Wednesday, December 30, 2015

Income Tax Relief after a Short Sale for 2015 & 2016

The President has extended the Mortgage Forgiveness Debt Relief Act through the end of 2016 by signing Congress’ Spending Bill into law. As a result, the amount of money from a mortgage loan that is forgiven incident to a short sale, foreclosure or deed-in-lieu of foreclosure will not be taxable as income.

In the last week of 2014, the extension was passed and then applied to all transactions that occurred in 2014, retroactively. Homeowners closed transactions assuming that they were paying income tax on the forgiven debt. As a result, homeowners elected not to pursue a short sale or deed-in-lieu when it turned out to be their best strategic option.

Now that the law proactively extends throughout 2016, homeowners in financial distress can list their homes for short sale, or work out a deed-in-lieu with their lender, without the fear of being hit with a severe income tax bill.

Another important provision of the Spending Bill, beyond the Mortgage Forgiveness Debt Relief Act extension, concerns mortgage insurance premiums, which are required for mortgage loans that exceed 80% of the purchase price of a home (and is required to be paid until the loan balance goes below 80% of the purchase price). Pursuant to the new law, premium payments can now be deducted from borrower’s income tax, in the same manner as mortgage interest, through 2016. This will continue to encourage homeowners who may not have the funds for a 20% deposit to still be able to purchase a home. 

Wednesday, December 23, 2015

4.5 CE Credits | Online Video Class | Divorce Deals (Lieb School Just Released!)

We know that you will never want education from anywhere else after you try it!

Lieb School's leading distance education combines the latest interactive technology, license law education and continuing edutainment. Take Lieb School online courses on-the-go on PCs, Macs, iPads or Tablets.

The first class offering is Divorce Deals ONLINE worth 4.5 Credits (having taken a live class on a topic does NOT prevent earning credits from the online class).

  1. Click here to create a new Online Classes Account
    (a new online classes account is required for first time users)
  2.  Login, click "CATALOG" (on the upper right hand side of page)
  3. Add course to shopping card: Divorce Deals ONLINE 

Watch out! Divorce Deals are terrific fun, but full of challenging obstacles that can cause you headaches and expose you to liability if you aren’t prepared. Ever work with divorcing spouses before? Then you know. Good luck getting them to agree on anything.

Divorce Deals ONLINE is an adaptation of the live class Divorce Deals offered by Lieb School. This 4.5-hour distance education course is designed to teach New York real estate brokers and salespersons how to navigate through all the complexities of divorce deals.

This course is instructed by premiere lecturer and attorney Andrew M. Lieb, Esq., MPH, who combines video footage of live class segments with visuals, study guides, and quizzes in order to optimize your understanding of the intense materials. It is delivered in an asynchronous model to allow for accessibility whenever and wherever you find convenient while also offering note-taking and in-class comment features to provide opportunities for feedback, questions, and discussions.

Unlike the 3-credit live class, this course accounts for 4.5 credits of the total 2-year requirement of 22.5 credits for license renewal, thereby allowing you to satisfy more credits with just one class. A divorce can pull everyone and everything into its grasp. This course will offer the tools that you need to handle those intricacies while earning your commission.  

Monday, December 14, 2015

Real Estate Brokerage Regulatory Updates - 11/7/15 NYS Board of Real Estate meeting summary

On 11/7/15 the NYS Board of Real Estate continued its mission of optimizing the regulation of real estate brokers in our state by holding its meeting in NYC, Buffalo and Albany. To remind real estate brokers and salespersons, the public is welcome at these meetings where the public can bring comments from the floor. It’s encouraged that Lieb School students attend these meetings to have your voices heard. 
"[T]he Board has general authority to promulgate rules and regulations affecting real estate brokers and salespersons in order to administer and effectuate the purposes of Article 12-A of the Real Property Law."

A complete video of the meeting is available on YouTube.

