LIEB BLOG

Legal Analysts

Tuesday, July 26, 2011

When must a residential landlord supply heat to its tenants?

When must a residential landlord supply heat to its tenants?
According to a recent Nassau County Case (Olszewski v. Neuman) - A landlord must supply heat once October begins, but is not obligated from May through September.

While this Court made this specific decision based upon its individual facts, it is estimated that the weather during a given year would be applicable to a proper determination of a future case. Also, this decision is not from an Appellate Court and does not constitute precedent that is binding into the future.

Nonetheless, a great black line for those who dabble in the business - Get that heat on before October!!!
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Monday, July 25, 2011

Brokerage / Attorney Fee Sharing

Real Estate Commissions ,
Brokerage / Attorney Fee Sharing
Pursuant to Formal Opinion 845 of the New York State Bar Association, while an attorney can act as a real estate broker and gain a commission in a transaction, that attorney cannot share his / her fee with a referring attorney who represents a party to the real estate transaction and suggested that the party utilize the broker.

The rationale for this rule is that the referral fee would work a conflict of interest for the attorney working on the transaction where he / she would be motivated personally to have the deal close to get a commission instead of blocking a deal if such action was in their client's best interest.

The opinion does have an exception though. The exception is that if the attorney's clients gives informed consent to the referral fee and the attorney transfers the referral fee to the client such an action would be acceptable.

Therefore, the takeaway is an attorney cannot benefit financially in any way from referring a broker in a deal in which the attorney is working in a transactional representative capacity. Instead, the attorney must have unabridged motivation to guard the real estate client's best interest.
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Saturday, July 23, 2011

Question: Should a real estate seller be forced to payoff liens over the sales price?

Question: Should a real estate seller be forced to payoff liens over the sales price?
A seller with a good attorney will not ever run into this problem because the attorney will utilize a short sale contract where a sale is subject to the seller's ability to obtain a full release of liens by way of only the proceeds of sale. In such a situation if the lien holders will not provide a release, the seller can cancel the contract without suffering damages.

Yet, I was called this morning by a contractual purchaser of a property where the contract allegedly does not include any right to cancel for the seller if the lien holders will not release their liens by way of an accord and satisfaction - the traditional short sale scenario. The contractual purchaser wants the property without any liens. Now what?

I suggested that the seller should be able to sue for either specific performance (forced sale with paid off liens) or for benefit of the bargain monetary damages. Yet, I cautioned that not only are the terms of the contract operative and may preclude either remedy, but that this is not often frequented territory and its therefore unpredictable.

What do you think? Should the seller just be able to cancel the contract? Or, should the seller have to reach into their own pocketbook to satisfy existing liens? What happens if there is nothing in that pocketbook?

Remember law is not often easily predictable and many different factors will play into the result.

Maybe, the easiest solution would be for the potential purchaser to just go to the beach and forget the whole thing. It is awfully hot to think of anything else.
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