2 recent decisions speak to the duties Boards have in Cooperative apartments.

Fair Housing Act: Not only can a Cooperative violate the Fair Housing Act regardless of the Business Judgment Rule, but specifically you can't keep the single guys out so says the Federal District Court in Lax v. 29 Woodmere Blvd. Owners, Inc. While the Court did not yet decide for the Plaintiff, the Court did say that the allegations if proven can constitute a cause of action.

Now that 2012 is here it is important to be aware of changes in the law in order to properly represent our clients. This is not a list about the best events from 2011, but, instead, a list that highlights the new legal landscape that you face as real estate practitioners. Being familiar with these laws, regulations and opinions may help you to better address your clients’ matters, save your license and make you money.

Property Tax Caps
Local government is now prohibited from raising property tax levies by more than the lesser of 2% or the rate of inflation (excluding New York City). An exception to this cap occurs if local government enacts a law or resolution explicitly overriding the cap by a 2/3rds vote. Currently, New York property taxes are the 2nd highest in the country and are 96% higher than the national median.

Marriage Equality
Same-sex couples may now marry and as an incident thereto may now be deeded title as tenants by the entirety. Yet, while New York now provides same-sex couples with many new rights, the practitioner must be mindful that the Defense of Marriage Act prevents same-sex married couples from realizing the full extent of rights enjoyed by opposite-sex married couples because it prohibits the availability of federally recognized rights.

Mortgage Modifications
Mortgagees / servicers who participate in the federal Home Affordability Modification Program (HAMP) and accept a borrower’s application for a loan modification under that program must fully abide by the rules of the program in New York. Specifically, the Appellate Division held in Aames Funding Corp. v. Houston that a foreclosure sale would be stayed until the borrower was fully evaluated under the HAMP program. Practitioners should therefore familiarize themselves with all HAMP rules, which can be learned by accessing the Making Home Affordable Handbook.

Electronic Recording
Real estate recordings are going digital. County clerks will begin accepting documents in electronic format on September 22, 2012. Don’t fret; you can still bring the Clerk your paper versions if you please. Yet, the justification for the bill argues that “owners of real property, real estate professionals and local government taxpayers would benefit from the more accurate and efficient land records system that this bill would facilitate” so you should consider the upside of going digital.

MERS’ Foreclosure Obstacle
Where Mortgage Electronic Registration Systems, Inc. (MERS) is nominee and mortgagee for purposes of recording, it cannot assign the right to foreclose upon a mortgage to a plaintiff in a foreclosure action absent MERS's right to, or possession of, the actual underlying promissory note. So says the Appellate Division in Bank of New York v. Silverberg where a foreclosure was dismissed for lack of standing as a result of MERS’ involvement. The decision coupled with the introduction of governmental electronic recording seems to signal the end of mortgagees’ practice of outsourcing their recordings to MERS in New York.

Ethical Seller’s Concession Rules Reinforced
The New York State Bar Association is at it again by clarifying its Opinion #817 which addressed the duty to disclose in a transaction involving a Seller’s Concession and a corresponding Gross-Up. Opinion #822 states that “all transaction documents containing the grossed-up sales price must disclose that the sales price has been increased by a sum equal to the seller’s concession” in order for the practitioner to comply with Ethics Rule 8.4(c).

Expanded Hardship Criteria for Real Property Redemptions
The Suffolk County Code has been amended to expand the definition of “immediate family” to include grandchildren residing with the applicant where an applicant seeks to enlarge its time period to redeem its tax foreclosed property past 6 months based upon an illness to a member of its “immediate family”.

Elimination of Recommended Attorney Lists by Title Agencies
In analyzing Insurance Law §6409(d), the New York State Insurance Department opinioned that a residential real estate broker may not refer its clients to attorneys on an “approved” or “recommended” list if the attorneys, in turn, refer those clients to the broker’s affiliate title agent. Yet, the opinion clearly states that it is premised upon the assumption that “attorneys that do not make the referral quota are removed from the list”, so a list is likely permissible so long as membership within the list is objectively independent from referral. Nonetheless, affiliated real estate brokerage and title companies are now eliminating their use of these recommended attorney lists.

On-Bill Recovery Loan Program
As part of the Power NY Act of 2011 and beginning January 30, 2012 homeowners can take out low-interest loans from NYSERDA for energy efficiency measures, to be paid back on their utility bills. Moreover, the payments may be tax deductible and are transferable if the property is sold. A great aspect of this program is that homeowners can watch their savings offset the cost of their energy efficiency measures on the very same bill.

