LIEB BLOG

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Showing posts with label Rentals. Show all posts
Showing posts with label Rentals. Show all posts

Friday, March 06, 2020

Real Estate Tips: Evaluating Projected Revenue

Tune in Sunday 3/8/20 at noon on LI News Radio 103.9 FM where Real Estate Investing Coach Andrew Lieb discusses projected revenue in real estate. Find out what information to request prior to negotiating terms of the deal. Discover tips to enhance future revenue and how to protect yourself from acquiring bad leases.

After the show airs - the Podcast will be available here. 


Tuesday, November 12, 2019

No Certificate of Occupancy? No Rent, No Eviction Proceeding

On November 6, 2019, Governor Andrew Cuomo signed Assembly Bill 1646 into law. Assembly Bill 1646 amends the Multiple Residence Law and adds a new Section 302-a. The Multiple Residence Law applies to buildings with three or more units outside New York City.

Effective immediately, the new law prohibits the recovery of rent AND the commencement of an action for possession of a dwelling based on nonpayment of rent if the dwelling or structure occupied for human habitation does not have a certificate of occupancy or is not in compliance with the existing certificate of occupancy pursuant to Multiple Residence Law § 302.

The dwelling may be caused to be vacated for any nuisance or if it is occupied by more families or persons than permitted or is erected or occupied contrary to law. Such dwelling cannot be occupied until it or its occupancy has been made to conform to law.

Apart from a landlord being prohibited from recovering rent and possession of the premises through a nonpayment eviction proceeding, landlords should also be aware that violations may also be fined up to $500 or imprisonment up to a period of one year, or both.

Wednesday, August 07, 2019

Don’t Check Your Prospective Tenant’s Eviction History

A new residential rental law exposes landlords to suit for checking their prospective tenant’s eviction history. This new law provides, at Real Property Law §227-f, that “[n]o landlord of a residential premises shall refuse to rent or offer a lease to a potential tenant on the basis that the potential tenant was involved in a past or pending landlord tenant action or summary proceeding…” In fact, the law contains a rebuttable presumption that a violation has occurred, which presumption arises when a landlord requests such “information from a tenant screening bureau… or otherwise inspect[s] court records.” Furthermore, the law expressly authorizes the attorney general to prosecute landlords for violations of the law and provides for statutory penalties to be recovered against violating landlords. Landlords—don’t check your prospective tenant’s eviction history if you don’t want to get sued by the attorney general.

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


Monday, July 15, 2019

Legally Speaking: The End of Prepaid Seasonal Rentals

Landlords in the Hamptons have traditionally demanded prepaid rent from tenants on seasonal rentals. If you rented your property for a three-month term, say from July to October, on lease signing, you’d traditionally demand that the tenant provide you with a check for the entire period’s rental fees together with an executed lease or you’d refuse to rent your property to that tenant for that period. So, at lease signing, a tenant would traditionally need to have enough money for the entire rental period plus an additional month’s worth of rent for the security deposit. That tradition, of receiving prepaid rent for the entirety of the rental period plus the security deposit at lease signing, was ended on June 14, 2019.

Read the full article on Dan's Papers here. 


Saturday, January 19, 2019

Rental Real Estate Safe Harbor - Tax Law

On January 18, 2019, the IRS issued the safe harbor for rental real estate to be treated as a trade or business for purposes of IRC 199A's Qualified Business Income 20% deduction.

Real etate professionals, who operate "a rental real estate enterprise... [which is] an interest in real property held for the production of rents and may consist of an interest in multiple properties," should study the safe harbor closely as it can make a huge difference in your pocketbook. Interestingly, while multiple properties may qualify as the same enterprise, "[c]ommercial and residential real estate may not be part of the same enterprise."

According to the IRS, the safe harbor requires:

(A) Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise;
(B) For taxable years beginning prior to January 1, 2023, 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental enterprise. For taxable years beginning after December 31, 2022, in any three of the five consecutive taxable
years that end with the taxable year (or in each year for an enterprise held for less than five years), 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental real estate enterprise; and
(C) The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: (i) hours of all services performed; (ii) description of all services performed; (iii) dates on which such services were performed; and (iv) who performed the services. Such records are to be made available for inspection at the request of the IRS. The contemporaneous records requirement will not apply to taxable years beginning prior to January 1, 2019

To claim the safe harbor, "include a statement attached to the return on which it claims the section 199A deduction or passes through section 199A information that the requirements in Section 3.03 of this revenue procedure have been satisfied."


