Wednesday, July 28, 2010

Be careful leasing your sharehouse

Following a noise complaint from a neighbor your extra money from renting your summer home can turn from dream come true to nightmare. An interesting article about a recent crack-down in Sag Harbor can be read by clicking here.

Just to explain the nightmare that you will face, its important to read the penalty provisions for violations. The penalty provisions for violations of the rental permit rule can be found at section 270-19 of the Southampton Town Code. The key provision is "each day's continued violation shall constitute a separate additional violation".

Section 270-19
A. A violation of this chapter by the owner(s) and/or tenant(s) is hereby declared to be an offense punishable by a fine not less than $1,500 nor more than $8,000 or imprisonment for a period not to exceed six months, or both, for a conviction of a first offense; for conviction of a second or subsequent offense within 18 months, a fine not less than $3,000 nor more than $15,000 or imprisonment not to exceed a period of six months, or both. However, for the purpose of conferring jurisdiction upon courts and judicial officers in general, violations of this chapter shall be deemed misdemeanors, and, for such purpose only, all provisions of law relating to misdemeanors shall apply. Each day's continued violation shall constitute a separate additional violation.

B. Additionally, in lieu of imposing the fine authorized in § 270-19A, in accordance with Penal Law § 80.05(5), the court may sentence the defendant(s) to pay an amount, fixed by the court, not exceeding double the amount of the rent collected over the term of the occupancy

C. The court may dismiss the violation or reduce the minimum fine imposed where it finds that the defendant had cooperated with the Town of Southampton in the investigation and prosecution of a violation of this chapter. Factors which the court may consider include, but are not limited to, a report from the office of the Town Attorney confirming that the defendant did in fact cooperate and whether:

(1) The defendant reported the violation(s) to the Town of Southampton;

(2) The defendant assisted the Town of Southampton in investigating and prosecuting the violation(s);

(3) The defendant provided access to the rental property;

(4) The defendant promptly pursued his/her/its own rights under the lease to remedy the violation or adequately pursued an eviction proceeding;

(5) All violations existing at the rental property have been promptly remediated.

D. Where authorized by a duly adopted resolution of the Town Board, the Town Attorney may bring and maintain a civil proceeding, in the name of the Town, in the Supreme Court, to permanently enjoin the person or persons conducting, maintaining or permitting said violation. The owner and tenants of the residence wherein the violation is conducted, maintained or permitted may be made defendants in the action.

(1) If a finding is made by a court of competent jurisdiction that the defendants or any of them has caused, permitted, or allowed a violation of this chapter, a penalty to be jointly and severally included in the judgment may be awarded at the discretion of the court in an amount not to exceed $1,000 for each day it is found that the defendants or any one of them individually caused, permitted or allowed the violation. Upon recovery, such penalty shall be paid into the Town Attorney's Enforcement Fund.

Tenant no show at eviction

When a tenant is a no show at an eviction proceeding the landlord will get a default judgment with a warrant of eviction. Thats a great situation for the landlord, but sometimes the tenant has a good reason for missing court. In this situation a tenant should read the following link offered by the NYS court system to stop the eviction. Click here to find some useful information for tenants who cannot afford an attorney to represent their rights.

Monday, July 26, 2010

New Real Estate School Sponsor - Astoria Federal

Astoria Federal Savings is now sponsoring the Real Estate School by Lieb at Law, P.C.

We will be offering Discovering The Home Inspection on September 21st in Flatbush Brooklyn. Spread the word if you know agents in Brooklyn that would enjoy our Continuing Education courses.

Registration is open.

Mortgage relief service scam - Short Sales Need Attorneys

The FTC has banned 8 firms from selling mortgage relief services. To read the article click here. I was very glad to see the government cracking down on what is an ever growing problem in the foreclosure defense profession.

Just today I had a conversation with agents of a real estate company who insisted on using one of these types of services in their short sale negotiations. They told me the only way I could have the deal was if I agreed to using these services. My answer was simple - NO!