Home Improvement Contractors can’t act on Behalf of Mortgage Brokers
Unnecessary repairs are thwarted as home improvement contractors and their agents are prohibited from promoting or arranging for the services of a mortgage broker or its affiliate. Also, referral fees are strictly prohibited under this legislation as are contractors acting as co-signers or guarantors of a loan for home improvements.

Private Transfer Fees are Eliminated
In furthering the public policy of the marketability of real property, new legislation prohibits private transfer fee obligations from running with title to property or otherwise binding subsequent owners of property. Also, the legislation provides a procedure to remedy existing obligations. Private transfer fees have traditionally been utilized as a creative means for developers to realize an income stream long after the finalizing of their projects.

This list only provides a small blurb on each new law, regulation and opinion. There may be further discussion on these topics going forward as they get fleshed out in the Courts. So stay tuned.

Sources for statistic:
http://www.labor.ny.gov/stats/olcny/real-estate-salesperson.shtm
http://www.labor.ny.gov/stats/olcny/real-estate-broker.shtm

Currently there are 57,599 real estate salespersons in NY & 55,162 real estate brokers.

Six former execs, including two former CEOs, were recently charged by the SEC with misleading investors about sub prime loans. In essence, the suit charges that the group greatly underestimated the amount of sub prime loans it had on its books in 2007.

Yet, to be clear, this is not about misleading borrowers, but instead investors. So, all those homeowners out there cannot point to these charges as justice for their personal foreclosures. Instead, this suit is about selling the loans on the secondary market to investors who believed those homeowners / mortgagors / borrowers were more credit worthy than they actually were in the macro.

Its likely that this is not the end of these types of suits and no criminal charges have yet been filed.

Recently, the Town of Brookhaven Town Code was amended to allow for the adoption of the Residential Solar Energy System Fast Track Permit Application Process. This will allow residents installing electric or hot water solar energy systems to use the universal forms which allow for an expedited permit application process. As a result, residents taking advantage of these amendments will benefit from a faster process, less paperwork, reduced expenses, and expedited approval from the Town.

To learn more:

Click here for the meeting minutes.

Specifically, Chapter 85 of the Code of the Town of Brookhaven, “Zoning” and Chapter 29 of the Code “Fees” were amended. Click here to view the amended changes.

Click here to review the press release.

Click here to access the Town of Brookhaven Forms.

From December 19th, 2011 to January 2nd, 2012 you won't be evicted if you have been foreclosed upon in a Fannie Mae loan. The mortgage empire has spoken and you can read its words by clicking here. To be clear, this will not stop judicial eviction proceedings, just the actual act of eviction.

A good PR move by the mortgage empire, but not much substantively there. Yet, if you are facing eviction, Santa coming down the chimney one more time would be good for the kids.

The Suffolk County Legislature has approved a law amending the allowable tax foreclosure hardship exemptions within the county. The additional exemption is for those grandparents providing monetary support for a grandchild currently residing with them in the household affected by the tax sale.

As its starting to get cold outside, Suffolk residents should be mindful of the Home Energy Assistance Program. This program offers financial assistance to help pay energy bills. Notate, this is not a loan, but assistance, so if you are in need permanently or on an emergency basis, check out this program by clicking here.

Qualification for the program is based upon your monthly income with reference to the number of household occupants. So first check out your paycheck and than see if you qualify.

Also, you can qualify regardless if your energy bill is in your name or part of your rent. Don't be ashamed if you need help, instead get the heat on because with a good night's rest you will be more productive and perform better at work. Thereafter, you can help someone else in need in the future.

If you weren't aware, the Fed Gov launched the Consumer Financial Protection Bureau this year and its starting to take names. Beyond a positive attempt to reframe the HUD-1, which all NY real estate professionals should take an interest in, the CFPB just launched a mortgage complaint hotline and web portal. Go check out the website at http://www.consumerfinance.gov/ to learn more.

While its still unclear what the extent of involvement in mortgage problems the CFPB will have, at the least, this new project provides a centralized place to submit complaints under the scary auspices of the government. Additionally, it is hoped that this new project will bring more attention to what has been this generation's epidemic, the housing bubble bursting. Maybe this project can help to light a fire under loan servicers to throw out their fax shredders and actually acknowledge receipt of workout documents and requests for information instead of blankedly claiming that the borrower has failed to comply.

The Long Island Education Board is excited to offer a brand new Free CLE course entitled Property Wars: Real Estate Issues Incident to Divorce.

Thanks to our event sponsor - PDE Title Services, LLC, this course will be offered on the following dates:

• 1/11/12 - Bridgehampton
• 2/29/12 - Manhattan
• 3/28/12 - Melville 

Registration for this free Continuing Legal Education course in Bridgehampton on Long Island is now available. Click here to register. 

Property Wars: Real Estate Issues Incident to Divorce