Real Estate Law

What do I need to know before I buy or sell my home in New York? (NY)

Buying or selling a home in New York can be both an exciting and frightening experience. New York real estate law is complex and it is also a good idea to consult an attorney before buying or selling a home. Attorneys specializing in real estate law are ideal consultants for vital questions that may have great impact on the overall quality of your transaction, such as: What is the proper down payment? Is 20% of the purchase price too much? Is 5 % too little? Should I have the home inspected by an engineer before the sale? What must I disclose to a potential buyer? In today's fast paced and volatile real estate market it has become increasingly important to have an experienced lawyer to answer these questions and advise on important procedures during the transaction such as contracts and closings. "Lawyer in-a-box" software kits available in office supply stores don't allow for complicated New York real estate laws and can wind up costing considerably more money and turn potentially profitable situation into a loss. Speaking with a qualified attorney can avoid loss of down payments or liabilities for unforeseen problems. A competent lawyer will guide you through the entire process and help make your sale or purchase as painless as possible. Buying or selling a home in New York is never easy but with a qualified lawyer, real estate laws need no longer be a hurdle to accomplishing the transaction.
(Courtesy of Association of the Bar of the City of New York)


I am looking to buy a coop in New York. What are some of my legal concerns? (NY)

There are many other concerns involved in the purchase of a coop besides those of buying a home in New York. Knowledge of the history of the coop, its reserve if any, and its existing mortgage is very important prior to purchase. Other financing, the coop's revenue stream, its by laws and board minutes, its policy on renting, and selling are a small selection among the wide variety of necessary information needed along with those inherent in dealing with New York real estate law can all be providing by any competent real estate attorney.
(Courtesy of Association of the Bar of the City of New York)


My co-op in New York is renovating the lobby in our building at a cost of about $1,000,000. The Board proposes to hire a general contractor who is willing to provide waivers of mechanics' liens only for itself. It will not provide them from the subcontractors who it will hire. The general contractor told the Board that when it receives payment from the Board and delivers its waiver to the Board, it will make payment to the subcontractors, and therefore they will not file any liens against the building. Can this be problematical? (NY)

Waivers of mechanics' and material men's liens under New York real estate law are valid only after the workman or supplier has received payment. There is, therefore, nothing to prevent a general contractor from obtaining these waivers from subcontractors and material men when the general contractor makes payment to them. However, this does not guarantee satisfaction of the subcontractors for the relationship between general contractor and subcontractor must be considered. Therefore payment of a general contractor does not guarantee payment to a subcontractor. For example, a job may call for the installation of lighting fixtures. Those fixtures are delivered and installed pursuant to the contract between the co-op and the general contractor, so that the co-op pays the general contractor for this work. However, the general contractor is having a dispute with the electrical subcontractor on another job and may decide to withhold payment from the subcontractor. If the dispute is not resolved, the subcontractor may be within his legal rights under New York real estate law to place a lien on the building. To avoid problems such as this, waivers of mechanic's liens should be obtained from all subcontractors and material men on the job.
(Courtesy of Association of the Bar of the City of New York)


I would like to buy a co-op unit in Manhattan from a person who now lives in Boston and who has leased the unit to a person who the seller says is an outstanding tenant. The seller claims to have informed the tenant of the sale of the apartment and that the tenant must move. The seller has been unwilling to have the contract specify an outside date for the tenant to leave and the sale to close. The seller would like the contract to simply state that when the tenant moves, the deal will close. Should I accept that? (NY)

A purchaser, upon signing of the contract, would probably be placing 10% of the purchase price in escrow with the seller's attorney. It is likely the buyer would also have to prepare to sell their current residence, if owned, or to terminate the current lease if leased. Application for a loan to aid in the purchase of the apartment and paying fees to the lender or a mortgage broker in connection with the loan would also be in order. An attorney would be required to complete these and other procedures pursuant with New York real estate law, such as negotiating the contract, due diligence and legal advice, and closing, and would be another necessary expense. Other obligations include preparing a board package and attending an interview before the board. These activities are time consuming, and it is unreasonable and unwise to be expected to sign a contract with an open date for a closing. It is also understandable the seller would not want to lose a great tenant without a guarantee of completion of transaction. Once the seller makes the decision to sell the apartment, real estate laws compel the tenant to leave. Under these circumstances it might be prudent to have the seller grant a firm outside date for the closing. This outside date may vary depending upon circumstances in the buyer moving in or out of their current residence and the possibility of losing a favorable interest rate on a mortgage. If the seller will not agree to a firm outside date, it might be best to reject the deal in its entirety.
(Courtesy of Association of the Bar of the City of New York)