Thereafter, I explained that neither my firm nor their real estate office should be deciding who the client uses to negotiate their short sale. I stated that they had it all backwards in making this choice because it was not their choice or my choice to make, but instead the clients choice. Moreover, I stated that my firm will not close on a deal where a third-party, non-attorney, negotiated the settlement because we believe that such practice constitutes the unauthorized practice of law in the State of New York. Furthermore, these companies only care about closing and not properly advising clients on minimizing their exposure to liability. Consequently, my position is that the job of the real estate agent was to inform the client of the need to obtain a competent attorney, nothing more and nothing less, and the attorney's job was to advise the client's options and facilitate their goals, nothing more and nothing less.

That is how we practice at Lieb at Law, P.C.

Seller cannot require use of title company

A federal statute called RESPA disallows a seller in a residential real estate transaction that is purchased with almost any mortgage from requiring the buyer to utilize a given title company as a condition of sale. This is a situation that we are seeing more and more in the REO adhesion contract world within which we are currently operating. HUD also has regulations that speak to this issue and have requested public comment on the definition of required use. To see HUD's request for comments click here and please make your voice heard.

Friday, July 23, 2010

Next Bethpage Class - August 12th Mortgage Mania

Real Estate School Registration

Don't forget to register for Mortgage Mania at Bethpage Federal Credit Union on August 12th.

Mortgage Mania - 3 Hours
Instructors - Andrew Lieb, Esq., MPH and Karen Laurence (Mortgage Loan Officer at BFCU)

Summary: It’s time to learn the secrets in order to qualify for a mortgage. This seminar will begin with the basics, discussing everything from the definition of a mortgage to types of mortgages. You will learn who the players are at the bank and how their respective roles impact your deal. Mr. Lieb will discuss the differences between a prequalification and a commitment and how to close your deal smoothly under the Real Estate Settlement Procedures Act. Mrs. Laurence will share secrets that occur behind the scenes at the banks and let you know how to navigate through issues with credit scores. This course will enable you to weed-out high-risk clients and to advise average credit score clients on structuring their applications to get approved. Let’s prevent mortgage contingency clauses from killing our deals.

Wednesday, July 21, 2010

Last Chance to Register for Thursday's Commercial Course

Reminder - Register for tomorrow's Commercial Real Estate Course at Bethpage Federal Credit Union. 3 credits - no cost. Share with your colleagues!

Summary:
Instructor(s): Andrew M. Lieb, Esq., MPH; Jennifer Pendzick

Summary: For both residential agents looking to expand their know-how and commercial professionals looking to hone their skills. This survey course discusses the commercial value add, land use (zoning), property management, commercial valuation, the 1031 exchange, and the tenants in common ownership structure.

Class Sponsors: Bethpage Federal Credit Union and Asset Preservation Inc.

Advanced Registration is required. Register at http://www.liebatlaw.com/realestateschool/register/commercial

Wednesday, July 14, 2010

Fannie, Freddie and the home energy retrofit programs

Apparrently the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, has restricted mortgage lending opportunities for homeowners who live in municipalities that offer home energy retrofit programs. FHFA cited the basis of their decision to be that some retrofit programs present significant safety and soundness concerns. To read the letter from FHFA detailing this restriction, please click here. Yet, if you read the letter, it appears that the main problem is not safety and soundness, but instead lien priority. FHFA does not want Fannie and Freddie to loose their priority position because these programs are funded by local municipalities and may consequently jump the general first in time, first in right rule. The main take away for purchasers and agents is to be careful when seeking a Fannie or Freddie loan where a retrofit program is available.

Monday, July 12, 2010

Next Bethpage Class - July 22nd Commercial Real Estate

Don't forget to register for the next Commercial Real Estate Class in Bethpage. Advanced Registration Required. Date of class is July 22nd.

Your License = Your Job

My firm gets questions everyday about what is permissible when working as a real estate agent. To answer the question, I first see the New York Real Estate Licensing Law that can be found by clicking here. Next, I check previous decisions on the issues by clicking here. After you determine the law and precedents you can determine what is permitted. Remember, New York State governs your license, not LIBOR. So, before you worry if your acts are okay pursuant to LIBOR ethics (which are important to check as well), focus on the rules of the Department of State because without your license, you must switch jobs.

Friday, July 9, 2010

Hamptons Realty Happy Hour

If you don't know, now you do. There is something going on in the South Fork, which is a must for the whose who of real estate. Homes of the Hamptons and Styled and Sold have been hosting monthly happy hours for the movers and shakers of the East End. Last night was my first attendance, but I will try not to miss another.

