How current events impact business & real estate

Showing posts with label Long Island Real Estate. Show all posts
Showing posts with label Long Island Real Estate. Show all posts

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.

Wednesday, July 22, 2015

2 Month Extension for New Mortgage Disclosure Rules

The rules for how lenders are required to disclose mortgage information to home buyers are about to change dramatically. In the interest of a smoother transition, The Consumer Financial Protection Bureau has delayed the effective date of these rules, known as the TILA-RESPA Integrated Disclosure Rules, from August 1, 2015 to October 3, 2015.

Mortgage lenders will face new requirements for providing financing information to home buyers during the mortgage application process. These rules will also affect how real estate attorneys and brokers manage the conclusion of a transaction because lenders will be required to send home buyers specific disclosures before a closing can occur and certain financial details of a transaction cannot be altered without a new disclosure form being issued.

Real estate professionals are encouraged to advise their clients who are close to choosing a home and applying for a mortgage to inquire with their lender about how these new rules may affect their mortgage application.

For more information about the new disclosure rules, please visit the Consumer Financial Protection Bureau website

Wednesday, January 28, 2015

An Eruv in the Village of Westhampton Beach May Bring in More Real Estate Sales and Rentals

A public utility company is permitted to enter into an agreement with a private Jewish group to erect displays of religious significance on the utility poles said the courts on January 6, 2015. 

In 2008, there was discussion of putting up an eruv in the Village of Westhampton Beach. An eruv is a religious boundary that permits observant Jews within the enclosed space to carry and push items on the Sabbath, which, under ordinary circumstances, is forbidden. This boundary is usually established by attaching strips of woods to telephone poles around the community, thereby requiring private contracts with telephone companies.

A religious group called the Jewish People for the Betterment of Westhampton Beach (or JPOE) sued the Village of Westhampton Beach to oppose the erection of the eruv, arguing that it was a wrongful exception to Jewish practices on the Sabbath and that the government, which was contracting with private parties to establish the eruv, was overtly endorsing one sect of religion over another.

Courts said on January 6, 2015 that it is lawful for public utility companies to erect eruvs as part of a contract with a private party. LIPA’s contract to erect an eruv using its telephone poles was neutral and did not establish a noticeable and overt display of religion throughout the town. In fact, no reasonable observer would conclude from the strips of wood on the utility poles that the government was endorsing one religion over another. Furthermore, since private parties had agreed to finance, install and maintain the strips on the utility poles, there was no excessive government entanglement with religion.

This decision is a victory for religious freedom as a fundamental First Amendment right but is also a victory for real estate in the area. As the strips of woods on the telephone poles are not very noticeable, they will not in any way diminish the appearance of the community. In fact, real estate sales and rentals may skyrocket in the Village of Westhampton Beach now since observant Jews will seek out the community for its eruv. 

Friday, January 02, 2015


Terrific news is here with a tax break for those who sold or lost their underwater homes to foreclosure in 2014.

The Mortgage Forgiveness Debt Relief Act (MFDRA) was extended through 2014 by the Tax Increase Prevention Act of 2014 on December 19, 2014.

Homeowners who were forgiven debt a/k/a “cancellation of debt income” (difference between the total amount of the mortgage still owed at closing and the sale price or fair market value of the property) resulting from a short sale, deed in lieu of foreclosure or foreclosure sale, will have the forgiven debt excluded from their taxable income for transactions completed through 12/31/2014. 
The MDFA previously expired on December 31, 2013.

So, for those who lost a home to foreclosure or a short sale in 2014, you will receive a nice holiday tax break when you file your taxes in the new year.  

Wednesday, July 23, 2014

Real Estate Agents Forbidden to Use Air Drones for Listings

If you are a licensed real estate agent and have ever used or are still using air drones to take photographs of properties to improve your listings, stop now and do not do so again. The Department of Transportation’s Federal Aviation Administration has recently provided clarification on the FAA Modernization and Reform Act of 2012, prohibiting the commercial use of model aircraft.  