I am buying a brownstone in New York City and am aware of the New York disclosure statute, requiring a seller of a home to answer questions concerning the condition of the property. I am also aware that if the disclosure is not provided, the seller is required to give me a $500.00 credit at closing. My seller has refused to answer the questions in the questionnaire and is requiring me to waive the $500.00 credit and also is requiring me to buy the home in "as is condition" as of the date of the contract. Is this legal? Whether or not it is legal, do I have recourse under New York real estate law against the seller if there is a condition regarding the property that I discover after the closing that would have been revealed by the questionnaire had the seller provided the responses in the questionnaire? (NY)

The New York Property Disclosure Condition Act, comprising Article 14, Sections 460 to 467, of the Real Property Law requires sellers of residential real estate, with certain exceptions, to provide a Property Condition Disclosure Statement to the buyer or agent prior to the buyer signing the contract of sale. The real estate law requires the seller, based on the seller's actual knowledge, to answer dozens of questions concerning legal, financial, and physical characteristics of the home in question. The form required by the New York statute provides that a knowingly false or incomplete statement by the seller may subject the seller to claims by the buyer prior to or after the transfer of title. The statute also states if a seller fails to perform the duty under Article 14 to deliver a disclosure statement, the buyer receives a $500 credit against the purchase price upon transfer of title. New York real estate law does not distinguish if the buyer's sole remedy for such a failure to deliver a disclosure statement is the $500 credit, although it has appeared to be the prevailing view real estate lawyers. The statute holds no provision that a buyer may not waive the $500 credit, and some similar statutes in other states do have anti-waiver provisions. This leads to the possibility that the legislature in enacting the statute intended that the parties could waive the provision concerning the $500 credit. The complexity of this question derives from the ambiguity in the language of the real estate law in this and many other areas illuminates the necessity of a buyer to be fully represented by a competent attorney.
(Courtesy of Association of the Bar of the City of New York)


When I came back home last night from work, I found a ticket in my door with the wording "Notice of Violation and Hearing." It further said "27-217 dwelling illegally converted 1 to 2 family". It also says that if a certificate of correction is not received by the cure date of 11/21/05 then I must appear at a hearing at the Environmental Control Board (the "ECB"). No inspector was ever in my house. Can I deny the charge at a hearing and never let the inspector into my home as several people have suggested? What should I do? (NY)

A New York City Department of Buildings Notice of Violation (called an "NOV") can be a serious matter and, if the matter is not properly handled it may result in a substantial fine especially if the violation notice is marked "Hazardous" and a daily penalty is noted. In a case where there is a family living in a basement apartment, New York construction law notes the records may be reviewed and if it is found that a description of a one family house was used on the original permit at the time of construction the building may be deemed in violation, even if the house was built before the City issued certificates of occupancy. Unless there is a problem with the service of the summons, there may be no defense to the allegation. A lawyer specializing in New York construction law with experience in the area should be consulted to see if there may be cause for a defense focused on the service of the summons. If certification of correction is not filed before the cure date the defendant must appear at the hearing (or seek a continuance or postponement) at the ECB. An oath would be pledged wherein any falsehood may expose the perpetrator to some severe civil and even criminal penalties. Barring an inspector from entering the domicile is not recommended. This will almost certainly give the inspector due cause to force entry into the premises if he believes there may be an imminently dangerous condition within the residency, such as an illegal gas line installation or any other building violation. The defendant may cure themselves before the cure date. A certificate of correction is available through the following link:
http://www.ci.nyc.ny.us/html/dob/html/forms/forms_violations.shtml . This certificate should be mailed or submitted to the New York City Administrative Offices listed on the certificate itself. The instructions on this procedure at that site are very clear. One must always be aware that filing the certificate is an admission of guilt of the charges on the face of the NOV and waives all defenses. If a second apartment does not exist, the tenant(s) could be persuaded to move out while all permits, including plumbing, were secured, or all building violations corrected to conform to standards defined by New York construction law. Each would have to occur before the cure date. It might be necessary to secure the services of an architect or engineer who specializes in "legalizing" violations to help expedite this process. If the curing process is not completed by the cure date, producing the work permits, plans and construction agreements dated before the hearing may be vital in order to help mitigate a fine at the hearing. It is highly recommended to have these documents dated prior to the cure date. A default would be issued and a maximum judgment entered if a defendant chooses not to attend the hearing. In light of possible building violations, this may be a substantial amount of money.
(Courtesy of Association of the Bar of the City of New York)


