Direct Negotiations in Co-Brokered Flat Fee MLS Real Estate Impermissible by Regulation

Flat fee MLS is a trend where a homeowner can pay a small fee (typically around $300), to list their For Sale By Owner home (referred to herein as “FSBO”), on the Multiple Listing Service (referred to herein as “MLS”). As a result, the homeowner can enjoy the best of both worlds in avoiding an approximate 4 to 6 percent commission, while nonetheless exposing their property to all of the clients and customers of licensed real estate brokers/brokerage firms throughout the region. However, the FSBO homeowner cannot directly place their home on the MLS on Long Island, but instead must pay a flat fee MLS vendor, who is also a real estate broker/brokerage firm (referred to herein as “MLS vendor”) for the privilege of using the MLS because only licensees of the service can list on the MLS.

Read the full article, written by Andrew Lieb, Esq. published in The Suffolk Lawyer. 

Making Home Affordable - New Handbook Available - Version 5

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 US Bank v. Sarmiento wherein the Court held that the statutory good faith standard for a CPLR 3408 Foreclosure Settlement Conference is whether the "totality of the circumstances demonstrates that the party's conduct did not constitute a meaningful effort at reaching a resolution", including 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.

Income Tax Relief after a Short Sale for 2015 & 2016

The President has extended the Mortgage Forgiveness Debt Relief Act through the end of 2016 by signing Congress’ Spending Bill into law. As a result, the amount of money from a mortgage loan that is forgiven incident to a short sale, foreclosure or deed-in-lieu of foreclosure will not be taxable as income.

In the last week of 2014, the extension was passed and then applied to all transactions that occurred in 2014, retroactively. Homeowners closed transactions assuming that they were paying income tax on the forgiven debt. As a result, homeowners elected not to pursue a short sale or deed-in-lieu when it turned out to be their best strategic option.

Now that the law proactively extends throughout 2016, homeowners in financial distress can list their homes for short sale, or work out a deed-in-lieu with their lender, without the fear of being hit with a severe income tax bill.

Another important provision of the Spending Bill, beyond the Mortgage Forgiveness Debt Relief Act extension, concerns mortgage insurance premiums, which are required for mortgage loans that exceed 80% of the purchase price of a home (and is required to be paid until the loan balance goes below 80% of the purchase price). Pursuant to the new law, premium payments can now be deducted from borrower’s income tax, in the same manner as mortgage interest, through 2016. This will continue to encourage homeowners who may not have the funds for a 20% deposit to still be able to purchase a home. 

4.5 CE Credits | Online Video Class | Divorce Deals (Lieb School Just Released!)

We know that you will never want education from anywhere else after you try it!

Lieb School's leading distance education combines the latest interactive technology, license law education and continuing edutainment. Take Lieb School online courses on-the-go on PCs, Macs, iPads or Tablets.

The first class offering is Divorce Deals ONLINE worth 4.5 Credits (having taken a live class on a topic does NOT prevent earning credits from the online class).

 HOW TO SIGN UP FOR LIEB SCHOOL ONLINE CLASSES

1. Click here to create a new Online Classes Account
   (a new online classes account is required for first time users)
2.  Login, click "CATALOG" (on the upper right hand side of page)
3. Add course to shopping card: Divorce Deals ONLINE 

Divorce Deals ONLINE: Selling The Marital Residence

Watch out! Divorce Deals are terrific fun, but full of challenging obstacles that can cause you headaches and expose you to liability if you aren’t prepared. Ever work with divorcing spouses before? Then you know. Good luck getting them to agree on anything.

Divorce Deals ONLINE is an adaptation of the live class Divorce Deals offered by Lieb School. This 4.5-hour distance education course is designed to teach New York real estate brokers and salespersons how to navigate through all the complexities of divorce deals.

