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Showing posts from 2013

NYC residential sales hit six-year high

New York City’s residential sale market broke new ground last quarter.  City-wide sales reached a six year-high in sales values in the third quarter according to REBNY’s NYC Residential Sales Report.  Released in the middle of October, REBNY’s Residential Sales Report is the most comprehensive quarterly review of recorded transactions available and includes data from all five boroughs.  The City saw impressive increases in part because increased competition and limited inventory encouraged buyers to act briskly and decisively.  Mortgage rates near historical lows and climbing residential rents added to the attractiveness of home ownership at the moment. The total value of all home sales in the five boroughs was $11.3 billion in the third quarter, up over thirty percent from both last quarter and third quarter last year.  The average sales price rose three percent from last quarter to $806,000, while the median sales price increased four percent to $515,000.  The volume of home sales,…

REBNY Legal Line Question of the Week: Rent Stabilized Leases

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Legal Line Question of the WeekRent Stabilized LeasesWhen can a Landlord (hereinafter the “Landlord or “Owner”) refuse to 
renew the lease of a rent stabilized tenant (the “Tenant”) who lives in a 
rent stabilized apartment (the “Apartment”)?  Furthermore, under what 
circumstances can an Apartment be “deregulated”?Generally, an Owner may refuse to renew a rent stabilized Tenant’s l
ease in the following circumstances, and only upon providing the Tenant 
with the required prior written notice: (i) where the Owner wants to take 
over the Apartment for his/her (or a member of the Owner’s “immediate 
family”) personal use and occupancy as a primary residence; (ii) where 
the Apartment is not occupied by the Tenant as their primary residence; 
or (iii)  where the Owner takes the Apartment off the rental market or 
demolishes the building. Notwithstanding the foregoing, an Owner cannot 
evict a Tenant from an Apartment if the Tenant, or the Tenant’s spouse, 
is 62 years or older (or if the Tenant is d…

U.S. home prices climbing at fastest pace since 1977

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Home price index, by percentage change year-over-year Home prices (including distressed sales) climbed 11.9% year-over-year in June, according to CoreLogic’s latest home price report. This is the 16th straight monthly rise in home prices. Prices were up 1.9% month-over-month. Ex-distressed sales (short sales and REO transactions), home prices were up 11% on the year, and 1.8% MoM. Meanwhile, in the first half of the year, home prices were up 10%. “This trend in home price gains is moving at the fastest pace since 1977,” said CoreLogic’s chief economist, Mark Fleming in a press release. Here are some details from the report: Including distressed sales home prices rose the most in Nevada, up 26.5% and fell the most in Mississippi, down 2.1%.Ex-distressed sales home prices climbed the most in Nevada, up 23.6%, and no state saw home prices fall. The peak-to-current decline in home prices, from April 2006 to June 2013, was 19%.The CoreLogic Pending home price index suggests that home price…