I recently hired a remodeling contractor to add a bedroom to the back of my house. I initially paid him $9,000, which is one third of the construction cost to start the project. He was supposed to finish in two months. Partway through the construction, I paid the contractor another $9,000. It is now 7 months and my house is a mess. There are wires and exposed plumbing pipes everywhere and according to my engineer, only about $4,000.00 of the work was ever completed. The contractor has not answered my calls for 3 weeks. What can I do? (NY)

This problem epitomizes the most prevalent occurrence in construction law. It is the primary factor motivating any legislation attempting to provide some degree of protection to the consumer called the Home Improvement statutes that most states, including New York, have adopted. In New York, construction law stipulates under CPLR 3015(e). Anyone in the business of making improvements to any land or building used as a private residence must obtain a home improvement license. This includes construction, repair, remodeling, renovation, modernization, improvement or addition to any land or building used as a private residence (more than 3 units), apartment (rental, cooperative or condominium) or dwelling place. This can include the construction, erection, replacement or improvement of driveways, swimming pools, terraces, patios, landscaping, fences, porches, garages, and storm windows. Some counties and municipalities also include interior and exterior painting in their definition of "home improvement." However, constructing a new home is generally not covered under these statutes. There is a guide published by the New York City Department of Consumer Affairs ("DCA"), downloadable for home improvement complaints at http://www.nyc.gov/html/dca/downloads/pdf/home_improvement.pdf In New York City, the contractor must secure a $20,000 performance bond or pay into a DCA trust fund after obtaining the license. It may be possible to collect money from the trust fund, but only if the contractor was licensed, and only up to $15,000. However, if the contractor was not licensed, it is not possible to seek compensation from the fund. However, in most cases, construction law does not required payment for services performed by an unlicensed contractor. This represents a rare exception to the doctrine of "quantum meruit" whereby the courts will almost always at least award the value of services performed to a litigant. An unlicensed contractor is subject to both civil and criminal penalties. Construction law declares such an offense as a class A misdemeanor in most counties in New York. Both contractors and subcontractors must be licensed. In addition to these penalties, an unlicensed contractor or subcontractor will incur the loss of the right to file a mechanics' lien against the property. Therefore, one must immediately notify the DCA by telephone at (212) 487-4379 or by mail at following address: Department of Consumer Affairs 42 Broadway New York, New York 10004 A booklet offered at the following site may be a valuable tool in resolving this situation: http://www.nyc.gov/html/dca/downloads/pdf/home_improvement.pdf A lawsuit may have to be filed with the small claims, or supreme court in the county in which the building violation occurred, if the contractor was not licensed and without assets. Under GBL §772 consumers are entitled to statutory amount of $500, reasonable attorney's fees and actual damages. There may be other remedies under common law that may be useful in a lawsuit.
(Courtesy of Association of the Bar of the City of New York)


I received a sanitation ticket that was lying in the street in front of my house. It is a ticket for having paper cups, bags, and miscellaneous debris in front of my house at 4:00pm. I am a working single mother. I leave early in the morning to go to work and bring my daughter to day care. I sweep in front of my house and into the curb every morning and when I get home at night. How can I be responsible for debris thrown by passersby in the late afternoon? (NY)

