Two Names on Deed, One on Mortgage – Who Owns the House?

Having shared property with someone is common, especially between spouses. It is also common to have the same bank accounts and even the same debts. However, this is not a universal experience and there may be some instances where both you and your spouse would be better off only including one name on the official document instead of sharing. 

Understanding the significance of when and which documents you include your and your spouse’s names can give you a better understanding of how title deeds and mortgages work in New York. Working with a skilled New York residential real estate attorney can also provide you with valuable insight on how to make sure your property documents are in accordance with the law and ensure that your rights are protected. To schedule a consultation with one of our qualified attorneys, call Avenue Law Firm today at (212) 729-4090.

Mortgage vs. Deed

To get a better understanding of how property ownership works in New York, it is important to first get a grasp of the differences between the mortgage and the deed. While both are legal documents concerned with real estate and can often be used interchangeably, they perform very different purposes. Knowing the difference between these two documents and what they represent can allow you to have better insight into how to protect your rights as well as to learn about the responsibilities and expectations required of you as a homeowner.

Title Deed

The title of the property represents its actual ownership. The ownership of a piece of real estate is often represented by a deed. When a house is purchased, the deed to the property should be transferred to the new owner through a deed conveyance to represent the change in ownership. The change in ownership should also be filed with the county’s Register’s Office. If there is a dispute regarding the ownership of the property, the deed would be the first place to look for confirmation of who the true owner is. People who are not listed on the title deed may have a hard time proving ownership due to the fact that they are not listed on the title.

Types of Multiple Property Ownership in New York 

A property can be owned by one or multiple people. It can also be held by a trust or a business. In New York, there are multiple ways in which a property can be owned by multiple parties.

Tenancy in Common 

In a Tenancy in Common, each owner has a right to sell, transfer, or borrow against their own interest in the whole property. An example can be when a deceased person passes on a piece of real property to more than one beneficiary in their will. If the tenants in common agree, they may be able to divide up their interests in the property and exchange it for a monetary value through filing an action for a “partition”. The court will divide up the interests and can ensure that each tenant in common will receive the value of their interest in the property.

Joint Tenancy

A Joint Tenancy may be somewhat like a Tenancy in Common, however, when an original party’s interest is sold, the ownership type becomes a Tenancy in Common. If one of the parties dies, however, their interest will automatically transfer to the other joint tenant. Joint Tenancy operates on a “right of survivorship”.

New York has 4 requirements for a Joint Tenancy with Rights of Survivorship (JTWROS):

• All owners must have an equal share and stake in the property. When one owner dies, their stake in the property should be distributed evenly among the surviving owners. No owner is allowed to have a bigger share than the others.
• No co-owner can limit any joint owner of their access to the property.
• All owners must be able to show their interest in the property at the same time, with the same legal instrument such as the property’s deed
• The joint tenancy must be established at the same time and no tenants with a right of survivorship can be added on the joint tenancy has been established.

A regular JTWROS may be severed even without the consent of the other property owners. This can be done in two ways:

• By one of the co-owners conveying their joint tenancy interest to a third party, regardless if the third party is required to reconvey the tenancy interest to the severing co-owner
• By one of the co-owners executing a written document (such as a quitclaim deed) of their interest to sever the joint tenancy. The document should include a deed naming the other joint tenant as the grantee of the severing co-owner’s tenancy interest 

Tenancy by the Entirety

A Tenancy by the Entirety is a special kind of Joint Tenancy for married couples. Owners in Tenancy by the Entirety enjoy the benefits of a Joint Tenancy along with the Right of Survivorship. However, the owners cannot file a petition to partition the property or transfer the property without both owners’ – the spouses’ – consent.

Mortgage

A mortgage loan represents a debt to the bank. As it is a secured debt, mortgages require an asset to act as leverage and assurance that the debt would be paid. In the event that the person who owes the mortgage cannot continue paying the bank, the bank can repossess the property. This ability to repossess the asset allows the lender – in this case, the bank – to minimize the risk of loss.

