Monday, March 29, 2010

Appliance Warranties, Recalls, and General Information

2 Great sites to learn if your appliance has a warranty that you were unaware of or has been recalled. Before you get a new appliance, check these sites to learn about your old appliance:

1. http://registrycentral.com/
2. www.recalls.gov

Saturday, March 27, 2010

Lead Paint Renovation Regulation

Starting on April 22, 2010, contractors who preform renovations involving lead paint will be required to have been trained and take many precautions similar to what is done with respect to asbestos. Contractors will be required to construct containment zones, wear protective clothing, and utilize HEPA vacuums.

Contractors who wish to learn more about the training requirements, should click here.

While lead paint has been outlawed in the US since 1978, its estimated to be in approximately 80 million homes. So this is a really big deal and if you have an older home, this may drastically increase the cost of your renovation project.

For information about lead paint, click here

The EPA has issued this new regulations for renovations involving lead paint pursuant to the Toxic Substances Control Act. The EPA, Environmental Protection Agency, is part of the Executive Branch of government and consequently this is a regulation, not a law, but its effect is law in that it provides requirements for the administration of the Toxic Substances Control Act. To view the regulation, click here

It is also my belief that this new regulation is going to spur a host of lawsuits concerning personal injuries that result from lead exposure during construction. This belief is based upon the media coverage that lead related health issues are now getting. With my background in public health, I see this regulation as a great step forward, but at a large economical cost for the housing sector, which is already suffering.

Friday, March 26, 2010

Loan Modification Scam Alert

Approximately half of my law firm's loan modification clients had used a loan modification company before finding my firm. The stories we have heard make you want to cry. Taking money and doing nothing. Never calling the client back. Getting a modification for more money in monthly payments than what previously was required. Oh, it goes on and on. Non-attorneys should not be doing modifications. Why? For starters, they lack the necessary tools to get the job done. Like it or not, only an attorney can represent someone in Court. Guess what? Part of a foreclosure proceeding includes a Foreclosure Settlement Conference where a modification can be pushed by a Judge. Also, part of a Bankruptcy proceeding has a similar availability. Moreover, attorneys know about RESPA and the availability of a Qualified Written Request to compel the Bank to produce documents under threat of penalty. In all, attorneys can use the legal system to benefit their clients. Modification companies can just beg for lower payments. This simply does not work. Yes, its important to utilize a Cost-Benefit Analysis, to which a finance degree proves useful, but the finance professional should consult with the law firm, not take the client.

Lets take this a step further. Have you ever heard of a sale and buy-back? That is where someone promises to pay all of the mortgage payments if you just do the small insignificant thing of putting the Deed to the house in their name. That is crazy. In fact, there is legislation that regulates this practice called the Home Equity Theft Prevention Act.

So what should you do if you feel that you are a victim of a scam in the mortgage modification world?

Go to this great website and learn the answers - http://www.loanscamalert.org/

Thursday, March 25, 2010

Thank you Karen and the Bethpage FCU Family

Your hospitality was wonderful and the students were great. Thanks for a great class. Please post all follow-up questions from the class here and we will answer them asap.

Wednesday, March 24, 2010

Class Update

Looking forward to Thursday night and our first class hosted by Bethpage Credit Union from 5:30 AM to 8:30 PM. Come and learn about Home Inspections with our friend Matt Kaplan from Housemaster in our course entitled, "Discovering the Home Inspection".

Summary: This course will introduce the student to the field of home inspection while providing the student with a detailed understanding of many of the various structures in a home and items to red flag during a walk-through. The student will also learn how to decode the inspection report and determine if ancillary inspections are necessary. Finally, the student will learn how to utilize inspections to obtain leverage when negotiating. Knowledge is power.

Go to Liebatlaw.com to register

Thanks to all who attended our great class on commercial real estate this past Tuesday. Jennifer Pendzick, as usual, was a star lecturer.

How many months is a modification?

We were just told by an undercover friend at a local bank that trial modifications are taking between 9 and 12 months to be approved internally. Moreover, her bank will not approve a modification for someone who is not in default. So while a modification may be appropriate for you, it should not be your only option and should be a strategic treatment within a larger foreclosure defense strategy.

Ending Second Mortgage Problems

So does this sound like a typical situation. You have a short sale offer on a property that has a first mortgage of $300K and a second mortgage of $100K, but an offer of only $250K. Your issue in getting the short sale approved is with the second mortgage who refuses to release their Notice of Pendency and let the deal close.

So what do you do?