In summary, the following was discussed:
1.      New Rules: A rule making package for new regulations in the field is going through the regulatory process concerning the following topics:
a.      Setting a specific timeframe to deposit escrow monies rather than a reasonable time as the rule currently requires;
b.      Rules concerning brokers who accept money from their client as opposed to the existing rule concerning a broker accepts money from all clients;
c.      Including a 1 hour safety training course in the curriculum;
d.      Modifying continuing education from a required minimum of 3 hours to 1 hour;
e.      Changing 1 credit of continuing education from constituting 1 hour of study to only constituting 50 minutes of study; and
f.       Revising the advertising regulations to require business cards to include the actual title of the cardholder on the card.
2.      Clarification of School Regulations: It was clarified that online schools and brick and mortar schools are regulated equally with regard to having a brokerage NOT control or own the school.  
3.      Continuing Education Credits: In the distant horizon the Department of State is implementing an online continuing education credit system so agents will not need to keep their original certificates at such time.
4.      Brokerage Curriculum:
a.      Changes to the broker’s curriculum were voted and approved as published. Such changes are not effective yet as there is a long regulatory process.
b.      The Board discussed updating the salesperson’s curriculum next and possibly updating the test to make it more difficult. However, it was pointed out that only approximately 60% pass the salesperson’s exam, as currently written, so making it harder may be too large of a barrier to entry into the field.

c.      The Board clarified that the legislature would have to make a high school diploma or GED a requirement of licensing because the statute, as written, does not give the Department of State the power to implement such regulations. 

Thursday, December 03, 2015

Zoning Ordinances Banning the Sale of Medical Marijuana Likely Discriminate Against People With Disabilities

Jessica Vogele, the number one ranked law student in the 2L class at Touro Law Center who is also a Law Clerk at Lieb at Law, P.C. addresses the most hot-button issue on Long Island today by delving into the zoning of medical marijuana facilities within her article published in The Suffolk Lawyer.

In July 2015, the New York State Department of Health licensed five companies to manufacture and sell medical marijuana in compliance with the Compassionate Care Act of 2014. Although no manufacturing plants will be located on Long Island, there are plans to build two dispensaries – one in Nassau County and the other in Suffolk County. The proposed site for Suffolk County is located in the Town of Riverhead and has met considerable resistance from town residents due to its proximity to a high school and the risks of increased violent crime and traffic generally associated with medical marijuana dispensaries. This backlash against the proposed site has prompted the Village of Islandia to preemptively amend its zoning ordinance in order to ensure that no dispensaries will be placed
within the village’s boundaries in the future.

The issue here is whether the village’s new zoning ordinance, which prohibits the sale of medical marijuana dispensaries within its boundaries, discriminates against people with disabilities.

Reasons to Involve an Attorney in the Rental of an Accessory Apartment

There is a strong temptation for homeowners to rent out the extra space in their home for a few quick bucks on the side, but long gone are the days where being a part time landlord was as easy as posting a classified ad in the newspaper and watching the monthly rent checks roll in. 

With the continuing evolution and advancement of tenant protection laws, it is critical that a landlord runs the rental of their accessory apartment in the same way that they would run a business. One of the biggest differences between a professional and someone who dabbles in a field is the thorough understanding and appreciation of the risks their business faces. 

This article focuses on a few key developments in landlord-tenant law that all mom-and-pop landlords should be conscious of in order to avoid turning their part-time supplemental income into a big time hole in their pocket.

Wednesday, December 02, 2015

Profiting From Real Property

Income producing real estate in Suffolk County is the backbone of our local economy. We have our weekend warriors who rent out their second homes, merchants who operate and lease our mixed use downtowns, REITs, public companies and national brands who manage our industrial parks and shopping centers, hospitals and their doctors, lawyers, architects and accountants who inhabit our professional spaces and every other category of property owners imaginable. Yet, the business of owning and/or managing an income producing property is truly a business, and should not be thought of as a passive investment afterthought. It’s a business that requires a lawyer to serve as counselor, negotiator, scrivener and litigator. In fact, best in class legal services can transform a poor real estate investor into the next great American tycoon.

In this issue of The Suffolk Lawyer, we not only focus on Real Property, but also focus on the business of profiting from real property with all of its associated risks and blue ocean opportunities. Regardless of your individual legal practice focus, knowing the basic pitfalls of real estate ownership is a necessary knowledgebase for every Suffolk County attorney. 