When there are two names on a title deed, it means that there are joint owners of the property and each person owns an equal share of the property. The mortgage does not need to include both names to be valid. Even if the mortgage only lists one spouse, it does not affect the share of the ownership of the property. 

Differences in Name Inclusion on Property Documents

So why do differences exist and why can two names be on a deed but only one name is included on the mortgage? There can be a few reasons why this is the case depending on when the home was bought and how the purchase was financed. Having both spouses’ names on the mortgage may be beneficial but this may not be ideal in some situations.

Interest Rates and Credit Score Impact

In cases where a spouse has a poor credit history, interest rates may become higher if they are included in the mortgage. The couple may opt to only include the spouse with the better credit score on the mortgage to be able to save up money on interest payments in the long run.

When foreclosure is imminent, the spouse whose name is on the mortgage would be the only one impacted. The other spouse would be able to apply for other financing options as their credit score would have not been affected by the foreclosure.

Income Requirements

Most real estate loans have income requirements. If a spouse has an income that does not meet the requirements, perhaps because they have not had an income due to the marriage or do not have a consistent income, it may be wise to leave them out of the mortgage application.

Marriage Dynamics

If the home is not intended to be bought for the use of both spouses, that is, one spouse is buying the house to be used after a pending divorce, it’s more prudent to include only one spouse’s name on the mortgage. If the house was acquired during the marriage, it may be considered marital property. The assistance of an experienced attorney may clarify things regarding how ownership would work in this scenario.

Differences in the inclusion of each spouse’s name on the title deed can also vary but it’s important to remember that ownership of the property is based on the inclusion of your name on the title deed. Some reasons why name inclusion on the title deed can differ in New York include the following:

• The property was bought by one of the spouses before the marriage
• Avoiding one spouse’s creditors who can file a claim against the spouse with poor credit to take the property as collateral
• If you have a previous marriage and want to leave the property to family members from your previous marriage, including only your name on the title deed would make it easier to transfer the property 

Adding, Removing, and Transferring Property Interest

New York allows for a distinction between property owned before and during a marriage. When one spouse has property acquired before the marriage, ownership does not automatically become mutual upon marriage. Even after a divorce, only property that is considered marital property and mutually owned would be divided and distributed between spouses. However, there are ways in which a spouse can transfer some ownership interest in their solely owned property to their spouse during the marriage.

Adding your spouse to the title deed can be done to give them a share in the ownership of the property. This can be done through a quitclaim deed which gives your spouse property interest. Quitclaim deeds can also be useful in the following cases:

• Giving a spouse ownership interest or making them a co-owner of the property after the marriage
• Giving a spouse sole ownership of a property after a divorce
• Transferring ownership of a property to a family member, such as an adult child
• Transferring ownership of a property to a trust

A quitclaim deed only serves as proof that a person “quits” any claim they have on a property. Filing a quitclaim deed does not mean that the person who is given the original owner’s property interest would have sole ownership. It only means that they would be acquiring any existing interest or ownership share the original owner has on the property. For property co-owned by two or more persons, each person can only quit their claim on the percentage of ownership they have and it will not affect their co-owners’ share.

This also applies to any taxes on property transferred such as capital gains tax. Discussing who will be responsible for paying these taxes is important to avoid any complications.

It is important to note that quitclaim deeds are only useful for specific purposes. When buying a property, it is strongly recommended to undergo the proper conveyance procedures and ensure that the purchase agreement includes everyone intended to be the property owner. 

Mortgage After Divorce

A quitclaim deed also does not affect any liability on mortgages on the property. In the case of couples divorcing, if both spouses have their names on the deed and the mortgage, even if one spouse has quit their ownership claim on the property, they may still be responsible for the mortgage. A separation agreement may be helpful in ironing out any issues regarding who will be responsible for the mortgage. If one spouse gets the marital home after the divorce, they can refinance it and get a mortgage that is under their own name. This can help the spouse who did not get the home in the divorce to be able to move on with their life without the financial obligation.