The ticket or notice of violation ("NOV") received indicate the time and place for the hearing if the choice is made not to pay the fine and instead offer a rebuttal or defense to the charges made. New York law grants the right to have a lawyer present at the hearing but this is unnecessary with this type of violation. It will have to be determined through a description of the area before a judge whether there are circumstances that would attract foot traffic above the norm of the area. A resident is generally responsible for two sweepings, one in the morning and one in the early evening. However, if the residence is near a pizza parlor, school, subway train stop, it may be required to sweep the sidewalk more often than twice a day. It is not prudent to overstate the proximity of a pizza parlor or school to gain sympathy from the judge. The judge will take this as an admission that there is greater than normal foot traffic and find a violation for only sweeping twice a day.
(Courtesy of Association of the Bar of the City of New York)


I want to convert my one family to a two family residence so I can take advantage of the rental income to help pay my mortgage. My engineer has told me the Department of Buildings rejected his application for a work permit, stating that my house is on a "mapped street." What does this mean? (NY)

A work permit from the Department of Buildings (DOB) is required before any renovation work may proceed on a residence in New York. Any work done without an appropriate permit may be construed as a building violation. The DOB may not decide to issue a permit, and may instead opt to issue a written "objection". This may occur even if plans are legal and the project is within the bounds permitted by the building code. The property may have outstanding liens or outstanding business or building violations that have not been corrected. Payment of a fine may not alleviate these violations. It may require a certificate of correction to be filed with the DOB. In some cases, the problem may be the result of a technical error, such as a city map showing a street running through the house where the renovation is proposed, even though the street indicated does not exist. In technical terms, the DOB has written an objection to the application for a work permit on the basis that an attempt is being made to "build in the bed of a mapped street." In order to continue the renovation project an application for a special permit with the zoning board, called the Board of Standards and Appeals ("BSA") would have to be filed. This will require the services of a construction law specialist experienced in representing business owners before the BSA. According to construction case law, if the City has not made any effort to use the mapped street during the last ten years it is possible to attain a special use permit. There are however, several hurdles, such as approval by the local community board that still would have to be overcome.
(Courtesy of Association of the Bar of the City of New York)


I want to buy a coop apartment in New York City. What should I do first? (NY)

The first order of business would be to research prices and consult with a mortgage lender or bank to see if attaining an apartment in New York City is a viable option. It is always recommended to consult a lawyer versed in real estate before signing any documents regarding home purchasing. The consulting lawyer should advise on whether to sign a contract with the agent or broker, and how to negotiate that contract for duration and exclusivity. This allows the consumer the option of choosing his lawyer to represent them in the transaction rather than depending on an attorney recommended by the bank, real estate agent, or broker. It is always sound advice for best representation to utilize an attorney outside the environs of the other parties in the transaction. This will help ensure the attorney's interests coincide with the consumer's alone. (Courtesy of Association of the Bar of the City of New York)

I have a small two man deck construction company? Do I need to obtain a home improvement license? Also, do I need to register my business with the City? (NY)

New York construction law requires permits for any major improvements on people's residences. A client using an unlicensed contractor would not be protected by a contractor's bond or indemnification as required by New York construction law. A homeowner or unit owner in a condominium or coop is not, in most instances, required by law to pay for services performed by an unlicensed contractor. This represents a rare exception to the doctrine of "quantum meruit" whereby the courts will almost always at least award the value of services performed to a litigant. An unlicensed contractor is subject to both civil and criminal penalties. Construction law declares such an offense as a class A misdemeanor in most counties in New York. Both contractors and subcontractors must be licensed. In addition to these penalties, an unlicensed contractor or subcontractor will incur the loss of the right to file a mechanics' lien against the property. There are stringent and specific requirements in contracts and other requirements that must be followed precisely in order to obtain a contracting license. In New York City you can go on the Department of Consumer Affairs site for information and a license application at http://www.nyc.gov/html/dca/html/licenses/100.shtml . (Courtesy of Association of the Bar of the City of New York)

I want to renovate my coop apartment in Queens. What do I do first? (NY)

