Articles Posted in General Interest

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?

By the time the 1970s rolled around, there were about fifty breweries in the United States, according to The Economist. A slew of new laws promoting tax breaks for small microbreweries spurred an era of innovation and explosion of smaller, craft breweries. Today, there are over 3,000 breweries, making the industry both crowded and competitive.

One of the prominent issues that arises, according to this article from NPR.org, is the challenge of finding a name that is not already taken by another brewery. There is a dearth of names that have not already been trademarked by others that connote a positive association with beer. Consequently, there have been more legal issues popping up with name trademarks because so many designs and names infringe on others’ similar ideas.

With so many breweries around the country, people do not have malicious intention to copy others’ names and designs, but there is inevitable overlap with so much market saturation.  Frequent legal issues emerge because there are public misconceptions about the fact that merely providing state registrations and ownership of domain names ensure ownership of the copyright/trademark; but that is not always the case.   A trademark attorney navigates murky waters where there is no national database of  beer brands/trademarks, and conducts common law and internet searches  – to see if there are overlapping images or names of other breweries. Intellectual property is vital to creating a strong business, and this web of legal issues associated with craft breweries’ trademarks illustrates that.

That is the question posed in a wonderfully entertaining and historically interesting article written by Dave Kluft from Boston’s firm Foley Hoag.

As his article points out, accusations of being a “witch doctor” and the use of “witchcraft” have served as a basis for defamation and slander suits around the country, and still percolate through various courts.   In New York, witchcraft is no longer considered a crime, so it is unlikely to be considered slander per se, however, you should still mind what you say.

In defamation per se cases, New York law doesn’t require a plaintiff to prove that they were “damaged” by the offending words, but a jury will decide how much or how little injury occurred. Damages are assumed only where the person defaming someone alleges that the injured person:

The Closing is scheduled for 1 PM at the office of the Bank Attorney, you arrive at your dream home, ready to sign all of the mortgage documents, and close; when you realize that the sellers have moved out, taking all of the covers to all of the electrical outlets, light switch plates, architectural stained glass windows in the bathroom and mail box.   Fact or fantasy?  That’s a real example from everyday real estate practice in upstate New York, and lead to a very unpleasant closing.

Among the standard details of a real estate contract is a paragraph innocuously labeled “personalty” or “personal property.”   First time home buyers sometimes pay close attention to the details in the contract, but not always:

  1. Personal Property: Included in this sale: (a) The sale includes all of Seller’s right, title and interest, if any, in and to:

Over the years I have received various telephone calls from prospective purchasers, and handled many cases involving condominium insurance claims.   Condo owners are often laboring under the misconception that the Condominium Owners Association insurance policy covers them in the case of disaster.   This article from the Washington Post helps explain some of the differences between home owners coverage for the interior of the Condominium and the Home Owner’s Association coverage that covers damage to existing for already constructed portions of the unit.

Let’s take the example of a water valve break in an upstairs condominium unit.    The water line breaks, flooding the upstairs apartment, and running down into, and ruining, interior walls, existing floors, and plaster ceilings of the unit below.    In the case Klose & Associates handled, the water valve was originally installed by the condominium association when the unit was built, and there was a faulty water pressure regulator on the main water line coming into the stand alone building containing the five (5) units.  The failure to regulate the pressure of the water caused the water filter to rupture many years later.

The condominium association had insurance coverage (but refused to pay) for the lines coming into the building (faulty regulator), and that insurance policy should have responded to the damage to the existing walls, floors and ceilings in the downstairs unit.   The owner of the upstairs unit received payment from her insurance company of items damaged inside her apartment, and the owner of the downstairs unit received some coverage for items that she had installed in her unit, but the “master” insurance policy owned by Condominium Association should have paid for the damage caused by the failure of the pressure regulator to originally existing items in both Units.   The condominium association refused to permit its insurance carrier to pay for any of the damage.  [Whether that was appropriate or not should be the topic of another blog entry].

When thinking about restructuring a mortgage or even going through the foreclosure process, most homeowners are motivated by the bottom line-lower monthly mortgage payments or relief from burdening debt.

What most homeowners do not consider is that along with lower mortgage payments, they may receive an income tax bill from the Internal Revenue Service (IRS). The Internal Revenue Code, which embodies the federal tax laws, classifies some discharge or forgiveness of debt as taxable income.

In other words, if the bank agrees to foregive or reduce your principal on the mortgage you signed, then you may owe income tax on the foregiven portion of the mortgage. For example, say you restructure the mortgage on your New York State home and you consequently owe $30,000 less, that $30,000 is considered “income” and is potentially taxed. The idea is that if you borrow money, which is then not paid back, it is a debt that is not being paid back and is akin to receiving “free” money. The taxing authorities consider such foregiveness “income,” because you got the value, but are now not paying it back.

In New York, grieving your property taxes means more than just complaining when your bill and assessment arrives. Each year the tax assessor for hundreds of municipalities sets a base line “assessment” for how much your they believe your real estate property is worth. Then, based upon formulas adopted by the State, they determineshow much you pay in taxes. You have the right to “grieve” your taxes by filing the correct form with your local “assessor,” in a formal review of the assessment, called a “tax grievance.”

As the property values escalated during the last decade, municipalities gleefully re-assessed the properties at higher and higher values so they could increase the amounts of revenue they collected from the real estate taxes. Homeowners are traditionally skitish about filing a tax grievance for various reasons– maybe they benefitted from such increased assessments because they took out home equity loans, or mortgages. That said, others refrained from filing a grievance fearing that the Town would reassess their property, find the various improvements made to the property, and then tax you more? While you may not file objections every year, the municipality is not permitted to raise your assessment because you grieved your taxes.

What does it mean for New York homeowners to “grieve” your property taxes. To begin with, you must file an RP-524 Form. This process is supposed to be simple, and is well explained here.