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.

There is a strong temptation for homeowners to rent out the extra space in their home for a few quick bucks on the side, but long gone are the days where being a part time landlord was as easy as posting a classified ad in the newspaper and watching the monthly rent checks roll in. 

Income producing real estate in Suffolk County is the backbone of our local economy. We have our weekend warriors who rent out their second homes, merchants who operate and lease our mixed use downtowns, REITs, public companies and national brands who manage our industrial parks and shopping centers, hospitals and their doctors, lawyers, architects and accountants who inhabit our professional spaces and every other category of property owners imaginable. Yet, the business of owning and/or managing an income producing property is truly a business, and should not be thought of as a passive investment afterthought. It’s a business that requires a lawyer to serve as counselor, negotiator, scrivener and litigator. In fact, best in class legal services can transform a poor real estate investor into the next great American tycoon.

In this issue of The Suffolk Lawyer, we not only focus on Real Property, but also focus on the business of profiting from real property with all of its associated risks and blue ocean opportunities. Regardless of your individual legal practice focus, knowing the basic pitfalls of real estate ownership is a necessary knowledgebase for every Suffolk County attorney. 

In this edition Dennis Valet, Esq. discusses the need to preemptively mitigate leasing risks in “Reasons to Involve an Attorney in the Rental of an Accessory Apartment,” and Alicia Menechino, Esq. addresses the need to respect the judicial process for evictions in her article, “Self-Help: Vigilante Justice or Legal Re-Entry?” Next, Jordan Fensterman, Esq. addresses the unique risks inherent with renting medical space in his article, “Leasing Medical Office Space in New York.” 

We just opened enrollment for The Fair Housing Act CE class which will be held at St. John's University Manhattan Campus, located at 101 Astor Place. Limited Seating. Online Registration Only. 

Date: 01/07/16 at 12:30pm

Instructor: Andrew Lieb, Esq. 

Credits: 3

Summary: Be warned - Discrimination in housing is very serious and exposes real estate agents to liability and the potential loss of their license. In fact, discrimination is so serious that the Department of State only requires that this course be included in the requisite 22.5 hours of continuing education and requires no other topic. This course is not a general survey course on discrimination, instead it explains a very specific law: The Fair Housing Act, which regulates our entire industry. The seminar will detail specific cases involving real estate agents and mortgage lenders who violated the Act. Be prepared for this course to hit home.

When your neighbors list their house for sale, proceed with caution and see an attorney immediately if you are presented with an out of possession title affidavit or a boundary line agreement.

This affidavit or agreement is a writing wherein you, as a neighbor, swears, under the penalties of perjury, that you do not assert an ownership claim to real estate which has been used by you as if it were your own. Meaning, part of the property owned by your neighbor in their deed, such as a driveway, fence, shrubs, bulkheading, wood chopping area, boat storage, or the like, may have been used by you for a period of time sufficient to transfer the ownership to you through legal concepts called either adverse possession or a prescriptive easement. However, the new purchaser wants this affidavit or agreement so you disclaim your ownership rights.

Read the complete article in full by Andrew Lieb, Esq. here.

We are thrilled to announce that Lieb at Law is the platinum winner of Dan's Papers Best of the Best 2015 - Law Firm.

Thank you for all of the support!

Mortgage Mania

Instructor: Andrew Lieb, Esq., MPH

At or about the time of contract execution in a residential transaction, the condition of the heating, cooling, plumbing and electrical systems coupled with that of the structural components becomes the foremost issue in the transaction and such conditions, when negative, typically give rise to contentious negotiations for adjustments to the initially accepted purchase price. In such, the home inspection not only offers lay purchasers ammunition for offsets, but when mismanaged the inspection can kill the deal completely.

To save your deal while leveraging proper due diligence, it is important to understand these top five home inspection issues in residential real estate transactions.

Read the full article, written by Andrew Lieb, Esq. here.

We are thrilled to announce that Andrew Lieb has been named a Rising Star by Super Lawyers for the 2nd year in a row.

About Rising Stars:
The Rising Stars list is developed using a patented multiphase selection process:

• To be eligible for inclusion in Rising Stars, a candidate must be either 40 years old or younger or in practice for 10 years or less.
• No more than 2.5 percent of the lawyers in a state are named to Rising Stars.

We have just opened enrollment for the Free CE on 10/15/15 in Patchogue at Briarcliff College. 

This course is instructed by Andrew Lieb, Esq. Online Registration Only. 

Foreclosure & The Economy: The Short Sale Class.

This course will shock you with the latest developments in New York's judicial foreclosure system from the perspective of a litigating attorney who spends his days in the Courts.