The event was hosted at the famous Dockers Waterside, 94 Dune Road, East Quogue, NY 11942, 631-653-0653,which graciously offered the group a private deck and to provide half price drinks and to pass free hors d'oeuvres.

This is a great way to network and to be a player in the Hamptons. If you would like to get invited to future events, contact the hostesses Mary Thames & Alegra Dioguardi at 631-899-3305.

Thursday, July 8, 2010

HUD-1 Availability

At our real estate school last evening a student asked about access to the HUD-1. The question was how long before the closing must it be made available and to whom?

First, the HUD-1 is a statement that summarizes all of the charges in a real estate transaction.

The answer is that the borrower has the right to inspect the HUD-1 one business day before the settlement (closing). Yet, the fully completed HUD-1 must only be delivered at the settlement (closing).

So what is the difference between inspection and delivery?

Under Regulation X, which promulgates the inspection rule for a HUD-1, § 3500.10 provides:

One-day advance inspection of HUD-1 or HUD-1A settlement statement; delivery; recordkeeping

(a) Inspection one day prior to settlement upon request by the borrower. The settlement agent shall permit the borrower to inspect the HUD-1 or HUD-1A settlement statement, completed to set forth those items that are known to the settlement agent at the time of inspection, during the business day immediately preceding settlement. Items related only to the seller's transaction may be omitted from the HUD-1.

(b) Delivery. The settlement agent shall provide a completed HUD-1 or HUD-1A to the borrower, the seller (if there is one), the lender (if the lender is not the settlement agent), and/or their agents. When the borrower's and seller's copies of the HUD-1 or HUD-1A differ as permitted by the instructions in Appendix A to this part, both copies shall be provided to the lender (if the lender is not the settlement agent). The settlement agent shall deliver the completed HUD-1 or HUD-1A at or before the settlement, except as provided in paragraphs (c) and (d) of this section.

(c) Waiver. The borrower may waive the right to delivery of the completed HUD-1 or HUD-1A no later than at settlement by executing a written waiver at or before settlement. In such case, the completed HUD-1 or HUD-1A shall be mailed or delivered to the borrower, seller, and lender (if the lender is not the settlement agent) as soon as practicable after settlement.

(d) Exempt transactions. When the borrower or the borrower's agent does not attend the settlement, or when the settlement agent does not conduct a meeting of the parties for that purpose, the transaction shall be exempt from the requirements of paragraphs (a) and (b) of this section, except that the HUD-1 or HUD-1A shall be mailed or delivered as soon as practicable after settlement.

(e) Recordkeeping. The lender shall retain each completed HUD-1 or HUD-1A and related documents for five years after settlement, unless the lender disposes of its interest in the mortgage and does not service the mortgage. In that case, the lender shall provide its copy of the HUD-1 or HUD-1A to the owner or servicer of the mortgage as a part of the transfer of the loan file. Such owner or servicer shall retain the HUD-1 or HUD-1A for the remainder of the five-year period. The Secretary shall have the right to inspect or require copies of records covered by this paragraph (e).

There appears to be a clear difference between an inspection and delivery, but not one that is actually articulated. In such, a good lawyer will look to case law. Nonetheless, a search of the case law only revealed one case and in that case the Court stated: "In any event, it appears that a violation of § 2603 would not give rise to a private right of action. See, e.g., Bloom v. Martin, 865 F. Supp. 1377, 1384 (N.D. Cal. 1994) ("The structure of RESPA's various statutory provisions indicates that Congress did not intend to create a private right of action for disclosure violations under 12 U.S.C. § 2603.")."

Therefore, I ask, what is the difference in what it means, since the buyer probably won't enforce a violation anyway.

As to the question of who can inspect, its likely that the buyer or his representative can inspect. Yet, the regulation only states buyer, which would mean the buyer or someone holding a valid power of attorney.

To the great real estate agent who brought up this question, my answer to you is that you cannot force the bank attorney to show you a proposed HUD-1 in advance. Sorry.

Tuesday, July 6, 2010

Latest Homes of Eastern Long Island article - Help from hanfra

Pick Up July's Homes of Eastern Long Island magazine issue. Page 50, Andrew's Article "Help from HANFRA". Here's a copy of the text.