Under this Act, a model aircraft is defined as an unmanned aircraft that is flown recreationally within visual sight of the aircraft operator. There are numerous statutory requirements that aircraft operators must adhere to when flying model aircraft, such as the weight of the aircraft and where and when the aircraft can be flown. However, the most important statutory requirement for real estate agents is that the aircraft must be used only for recreational purposes.

Millions of Americans have joined aircraft clubs in order to build and fly model aircraft and have used model aircraft to take aerial photographs and video of their communities, gardens, and farms. This is allowed. If you are using a model aircraft to take photographs for pleasure and do not intend to use or sell the photographs for your business, then you do not violate any statutes. Real estate agents, however, use model aircraft for commercial purposes, violating the statutory requirement of recreational use. For example, many real estate agents use model aircraft to take aerial shots of properties for their listings, especially if the properties are large and have a high sales price. With high commissions at stake, real estate agents are willing to put forth the extra effort to take these aerial photographs and improve their listings to catch a worthy buyer’s eye. It is important to note that if a real estate agent is caught using model aircraft to take photographs of properties for listings, the Federal Aviation Administration, under this Act, may fine this real estate agent (or exact punishment in any other way it deems necessary) for the violation of this statutory requirement.

Since the Federal Aviation Administration has the power of enforcement, it is wise to avoid using model aircraft for commercial purposes at all costs.

Stay tuned for an update on what kind of fines the FAA can exact on violators.

Monday, June 30, 2014

Copyright Infringement Risks When Building Custom Homes

Sometimes it's tempting to purchase a plot of land and build a custom home. However, understanding the risks associated can help you avoid costly mistakes. One risk particularly is called copyright infringement.  Brokers, keep this in mind as you work with clients who are buying to retrofit or develop real estate. 

Copyright infringement on architectural designs has recently been addressed by the Second Circuit United States Court of Appeals on June 5, 2014 in the case James E. Zalewski, Draftics, LTD. v. Cicero Builder Dev., Inc., et al.

Mr. Zalewski is an architect who licensed several builders to use his architectural designs. He claims that these builders infringed on his copyright by customizing his designs and building homes based on his designs without his consent.

Mr. Zalewski points to the vast similarities between his designs and the Defendants’ designs, arguing that these similarities prove that the Defendants knowingly took from his work and infringed on his copyright.
However, the Court explains that copying in itself is not grounds for copyright infringement. Mr. Zalewski must not only prove that his work is copyrighted and that it has been copied, but that it was wrongfully copied as well. The Court held in this case that the Defendants’ designs, although similar, did not wrongfully copy from Mr. Zalewski’s original designs. The designs were for a colonial home and colonial homes can only be arranged in so many ways.

Ruling in favor of the Defendant, Circuit Judge Wesley claimed, “Plaintiff can get no credit for putting a closet in every bedroom, a fireplace in the middle of an exterior wall, and kitchen counters against the kitchen walls. Furthermore, the overall footprint of the house and the size of the rooms are ‘design parameters’ dictated by consumer preferences and the lot the house will occupy, not the architect.”

Based upon this ruling, a builder can use general designs without having to hire an architect.

Nonetheless, builders should always consult with an attorney prior to using a design to ensure that no copyright infringement is occurring.

Friday, June 27, 2014

New Foreclosure Prevention Program launched in New York State

Yesterday, the New York Attorney General, Eric Schneiderman, announced the New York State Mortgage Assistance Program to help homeowners avoid foreclosure. 

Long Island, with its beautiful, expensive real estate, was devastated by the economic crisis in 2008 and is still struggling to recover six years later. It currently has the highest rate of defaulted mortgage loans and some of the highest foreclosure rates in New York State. In order to speed up the recovery process, Mr. Schneiderman launched this program yesterday to help struggling homeowners borrow up to $40,000 to stave off foreclosure. This program will become effective in September and will be available to Long Island before the rest of New York State, using the money from the National Mortgage Settlement of 2013 to fund these loans.  Many homeowners have been denied for loan modifications in the past because they were unable to pay off their arrears or because there were liens against their property. These loans, which are interest-free and not due until the mortgage is paid off in full, will help struggling homeowners pay off the obstacles to their loan modification approval and allow them to keep their homes.