Regardless of the size of the project, it is advisable to review the cooperative documents received at closing in order to avoid any possible inadvertent building violations. These should include the declaration, articles of incorporation, by-laws and house rules. This should indicate the requirements and procedures for renovation in the coop. It is also recommended to contact the president or secretary of the Board of Directors and/or the managing agent to get further information on these procedures for approval of a renovation project. If the project is substantial an engineer or architect well versed in New York City multiple dwelling renovation design and New York construction law should be consulted. When hiring a contractor be sure to follow these simple rules (most coop boards will already have required proof of 1 and 2): the contractor must provide proof of insurance, at a minimum workers' compensation and comprehensive general liability (it is advisable to have those present in the resident to be added as an also insured); the contractor and subcontractors must be licensed home improvement contractors by the New York City Department of Consumer Protection. Under these construction laws there must be a written contract with specific statutory requirements. Most coop boards already require these proofs. It is also often advisable to have a contractor who has been previously contracted by an acquaintance. It is important to check references, especially with the consumer protection agency, as well as with the New York state business Secretary of State's Division of Corporations at (518) 473-2492. Please read the DCA brochure on home improvement contracting at http://www.nyc.gov/html/dca/downloads/pdf/home_improvement.pdf . This document provides a wealth of tips, such as never paying for more work and materials stored than has been done during the project, or including a clause in the contract for remodeling that requires subcontractor and supplier lien waivers to protect you from mechanics' liens on the property down the road.
(Courtesy of Association of the Bar of the City of New York)

How is real estate transferred?

The basic mechanism by which real estate is transferred is a deed. In order to be effective, a deed must adequately (and accurately) describe the property being conveyed, and it must identify the person making the transfer, and the person receiving it. In addition, the deed must be signed and delivered to the recipient. In most jurisdictions, there is an additional step: the deed must be recorded. The reason for recording is that most jurisdictions maintain "Official Records" which list the parties to a transfer of real property. This is very important, because it enables owners to be "registered" on the official records and to give notice to the world that a piece of property has changed hands.

What is the role of Title Insurance?

Title Insurance is just like any other insurance policy, but instead of protecting the policy holder in case of fire or other calamity, it protects a person's title. It is a guarantee that the title to a certain piece of property rests in the name of the person(s) listed on the policy. For example, say John and Becky Smith buy a house on January 19, 2000. They want to make sure they are in fact the legal owners of that property. In connection with their purchase, they buy a policy of "Title Insurance" that guarantees them the title stands in their name as of the close of escrow. Usually, title insurance is required by lenders who put up money (loans) to help the purchasers buy the property in question. The lender, who is taking a mortgage back from the owner/borrower, wants to make absolutely certain that the borrower is in fact the owner of the property. If there is a problem with title, the policy holder makes demand on the insurance company to pay the value of the policy (usually the purchase price) in damages.

What is the role of financing, deeds of trust and mortgages in the purchase and sale of real estate?

Of course, you can purchase real estate by paying full cash. That is the easy way, and it is very, very rare. Usually, people do not have the cash on hand to make such a purchase (understandable, as the prices usually are in the hundreds of thousands of dollars, if not millions). One way to "do the deal" is to borrow the money required to make the purchase. Hence the need for "financing," which is a fancy word for a loan. Usually, a lender making a loan that is to be used in connection with a purchase of real estate wants to be guaranteed the money will be paid back, and they want more than a signature on a promissory note. One convenient (and common) security mechanism is for the borrower to use the real estate in question as security for the loan. That is, the borrower agrees that if he/she cannot make the payments on the loan, the lender can "look to the property" for repayment. The legal method by which this is done is called a mortgage. A mortgage is a document (it is always in writing) by which the borrower agrees that if he/she cannot make the payments on a loan, the lender may step in and sell the real estate and apply the proceeds of the sale to repay the loan. In many states, a mortgage is now known as a "Deed of Trust." In California, for example, the technical differences between a mortgage and deed of trust have been eliminated by statute; the two are treated as one and the same.

What is the rule of "full disclosure"?

In any transaction, the parties should deal honestly and forthrightly with each other. Anything less is a species of fraud - either deliberately lying, or telling half truths when questions are asked. The rule of full disclosure is one that requires the seller of property to disclosure fully all he/she knows about the property being sold - the good, the bad, and the ugly. One tricky problem is what to do if nothing is said - i.e., when a seller knows something is wrong and, rather than make a statement or tell a half truth, simply says nothing, relying on a rule of "caveat emptor" ("let the buyer beware"). In many real estate deals, such an approach will create swift and sure liability. In cases of residential real estate (homes), there are affirmative disclosure rules, and specific forms that require disclosures on issues of importance. The same rules do not apply across the board in commercial cases, but many astute buyers manage to ask detailed questions, in writing, and they require detailed answers, in writing, before proceeding. Also, there can be inspections and reports generated that describe the contrition of various properties. The bottom line is that a seller should disclose all he/she knows, and a buyer should be asking pertinent questions, or else relying on professionals to inspect the property and report problems (or potential problems) before the property changes hands.