Help from HANFRA

My phone rang and my paralegal said Joshua Horton is on the phone. Recalling a recent article that I had read about Mr. Horton being named the newest President of the Hamptons and North Fork REALTORS@ Association (HANFRA), I quickly grabbed the phone to appease my curiosity about the call. Mr. Horton and I had never met before, but my law firm had worked with some of his agents at Corcoran in the past on a number of real estate transactions, so I wondered if this was about a new deal (Mr. Horton is a Senior Managing Director at The Corcoran Group and has direct oversight of the company’s Shelter Island, North Fork and Westhampton Beach markets). It was not about a real estate deal, but instead a deal between my law firm, Lieb at Law, P.C., and HANFRA. Mr. Horton was calling because he had a vision for the future of HANFRA and wanted to collaborate with my law firm to achieve his goals. Mr. Horton knew that my law firm had owned and operated a New York State licensed real estate school for the previous two years and that we were becoming known as a leader in real estate education throughout Long Island. As the new President of HANFRA, he wanted to bring The Real Estate School to the membership of his association because he believes, as stated to me, that the Twin-Forks must lead the rest of Long Island in learning and practicing at the cutting-edge of the industry. During our conversation, Mr. Horton also stated to me that many of his own staff had attended my classes and that he felt the collaboration would be mutually beneficial. He knew that The Real Estate School by Lieb at Law was a pro-bono project, which did not charge for classes and in appreciation of this charitable endeavor, he offered his help to minimize costs to the firm by helping to find both venues to host our classes and partners to provide food and refreshments. In exchange, Mr. Horton asked for courses throughout the Twin-Forks and for the development of additional courses to address topics of need tailored to the local markets. Mr. Horton was correct, it was a perfect match.

The Real Estate School by Lieb at Law is the pro-bono arm of my law firm, which currently offers five continuing education courses, at three credits, each counting towards the 22.5 credits required to maintain a real estate license over the course of two years, in New York State. The five courses offered are: (1) Foreclosure and the Economy: the short sale course; (2) Mold is Money; (3) Discovering the Home Inspection; (4) Commercial Real Estate: an introductory course; and (5) Mortgage Mania. To register for any of these courses, please go to www.liebatlaw.com.
Of interest to the readership of Homes of the Hamptons and Homes of Eastern Long Island, Mary Thames Louis, Claudette Keeton, and Kathy Silvanovich of the magazines, were the first in the community to identify that my law firm was addressing a serious need in the Twin-Forks through our local free courses and made their magazines the first sponsor/partner of this project. My gratitude to these three outstanding professionals and to the magazines, which they run, must be expressed. Without their support, free continuing education for real estate agents throughout the Twin-Forks would just be a dream, but with them, it’s a reality.

Last week, The Real Estate School offered our first class to HANFRA in Southold at Sea Tow. We thank Sea Tow for being a gracious host and both Rolling in Dough Pizza and Sacredsweets for providing food and refreshments. Upcoming classes are scheduled in Southampton, at TD Bank in Westhampton Beach, and at Lieb Family Cellars in Mattituck. Keep an eye on www.liebatlaw.com for more locations throughout the coming months. These companies believe in the future of our great community and enhancing the professionalism of our real estate industry. Mr. Horton, thank you for your leadership.

Homes of Eastern Long Island - Latest Issue

Don't forget to pick up the latest issue of Homes of Eastern Long Island magazine. Checkout Andrew's recent article on page 50 - about The Real Estate School's collaboration with HANFRA.

Friday, July 2, 2010

Homebuyer Tax Credit Closing Deadline Extended to Sept. 30

To be clear, this great news only applies to eligible taxpayers who contracted to buy a home, qualifying for the first-time homebuyer credit, before the end of April. So new contracts are not part of the extension.

The extension was made available as part of The Homebuyer Assistance and Improvement Act of 2010.

Now eligible taxpayers have 3 more months to close!!!

To receive the credit, eligible taxpayers must fill out Form 5405 and include the HUD-1. Good luck and have a great July 4th weekend.

Thursday, July 1, 2010

Homebuyer Tax Credit likely extended

President Obama plans to extend a deadline for homebuyers to complete purchases and qualify for an $8,000 tax credit according to the White House.

Under the extension, qualified homebuyers who signed purchase contracts before April 30 will have until Sept. 30 to complete paperwork and settle on the house. The original settlement deadline was June 30, 2010.