In this edition Dennis Valet, Esq. discusses the need to preemptively mitigate leasing risks in “Reasons to Involve an Attorney in the Rental of an Accessory Apartment,” and Alicia Menechino, Esq. addresses the need to respect the judicial process for evictions in her article, “Self-Help: Vigilante Justice or Legal Re-Entry?” Next, Jordan Fensterman, Esq. addresses the unique risks inherent with renting medical space in his article, “Leasing Medical Office Space in New York.” 
Then, we are thrilled to have Jessica Vogele, the number one ranked law student in the 2L class at Touro Law Center, address the most hot-button issue on Long Island today by delving into the zoning of medical marijuana facilities within her article, “Zoning Ordinances That Ban the Sale of Medical Marijuana Likely Discriminate Against People With Disabilities.” 
Lastly, but perhaps most importantly, Michael S. Brady, Esq. addresses inspired capital gains tax deferral strategies, which transform the income producing property owner into a true income producer, in his article “Bending Over Backward to Defer Taxes: Reverse 1031 Exchanges.”
In my fourth year as the Special Section Editor for Real Property, I need to thank our Editor-in-Chief, Laura Lane, who has made this all possible. Thank you to Ms. Lane and to all of our writers. I hope that you enjoy this edition.

Friday, November 20, 2015

Bans Against Smoking May Discriminate Against the Elderly and Disabled

The Department of Housing and Urban Development (HUD) is proposing a ban on smoking in public housing units nationwide to protect residents from the dangers of secondhand smoke. Citing to the higher risks of cancer and other diseases associated with secondhand smoking, HUD Secretary Julian Castro stated that this policy would protect millions of Americans from preventable diseases every year. Additionally, it would save public housing agencies millions of dollars in repairs from fire and smoke damage caused by lit tobacco products.

The “castle doctrine” is a long-standing legal doctrine allowing individuals certain protections in his or own home. However, if HUD’s proposed ban is enacted, public housing will no longer be a castle for those residents who want to smoke in the privacy of their own homes. By conducting public health studies and hearing public comments, HUD is within its rights to create such a ban.
Many public housing agencies across the country have already implemented anti-smoking policies due to the HUD’s vigorous campaign to adopt such policies since 2009. However, this proposed ban would require all public housing agencies to conform to a non-smoking policy in not only the residences but also the indoor common areas, administrative offices, and within 25 feet outdoors of these units.

It is unclear how the rule will be enforced and what kinds of accommodations will be offered to smokers who already reside in these public housing units. Though the act of smoking lit tobacco products does not fall under a protected class, this policy may have a disparate impact on elderly and disabled smokers who cannot easily leave their homes every time they want a cigarette. If the elderly and disabled are unable to conform to the rule, they be forced out of their residences without any other place to go.

Secondhand smoke is a public health issue, but HUD must tread lightly to offer reasonable accommodations to those who already reside in public housing and who may not be able to abide by the new rule.  Otherwise, HUD may face a flood of discrimination lawsuits.

Monday, November 16, 2015

Fair Housing Act - FREE CE in NYC on 1/7/16

We just opened enrollment for The Fair Housing Act CE class which will be held at St. John's University Manhattan Campus, located at 101 Astor Place. Limited Seating. Online Registration Only. 

Date: 01/07/16 at 12:30pm

Instructor: Andrew Lieb, Esq. 

Credits: 3

Summary: Be warned - Discrimination in housing is very serious and exposes real estate agents to liability and the potential loss of their license. In fact, discrimination is so serious that the Department of State only requires that this course be included in the requisite 22.5 hours of continuing education and requires no other topic. This course is not a general survey course on discrimination, instead it explains a very specific law: The Fair Housing Act, which regulates our entire industry. The seminar will detail specific cases involving real estate agents and mortgage lenders who violated the Act. Be prepared for this course to hit home.

Click Here To Enroll

Wednesday, November 04, 2015

Neighbor Warning: Don't Sign Out of Possession Title Affidavits

When your neighbors list their house for sale, proceed with caution and see an attorney immediately if you are presented with an out of possession title affidavit or a boundary line agreement.

This affidavit or agreement is a writing wherein you, as a neighbor, swears, under the penalties of perjury, that you do not assert an ownership claim to real estate which has been used by you as if it were your own. Meaning, part of the property owned by your neighbor in their deed, such as a driveway, fence, shrubs, bulkheading, wood chopping area, boat storage, or the like, may have been used by you for a period of time sufficient to transfer the ownership to you through legal concepts called either adverse possession or a prescriptive easement. However, the new purchaser wants this affidavit or agreement so you disclaim your ownership rights.

