LIEB BLOG

Wednesday, May 15, 2013

Sex Offenders & Disclosure Obligation of Real Estate Agents

Andrew M. Lieb, Esq., MPH Agency Disclosure , Real Estate Tips

While teaching agency disclosure, I was recently questioned about the duty of a seller's agent to disclose to prospective purchaser customers whether a sex offender lived in the subject Condominium.

The agent made inquiry pursuant to Real Property Law 443(4)(a) where the statute requires a seller's agent to "disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law."

The agent's point was that a sex offender's presence would lower the "desirability of property", if not the "value" of the Condominium unit. It was a good point that the agent made and it stumped me. So I said that I would check some law and let everyone know the answer on this blog.

Here goes - The closest case on point is Glazer v. LoPreste. Therein, a home purchaser sued the seller and real estate agents stating that the seller and agents fraudulently misrepresented that the home was a good place to raise children and concealed the existence of sex offenders in the neighborhood. The Appellate Division (2nd highest Court in the State) held (decided) that there was no rightful claim under these circumstances and dismissed the case.

Glazer is differentiated from the facts presented in that Glazer involved allegations of an affirmative misrepresentation whereas the facts presented only involved a failure of a duty to disclose. However, Glazer involved a sex offender in the neighborhood whereas the question presented involved one living within the same Condominium, which appears to be a heightened situation. Nonetheless, it seems safe for a real estate agent not to disclose the existence of a sex offender in this facts presented because, as the Court stated in Glazer, "the information was not 'peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care with respect to the subject transaction'".

Stated otherwise, the Glazer decision seems to limit the obligations for a real estate agent to disclose to facts that are not generally known nor easily discovered through due care. Meaning, why didn't the purchaser check the sex offender registry for himself?

So, agents, while there is no license law opinion directly on point, it appears that Glazer, while not addressing license law compliance and section 443(4)(a) expressly, would make nondisclosure permissible.

Commercial Space: Municipal use prohibitions prohibited

Lauren Lieb New York Real Estate Journal , Real Estate Tips

New York's highest court, the Court of Appeals, ruled earlier this year that "zoning is concerned with the use of land, not with the identity of the user" in the case of Sunrise Check Cashing and Payroll Services, Inc. v. Town of Hempstead.

What does this mean to commercial landlords and tenants? How should you, a real estate professional, be equipped to now navigate the commercial real estate industry?

Learn more at the New York Real Estate Journal

Andrew Lieb receives award from the Bar Association

Lauren Lieb Lieb at Law UPDATES ,

We are very happy to announce that Andrew Lieb, Esq. received an Award of Recognition from The Suffolk County Bar Association for Chairing the Real Property Committee of the Bar Association.

Child Support and Maintenance as Lien Priority

Andrew M. Lieb, Esq., MPH Divorce Deals , Lieb School

At our continuing education course, Title Waves, held last week at Chase Plaza, a real estate agent inquired whether child or spousal support (maintenance) received lien priority in the same way that real estate tax liens do.

The answer is that they don't. In fact, a child support or spousal support Order is not even a lien in the first place, much less a prioritized lien. Instead, only after there are arrears and a money judgment concerning those arrears is a lien even possible.

So, in every situation, in order to even receive a lien, a judgment is necessary. To be clear, a judgment for periodic future support payments does not qualify for a lien regardless that the Judge Ordered someone to pay. The lien only arises when a Judge indicates through an Order that the payor is in default.

With respect to lien priority, only real estate tax liens and certain mechanics' liens can skip the general rule of first in time, first in right with respect to lien priority.

However, this is not the end of the discussion. You see, while there is no lien priority with respect to real property for child support and maintenance liens, CPLR 5234(b) does provide for priority with respect to personal property. In fact, the CPLR section states, in pertinent part, that "child support shall have priority over any other assignment, levy or process" with respect to satisfying an execution or order of attachment against a debtor.

So, while there is no lien priority to support obligations with respect to real property (land & structures thereon, such as a house); there is lien priority when a Sheriff sells personal property to satisfy the debt on behalf of the creditor.

Mortgage Foreclosure Alert: New Making Home Affordable Program Handbook Released - Version 4.2

Andrew M. Lieb, Esq., MPH Foreclosure Defense , HAFA

To access the new Handbook for MHA, inclusive of HAMP and HAFA, click here. While reviewing the Handbook you should be aware of the case of Flagstar Bank v. Walker wherein the Court held that the statutory good faith standard for a CPLR 3408 Foreclosure Settlement Conference is compliance with the Handbook. To review the case, click here.

This Handbook is the rules for banks / servicers to modify mortgages, so pay careful attention to detail and make sure that they comply.