What is the role of a Real Estate Broker?

In general terms, real estate brokers help sellers sell, and buyers buy. They are agents who represent principals. A seller's broker, is the agent for the seller, and usually handles all the communications with the buyer. A buyer's broker, is the agent for the buyer, and usually handles all the buyer's communications with the seller. It is not required that parties be represented by real estate brokers, but it is quite common that they are. Real estate brokers act as fiduciaries for the parties they represent. They have heightened duties and must exercise the utmost care to protect their clients (who are also referred to as principals). A broker representing a seller, has a duty to disclose what he knows about the property, to make sure his principal (the buyer) is properly represented. A buyer's broker, has a duty to inquire about property and learn pertinent facts about it. One interesting twist to all of this is that real estate brokers generally do not have a duty to discover hidden defects. While a seller might have a duty to disclose, his/her broker does not necessarily have duty to discover. Statutes govern these relationships in many states, and the rules can vary from state to state. It is usually a good idea to have any real estate papers reviewed by a competent real estate attorney before signing on to a deal.

Does a commission agreement have to be in writing?

In most states, the answer is yes. In some jurisdictions (like California) unwritten commission agreements are unenforceable. The statute that requires the writing is known as the Statue of Frauds, and it is designed to avoid fraud and misunderstanding in certain types of transactions by requiring clear writings in order for there to be enforceable relationships. A writing is also required in order to transfer real estate. Remember also that real estate commissions are negotiable. Just because an agent says his/her commission is 6.5% doesn't mean you have to pay that. You can negotiate a lower or higher fee, depending on the circumstances. Once you sign the contract, however, you are "stuck" with the bargain you have made.

What is "dual agency" and is it a problem?

Dual agency exists whenever a single agent represents two parties. A classic example in the real estate arena is where the same agent (or broker) represents both the buyer and seller. While this can be done (and is done) it is a formula for trouble, for the agent is in the middle and has loyalties that are inherently incompatible. The classic agency situation is where the agent has an undivided duty of loyalty to his principal (client). In a dual agency situation, that is impossible. For example, if you have a dual agency, how can a buyer or seller communicate anything in confidence to the "agent" who also represents the other side. While dual agencies exists and are legal in many states, they are dangerous. Be warned.

I have heard the term "Hazardous Waste Cleanup." What does it mean?

Actually, there are several terms in this area that you may have heard. "Toxics." "Toxic waste." "Hazardous waste." "Environmental contamination." "Superfund." "CERCLA" (pronounced circle-la). Each of these deals with the same problem: a piece of property that has been used in the past as a site where certain types of waste has been left in the ground. We are avoiding the word "dumped," because in many cases there is no dumping at all, but rather, a decades-long seepage that has resulted in environmental contamination. The problem is that the site needs to be cleaned up and the cost can be (and usually is) substantial. One issue that comes up often is who is obligated to pay for all of this? Under some statutes, any owner - any person in the decades long chain of title - can be held responsible to the government for clean up costs, and the rights then get adjusted among the owners themselves in a separate lawsuit. Thus the last person in the chain of title may be obligated to clean up the mess and it is his burden to then track down the other parties who may have actually caused the contamination in the first place. The problem may be compounded if the party who initially caused the problem has gone out of business. One way around the problem is to do a pre-purchase survey to identify any environmental problems with the site and then negotiate with the seller as to who will pay for any remedial clean up costs. This is a common procedure with commercial transactions, especially those dealing with industrial sites. But it can be an issue with residential properties, too (particularly if it is an older property where a gas or oil powered furnace was used).

What are the different forms of real estate ownership?