Read the complete article in full by Andrew Lieb, Esq. here.

Friday, October 30, 2015

Lieb at Law won Dan's Papers - Best Law Firm 2015

We are thrilled to announce that Lieb at Law is the platinum winner of Dan's Papers Best of the Best 2015 - Law Firm.

Thank you for all of the support!

Thursday, October 29, 2015

Upcoming Lieb School CE: Mortgage Mania in Melville

Mortgage Mania

Instructor: Andrew Lieb, Esq., MPH
Credits: 3.0 CE Hours
Price: Free
Location: Newsday Training Center (Melville)
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. We will discuss the differences between a prequalification and a commitment and how to close your deal smoothly under the Real Estate Settlement Procedures Act. You will learn secrets that occur behind the scenes at the banks and how to navigate through issues with income, assets, credit scores, CO's, and open permits. 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.

Thursday, October 15, 2015

Top 5 Home Inspection Issues in Real Estate

At or about the time of contract execution in a residential transaction, the condition of the heating, cooling, plumbing and electrical systems coupled with that of the structural components becomes the foremost issue in the transaction and such conditions, when negative, typically give rise to contentious negotiations for adjustments to the initially accepted purchase price. In such, the home inspection not only offers lay purchasers ammunition for offsets, but when mismanaged the inspection can kill the deal completely.

To save your deal while leveraging proper due diligence, it is important to understand these top five home inspection issues in residential real estate transactions.

Read the full article, written by Andrew Lieb, Esq. here.

Monday, October 05, 2015

Andrew Lieb, Esq. wins 2015 Rising Star Award by Super Lawyers

We are thrilled to announce that Andrew Lieb has been named a Rising Star by Super Lawyers for the 2nd year in a row.

About Rising Stars:
The Rising Stars list is developed using a patented multiphase selection process:

  • To be eligible for inclusion in Rising Stars, a candidate must be either 40 years old or younger or in practice for 10 years or less.
  • No more than 2.5 percent of the lawyers in a state are named to Rising Stars.

Monday, September 28, 2015

Foreclosure & The Economy: The Short Sale Class

We have just opened enrollment for the Free CE on 10/15/15 in Patchogue at Briarcliff College. 

This course is instructed by Andrew Lieb, Esq. Online Registration Only. 

Foreclosure & The Economy: The Short Sale Class.

This course will shock you with the latest developments in New York's judicial foreclosure system from the perspective of a litigating attorney who spends his days in the Courts.
Yes, a short sale is not always arrived at in Court through a Foreclosure Settlement Conference and yes, you must also understand Equator, HAFA and Deficiencies to play in this field. This course will hit home when you gain an appreciation for how a foreclosure will work if a short sale is denied, a Referee is appointed and your listing is Auctioned.
Learn the dos and the don'ts. Become familiar with the terms of art. Know the players. Next, save a friend in need by avoiding foreclosure in this troubled economy.

Friday, September 25, 2015

Real Estate Attorney No-No's

You may have read in the news about attorneys who stole their clients’ money, lost their license and went to jail. Yes, managing escrow money gets attorneys in trouble the most often. However, there are many other red flags that you should watch out for when selecting legal representation for your real estate transaction. Here is a list of the top five real estate attorney no-no’s that go beyond theft, and which every client should be mindful of when seeking representation.

Tuesday, September 15, 2015

We Have Been Nominated For Best Law Firm on Dan's Papers Best Of The Best 2015

Estate Deals - Free Lieb School Continuing Education Course Offered in Southampton

Estate Deals

Instructor: Andrew Lieb, Esq., MPH

Credits: 3

Price: Free

Sponsors: Behind the Hedges, Citizens Bank, Douglas Elliman

Course Summary: Estate sales offer a unique opportunity to help the grieving by doing your job professionally. Starting with speaking the language of the Surrogate’s Court, this course will empower the real estate broker / salesperson to assist the Executor / Administrator in liquidating real property in order to satisfy debts of the estate. Additionally, disputes between beneficiaries and with the fiduciary, sales forced by the court, and foreclosures incident to the probate process will be discussed. Lastly, the student will be exposed to the overlay of brokerage and executor’s commissions where an Executor / Administrator is expressly exempt from the Real Estate License Law for Brokerage.