If the couple is unable to come into a consensus regarding who will pay the mortgage and continue to have both their names on it even after the divorce, it can present a serious problem. If one spouse is not able to fulfill their obligation, it may be up to the other spouse to complete payments on the loan even if they are not living on the property. If the property ends up in foreclosure due to nonpayment of the debt, both spouses can suffer damages to their credit scores. Regardless of whose names are included on the deed, it is important to continue paying the mortgage to avoid the loss of the property through foreclosure.

Removing a Spouse From a Mortgage

Mortgages are an agreement between the borrower/s and the lender. It can be difficult to remove a spouse’s name on a mortgage without the lender agreeing, especially when it can mean that the lender is being deprived of one means to collect on the debt. Removing a spouse on a mortgage can only be done with the lender’s consent or through refinancing the home. 

Adding a spouse to a mortgage can also only be done through refinancing. This can be considerably complicated due to the fact that the spouse would need to be approved. 

If Your Name Is in the Mortgage but Not the Deed

If your name is not included in the title deed of the home but is included in the mortgage, this can mean that you do not have an ownership stake in the property while also being obligated to make payments to the mortgage. In this scenario, you have all the liability of having a mortgage named after you while none of the benefits of having an ownership stake in the property. 

Having only one name on the deed can also present an issue in terms of inheritance. If the spouse whose name on the deed passes away, it can present a succession issue on who will be able to get the property. In most cases, when both spouses are co-owners of the property as in a Joint Tenancy by the Entirety, a spouse automatically gets ownership of the property upon the other spouse’s death.

When there is only one name on the deed and the person dies, the property’s ownership will transfer depending on who the rightful beneficiary is as included in the person’s will or according to New York’s intestacy laws. This can mean that the deceased person’s spouse may not inherit the home.

For a mortgage, when the spouse on the mortgage dies, paying the outstanding debt will be done through their estate. The deceased person’s estate would have to continue paying the debt or risk the foreclosure of the home. The bank can also put a claim on other assets in the estate to ensure payment of the loan. To avoid this, the surviving spouse may enter a negotiation with the bank to refinance the mortgage under their own name.

Getting Professional Assistance For Your Real Estate Needs

Overall, discussing the matter of property ownership and the mortgage with your spouse, especially when you are not sure whether or not both of your names are on the title deed of your home is best done sooner rather than later. Ensuring that your property documents are in order can help you have a sense of security and prevent costly mistakes down the line.

Consult an experienced New York City real estate attorney to make sure your property documents reflect your real estate goals. An attorney can walk you through the potential complications and any issues you may encounter and provide the most applicable solutions. At Avenue Law Firm, our capable Manhattan attorneys have handled numerous real estate transactions in New York. Our attorneys provide tailored assistance that keeps our clients’ best interests in mind. Contact us today at (212) 729-4090 to schedule a consultation with one of our attorneys.

source https://www.avenuelawfirm.com/two-names-on-deed-one-on-mortgage-who-owns-the-house/

What To Do in an Apartment Lease Buyout?

As a renter, the prospect of being tied down to an apartment lease, especially if the contract is extended, can be a daunting, but calculated risk. A renter should go into a lease knowing the terms and abide by them throughout the duration of the contract. If a renter wanted to get out of the lease early, they would have to pay a termination fee, lose their security deposit, or risk being taken to small claims court. On the flip side, landlords who want to end an existing apartment lease early or want a renter to move out before the lease is over can make an offer to buy out the existing lease.