The owner of real estate holds title to the property. There are many different ways to hold title, including: Fee simple - This is outright ownership, with no restrictions. The fee simple owner holds title in his own name. Joint Tenancy - This is a form of joint ownership between two or more persons. In a joint tenancy, there are multiple owners and the key point is that if one of them dies, the title passes automatically to the other joint tenants. There is no right to dispose of one's joint tenancy property by will. The surviving joint tenant(s) succeed to your interest. Tenancy in Common - This is like joint tenancy, but with a crucial difference. In a tenancy-in-common, each tenant may dispose of his/her interest by will. Thus, if one co-tenant dies, the survivors do not automatically succeed to the deceased person's interest. That interest passes by the will of the deceased person and a new tenant (the beneficiary under the will) enters the picture. Easements - An easement is a right in the property of another, usually a right of access or use, or a right to drill for minerals or water. The most common type of easement is a roadway easement. For example John Jones may have an easement for roadway purposes over the land of Dave Smith. He has a right to construct and use a road over Mr. Smith's property. Other common easements are those enjoyed by utility companies to lay wires and cables for telephone service; pipes for water and sewage service; and a right to drill for oil and other precious minerals. Usually, easements are granted by deed, just like full title.

What is "zoning" and how does it affect my property?

At the dawn of the twentieth century, this might have been a controversial question. At that time there was great debate over the power of the government to control the use of private property. A long line of US Supreme Court cases has settled the issue in general terms, and there now is widely acknowledged "police power" of government to control the use of property. Thus a municipality can mandate that a neighborhood remain "residential" and can bar commercial enterprises from it, or at least restrict them to certain locations (a corner grocery store, for example, instead of stores in the middle of a residential block). Also, there can be different types of commercial and industrial zones, the theory being that the general public is best served if all heavy industry is in one part of town, rather than having a smelting plant next to a church. There are complexities, of course, but the general point is that local governments have the right to set and enforce "zones" of use - hence the term "zoning." Check with your local planning department for what the rules are in your area.

What is a "non-conforming use"?

Non conforming uses are properties that are in a particular "zone" but which do not conform to the use officially specified for that zone. The easiest and most common example is a commercial property in the middle of a residential zone. Often times, when an area is zoned (or re-zoned as times change) there are pockets of individual properties that do not conform to the designated use. To be fair, local governments often allow these "non-conforming" properties a period of time to bring their use into conformity with the surrounding properties. Thus, a non-conforming business located in a residential zone may be "grand fathered" into the residential district, but given twenty years to eliminate the non-conforming use. Different rules apply in different states, but hopefully this brief discussion will give you a general idea of the concept.

What is a "variance"?

A variance is similar to a non-conforming use in that it is official permission to do something different from what is specified in the local ordinance or code. For example, there may be a rule that all backyards have a certain "buffer" area between the adjoining property. Neighbors may have established a community garden and may seek a "variance" from the buffer requirement. Once granted a variance exempts a property from certain requirements (or sets up different requirements). Usually, variances must be approved by the local planning agency, after notice to surrounding property owners, and sometimes special conditions are imposed before the variance can take effect.

What are the implications of "landmark status" being applied to a building?

It can be a blessing and a curse, all rolled into one. The blessing is that when a local authority confers "landmark" status on a property, it means there is recognition that the property is special and a part of local heritage that should be preserved. So far so good (in some cases, the designation may even add to a property's value in the open market). The rub comes when the owner tries to change or improve the property. The local authorities may rule that no changes can be made in the landmark property, or else they may require more expensive repairs and procedures than would otherwise take effect. Each case is different, but the basic point is that local authorities do have authority to confer this status in particular circumstances and it can have a substantial effect on the maintenance and development of property.

What is a subdivision map?

The simple answer is that it is a map of a subdivision. But that isn't saying very much, is it? Every property must be shown on some official map in the local records. When there are a group of lots that are drawn up at the same time, they may comprise a "subdivision" which is a fancy word to describe an area that is carved out of a larger parcel and subdivided into individual lots, usually created for individual home sites. The subdivision map is the instrument that must be prepared, approved and recorded for the lots to become saleable and able to be developed. An important corollary of this is that when a single building is divided up into condominiums, the building must be the subject of a subdivision map itself - individual units must be mapped and shown on a separate subdivision map that covers the building.

What are "planned unit developments"?