Register Online Here

Monday, September 07, 2015

Real Estate Brokerage Regulatory Updates - 8/16/15 NYS Board of Real Estate meeting summary

On 8/26/15 the NYS Board of Real Estate continued its mission of optimizing the regulation of real estate brokers in our state by holding its meeting in NYC, Buffalo and Albany. To remind real estate brokers and salespersons, the public is welcome at these meetings where the public can bring comments from the floor. Its encouraged that Lieb School students attend these meetings to have your voices heard.

"[T]he Board has general authority to promulgate rules and regulations affecting real estate brokers and salespersons in order to administer and effectuate the purposes of Article 12-A of the Real Property Law."

A complete video of the meeting is available on youtube.

In summary, the following was discussed:

  1. Enforcement:
    • 5 new investigators are on the enforcement staff;
    • Approximately 70% of DOS enforcement is related to real estate brokerage;
    • The majority of enforcement has recently addressed client funds (a/k/a, escrow) - it was suggested that a brokerage creates a job of escrow accounts supervisor to minimize organizational confusion and it was suggested that such individual needn't be licensed in brokerage;
    • Secondarily enforcement has mostly addressed brokers failing to immediately terminate their salespersons upon request by the salesperson;
    • Enforcement contacts respondents often through the email address provided to DOS, so brokers need to check their email (not just physical mail);
  2. Curriculum:
    • Changes to the broker's curriculum are in the works:
    • Curriculum will maintain 45 hour requirement; 
    • Curriculum is expanding the topic of broker's operations to 16 hours, which includes license law and agency; 
  3. The Real Estate License Law updates from 5/2015 address changes to part 19 NYCRR sections:
    • 175.12 - key change of duplicate original to only require a copy (strangely the title stayed at "Delivering duplicate original of instrument")
    • 175.20
    • 175.24(a)
    • 177.2
    • 179.1
    • 179.2(b)
    • 179.3(a) 
At the end of the meeting there was public comment addressing 19 NYCRR 177.2, which states, in pertinent part, as follows "[n]o real estate course of study seeking approval may be affiliated with or

controlled by a real estate broker, salesperson, firm or company or real estate franchise, or controlled by a subsidiary of any real estate broker or real estate franchise." 

Specifically, it was alleged that online schools are giving referral fees to brokerage offices that recommend such schools on the brokerage's website. The Board suggested that a complaint be made to enforcement and/or an opinion letter be requested from the Department of State to clarify the applicable regulation to the alleged facts.  

The next meeting will be scheduled in November or December 2015. 

Tuesday, September 01, 2015

Top 5 Risks For Airbnb Landlords

It may seem homeowners have a money tree at their house. It’s easy, just rent your house for the weekend and the dollars will shake into your bank account. Better yet, companies like Airbnb can facilitate the process and get landlords timely and secure payments, right? Making money is never so easy. Here are five risks of using Airbnb. In each, you need to decide if an Airbnb host is a residential property landlord or instead a hotel operator, in order to understand your exposure.

Read the full article by Andrew Lieb, Esq. here. 

Monday, August 31, 2015

Five Discrimination Issues in Residential Real Estate Leasing

Landlords have an incredible number of issues to deal with, not the least of which is considering to whom they will open their doors as tenants. Landlords and their agents are restricted by civil rights laws from privately discriminating against prospective and current tenants. In fact, the seminal U.S. Supreme Court case of Reitman v. Mulkey expressly found that a private right to discriminate was unconstitutional. Yet, what does it mean for a landlord to discriminate? Here are the five ways a landlord can get sued under discrimination laws.

Read the full article written by Andrew Lieb, Esq. here. 

Thursday, August 27, 2015

Fortune Attacks Real Estate Brokers – Do You Agree?

Yesterday, Chris Matthews’ article “Real estate agents may be colluding to rip you off” was published by Fortune while citing to a paper published by the National Bureau of Economic Research and authored by Panle Jia Barwick, Parag A. Pathak, and Maisy Wong.