You may have read in the news about attorneys who stole their clients’ money, lost their license and went to jail. Yes, managing escrow money gets attorneys in trouble the most often. However, there are many other red flags that you should watch out for when selecting legal representation for your real estate transaction. Here is a list of the top five real estate attorney no-no’s that go beyond theft, and which every client should be mindful of when seeking representation.

Estate Deals

Instructor: Andrew Lieb, Esq., MPH

Credits: 3

Price: Free

Sponsors: Behind the Hedges, Citizens Bank, Douglas Elliman

Course Summary: Estate sales offer a unique opportunity to help the grieving by doing your job professionally. Starting with speaking the language of the Surrogate’s Court, this course will empower the real estate broker / salesperson to assist the Executor / Administrator in liquidating real property in order to satisfy debts of the estate. Additionally, disputes between beneficiaries and with the fiduciary, sales forced by the court, and foreclosures incident to the probate process will be discussed. Lastly, the student will be exposed to the overlay of brokerage and executor’s commissions where an Executor / Administrator is expressly exempt from the Real Estate License Law for Brokerage.

Register Online Here

On 8/26/15 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. Its 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. Enforcement:
• 5 new investigators are on the enforcement staff;
• Approximately 70% of DOS enforcement is related to real estate brokerage;
• The majority of enforcement has recently addressed client funds (a/k/a, escrow) - it was suggested that a brokerage creates a job of escrow accounts supervisor to minimize organizational confusion and it was suggested that such individual needn't be licensed in brokerage;
• Secondarily enforcement has mostly addressed brokers failing to immediately terminate their salespersons upon request by the salesperson;
• Enforcement contacts respondents often through the email address provided to DOS, so brokers need to check their email (not just physical mail);
2. Curriculum:
• Changes to the broker's curriculum are in the works:
• Curriculum will maintain 45 hour requirement; 
• Curriculum is expanding the topic of broker's operations to 16 hours, which includes license law and agency; 
3. The Real Estate License Law updates from 5/2015 address changes to part 19 NYCRR sections:
• 175.12 - key change of duplicate original to only require a copy (strangely the title stayed at "Delivering duplicate original of instrument")
• 175.20
• 175.24(a)
• 177.2
• 179.1
• 179.2(b)
• 179.3(a) 

It may seem homeowners have a money tree at their house. It’s easy, just rent your house for the weekend and the dollars will shake into your bank account. Better yet, companies like Airbnb can facilitate the process and get landlords timely and secure payments, right? Making money is never so easy. Here are five risks of using Airbnb. In each, you need to decide if an Airbnb host is a residential property landlord or instead a hotel operator, in order to understand your exposure.

Read the full article by Andrew Lieb, Esq. here. 

Landlords have an incredible number of issues to deal with, not the least of which is considering to whom they will open their doors as tenants. Landlords and their agents are restricted by civil rights laws from privately discriminating against prospective and current tenants. In fact, the seminal U.S. Supreme Court case of Reitman v. Mulkey expressly found that a private right to discriminate was unconstitutional. Yet, what does it mean for a landlord to discriminate? Here are the five ways a landlord can get sued under discrimination laws.

Read the full article written by Andrew Lieb, Esq. here. 

Yesterday, Chris Matthews’ article “Real estate agents may be colluding to rip you off” was published by Fortune while citing to a paper published by the National Bureau of Economic Research and authored by Panle Jia Barwick, Parag A. Pathak, and Maisy Wong.

According to the authors of the cited article, Conflicts of Interest and the Realtor Commission Puzzle,

“[t]hese adverse outcomes reflect decreased willingness of buyers' agents to intermediate low commission properties (steering) rather than heterogeneous seller preferences or reduced effort of listing agents.”

So, in English, it’s not that seller’s agents’ efforts are adversely affected by lower commissions, but instead, that buyer’s agents, who are generally compensated by seller’s agents, are less likely to bring buyers to properties where they are offered a lower percentage for procuring.

As an industry, we need to make sellers capable of gauging the quality of what they’re buying; to make informed decisions as to commission payments.

Seller’s agents need to explain that buyer’s agents and/or broker’s agents are money driven and will steer their buyers to the properties where they are compensated at a higher level (as stated in the study).


To illustrate, if a seller is paying a broker 6% one cannot deduce that the cooperating broker, who procures, will always get 3% for their efforts. Instead, the cooperating broker will get whatever percentage that is listed on the cooperating brokerage listing (i.e., Stratus) agreement by the seller’s agent (each region in New York has a different cooperating brokerage agreement and therefore this blog’s suggestion does not hold true everywhere).