Legal Line Question of the Week: Transfer Taxes and Grossed up Consideration

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Legal Line Question of the Week - REBNYTransfer Taxes and Grossed up ConsiderationI represent the prospective purchaser of a new construction condominium 
unit. In speaking with the sales office for the sponsor, I was informed that 
my purchaser is responsible for paying both the New York City and 
New York State transfer taxes.  I thought that the obligation to pay transfer 
taxes was the responsibility of the seller.  Can you please explain?
Generally, when real property (or a co-op apartment) is sold in New York 
City, the seller is responsible for paying both the New York State and 
New York City transfer taxes.  In residential real estate transactions 
where the purchase price is greater than $500,000, the New York City 
transfer tax equals 1.425% of the purchase price (and where the purchase 
price is $500,000 or below, the New York City transfer tax is 1% of the 
purchase price).  The New York State transfer tax is .4% of the purchase 
price.
New York state law permits a seller to shift the…
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Legal Line Question of the WeekSwitching Electricity 
& Gas Accounts in NYCI have been asked by my purchaser of a condominium unit in 
New York City how to switch the electricity from the seller’s 
account to their own account? How is this done and is 
the purchaser responsible for the seller’s unpaid bills?Once the closing date is established, the purchaser should contact 
Con Edison to inform them that the account should be switched to 
the purchaser’s name on the scheduled closing date.  Con Edison 
may ask for documentation which will indicate that there will be 
a new owner of the unit.  The purchaser will establish a new account 
with Con Edison and a final electric bill will be sent to the seller.  
The purchaser will not be responsible for the seller’s balance.  
It is also prudent for the seller to contact Con Edison so as to verify 
that the account was switched over to the purchaser’s name.
If gas is metered separately in the condominium, then the same 
procedure will apply for switc…
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Legal Line Question of the Week
Can an Exclusive REBNY Broker insist 
that a Co-Broker not accompany 
a Purchaser to visit a listing?I represent a purchaser who is interested in seeing an apartment that is 
listed with a REBNY Exclusive Broker.  Apparently, the Exclusive Broker 
is not allowing me to accompany my purchaser to view the apartment.  
Can the Exclusive Broker do this?No.  The Department of State (“DOS”) has consistently stated that 
(i) “a seller's broker must always honor the buyer's right to be represented 
by his or her own broker,” (ii) “refusal to work with a buyer's agent denies 
the buyer the right to the professional services of the broker of his or her 
choice,” and (iii) “any such denial will be construed as a violation of the 
selling broker's duty to deal honestly, fairly and in good faith with the 
buyer.”  Furthermore, the DOS has specifically stated in an 
opinion letter: “With regard 
to showing the property, the buyer has the right to have the buyer'…

Q1-2013 in the Books -- Buyers Facing Inventory Shortage

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A: Manhattan active inventory stands at 4,826 units, down 30% from this time last year. At the same time Manhattan's Pending Sales, the measure of real-time demand, stands at 3,154 contracts awaiting closing; this is up 24% from this time last year. On a monthly basis, we continue to see 'less new stuff' coming onto the market and 'more listings' than usual going to contract. It seems Manhattan is a tale of two markets; one kind of market for lower quality/higher priced listings that aren't experiencing the activity being discussed here and the other is a fierce market where buyers are competing each other over quality product that is reasonably priced. Either you are priced right or you aren't. This combination is leaving buyers frustrated as they pass over the over-priced stuff and deal with 'best & final situations' for the quality, well priced listings. I'll repeat what I said earlier this year, "I can't think of a better time f…

Legal Question: What is a BPO?

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Legal Line Question of the Week Broker Price OpinionsWhat is a BPO?“BPO” stands for Broker Price Opinion.  A Broker Price Opinion is 
prepared by a real estate broker to provide an estimated value 
of the probable selling price of a subject property where the 
requesting party does not want to incur the expense of an appraisal 
of the subject property.  The real estate broker determines the
 probable selling price of the property by analyzing various factors, 
including but not limited to comparable properties in the area.  
Broker Price Opinions are generally prepared for a fee.  Recently, 
the Department of State clarified that only a real estate broker 
can collect a fee for preparing a BPO.  Accordingly, real estate 
salespersons and associate real estate brokers cannot receive 
compensation directly for preparing a BPO.  The fee for preparing
 the BPO would be paid to the real estate broker and the real estate 
broker, would, in turn, compensate its salesperson or associate broker.

By: Neil B. …

Legal Question: Offering Plan & Due Diligence

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Offering PlanIt seems that real estate attorneys are asking for more and more “due diligence” materials when representing a prospective purchaser of a co-op or condominium apartment.  What are the “customary” due diligence materials that an attorney will ask for?Real estate attorneys conduct a due diligence investigation in order to give prospective purchasers of co-op and condominium apartments a better understanding of the overall condition of the property.  This includes, for example, determining what capital projects will be undertaken by the co-op/condominium in the future, when maintenance/common charges will increase, whether there are any anticipated special assessments and if there are any “quality of life” issues in the building.
The customary due diligence materials that a purchaser’s attorney will request include the condominium or co-op’s: (i) board minutes (an attorney will generally schedule an appointment to review the board minutes with the building’s managing agent); …