The article claims that “brokers who charge lower commissions are punished in the marketplace” and that sellers are “uniquely incapable to gauge the quality of what they’re buying”.
According to the authors of the cited article, Conflicts of Interest and the Realtor Commission Puzzle,
“[t]hese adverse outcomes reflect decreased willingness of buyers' agents to intermediate low commission properties (steering) rather than heterogeneous seller preferences or reduced effort of listing agents.”
So, in English, it’s not that seller’s agents’ efforts are adversely affected by lower commissions, but instead, that buyer’s agents, who are generally compensated by seller’s agents, are less likely to bring buyers to properties where they are offered a lower percentage for procuring.

As an industry, we need to make sellers capable of gauging the quality of what they’re buying; to make informed decisions as to commission payments.

To accomplish this, brokers need to explain to sellers that they offer a split of their commission to other brokerage companies in the area (i.e., cooperative brokerage) in order to induce such other brokers to act as buyer’s agents and/or broker’s agents in procuring their purchaser to buy the property (i.e., this practice increases demand and consequently the price for real estate).
Seller’s agents need to explain that buyer’s agents and/or broker’s agents are money driven and will steer their buyers to the properties where they are compensated at a higher level (as stated in the study).

Consequently, the amount of the commission that is to be paid to the cooperating brokers must be discussed when a seller’s agent initially takes the listing and such percentage should be included within the brokerage contract (i.e., exclusive right to sell agreement).

In Long Island, the local REALTOR© Board, LIBOR, permits the seller’s agent to control the commission percentage offered to cooperating brokers in each individual deal.
To illustrate, if a seller is paying a broker 6% one cannot deduce that the cooperating broker, who procures, will always get 3% for their efforts. Instead, the cooperating broker will get whatever percentage that is listed on the cooperating brokerage listing (i.e., Stratus) agreement by the seller’s agent (each region in New York has a different cooperating brokerage agreement and therefore this blog’s suggestion does not hold true everywhere).

As a result, sellers need to be educated that they have 5 points of negotiating commissions when hiring their real estate agent, as follows:
  1. The commission percentage to pay the seller’s agent for merely listing the property and negotiating for the seller;
  2. The commission percentage to pay the seller’s agent if such agent individually lists and procures the purchaser (i.e., direct deal);
  3. The commission percentage to pay the seller’s agent if such agent lists, and the commission percentage to pay a colleague within the same brokerage if such colleague procures the buyer  (i.e., in-house deal; this will be one total commission number for both the listing and procuring because the brokerage and not the salespersons is paid the commission);
  4. The commission percentage to pay the cooperating broker where the seller’s agent lists only, but another brokerage procures the buyer while such cooperating broker is negotiating for the interests of the seller (i.e., broker’s agent);
  5. The commission percentage to pay the cooperating broker where the seller’s agent lists only, but another brokerage procures the buyer while such cooperating broker is negotiating for the interests of the buyer (i.e., buyer’s agent)

The article’s title attacks an industry (“colluding to rip you off”). Yet, this blogger theorizes that sellers care more about themselves and getting the job done (i.e., selling) than fixing an industry. Without commenting as to whether the authors have a point about collusion, its submitted that simply having our brokerage industry inform and educate our buyers of the statistical effects of their commission offerings will make meaningful change. Let’s give our clients the tools to make smart choices. Let’s educate the vulnerable consumers that we serve. It’s the job of a seller’s agent to explain to their seller the 5 points of negotiating commissions.

Real Estate Contract Originals Must be Retained

A New York Appellate Court, in Stathis v. Estate of Karas, recently addressed a lawsuit against an estate to enforce a real estate contract of sale that was entered into by the decedent pre-death. However, the Plaintiff could not produce the original contract of sale so he submitted a copy to the Court. The Court refused to accept the copy as evidence when hearing the case.

The Court explained that when a plaintiff wants to submit a copy, pursuant to the Best Evidence Rule of CPLR Rule 4539, they must establish:

  1. Why the original document could not be produced;
  2. That person’s attempts to find the original contract; and
  3. That the copy was a reliable and accurate depiction of the original contract.

In Stathis v. Estate of Karas, the Plaintiff failed to show why he could not produce the original contract, and what efforts he undertook to try and find such original contract. Also and most importantly, the Plaintiff failed to show that the copied contract of sale was a reliable and accurate portrayal of the original contract. As a result, the Plaintiff was not allowed to produce the copied contract of sale, the Appellate Court reversed a verdict in the Plaintiff’s favor, and a new trial was ordered. 

It is always safe to keep your original real estate contracts of sale because the burden of proof to submit a copy is hard to satisfy.

