LIEB BLOG

Legal Analysts

Friday, August 26, 2011

Lead Disclosure Law is Limited

Residential Lead-Based Paint Hazard Reduction Act


In a landlord-friendly decision, the Appellate Division, Second Department (with jurisdiction over Long Island, among other places) just ruled that minor children of tenants cannot sue landlords for injuries resulting from exposure to lead paint under this Act even if they take possession with the tenant at the beginning of the tenancy.

To be clear, we are talking about the law that requires disclosure of known information on lead-based paint and lead-based paint hazards to a purchaser or lessee. A law that real estate agents should be very familiar with.

The Court held that the purpose of the act was to establish disclosure obligations triggered upon the lease or sale of property. The case is Brown v. Maple3, LLC and can be found by clicking here and the applicable law, RLPHRA, is 42 USC 4851. The clear rule is that infants residing with lessors are not within the zone of interest protected by the statute. The statute is about disclosure, not about strict liability for injuries.

Nonetheless, the Court did note that the door is not closed on the minor children and suggested that they instead pursue a claim under common law negligence. This means if you are injured in a residence as a result of lead exposure, your rights may be limited, but that you still do have rights and you should pursue them.

Thursday, August 25, 2011

There's a storm front coming - what if the house is destroyed pre-closing?

Buyers: The general rule is that if you have not taken possession or closed the deal, you can cancel the contract because of a mutual impossibility of performance. Nonetheless, you are in a great position because you may also demand performance with a price reduction. The price reduction would be the fair market value of what was lost in the storm as determined by an appraisal (this would likely be litigated as I'm sure the seller's appraisal would differ with yours). Yet, should you wish to cancel the contract, you can get your deposit back and that is the direction you will likely go. Anyway, lets hope the storm changes course and you can close on a fabulous property that's now in contract.
Sellers: You may have to take a price reduction as stated above, but hopefully your homeowners policy covers your loss. Nonetheless, its likely the deal will just be cancelled and you will have to rebuild.

Disclaimer: This advice assumes material damage to the premises and is based upon NY General Obligations Law 5-1311(1)(a)

Monday, August 22, 2011

Cell Phone Deposits

Recently, there have been developments in technology, notably, smart phone applications which allow persons who bank at large franchises to take snapshots of the front and back of a check in order to immediately send it for deposit. This can be useful-or detrimental-when it is done by a Seller at a real estate closing.

Cell phone applications now make available the option of taking a photograph of the front and back of check for immediate deposit.

Beware of this as the Buyer because Sellers should not be depositing checks without Buyer's awareness or consent, or until such time has passed that it is acceptable to do so.

This can be an extremely efficient way to deposit funds and move forward in a deal in the best case scenario-when everything goes smoothly. In fact, this can help where Seller is going to turn around and purchase a house after selling their former residence.

However, it does not always work out where that is appropriate. Checks should be monitored because there may be situations where they are initially presented (and deposited unbeknownst to the Buyer). If Seller immediately deposits, then the deal goes bad by bickering, which we all know is possible, by the end of the closing Seller now has money they are not entitled to.