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.