Beware of Form Contracts – Why Your Business Needs a Tailored Agreement

As an attorney that regularly practices commercial litigation, I read a lot of contracts. Some good, most bad. One disturbing trend that I have noticed is the willingness of businesses – both small and large – to use form contracts or contracts created for other companies. The justification I hear is the belief that the contract must be good enough because a larger or older company is using it. The thinking is simple – “if it works for them, why wouldn’t it work for me?”

This isn’t a knock on Blumberg forms or other form contracts. They have their purpose and may work for some people. I do, however, take exception to the thought that because it’s good enough for someone else, it is good enough for your business. It’s not, and the fact that I just finished a trial on a ten year old breach of contract litigation confirms that every business needs its own tailored contract.

Form contracts and contracts written for other businesses do not take into account the traits that make your business unique. Every business has a differentiator, especially in highly regulated fields. When you use a form contract, you are failing to include language that accounts for and takes advantage of the differentiator that makes your business successful.

Form contracts typically are overbroad and are not sufficiently specific. Blumberg doesn’t know the nuances of the agreement between your business and your clients, so their contracts are intentionally drafted using vague, ambiguous and broad terms and topics. In a breach of contract litigation, ambiguities are the death of your contract. Not only are ambiguities construed against the drafter of the contract (yes, you are considered the drafter of the contract if you choose a form contract[1]), but once a court finds an ambiguity, the door is open to parole (extrinsic) evidence which can potentially modify the written contract.[2] If you are fighting about what the parties “thought” the contract meant, you have already lost the battle.

My ten year old breach of contract case likely never would have gone to trial if the business had used a contract tailored to their specific business instead of using a generic contract used for their industry in general. Because the form contract included services and methods of payment that were inapplicable to the business, following a motion for Summary Judgment (asking for a pre-trial decision by the Court as a matter of law), the Court held that the contract was ambiguous. Once it was determined that the contract was ambiguous, the defendant was allowed to introduce a slew of evidence of oral representations allegedly made by the business which made the defendant misunderstand the written terms of the contract. If the business had retained an attorney to draft a contract specifically for the services that they provided instead of using a form contract shared between multiple businesses in the industry, there likely would have never been a lawsuit in the first place, let alone a trial.  

If you have the ability to control the contents of your contract and you take a shortcut or the cheap way out, you are being penny-wise but pound-foolish. A rock solid contract decreases litigation costs and increases the chances that you will be compensated for your goods or services. A defaulting party is less likely to challenge a contract in Court if the language is straightforward and tailored specifically to address the dispute in question. Finally, in the event that you are forced to go to Court to enforce your contract, a tailored agreement decreases the chances that there will be a trial[3] to resolve what the parties were really agreeing to when they entered into a written contract that was supposed to memorialize their understanding and agreement.

Be wary of forms.  

[1] Interested Underwriters at Lloyds v. Ducor’s Inc., 103 A.D.2d 76 (1st Dept. 1984)
[2] Hartford Accident & Indemnity Co. v. Wesolwski, 33 N.Y.2d 169 (1973).
[3] The interpretation and application of an unambiguous contract is a matter of law that may be disposed of in a motion for Summary Judgment, obviating the need for a trial. Hartford Accident & Indemnity Co. v. Wesolwski, 33 N.Y.2d 169 (1973).

Monday, August 24, 2015

Top 5 Invisible Location Issues For Purchasing Property

Location, Location, Location. Have you ever driven by a property and questioned why THEY don't just put XYZ (i.e., Coffee Shop, Apartments, Offices, Gym) in over there? Then, you thought to yourself: "I can do it, I'm going to be rich!!!" The problem with your get rich plan is that what you see is not what you get when you solely focus on the visual of a given property (i.e., Location, Location, Location). Before becoming a first-time developer of residential or commercial real estate you need to understand these five invisible location issues.

Wednesday, August 19, 2015

Superstorm Sandy Property Tax Relief

The Governor signed a new law this month that provides tax relief to homeowners who renovated or repaired their homes after Superstorm Sandy (Sandy), or are in the process of or are considering doing the same. 

While driving through the coastal neighborhoods of Long Island, Queens and Brooklyn, it’s a very common sight to see homes being raised, abandoned, for sale or completely renovated and looking brand new; all of these events generally being caused by Sandy.