Monday, July 24, 2017

Top 10 Silent Lease Rights for Tenants

Just because it’s silent doesn’t mean it isn’t there. Did you know that the state of New York provides residential tenants with many rights that supersede even the most grueling landlord-favorable lease terms? 

Andrew Lieb, Esq. shares the top ten tenants' rights that should be fully understood by landlords, tenants and real estate brokers who engage in the rental market on Dan's Papers. 

Click here for the full article. 

Tuesday, April 26, 2016

10 Secrets to a Perfect Summer Rental

Summer rentals got off to a great start this year, yet there are still people looking to secure that ideal getaway, and there are still East End homeowners who could quickly become landlords for the season. In each issue of Behind the Hedges, I offer insights and information about the legal side of Hamptons real estate. Here’s one that is particularly valuable and bears re-sharing this time of year, when we need to remember: with every great summer rental comes great responsibility. The secret to success for both landlords and tenants is to set clear expectations before the rental period gets underway. If either party has false expectations, the summer can end with anger, arguing and possibly court. Before renting, discuss these topics and then have an attorney draft a lease accordingly.

Read the full article by Andrew Lieb, Esq. in Behind The Hedges.

Thursday, December 03, 2015

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.

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. 

Tuesday, January 27, 2015

What Affluent Renters Consider Before Securing a High-End Summer Home in the Hamptons

It's imperative to realize that the east end of Long Island is a massive place. It's over 30 miles from Westhampton to East Hampton on the south fork and not that much shorter on the north fork between Riverhead and Orient. As a result, the experience of summering on Shelter Island as opposed to staying in Southampton is drastically different. The fact is that each community on the east end has its own unique offering of features that are "fabulous" to some and that represent "shortcomings" to others.

Read the full article in the Huffington Post.

Monday, January 26, 2015

10 Questions to Ask Yourself About a Summer Rental

Andrew Lieb's latest article is now available on Dan's Papers.

Keep these tips handy when planning your seasonal rental search.

Wednesday, December 10, 2014

ALERT - Throw Out Your Old Form Leases Immediately

Residential leases are now required to contain a notice to tenant(s) concerning the existence of sprinkler systems.

“Sprinkler system” shall mean a system of piping and appurtenances designed and installed in accordance with generally accepted standards so that heat from a fire will automatically cause water to be discharged over the fire area to extinguish it or prevent its further spread.
See Executive Law 155-a.

Read the new law at Real Property Law 231-a.

The law specifically requires:

  • Notice in bold face type;
  • Notice that a maintained and operative sprinkler system in the leased premises is in - EXISTENCE OR NON-EXISTENCE; &
  • The last date of maintenance and inspection of any EXISTING sprinkler system.
The Bill's Justification states that "According to the Fire Sprinkler Initiative, the availability of smoke detectors, coupled with a maintained and operative sprinkler system installed in a residence, decreases the risk of dying in a fire by over 80%."

As a person that is into living, that statistic is jaw-dropping in support of the existence of sprinklers in residential housing. At the least, this new law provides tenants with the knowledge to make an informed choice as to whether to live in a premises without a sprinkler system. 

Real estate professionals should now immediately throw out any of their old leases and make sure to have a new residential lease prepared that complies with Real Property Law 231-a. Also, cooperative boards must not forget that they are leasing property as well. So, cooperatives that amend their proprietary leases must comply with RPL 231-a or risk the lease being held void. 

Wednesday, September 10, 2014

Why Not to Rent Property to a Family Member

Before letting a family member stay at your house, read and share Andrew Lieb's latest article published in the New York Section of the Huffington Post.

The answer depends on two very important factors:
  1. Do you really need the money from your rental?
  2. Are you actually related to your family member?