While this may seem unbalanced, landlords are also bound to abide by the terms of a lease agreement. Just as landlords have rights, New York also has laws that protect the renter’s rights in the event that their landlord wants to end their lease agreement early. However, not everyone may be familiar with the inner workings of the law. Before you make any decisions, it is important to retain the services of a competent NYC real estate attorney. Working with a skilled real estate attorney can be beneficial in ensuring that your rights are protected in a buyout. Our experienced Manhattan residential real estate attorneys at Avenue Law Firm may be able to help you in ensuring that the terms of your buyout are favorable to you. Call us today to schedule a free consultation at (212) 729-4090.

Understanding an Apartment Lease Buyout

While apartment lease buyouts are not uncommon in New York, they can still take an inexperienced renter by surprise. Apartment lease buyouts occur when a landlord offers to pay a renter a lump sum in exchange for the renter moving out and are usually done by landlords in the hopes of getting a higher-paying tenant. 

Apartment lease buyouts happen more frequently in rent-controlled or rent-stabilized apartments, usually for the following reasons:

• Rent increase caps
• Laws allowing tenants to renew their leases

New York laws prohibit landlords from increasing rent above a certain cap annually as long as the same tenant remains in the apartment. Tenants are also allowed by NYC rent regulations to renew their apartment leases in perpetuity, meaning that they cannot be evicted due to their leases expiring. As long as the tenant follows the terms of the lease and pays their rent on time, they can be allowed to renew their lease until they choose to move out. 

While this may not always be the case, apartment lease buyouts usually occur more in areas of the city that are seeing more development. Development in terms of more job opportunities or commercial spaces can often mean that rent prices increase but NY laws protecting tenants in rent-controlled or rent-stabilized apartments make it difficult for landlords to evict tenants or impose a higher rent. There are also scenarios wherein the City or a developer offers to buy a landlord’s property. If there are remaining tenants, a landlord cannot sell their property.

A lease can only be broken if the tenant has not been following the terms or through mutual agreement. Through an apartment lease buyout, a landlord and tenant can work together to find terms that are mutually acceptable and end the lease agreement without issues.

The NYC Rent Guidelines Board oversees lease agreements and ensures that statutes and guidelines are followed both by landlords and tenants. While tenants face eviction if they do not follow the agreements, landlords themselves are subject to high fines and penalties if they abuse the agreements. Both parties are expected to adhere to New York City landlord-tenant laws which govern lease agreements.

Should You Accept or Negotiate?

If you have been offered a lease buyout by your landlord, it’s important to remember that you are not obligated to accept. You are well within your right to reject an offer, even if the buyout offer is high. 

A landlord also cannot coerce or harass you to accept a lease buyout offer. It’s illegal for a landlord to threaten you or otherwise cancel essential services to your apartment because you don’t want to accept the offer.

However, a buyout can also allow you to move into a new apartment or relocate somewhere else. You also do not have to accept a buyout outright and can even negotiate better terms if you think that the current terms are not favorable to you.

How Much a Buyout Is Worth

Before you accept your buyout or negotiate, it is important to know what price is reasonable for you to ask. New York buyouts have to be approved by city officials to ensure that landlords are not lowballing tenants but a landlord can also take the buyout off the negotiating table if they think that your asking price is too high.

It may be difficult for an individual tenant to determine how much a lease buyout is actually worth. A good measurement would be to compare how much rent a tenant is currently paying with how much rent is currently worth in the vicinity. It may also be good to consider future developments and construction and how much these would affect rent. The market rate is not a fixed amount and is more reliant on how much tenants are willing to pay given an apartment’s amenities and its proximity to other necessary facilities. 

For a rent-stabilized apartment, apartment lease buyouts in general could range from $20,000 to $60,000.

Determining your landlord’s intentions or what is pushing them to offer the lease buyout can be a negotiating chip. When offering a buyout agreement, landlords must disclose in writing the following information:

• The purpose of the agreement
• A clause stating that the tenant may deny the offer and continue living in their apartment as is
• A clause stating that the tenant is allowed to seek legal counsel and provide additional information regarding the agreement
• A clause stating that the tenant is allowed to refuse contact from the landlord for 180 days.