Some beg the second to approve the sale. Some try and get concessions from the lawyer, real estate agents, and first mortgage to appease the second. Yet, this is all begging. I am not into begging.

Here is a situation that works better. Use the Bankruptcy Courts and do what is called a Cram-down or strip-off. This is when the bankruptcy Court removes the secured status that accompanies a mortgage because the property's fair market value does not support the security. Traditionally, in a Chapter 7 Bankruptcy, the Court removes any unsecured debt, but keeps the security interest and permits a debtor to either reinstate the debt and keep the property or allows the creditor to take the property through their security interest. Here, there is no value to secure, so the Bankruptcy Court removes both the debt and the security interest. This is great. Now you can have your short sale approved and thumb your nose at the second mortgage. Maybe if you explain this to the second mortgage (showing your knowledge) and the Bankruptcy Court fees that they will incur in loosing this battle about their mortgage, they will just permit the sale. Just saying.

Be ware - Cram-downs don't work on first mortgages. Moreover, they used to only work in Chapter 13 Bankruptcies. Well there was a case just last year entitled, Lavelle, where a decision permitted Chapter 7 debtors to cram-down their second mortgage just like in a Chapter 13.

Here is to your next short sale approval.

Sunday, March 21, 2010

NY Property Tax Cap Bill

There is so much talk about reducing your taxes through a Tax Grievance these days, I figured it appropriate to mention a current Bill proposed by the Governor that caps property taxes. Yet, before I give you the details lets first be clear that a Tax Grievance does not address the amount of property taxes on the macro, but instead how much percentage of the total property taxes in a given area that each individual property owner is assessed on the micro.

Anyway, the currently proposed Bill would limit tax levy growth for all school districts, counties, cities, towns, villages, special districts and fire districts to the lesser of 4% or 120% of the annual increase in the consumer price index. Yet, the Bill would allow local government officials to override the cap with a 2/3s vote. So with this Bill the total amount of taxes felt by every homeowner in a given area would be uniformly capped. Nonetheless, remember that grievance day in Suffolk County Towns is May 18 so get to filling out your grievance forms and reducing your property taxes in the micro. Plus, for all of you who need a little help, Lieb at Law will be co-hosting a workshop on Tax Grievances with the Moriches Chamber of Commerce on April 29 at 7pm at the Center Moriches Library where all are welcome to attend and learn.

I will keep you posted if the Bill is passed.

Wednesday, March 17, 2010

Small Claims Assessment Review v. Tax Certiorari

There are 2 options available if the property owner wants to appeal the Board of Assessment Review in a Tax Grievance. Each option examines the grievance De Novo (anew) without influence from the Board of Assessment Review and each generally precludes another grievance for 3 years. Yet, the Small Claims Assessment Review (SCAR) is quicker and less expensive; a property owner can be represented by a nonattorney; and the matter is decided by a Hearing Officer who does not require formal rules of court.

Requirements to use SCAR:
1. Must be person aggrieved by an assessment;
2. Assessment must be on a one, two or three family, owner-occupied residential structure;
3. Structure must be used exclusively for residential purposes; and
4. Aggrieved person must have filed grievance

So
- income producing property requires a Tax Certiorari. Therefore, owners of income producing property should either use an attorney from the get go of the grievance process or do it themselves instead of using one of those tax grievance companies that send you a letter every other day because the companies can't appeal the Board of Assessment Review's decision. What are your thoughts on tax grievance companies?

Tuesday, March 16, 2010

Commercial Realty Valuation Question

Generally, when tenants talk about prospective commercial spaces they talk in terms of price per a square foot. This makes sense in that its a small unit of quantification that is easily comparable between locations. Moreover, many prime tenants are either corporately owned or franchises and consequently utilize operational systems that are based upon statistics. Yet, do you think that commercial spaces on Main Street should be discussed in terms of price per square foot or just as a more vague market value? I find on Main Street the latter is often used, but maybe Main Street should follow Wall Street and use the square foot measurement more. It would bring objectivity to the market and optimize the valuations of property.

Tax Grievances Document Requirement

1. Most recent property tax bill
2. Appraisal completed within the last 12 months
3. Contract of Sale (if purchased within the last two years)
4. Recorded Deed


Lets talk appraisal; there are 3 traditional ways to value realty:
1. Market comparison approach estimates the value of property by applying a comparative analysis of recent sales that are similar to the property being assessed in terms of physical and locational characteristics.
2. Cost approach or summation approach estimates the value property by adding the depreciated value of all improvements to the value of the land. The cost approach is most useful to estimate the value of specialty properties for which there is no market.
3. Income approach is used primarily for commercial and industrial properties. The income approach estimates value by capitalizing the income generated by the property after deducting charges for vacancy, collection loss and expenses.