This course is instructed by premiere lecturer and attorney Andrew M. Lieb, Esq., MPH, who combines video footage of live class segments with visuals, study guides, and quizzes in order to optimize your understanding of the intense materials. It is delivered in an asynchronous model to allow for accessibility whenever and wherever you find convenient while also offering note-taking and in-class comment features to provide opportunities for feedback, questions, and discussions.

Unlike the 3-credit live class, this course accounts for 4.5 credits of the total 2-year requirement of 22.5 credits for license renewal, thereby allowing you to satisfy more credits with just one class. A divorce can pull everyone and everything into its grasp. This course will offer the tools that you need to handle those intricacies while earning your commission.  

Real Estate Brokerage Regulatory Updates - 11/7/15 NYS Board of Real Estate meeting summary

On 11/7/15 the NYS Board of Real Estate continued its mission of optimizing the regulation of real estate brokers in our state by holding its meeting in NYC, Buffalo and Albany. To remind real estate brokers and salespersons, the public is welcome at these meetings where the public can bring comments from the floor. It’s encouraged that Lieb School students attend these meetings to have your voices heard. 

"[T]he Board has general authority to promulgate rules and regulations affecting real estate brokers and salespersons in order to administer and effectuate the purposes of Article 12-A of the Real Property Law."

A complete video of the meeting is available on YouTube.

In summary, the following was discussed:

1.      New Rules: A rule making package for new regulations in the field is going through the regulatory process concerning the following topics:

a.      Setting a specific timeframe to deposit escrow monies rather than a reasonable time as the rule currently requires;

b.      Rules concerning brokers who accept money from their client as opposed to the existing rule concerning a broker accepts money from all clients;

c.      Including a 1 hour safety training course in the curriculum;

d.      Modifying continuing education from a required minimum of 3 hours to 1 hour;

e.      Changing 1 credit of continuing education from constituting 1 hour of study to only constituting 50 minutes of study; and

f.       Revising the advertising regulations to require business cards to include the actual title of the cardholder on the card.

2.      Clarification of School Regulations: It was clarified that online schools and brick and mortar schools are regulated equally with regard to having a brokerage NOT control or own the school.  

3.      Continuing Education Credits: In the distant horizon the Department of State is implementing an online continuing education credit system so agents will not need to keep their original certificates at such time.

4.      Brokerage Curriculum:

a.      Changes to the broker’s curriculum were voted and approved as published. Such changes are not effective yet as there is a long regulatory process.

b.      The Board discussed updating the salesperson’s curriculum next and possibly updating the test to make it more difficult. However, it was pointed out that only approximately 60% pass the salesperson’s exam, as currently written, so making it harder may be too large of a barrier to entry into the field.

c.      The Board clarified that the legislature would have to make a high school diploma or GED a requirement of licensing because the statute, as written, does not give the Department of State the power to implement such regulations. 

Zoning Ordinances Banning the Sale of Medical Marijuana Likely Discriminate Against People With Disabilities

Jessica Vogele, the number one ranked law student in the 2L class at Touro Law Center who is also a Law Clerk at Lieb at Law, P.C. addresses the most hot-button issue on Long Island today by delving into the zoning of medical marijuana facilities within her article published in The Suffolk Lawyer.

In July 2015, the New York State Department of Health licensed five companies to manufacture and sell medical marijuana in compliance with the Compassionate Care Act of 2014. Although no manufacturing plants will be located on Long Island, there are plans to build two dispensaries – one in Nassau County and the other in Suffolk County. The proposed site for Suffolk County is located in the Town of Riverhead and has met considerable resistance from town residents due to its proximity to a high school and the risks of increased violent crime and traffic generally associated with medical marijuana dispensaries. This backlash against the proposed site has prompted the Village of Islandia to preemptively amend its zoning ordinance in order to ensure that no dispensaries will be placed
within the village’s boundaries in the future.

The issue here is whether the village’s new zoning ordinance, which prohibits the sale of medical marijuana dispensaries within its boundaries, discriminates against people with disabilities.

Read the full article by Jessica Vogele here.