A landlord can do anything they can to convince you to sign the agreement as long as they abide by the law. As a tenant, it is important for you to know your rights. According to the NYC Protection Act, a landlord cannot subject a tenant to the following acts to force them to accept a buyout agreement:

• Providing a tenant with misleading information
• Sending communications or calling a tenant at their workplace
• Directing threatening, coercive, or harassing language at the tenant
• Preventing the tenant from entering the building (ie. changing locks)
• Filing frivolous lawsuits against the tenant
• Using force or intimidation to get the tenant to accept the agreement

Tenants who have been subjected to such acts may sue their landlord for harassment. Tenants can notify their landlord that they do not wish to be contacted, for up to 180 days, and the landlord must abide by the request or face legal consequences. In addition, tenants can also file a complaint with the City. Landlords proven to have engaged in such behavior may be subjected to various fines. A tenant can receive an amount ranging from $1,000 to $10,000 for a first offense and anywhere from $2,000 to $10,000 for any subsequent offenses.

If your landlord is harassing you into accepting an apartment lease buyout agreement, getting the help of a skilled NYC residential real estate attorney can ensure that the terms are fair and that your rights are protected. Our Manhattan real estate attorneys at Avenue Law Firm are well-versed in the relevant laws involved, including the NYC Buyout and Tenant Protection Laws. We can also assist you in filing a complaint with the City and represent your rights in court if necessary. 

Tax Implications of an Apartment Lease Buyout

Having favorable terms on your apartment lease buyout may seem like a windfall but getting a high tax liability on your buyout can decimate any financial benefits you can get. Being aware of the tax implications of accepting an apartment lease buyout can be just as important as getting good terms on your agreement.

Even though apartment lease buyouts are offered as a lump sum, you may not actually be entitled to the whole amount. You need to be aware of the tax rates that would apply to the payout you get and structure your agreement in a way that reduces your tax liability.

When a buyout is accepted as is, the funds are taxed as regular income and are subject to federal, state, and city tax rates. Finding a skilled Manhattan real estate attorney who can help negotiate and structure your agreement in a way that allows you to benefit from tax rates is beneficial.

Effective Negotiation Tips

When negotiating your apartment lease buyout, you must be aware of the current and future implications of accepting the agreement. The following factors can be useful to keep in mind during the negotiation:

• Why your landlord is offering the agreement – If your landlord is up against lawsuits, city violations, or is looking to sell the property for a high price, which depends on you moving out, you have more leverage in the negotiation. While it may feel unconscionable to take advantage of such a situation, remember that your acceptance of the agreement will also bring benefits to your landlord. 
• What is your landlord’s financial situation – Requesting too high an amount on your buyout agreement may not be financially possible for your landlord to meet. There can be alternatives to a lump sum that you can include in your agreement as compensation, such as a partnership agreement on the property.
• How much you currently pay in rent – If you are in a rent-controlled or rent-stabilized apartment, there is a high chance that you are currently paying below market rate based on NYC rent control laws. Once you move out, your landlord can be free to write a more expensive lease with a new tenant. 
• Where the property is located – If the property is located at a more marketable location, the demand for housing may increase the rent potential new tenants are willing to pay which your landlord stands to take advantage of. Your landlord may agree to a higher buyout if they expect to gain much by increasing the rent for new tenants.
• How much it costs to move out and into a new place – Moving out can be expensive and finding a new apartment may also take some time if the buyout offer comes unexpectedly. Factoring these costs into the buyout agreement can lessen your hassle in the future.

Although it would be ideal to assume that your landlord would not be applying underhanded tactics in the negotiation, it is not usually the reality. To protect your rights and to have someone looking out for your best interests in the negotiation proceedings, seeking the help of a knowledgeable Manhattan real estate attorney is crucial. 

How a Skilled NYC Residential Real Estate Attorney Can Help

Getting a handle on all the moving parts of your agreement can become overwhelming. Determining the current market rate for your specific location may also be difficult. An experienced attorney can help you negotiate favorable terms of your agreement while also taking into account the tax consequences.