For residential property, the best bet is to get a Broker's Price Opinion ("BPO"), which costs the least and is the most available. In fact, its created by a Broker, not an Appraiser. Just be mindful that a BPO must include at least 3 Comparisons ("Comps") to similarly situated realty.

We will be co-hosting a workshop on grievances ("Do it yourself grievances") with the Moriches Chamber of Commerce at the Center Moriches Public Library on April 29, at 7pm. Please attend to learn more.

Monday, March 15, 2010

More on Security Deposits

I was asked by an attorney in Chicago if there was a penalty to a landlord if they commingle their money with the security deposit of the tenant. In Chicago, I am informed that its 2x the security deposit plus reasonable attorneys fees. Not in NY. Here the tenant only has an immediate strict liability right to recover their security deposit regardless of the status of the lease. Meaning, even if the tenant already breached the lease, if the landlord had commingled the tenant's security deposit, the tenant can recover. Yet, I like Chicago's law better. Do you think we should add teeth to our law and provide for punitive (punishment) damages if landlords commingle the money?

Here is a blurb from a case on point:

General Obligations Law § 7-103(1) provides that a security deposit “shall continue to be the money of the person making such deposit ... and shall be held in trust by the person with whom such deposit ... shall be made and shall not be mingled with the personal moneys or become an asset of the person receiving the same.” While the statute does not provide any specific penalty or sanction for a landlord's commingling of a security deposit with personal funds, it has been held that the commingling of a security deposit with a landlord's personal funds is a conversion, which entitles a tenant to an immediate right of recovery ( see LeRoy v. Sayers, 217 A.D.2d 63 [1995]; Sommers v. Timely Toys, 209 F.2d 342 [1954] ).

Sunday, March 14, 2010

Tree damage liability

Just at my house we lost 5 trees. We live in East Moriches. My uncle in Bellport lost 4. They are down everywhere. Through houses, on cars and boats, and on top of fences. So who is responsible if a tree falls from my yard onto my neighbors? The answer is that I have no liability for damage if the tree was sound (in good condition), but if the tree was decayed and unsound I will probably be liable. Here is to hoping the tree was sound.

Friday, March 12, 2010

Tax Grievances

Its time to start talking tax grievance. In many Long Island Towns your clock is ticking if you want to lower your property taxes. Remember, the filing of a grievance complaint with the assessor or board of assessment review is a condition precedent to going to Court. It only takes a 4 page form with simple questions and answers to start the process. During the next month this will be my topic of interest and I will be giving you the ins and the outs of the process. Lets reduce our property tax assessments.

Thursday, March 11, 2010

Short sales are part of foreclosure defense

Foreclosure Defense

It’s not just about short sales anymore. Remember that when a house is upside-down the lender can and will foreclose on the property. Therefore, every treatment available to a client should be looked at through the lens of foreclosure defense. The goal is to protect the rights of homeowners and to ensure that victims of predatory lending have a voice and an advocate. This can only be done by holding mortgage providers accountable and honest. In such, it’s proper to put the mortgage company on the defensive before negotiating a modification, short sale, or deed in lieu. This is done by way of a Qualified Written Request under RESPA. Also, a mandatory Foreclosure Settlement Conference is a great opportunity to have a short sale approved with a waiver of the entire deficiency. The key is that without managing the foreclosure action, a judgment in that action may undermine all of your work in negotiating a short sale. In today’s economic climate it’s essential that homeowners have a team of professionals in their corner. Both the real estate agent and the attorney must collaborate from the first consultation to achieve a positive result. It’s time to work together.

Foreclosure filings are down

According to newsday.com Long Island's foreclosure activity fell 34% from a year ago. (citing RealtyTrac)

Do you think the tide has turned and the real estate market is stabilizing?

Wednesday, March 10, 2010

Home Sales Increase

Long Island Business News has reported that January homes sales were up 21% from a year prior. Congrats real estate agents. Lets keep it going.

Class Tonight - Foreclosure and the Economy

We are hosting a class on Short Sales tonight, 3/10/10, from 5:30PM to 8:30PM at 376A Main Street, Center Moriches, New York. See www.liebatlaw.com to register.