1. The commission percentage to pay the seller’s agent for merely listing the property and negotiating for the seller;
2. The commission percentage to pay the seller’s agent if such agent individually lists and procures the purchaser (i.e., direct deal);
3. The commission percentage to pay the seller’s agent if such agent lists, and the commission percentage to pay a colleague within the same brokerage if such colleague procures the buyer  (i.e., in-house deal; this will be one total commission number for both the listing and procuring because the brokerage and not the salespersons is paid the commission);
4. The commission percentage to pay the cooperating broker where the seller’s agent lists only, but another brokerage procures the buyer while such cooperating broker is negotiating for the interests of the seller (i.e., broker’s agent);
5. The commission percentage to pay the cooperating broker where the seller’s agent lists only, but another brokerage procures the buyer while such cooperating broker is negotiating for the interests of the buyer (i.e., buyer’s agent)

Location, Location, Location. Have you ever driven by a property and questioned why THEY don't just put XYZ (i.e., Coffee Shop, Apartments, Offices, Gym) in over there? Then, you thought to yourself: "I can do it, I'm going to be rich!!!" The problem with your get rich plan is that what you see is not what you get when you solely focus on the visual of a given property (i.e., Location, Location, Location). Before becoming a first-time developer of residential or commercial real estate you need to understand these five invisible location issues.

While driving through the coastal neighborhoods of Long Island, Queens and Brooklyn, it’s a very common sight to see homes being raised, abandoned, for sale or completely renovated and looking brand new; all of these events generally being caused by Sandy.

When the renovations were made, homeowners likely were worried about being able to live in their homes again, not about minimizing the resulting property value increase, so this law creates welcomed relief for those who are going to be shocked to find a significantly higher property tax bill for their renovated homes (i.e., the renovation increased the home’s value and hence the home’s allocation for real estate taxes).

Some fine print that is important for assessing eligibility for this exemption:

1. Applications are to be made to your local Town Assessor; 
2. The home must be used and occupied for residential purposes (1-3 family homes are eligible); 
3. The current owner must have owned the home prior to October 29, 2012; 
4. Renovations must have been made to portions of the home that existed before October 29, 2012 and a new Certificate(s) of Occupancy showing the improvements must be obtained on or before March 1, 2018; 
5. You can apply for the exemption beginning March 1, 2016, but no later than March 1, 2018; 
6. If you are thinking of selling or buying a home that may be eligible for this exemption, be aware that the exemption terminates if the title to the home is transferred (except for those who inherit and then occupy the home); and 
7. The exemption can last 8 years if homeowner complies with the conditions described herein. 

It is important for those who recently completed or are in the middle of renovations to make sure that they obtain their final Certificate(s) of Occupancy before March 1, 2018 to remain eligible for this exemption, as this process can be frustratingly long depending on the work done to the home.

Homeowners who are interested in applying for this exemption should consult with their contractors and real estate attorneys to make sure their Certificate(s) of Occupancy are in order and that important deadlines are not overlooked.

The U.S. supreme court ruled that victims of discrimination under the Fair Housing Act can sue based upon a legal theory called disparate impact discrimination, which addresses conduct that appears neutral on its face, but which nonetheless has a discriminatory effect. 

Read the full article in New York Real Estate Journal, written by Andrew Lieb, Esq., and Dennis Valet, Esq. here. 

Long Island is developing its rental inventory in droves with mixed-use downtowns and multi-family construction. We saw development first boom in the emergence of Patchogue. Now it’s Riverhead, with the recent sale of the Sears building and the prospective redevelopment of the site to include 160 apartments in a revitalized downtown. Yet, this is nothing new to the East End, where our summer rental community has supported the economy for decades. While rentals offer a great housing option that supports the community, they also involve many disputes that find their way into our courts.

Read the full article in Dan's Papers, written by Andrew Lieb, Esq. here. 

There are so many get-rich-quick schemes for investing hard-earned savings in real estate to generate a huge passive income through rentals. Wake up--nothing in life is always roses, and not everyone can be Kiyosaki's Rich Dad. This is the list of the Top 5 litigation issues that income-producing property owners face incident to living the landlord's dream.

Full article in The Huffington Post, written by Andrew Lieb, Esq. here. 

New York County, Supreme Court, recently published a case opinion by initially referencing the plight of many homeowners in the first paragraph as follows:

"They have been thwarted by unresponsive loan servicers, unprepared lawyers, boilerplate form letters, and the banks' or servicers' often-changing and repetitive demands for financial information."

Sound familiar?

In the case, the Court reduced interest to 2% during the time that it found the lender acted in bad faith. This opinion is legally important because it expands the time of its interest sanction to pre-settlement conferences, but more so, its functionally important for borrowers because the opinion represents a terrific explanation of the current law governing mortgage modifications.