They are what the name implies: developments of homes that are planned in advance as a single community. The clearest example are condominium developments, which consists of a series of individual units in a particular building (apartment houses are frequently converted into condominiums), or else a series of lots in a given development project that will be ruled by common rules. The point is that "planned unit developments" are residential areas consisting of multiple households (whether condominiums or otherwise) that are governed by common rules, usually contained in a documents referred to as "Covenants, Conditions and Restrictions" or "CC&R's." Another form of a planned unit development is a cooperative. A cooperative usually consists of apartments in a single building. The apartments are not owned separately, but rather, all residents own stock in a company that owns the building itself; rights to individual units are spelled out in an agreement among the shareholders; this form of ownership is more common on the East Coast, and in the west has been largely replaced by condominiums).


How do you resolve a disputes between joint owners?

Disputes between joint owners of property can be difficult and (no pun intended) divisive. One owner may want to develop a vacant lot that is owned jointly, while the co-owner may prefer to leave the lot as is and sell it to a third party. If owners cannot get along, usually one of them buys out the other; in a worst case scenario, the respective interests can be divided and separate ownership interests created for each person. The means by which the separate interests are created is called a partition suit, which is explained below.

What is a partition suit?

Partition is a legal term used to describe the division of a single property into multiple interests. If three bothers own an apartment house as joint tenants and they cannot get along, one of them may sue to partition the property into three separate interests. Once that is done, each person may sell his interest separately. Another result of a partition suit is that the property can be sold as part of the process and the proceeds divided between the separate owners.

What is a "Quiet Title" action?

If there are multiple ownership claims to a particular property, one of the claimants may bring a quiet title action to settle the controversy and "quiet" the title so there is no yelling and screaming as to who the owner is. While these cases can be hotly contested, the more usual process is when there is some doubt as to the title, and a claimant files the action, publishes notice in a newspaper of record (thus giving effective legal notice to all the world) and when no one comes forward to prove up a competing claim, obtains a court order "quieting" the title in the plaintiff/owner's name.

What is a "Tax free exchange"?

Normally, when you sell or exchange real property, it is a taxable event, and you will have to pay taxes on the amount of profit you have made. The profit is the difference between the cost (also referred to as the "basis") of the property and the selling price. The profit in some cases can be substantial, and so are the taxes. One way to avoid taxes, is to exchange the property rather than sell it outright. Here is an example: Say Owner Able owns a run down apartment house. He is tired of dealing with the tenants, worried about the property being run down, and he doesn't want the hassle of fixing it up. By the same token, let's assume the property has been in the family for 30 years and even in its run down state is worth far more than was paid for it. If the apartment house is sold, there will be a sizable gain (profit) and sizable taxes to pay. Owner Able does not want to pay taxes and he doesn't need the cash from the sale. One way to get out of the apartment house ownership without incurring tax liability is to exchange the apartment house for a like kind property. If the exchange is made within 6 months of the date of sale, there are no taxes to pay. There are two ways this can work. One way is for the owner to "swap" the apartment house for another property of the same general fair market value. Another way is to sell the apartment house and then invest the proceeds in a like kind property within the time limit. Either way, Owner Able is out of the apartment house business and he doesn't have to pay taxes. (Of course, when the "exchange property" is sold in the future, Owner Able will be paying taxes on the gain, and he will retain the basis from the original apartment house.)

What duties do I have as a property owner?

The answer varies depending upon the type of property. If you own rental property, you generally have a duty to keep it in good repair, although those duties can be shifted to a tenant in a lease. Generally, property owners have a duty to keep their properties in good repair, avoid injury to others, and comply with all applicable codes that regulate the building services (electrical codes, plumbing codes, and so forth). There are duties owed to tenants, as well as duties owed to the public. Generally, a property owner must refrain from allowing his property to fall into such a state of disrepair that is becomes dangerous to third parties. That is not to say that an owner is required to repaint a house every so often or replace the stove at regular intervals; but there is a general duty to keep the property in such a state that it is not dangerous to the public or tenants renting it. If the stove leaks gas, it must be repaired. If the stairs to a home are weak and in danger of collapse, they must be repaired. There is also a duty to abate nuisances on the property. Nuisances are not just things that bother someone else - a neighbor may not like the type of flowers you plant, but your garden is not a nuisance for that reason. Nuisances are things that generally offend the public taste - continuous loud noise at three in the morning; noxious odors, and so forth.



 
 

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