Notice of Pendency

A Notice of Pendency (Lis Pendens) can be had by merely filing a form with the county clerk of the county where the real estate identified in the notice exists. Nonetheless, a Lis Pendens is often discussed by real estate professionals as having the effect of labeling someone as a black sheep. We need to change this perception because a Defendant has little control of the fact of its existence. The key is that a Notice of Pendency does not require someone to go to Court prior to its existence. Consequently, there is no pre-filing judicial review and no requirement that the Plaintiff shows that his case has merit. Therefore, the fact that a Lis Pendens is filed means as little as nothing as far as an assessment of fault in a case.

Post-filing, the Defendant can move to have the notice cancelled under CPLR 6501.

Rule: Post-filing judicial review requires a showing that the judgment sought by the Plaintiff would "affect" the real estate in the Notice of Pendency. Yet, this review is limited to the pleadings (Complaint and Answer) of each party and does not address the underlying transaction. The key is that a direct relationship exists between the action and the Defendant's real estate.

Actions where a Notice of Pendency is always available:
1. Mortgage foreclosure action;
2. Partition action;
3. Specific performance action concerning a real estate transaction contract;
4. An action about title to property; and
5. An action to enforce easement rights.

Most people these days just associate a Notice of Pendency with a foreclosure action, but as you can see there are many other topics where it is applicable.

So, lets stop the belief that a Lis Pendens means someone is a deadbeat. There simply is no causation for this belief.

Tuesday, March 9, 2010

Misclassifying a Certificate - NY Times

In Sunday's real estate Q & A section, Jay Romano reported that a seller likely has no recourse against a seller where the seller misrepresented the status of a Certificate of Occupancy prior to closing. Mr. Romano's report was pursuant to the direction of Douglas F. Wasser, a Manhattan real estate lawyer. Yet, this is not necessarily true. In fact, the case of Scharf v. Tiegerman completely holds otherwise and states that where the seller misrepresents the property in a fraudulent manner, liability follows.

Moreover, my law firm has previously sued attorneys for malpractice in representing the purchaser in such a situation without performing due diligence and advising the purchaser of the actual conditions. To be clear, a Certificate of Occupancy is a municipal record that it is safe to occupy the house in the listed manner. A purchaser with an intent to occupy the house in a manner must be advised if their intended occupancy is legal or not. If an attorney to a real estate transaction doesn't provide this advise, they have committed malpractice.

Hon. Spinner does it again - The Peoples' Champion

In a very recent foreclosure case, Justice Spinner awarded over $150,000 to a Long Island borrower where the lender wrongfully entered the house on 2 occasions under a false claim that it had a right to do so.

See Wells Fargo v. Tyson

Monday, March 8, 2010

Thank you Bethpage Federal Credit Union

I met with Karen Laurence today from Bethpage and she was so wonderful in welcoming the Real Estate School to her bank. Karen and I will be offering a class on mortgages in the near future, but until than, the bank will be hosting a classes on Home Inspections and Short Sales. To attend, go to www.liebatlaw.com and register today.

Sunday, March 7, 2010

Reality of the Rental Roadblock

The real estate section of the Sunday times today discusses a trend of potential sellers renting out homes after not receiving their original asking price for the property. The article states that times are changing and these sellers/new landlords are finally receiving the asking prices, while having a tenant in the home - further preventing the purchaser from completing a sale. The article implies that these sellers/new landlords are being blindsided by tenants who are uncooperative with showing the home for purchasers and getting out of the home upon a sale. Yet, the article is misinforming the reader of what is actually happening. We should not feel bad for these sellers / landlords because of their current plight. Instead, we should recognize that when you agree to a contract (a lease), you are bound by its terms. If the sellers / landlords want to continue listing their property while renting it out - they should have strong terms in the leases that permits such action. If they do not have these terms in the agreement - they should have proper expectations that they are now landlords abiding by the terms of the lease signed with the tenants. This seems to be a recurring theme I see over and over - most of the time the seller's dont even understand the contract/lease they had their tenants sign. It's also problematic in real estate that everyone wants to sell for the absolute most that they can possibly get all of the time as if its some sort of competition. Yes, its good to make a lot of money in a sale, but seeking the absolute best often creates subsequent risks, preventing the optimal profit the seller was originally looking for. Stop second guessing, it's simply not predictable to know exactly what the sales price will be. Instead, you should make a decision and stick with it without looking back. Have realistic expectations. Consult with a professional to understand your responsibilities and liabilities. If you decided to rent because you needed to cover the short-term carrying costs of the home as a condition of not selling in hopes of a better market a year or two later, now you must wait that year or two. Its not 'woe is me' because 6 months later the markets good and now you are stuck. The key is to get good advise, not sign contracts that you don't understand, and realize that you can't control the market. Good luck.