The comprehensive article is available through the following link. Full Article

Wednesday, September 03, 2014

5 Tips Landlords Must Know Before Wrapping-U​p Seasonal Rentals (Andrew Lieb's Latest Article Published in The Huffington Post)

Just because the term of the lease is over does not mean that the landlord automatically gets their seasonal rental property back. Additionally, smart brokers put a clause in their agreements that provides for a commission being due should the tenant purchase the rental property from the landlord.  

Andrew Lieb shares even more tips in the Home Section of the Huffington Post.  

The comprehensive article is available through the following link.  Full Article 

Tuesday, September 02, 2014

5 Tips for Landlords in Wrapping-Up Your Seasonal Rentals

  1. Gaining Repossession: Just because the term of the lease (a/k/a duration) is over does not mean that you, the landlord, automatically gets your seasonal rental property back. In many States, such as New York, the tenant must surrender possession of the property prior to the landlord retaking possession regardless if the lease period has ended. In best practice, a written lease agreement will provide not only when the term is over, but also the mechanism of how, when and where the tenant is supposed to surrender possession (e.g., tenant shall surrender possession by way of turning over the keys to the subject premises to the landlord, in-person, at the subject premises at 12:00 p.m. on September 30, 2014 or at such other time, date and manner as is mutually agreed upon by and between the parties in a signed writing). Such a surrender clause is particularly important for landlords because a landlord who engages in a self-help eviction (i.e., going into the property without the tenant’s permission and changing the locks) is exposed to a lawsuit by the tenant for treble damages for the tenant’s lost use and occupancy of the property. Beyond protecting oneself from a self-help claim, landlords should also motivate the tenant to leave on time by utilizing a holdover liquidated damages clause (i.e., predetermined monies due and owing in the case of a holdover tenant – staying after the expiration of the lease). Courts in many States, such as New York, will enforce this type of clause at a level of three times the previous rent due for the duration of the holdover period.
  2. Damage Inspection: There are 4 steps to a proper damages inspection: (1) Establishing a baseline condition of the property when the tenant takes possession (i.e., countersigned and dated pictures should have been taken); (2) Distinguishing between actual damage and ordinary wear and tear (i.e., definitions should be included in the lease for each category); (3) Determining the condition of the property upon the tenant surrendering possession (i.e., tenant and landlord walk through the property while memorializing the condition in pictures that are countersigned and dated); and (4) Obtaining 2 estimates for repairs from licensed home improvement contractors to establish the cost of repairs.   
  3. Refunding the Security Deposit: A landlord is a trustee for the tenant’s security deposit monies. Where a landlord wrongfully withholds the security deposit, the tenant may be able to sue for those monies on theories such as breach of contract, conversion and breach of fiduciary duty, among others. Additionally, many States, such as New York, provide a tenant with a reciprocal right to sue for attorneys’ fees whenever a lease provides the landlord with such a right (i.e., landlord’s right to attorneys’ fees in the event of breach is standard practice in leases). Consequently, a tenant can frequently hire an attorney, who will be paid for by the landlord, to recover their security deposit.
  4. Lease Renewal: The best tenants continue to renew season after season. For the landlord, this not only makes your budget for operating the property predictable, but also avoids the landlord from having to continually make yourself or your agent available to show the property to prospective replacement tenants. The protocol for the tenant exercising a lease renewal option should be set forth in the current lease agreement, including how notice to renew should be rendered (i.e., mailing a certified mail return receipt letter to the landlord indicating that the tenant shall exercise its renewal option). Additionally, the lease should provide how the rental fee will be adjusted for future seasons by what is typically referred to as a rent escalation clause, (i.e., either at a percentage increase such as 3% or tied to an index such as the Consumer Price Index). Oral renewals and text messages should be avoided as they often result in litigating.   
  5. Brokerage Agreement: Many real estate brokerage agreements provide for additional monies being due to the broker in the event of a renewal of the lease by the current tenant or a member of the tenant’s family. Additionally, smart brokers put a clause in their agreements that provides for a commission being due should the tenant purchase the rental property from the landlord. Reviewing the brokerage agreement that was applicable when the tenant first let the property is a great first step before lease renewal to know how a landlord’s net profits will be effected in future years.



