George Walter Klorfein in 1963 argued that “there need not necessarily be a conflict between this form of tenancy and the acquisition of equal property rights by married women [since] New York considers that the chief characteristic distinguishing this form of ownership from other classes of concurrent ownership, namely, the impossibility of either spouse defeating the right of survivorship of the other, is worth preservation.” In New York State, tenancy by the entirety is very common form of home ownership.
To determine whether two people own the home as “Tenants by the Entirety,” it is first necessary to know whether the owners are legally married. Sometimes this is plain from the language of the deed that refers to the owners as Mr. and Mrs. John Doe, husband and wife, or something indicating legal marriage. If the owners are legally married, then Tenancy by the Entirety is presumed; and, if the spouses want a different arrangement, it must be specified to say tenancy with right of survivorship (when one co-owner dies his share of property goes to his spouse) or tenants in common (when one or more people live on a property they each get a share of the property and this share is transferred to the estate after the death).
Under the customary arrangement of tenancy of the entirety, each spouse possesses one hundred percent of the property and, upon the death of the spouse, the other owns the property completely. Tenancy by the entirety implies that if one spouse tries to sell his share of the property, the owner cannot force the other spouse to sell or “partition” the property, and has no right to separate the property. Spouses are prohibited from disinheriting the other by gifting it to a beneficiary in their wills, so a will that leaves a husband’s share to his son is invalid if the wife is still alive.
Technology has revolutionized the way we live. We order rides on Uber, rent cars through Turo, and stay at a person’s home though AirBnB rentals. The rise of the sharing economy pervades every sector of the economy, and our lives, with the idea that we can “share” our possessions – homes, cars, time – and rent them.
Sometimes its cheaper for the individual, but not the community. Like the car share rented through Uber, Airbnb allows our neighbors a platform to rent their homes and apartments to people for short periods of time, mimicking (some say replacing) hotel rooms.
Just as with any new approach to living, driving and shopping, our old laws may not adequately address or comply with how others in that industry, or that community want to enforce those laws.