Tuesday, January 31, 2017

ALERT - Amended Real Estate Brokerage Regulations

The Real Estate License Law regulations at 19 NYCRR 175.1, 175.7, 176.3, 177.3, 177.7 & 175.25 have been amended. 

The industry now has new understandings of escrow requirements, compensation, advertising, qualifying education and continuing education as of January 4, 2017. 

Summary of New Understandings:

  • As to escrow, we now know that we must deposit all escrow money within 3 business days and hold it in a secure place like a safe until such time as its deposited in the bank.
  • As to compensation, we have learned that if we are paid by more than one source, we no longer have to receive consent from all parties, just our client.
  • As to advertising, we understand that business cards must include our license type.
  • As to qualifying education, we know that we now need to learn 1 hour on the new topic of License Safety, but the topic of Property Insurance has been reduced to only 1 hour from 2. 
  • Finally, with respect to continuing education, we no longer have to take a minimum of 3 hours in a course module, but can take only 1 hour when such a course is available (Lieb School is launching a 1 hour Agency Disclosure course very soon) and each hour is now only 50 minutes long (for bathroom breaks, etc.) whereas it used to be a 60 minute requirement. 



The full amended regulations are as follows:

Section 175.1 of Title 19 NYCRR is amended to read as follows:
            Section 175.1. Commingling money of principal.
A real estate broker shall not commingle the money or other property of his principal with his own and shall at all times maintain a separate, special bank account to be used exclusively for the deposit of said monies and which deposit shall be made [as promptly as practicable] within three business days.   Until such time as the money is deposited into a separate, special bank account, it shall be safeguarded in a secure location so as to prevent loss or misappropriation.  Said monies shall not be placed in any depository, fund or investment other than a federally insured bank account.  Accrued interest, if any, shall not be retained by, or for the benefit of, the broker except to the extent that it is applied to, and deducted from, earned commission, with the consent of all parties.

Section 175.7 of Title 19 NYCRR is amended to read as follows:
            Section 175.7. Compensation.
A real estate broker shall make it clear for which party he is acting and he shall not receive compensation from more than one party except with the full knowledge and consent of [all parties] the broker’s client.

Section 176.3 (a) of Title 19 NYCRR is amended to read as follows:
            Section 176.3. Subjects for study--real estate salespersons.
            (a) The following are the required subjects to be included in the course of study in real estate for licensure as a real estate salesperson, and the required number of hours to be devoted to each subject:

Salesperson's Course
Subject Matter: Hours:
License Law and Regulations ................................... 3
Law of Agency ................................................. 11
Legal Issues .................................................. 10
The Contract of Sales and Leases .............................. 3
Real Estate Finance ........................................... 5
Land Use Regulations .......................................... 3
Construction and Environmental Issues ......................... 5
Valuation Process and Pricing Properties ...................... 3
Human Rights and Fair Housing ................................. 4
Real Estate Mathematics ....................................... 1
Municipal Agencies ............................................ 2
Property Insurance ........................................... [2] 1
License Safety ........................................... 1
Taxes and Assessments ......................................... 3
Condominiums and Cooperatives ................................. 4
Commercial and Investment Properties .......................... 10
Income Tax Issues in Real Estate Transactions ................. 3
Mortgage Brokerage ............................................ 1
Property Management ........................................... 2
Instruction ................................................... 75
Final Examination ............................................. 3
TOTAL ..................................................... 78

Section 177.3 (g) of Title 19 NYCRR is amended to read as follows:
             
 (g) a detailed outline of the subject matter of each course or seminar containing at least 22½ hours of instruction, or of each course module containing at least [three hours] one hour of instruction, together with the time sequence of each segment thereof, the faculty for each segment, and teaching techniques used in each segment;

Section 177.7 of Title 19 NYCRR is amended to read as follows:
            Section 177.7. Computation of instruction time.
            To meet the minimum statutory requirement, attendance shall be computed on the basis of an hour equaling [60] 50 minutes.

Section 175.25 (d)(2) of Title 19 NYCRR is amended to read as follows:
            Section 175.25. Business cards.


(2) Notwithstanding subdivision (c) of this section, business cards must contain the business address of the licensee, license type, and the name of the real estate broker or real estate brokerage with whom the associate real estate broker or real estate salesperson is associated. All business cards must also contain the office telephone number for the associate real estate broker, real estate salesperson or team.