Monday, February 17, 2014

Welcome to Hamptons Rental Season

East End Landlords - its time to make sure your rental permits are in order, you have a valid Certificate of Occupancy, and you have a sample lease / house rules drafted to rent out your place for the season.

Real estate agents should ask their clients to see the rental permit / Certificate of Occupancy to avoid their own License Law liability.

Throughout the coming months, this blog will focus in on the tricks of the trade to enhance landlord profitability & to minimize landlord exposure.

Starting this up with a bang, Lieb School just submitted a new continuing education course, Property Manager Liability, to kick the season off.

In this course you will learn NYS laws for property managers license requirements, security deposit rules, unique exposure for offering services to foreign owners, premises liability, and fair housing / discrimination.

Most of all, you will learn to make your landlord money so that they can increase their portfolio of properties.

Tuesday, November 12, 2013

Get Out Girlfriend - Evicting Your Significant Other

Guess what? If you are trying to evict a family member and you resort to a summary proceeding, it will likely be dismissed. Instead, you will end up in a prolonged ejectment proceeding in Supreme Court or in the appropriate matrimonial / family part depending on your precise circumstances. This jurisdictional result is
because Family Member Evictions are typically not available in a summary proceeding. However, should an unrelated paramour be considered a family member after all?

See the full published article here...

Friday, August 02, 2013

Check out 88.3 at 5:30pm Today and Tomorrow for Real Life

Tune in today and tomorrow 8/2 and 8/3 at 5:30pm WPPB Peconic Public Broadcasting 88.3- Check out Real Life hosted by John Christopher from Brown Harris Stevens. John will be interviewing Andrew Lieb concerning a multitude of issues facing Hamptonites in the real estate market from commercial valuation to simply the new regulations requiring a bank to verify ability to repay a loan.

Thursday, July 11, 2013

Lease Clauses - by Business Insider

Business Insider has an article called 11 Clauses to Beware The Next Time You Sign a Lease that I thought was better serving to the first time landlord rather than the first time tenant. You see, so often landlords call their attorneys and say how much do you charge for a lease and my firm's standard answer is; what do you want in it as leases range from $300 to thousands and thousands?

While we could spend 3 hours educating the client, than a lease will not be affordable to most weekend warriors. Instead, its best for a landlord to think about, in English, what they want the functional relationship with their tenant to be and then to see an attorney to make it enforceable and to provide additional suggestions.

I found this article to be a great start for first time landlords to think about their tenants' rights and responsibilities before they see their attorney.

Friday, May 24, 2013

Listen NYC Residents - Airbnb is Dangerous: Be warned

On November 8, 2012, we wrote a blog called Airbnb is Brilliant - NYC Housing. Therein, we said that "[a]   major barrier to their success are local laws that prohibit short term rentals in many municipalities across the Country". We also referenced NYC's rental law and said that maybe Airbnb's helping with housing in the wake of the hurricane would generate enough good will to overturn the City's minimum rental law.

It didn't.

On 5/9/13, a NYC resident was found liable for a $2,400 Civil Penalty for violating AC 28-118.3.2 as a result of renting his condominium unit (actually the rental at issue was offered by the tenant of the unit, but that is irrelevant for this discussion) to two Russian women from the 9th to the 14th of September in 2012.

NYC's minimum rental period law is designed to prevent transient guests, which is a topic that have discussed previously on quite a few occasions such as in February of 2010 and May of 2012. The thrust of the topic is that there are safety issues in permitting unregulated hotels to exist for consumers and that there are further issues for other unit owners in allowing unscreened strangers to have access in and out of their condominium and cooperative buildings. There are also many arguments that transient guests in neighborhoods greatly reduce property values.

Its important to note that the decision distinguished the violated act from simply having "house guests or lawful boarders, roomers or lodgers" who stay for less than 30 days. The decision sets forth that house guests cannot be strangers who pay for occupancy and with respect to the other terms it looks to the definition of a common household in the Code as "A common household is deemed to exist if every member of the family has access to all parts of the dwelling unit. Lack of access to all parts of the dwelling unit establishes a rebuttable presumption that no common household exists".

So, NYC residents stop using Airbnb, it advertises your illegal rentals and gives the government great evidence if they wish to prosecute. To read the decision for yourselves, click here.