The law is set forth in detail below:



In reaching its decision, the Court, laid out the law as follows:

Duty Post-Default:
"3 NYCRR 419.2 establishes a "duty of good faith and fair dealing" by mortgage loan servicers in connection with their transactions with borrowers. This duty requires that servicers "make borrowers in default aware of loss mitigation options and services offered by the servicer in accordance with section 419.11" (3 NYCRR 419.2 [e]). This duty also requires servicers to "provide trained personnel and telephone facilities sufficient to respond promptly to borrower inquiries regarding their mortgage loans" (id., 419.2 [f]), and to "pursue loss mitigation with the borrower whenever possible in accordance with section 419.11" (id., 419.2 [g]). Part 419.11 creates an obligation on the part of servicers to make reasonable and good faith efforts to pursue appropriate loss mitigation options, including loan modifications as an alternative to foreclosure. Notably, section 419.11 (d) requires that servicers must complete their review of a borrower's eligibility for a loan modification or other loss mitigation options and advise the borrower or their representative of the determination in writing within 30 days of receiving all required documentation. Finally, section 419.11 (i) creates a good faith presumption on the part of servicers if they offer loan modifications in accordance with HAMP guidelines."

Duty Post-Commencement of Mortgage Foreclosure Action:
CPLR 3408 (a) and (f) read, in pertinent part, as follows:
"(a) In any residential foreclosure action involving a home loan . . . in which the defendant is a resident of the property subject to foreclosure, the court shall hold a mandatory conference . . . for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan[*8]documents, including, but not limited to determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workout options may be agreed to, and for whatever other purposes the court deems appropriate.
.....
(f) Both the plaintiff and defendant shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible."

To conclude that a party failed to negotiate in good faith pursuant to CPLR 3408 (f), a court must determine that "the totality of the circumstances demonstrates that the party's conduct did not constitute a meaningful effort at reaching a resolution" (US Bank N.A. v Sarmiento, 121 AD3d 187, 203 [2d Dept 2014]). Following the adoption of CPLR 3408, the Chief Administrator of the Courts promulgated regulations setting forth the rules and procedures governing CPLR 3408 settlement conferences (see 22 NYCRR 202.12—a). This regulation requires that "[i]f the parties appear by counsel, such counsel must be fully authorized to dispose of the case" (22 NYCRR 202.12-a [c] [3]).


Next, the Court laid out its options in sanctioning violations of CPLR 3408(f) as follows: 

"barring of interest on the loan for the period of time that the servicer acted in bad faith and unduly prolonged the foreclosure proceedings (see U.S. Bank N.A. v Smith, 123 AD3d 914 [2d Dept 2014] [mortgagee barred from collecting interest on mortgage for 9-month period]; US Bank N.A. v Williams, 121 AD3d 1098 [2d Dept 2014] [court canceled all interest accrued on the subject mortgage loan between the date of the initial settlement conference and the date that the parties agreed to a loan modification]; US Bank N.A. v Sarmiento, 121 AD3d at 200 [interest tolled from date mortgagor began placing $2,000 per month in an escrow fund, at the court's direction]; see also Bank of America N.A. v Lucic, 45 Misc 3d 916 [Sup Ct, NY County 2014]; U.S. Bank, N.A. v Shinaba, 40 Misc 3d 1239[A], 2013 NY Slip Op 51484[U] [Sup Ct, Bronx County 2013]; Wells Fargo Bank, N.A. v Ruggiero, 39 Misc 3d 1233[A], 2013 Slip Op 50871[U] [Sup Ct, Kings County 2013]; Deutsche Bank Trust Co. of Am. v Davis, 32 Misc 3d 1210[A], 2011 Slip Op 51238 [Sup Ct, Kings County 2011]). Because foreclosure is an equitable remedy which triggers the equitable powers of the court (Notey, 41 NY2d 1055 supra; Norwest Bank Minn., NA, 94 AD3d at 836, supra), courts have not hesitated to toll interest when it is an appropriate remedy for a [*9]mortgagee's unconscionable delay in prosecuting foreclosure actions (see Dayan v York, 51 AD3d 964 [2d Dept 2008]; Danielowich v PBL Dev., 292 AD2d 414 [2d Dept 2002]; Dollar Fed. Sav. & Loan Assn. v Herbert Kallen, Inc., 91 AD2d 601 [2d Dept 1982]; South Shore Fed. Sav. & Loan Assn. v. Shore Club Holding Corp., 54 AD2d 978 [2d Dept 1976])."