Friday, January 20, 2017

HUD Suspends Planned 25 Basis Point Reduction of FHA Mortgage Insurance Premiums

The Trump Administration has suspended a planned fee reduction of the annual mortgage insurance premiums required on FHA loans. In a letter released just hours after Donald Trump was sworn into office, the U.S. Department of Housing and Urban Development announced that "Mortgagee Letter 2017-01, reducing Mortgage Insurance Premiums for loans with Closing/Disbursement date on or after January 27, 2017, has been suspended indefinitely."

The planned fee reduction, announced by the Obama Administration earlier this month, was set to reduce the annual fee by twenty-five (25) basis points, or one quarter of one (1) percent, from 0.85% to 0.60% for loans less than or equal to Six Hundred Twenty-Five Thousand Dollars ($625,000.00). The planned reduction corresponded to a savings of approximately Five Hundred Dollars ($500.00) in the first year of a Two Hundred Thousand Dollar ($200,000.00) loan.

The FHA mortgage insurance premium rate has varied between 0.55% and 1.35% during the Obama Administration as a reflection of changing market and credit risk. 

Explaining the decision to suspend the planned fee reduction, the letter stated that "FHA is committed to ensuring its mortgage insurance programs remains viable and effective in the long term for all parties involved, especially our taxpayers. As such, more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts". 

Thursday, January 19, 2017

Wednesday, January 18, 2017

Newsday - "Long Island home prices rise as listings dwindle, report says"

Check out Newsday's front page for the article.

For real estate brokers that sounds like a mixed bag; higher numbers, but less listings.

For individual salespersons, this is the time where the top associate brokers will shine and separate themselves from the rest. Its time to roll up your sleeves and bring your A-Game.


Monday, January 9, 2017

Enforcing a Commercial Lease Against a Guarantor

Landlords cannot sue a guarantor in a Summary Proceeding because there is “no relationship of landlord and tenant … [where guarantor] was not a primary or joint obligor but assumed a secondary liability which accrued only upon default by the principal.” See Marburt Holding Corp. v. Picto Corp.,(1st Dept., 1958). Therefore, to enforce a guarantee, a landlord must pursue a Plenary Action against the guarantor following the conclusion of the Summary Proceeding. Nonetheless, landlords need not fret about the difficulty and cost incident to instituting a Plenary Action against a guarantor because landlords can proceed pursuant to CPLR §3213 and utilize the Doctrine of Collateral Estoppel in order to avoid the protracted litigation that is typical of a Plenary Action.


Read the full article by Andrew Lieb, Esq. published in The Suffolk Lawyer here. 

Friday, January 6, 2017

2016 SURVEY RESULTS ARE IN! Agency Disclosure ONLINE ranked BEST Real Estate CE



Nearly 100 NY Real Estate Agents concluded that Lieb School’s Agency Disclosure ONLINE CE course is the best real estate course on the market.

Surveys were conducted after each student completed the course. Below are some highlights: 
  • Best Instructor Ever.
  • Andrew is riveting and brilliant. A joy to watch and learn from.
  • Andrew can take a difficult to understand topic and make it easy to follow and comprehend.
  • Andrew Lieb is the only instructor that can keep me interested and awake when the content becomes boring. He is intelligent, well prepared, & entertaining. He is the only instructor for me.
  • I think Andrew Lieb is passionate and extremely knowledgeable. He makes an otherwise confusing subject easy to interpret and absorb!!!!
  • I loved the live interactions. Great sense of humor and outgoing personality made it interesting.
About The Course
  • THEEEEE BEST!!!!! Enough said. Period.
  • The best overall experience I've had. Thanks!
  • He breaks it into parts that makes so much sense, and keep you on your toes. No sleeping in this class@ :-) Even online, he makes it very interesting! 
  • I have had the opportunity to take this course in person and online and felt that this online format allowed me to better understand the subject. Particularly the section where you go through each possible way of filling out the form and what type of agency makes sense for what type of consumer. I feel more knowledgeable and confident with agency after completing this online course.
  • Was in the dark, now I see the light!!!!!!
  • This course exceeded my expectations and gave me a fresh perspective on the use of the Agency Disclosure form. I will be amending the way I present the form given the information I received and my improved understanding of the document.