When the renovations were made, homeowners likely were worried about being able to live in their homes again, not about minimizing the resulting property value increase, so this law creates welcomed relief for those who are going to be shocked to find a significantly higher property tax bill for their renovated homes (i.e., the renovation increased the home’s value and hence the home’s allocation for real estate taxes).

Some fine print that is important for assessing eligibility for this exemption:
  1. Applications are to be made to your local Town Assessor; 
  2. The home must be used and occupied for residential purposes (1-3 family homes are eligible); 
  3. The current owner must have owned the home prior to October 29, 2012; 
  4. Renovations must have been made to portions of the home that existed before October 29, 2012 and a new Certificate(s) of Occupancy showing the improvements must be obtained on or before March 1, 2018; 
  5. You can apply for the exemption beginning March 1, 2016, but no later than March 1, 2018; 
  6. If you are thinking of selling or buying a home that may be eligible for this exemption, be aware that the exemption terminates if the title to the home is transferred (except for those who inherit and then occupy the home); and 
  7. The exemption can last 8 years if homeowner complies with the conditions described herein. 

It is important for those who recently completed or are in the middle of renovations to make sure that they obtain their final Certificate(s) of Occupancy before March 1, 2018 to remain eligible for this exemption, as this process can be frustratingly long depending on the work done to the home.

Homeowners who are interested in applying for this exemption should consult with their contractors and real estate attorneys to make sure their Certificate(s) of Occupancy are in order and that important deadlines are not overlooked.

Tuesday, August 18, 2015

Lieb School Student Question: If a client [Home Owner] informs me that there was a suicide in their home, do I have to inform my customer [buyer]?

The applicable law is RPL 443-a(1)(b).

If you are a seller's agent in this situation dealing with a buyer that you don't represent, which appears to be the case by way of your terms client and customer, then there is no affirmative obligation to inform the buyer about the suicide. More so, you would be breaching your duty of confidentiality to the seller if you gave this information. Instead, you can only answer the question if the buyer asks in writing and you inform your client and your client approves of you answering.  

Tuesday, August 11, 2015

Supreme Court Rules To Remove Housing Discrimination: Landlords And Developers Beware

Wednesday, August 05, 2015

The 5 Most Common Landlord/Tenant Disputes

Long Island is developing its rental inventory in droves with mixed-use downtowns and multi-family construction. We saw development first boom in the emergence of Patchogue. Now it’s Riverhead, with the recent sale of the Sears building and the prospective redevelopment of the site to include 160 apartments in a revitalized downtown. Yet, this is nothing new to the East End, where our summer rental community has supported the economy for decades. While rentals offer a great housing option that supports the community, they also involve many disputes that find their way into our courts.

Read the full article in Dan's Papers, written by Andrew Lieb, Esq. here. 

Tuesday, July 28, 2015

Here’s Why to Secure Your Original Will

Having an Attorney prepare your Will allows you to control the way your assets are distributed upon death. If you have a Will prepared, it is imperative that you secure your original Will in a safe location so that it may be produced for the Court following your death. Failing to do so may result in a Court making the rebuttable presumption that your Will has been revoked or terminated. See In re Fox’s Will. In other words, unless it is proven otherwise, the Court may conclude that you intentionally destroyed your Will while you were alive so that the Will could no longer be enforced.

Recently, the Courts reminded us why this principle is important in the Matter of the Estate of Robyn R. Lewis. In that case, the decedent (i.e. the person who passed away) had more than one original Will but not all of the original Wills were produced for the Court. As a result, the Court found that the decedent may have revoked the Will, even though that may not have been the decedent’s intent.  

Therefore, it is wise to only have one original Will, so that you only have to worry about securing that one Will for later production in Court. Options to secure a Will include, but are not limited to, leaving your Will at your Attorney’s Office, keeping your Will at your home, or filing the Will with the Court pursuant to Surrogate’s Court Procedure Act §2507. Do not keep your Will in a safety deposit box because it may be difficult or even impossible to access it after your death.

A person spends time and money to have a Will prepared, and all of that work may be undone due to a simple mistake, such as neglecting to tell someone where the original Will is located. If you want your friend to get that piece of jewelry you promised her in your Will, then you need to make sure you secure your original Will so that it may be enforced upon your death.