An attorney can also use legal resources to find out whether there are lawsuits or actions influencing your landlord to offer a buyout agreement. If you reject your landlord’s offer and they resort to harassment to force you to move out of your apartment, an attorney can also file a complaint and a lawsuit, if needed. An attorney can also ensure that your landlord adheres to a request of 180 days of no contact.

At Avenue Law Firm, our team of Manhattan residential real estate attorneys provides quality legal counsel in matters of rent negotiation to apartment lease buyout agreements. We may be able to help you get favorable terms and understand your rights whether you choose to accept or reject a buyout offer. 

Contact Avenue Law Firm today at (212) 729-4090 to schedule a free initial consultation and to learn more about our services.

source https://www.avenuelawfirm.com/what-to-do-in-an-apartment-lease-buyout/

Who Draws Up the Contract in A For Sale by Owner Transaction?

Selling and buying a home can be an exciting experience but it can also be a very expensive process. Sellers may opt to forgo hiring a real estate agent to avoid having to reduce their profits by having to pay a commission. While not hiring a real estate agent to sell your home can seem like a lucrative option, the process of selling your home by yourself can be very complicated. 

You will have to do most of the work by yourself including marketing your home, dealing with prospective buyers and agents, and initiating the necessary legal processes. You will also need to draft and produce the legal documents required to facilitate the sale of your home which can be daunting for someone without the appropriate knowledge and experience. While it is your intention to save money by not hiring an agent, you may end up spending more on fixing costly legal mistakes and real estate litigation. Hiring an experienced real estate attorney can be beneficial in ensuring that your rights are protected.

Working with a skilled Manhattan residential real estate attorney can help give you the guidance you need to sell your home. At Avenue Law Firm, our experienced team of real estate attorneys has successfully assisted New York residents in selling or purchasing their homes. To learn more about how we can assist you, contact us today at (212) 729-4090 to schedule a consultation.

What is a For Sale By Owner Transaction?

When a property such as a house is offered for sale without a real estate agent or a broker, the transaction that commences is referred to as a For Sale By Owner (FSOB) Transaction. 

A seller can save up to 6% of the sale price by opting out of hiring a real estate agent which is why it can be a logical choice for some. While it would still be necessary to pay the buyer’s agent a commission, the cost would be half as much compared to a traditional transaction with two agents.

Sellers who want to proceed with an FSBO deal would have to take on the responsibilities a real estate agent would. The seller themselves would have to determine a reasonable asking price for their home by conducting research on the costs of similar properties around the area that offer the same features as the seller’s own property such as the size of the lot and the number of rooms. An FSBO deal works best in a seller’s market or a market in which sellers have more leverage to price their property due to high buyer demand. 

The seller would also have to conduct repairs and stage the home for viewings, including scheduling appointments for viewings and pooling buyers’ contact information. This also includes doing marketing such as taking photos and putting up listings on property search sites and multiple listing services. It would also be up to the seller to do legwork such as handing out brochures and flyers. It is possible to pay an agency a fee to list the property; however if the seller outright refuses to pay a commission to a realtor, they may be unwilling to show the property to their clients. 

Once a buyer becomes interested, the more complicated stages of an FSBO transaction are initiated. The seller would be the only one to conduct negotiations with the buyer and the buyer’s agent to determine the price and other terms of the sale. The seller would also have to prepare the multiple legal documents necessary to officiate the transaction and the transfer of the property. 

Contract of Sale vs Contract To Sell

The contract of sale is one of the many documents a seller is expected to draft and prepare as part of an FSBO transaction. While the contract of sale sounds similar to a contract to sell, sellers without a real estate agent should take note when creating these documents that they have significantly different purposes. 