Saturday, March 6, 2010

Real Estate Tip of the Day

A house that you live in is not an asset, no matter who tells you otherwise, but instead a liability. It may be a good liability to have, but when more money is going out than coming in, its a liability. It can only become an asset through appreciation, which is speculative at best and should not be relied upon as part of your purchasing decision if you are a prudent investor. Mindset changes everything, with realistic expectations, you can manage your life.

Chinese and Spanish Speaking Attorneys

My firm has just began an Of Counsel relationship with attorneys who speak Spanish and Chinese. Please let me know if we should offer the Real Estate School in either of these languages. Also, these attorneys are available for your Non-English speaking clients.

21 East Shore Road, Manhasset New York

Opening the new location today. We are going to take measurements and start a little construction. By the end of the month, we expect consultations to be available in both Manhasset and Center Moriches. The Manhasset office is opening in correlation with our real estate school offerings through Bethpage Federal Credit Union, at their South Oyster Bay Road, Bethpage, location. We will now be a presence in both Suffolk County and Nassau County. For more information, please contact Lieb at Law at 631-878-4455 or at info@liebatlaw.com or you can always visit the website at www.liebatlaw.com.

Thursday, March 4, 2010

Security Deposit Ownership

This money is the tenants, not the landlords. Therefore, if the landlord gets interest on this money, its the tenants. So, landlords should not commingle this money and instead should use a separate account if they want to put it in a bank. In fact, there are specific laws about this in the General Obligations Law and a landlord is sometimes required to get interest for the tenant. From a landlords perspective, safe is better than sorry. Know the law and follow it.

Wednesday, March 3, 2010

The Foreclosure Mill

If you are being foreclosed upon the bank's attorney is probably Steven J. Baum P.C.

According to the New York Post, his firm filed 12,551 foreclosure lawsuits last year, which equals about 48 a day. -WOW-
(See Feb. 28, 2010 article by Richard Wilner, Liening on NY homeowners)

Lets throw a stick in their mill and show some of the questionable legal work that was referred to in the article. So, if you are being foreclosed upon or you are an agent of someone who is, make sure they get a competent attorney to act as that stick. There are many great defense attorneys in New York that would love nothing better than to shut down the mill and help some struggling New Yorkers just like you.

Foreclosed, but Staying Put

Even after the years that it often takes to accomplish a foreclosure and sell a referee's deed at a foreclosure sale, did you know that the former homeowner can still stay in the property?

Yes, that's right, the former homeowner becomes a holdover occupant and not only that, but the new owner must even provide written notice, called a "Notice to Quit", before starting eviction proceedings. In fact, under RPAPL Sec. 713, the notice must be at least 10 days for former owners and thereafter the new owner must get a Judgment of Possession and a Warrant of Eviction.

Lastly, its possible for the holdover to get another 4 months in the home under RPAPL Sec. 751(a) and (b) even after a Warrant of Eviction is issued by the Court, but there is a tough burden on the holdover and they must pay certain monies into the Court for this benefit.

Yet, this is real technical stuff and you must get a lawyer to guide you, as a former owner, through this difficult terrain if you seek to succeed.

As a foreclosure purchaser be warned that you may not have possession for quite some time.

Tuesday, March 2, 2010

No Blog Keith & Long Island 2nd Home for the Winter

Sorry for the false advertisement on a substitute blog from Keith while I was away, but I guess we had a miscommunication and he did not realize to blog.

Anyway, I wanted to first remind everyone to check out liebatlaw.com to learn about our new classes. The real estate school is booking fast in both Center Moriches and Bethpage, so get on the site if you want to register for our free CE classes.

While I was away in Utah, which was great by the way, they have the best snow in the world, I was thinking about an issue in Long Island. You know that Utah boasts about being a winter destination with great mountains and snowboarding, in fact I saw a sign saying "there is no place like your 2nd home". Well Long Island is comparable in boasting about being a 2nd home community, but instead as a summer destination. You know the Hamptons, Fire Island, the North Fork. Hell, even Long Beach, the Rockaways, and Montauk. Yet, we have a problem? We only talk summer. In Utah, the whole time I was there all I heard about was the hiking and the mountain climbing and the biking during the spring, fall, and summer. They target the off season, we don't. What are some things that we should promote in Long Island that do not happen in the Summer? Why should people find Long Island to be the best place on earth for a 2nd home?

For starters, lets talk about ice boating, ice skating, the Islanders, restaurants, shows in Patchogue, Westbury, Westhampton and elsewhere, but I am stumped on what else. So please help me with this and lets put together a list of why people should love the Long Island winter.