In a usual real estate transaction, the buyer and sellers’ agents or attorneys would be the ones involved in creating the legal contracts. However, in FSBO cases, the drafting can go down in one of different ways:

• The seller drafts the contracts themselves. Under New York law, an attorney is not required to purchase or sell a home. There are DIY alternatives that can allow a seller to draft the necessary documents in a residential sale. However, your buyer may be reluctant to go into an agreement if the contract was not created by a professional. There is also the question of whether the agreement would hold under legal scrutiny if there is a dispute.
• The seller engages the assistance of the buyer’s real estate agent as a “transactional agent” or “dual agent. In this scenario, the real estate agent would act as a neutral third party to draft the contract. New York law allows for dual agents but with the imposition of strict regulations. Dual agents are required to obtain written consent from the buyer and seller and inform them of their rights and responsibilities as accorded by their agency relationship. While the buyer is the one to pay their agent’s commission, the seller should at least agree to pay a share for the services rendered.
• The seller enlists the assistance of an experienced real estate attorney to draft the contract. To ensure that the contract is legally binding, a seller can hire a skilled attorney to draft the contract. You would still be paying for the services of an attorney compared to paying a commission but this way, you can be assured that your rights are protected and that you have an advocate who can provide you with professional and legally-sound advice.

Negotiating the terms of the contract and drafting the relevant documents can be the hardest part of an FSBO. Sellers should be aware of their options and consider seeking additional guidance. Regardless of the option you choose, understanding the differences between a contract to sell and a contract of sale is important to avoid jeopardizing the deal or entering into a disadvantageous agreement.

Contract To Sell

Also known as a purchase and sale agreement, a contract to sell is an agreement illustrating the commitment of the seller to sell property to a buyer and the buyer’s commitment to pay for the property. The contract should contain the following:

• Purchase price
• Financing terms
• A complete legal description of the property
• Closing date
• Disclosures
• Contingencies

The contract to sell is an outline of the actions or conditions the buyer and seller must meet. The ownership of the property would only transfer from the seller to the buyer once the terms and conditions have been met. In a contract to sell, the seller retains ownership of the property. 

It is important to note that in a contract to sell, the seller and the buyer can still opt out of the agreement if the other party is not fulfilling the obligations indicated in the contract. Sellers should take note that most purchase and sale agreements are drafted to protect buyers. It may be a good idea to negotiate the inclusion of conditions that protect your interests in the event that the buyer is not holding their end of the bargain.

Contract of Sale

The contract of sale serves as proof that the seller has sold the property to the buyer and relinquishes any ownership they have of the property in exchange for the agreed-upon price. A Contract of Sale can and does sometimes have the same information as a contract to sell, especially the description of the property, the financing terms, and the negotiated price. Once the contract of sale has been signed, the transaction is considered final. The signing of the deed of sale can also be done at the same time as the contract of sale to reflect the immediate turnover of ownership.

Before you sign any kind of contract, it is important to always read the fine print, especially in an FSBO where you won’t have the assistance of a real estate agent. You might be signing away the rights to your home or agreeing to risky terms and conditions that put you in a vulnerable financial position. Depending on the kind of contract and the way it is written, reneging can be subject to expensive fines or can result in extensive litigation. It is strongly recommended that you consider having a competent lawyer review the terms of your contract to ensure that there are no issues.

Working with a Skilled New York City Real Estate Attorney

Even if you pursue the sale of your home without a real estate agent, consulting an attorney can save you the time, money, and energy necessary to learn the ropes of the real estate market in New York City. A skilled attorney can also leverage their experience and knowledge of both real estate law and the market to help you avoid scams and ensure that your rights are protected. Your attorney can also help you avoid litigation by providing guidance regarding New York’s disclosure and housing laws.

At Avenue Law Firm, our team of seasoned New York City real estate lawyers has assisted in numerous real estate transactions both on the buying and selling side. We provide quality legal services, from drafting contracts to representing your best interests in negotiations and fighting for your rights in real estate litigation. We can help you create a contract that reflects your real estate goals and ensure that the terms and conditions are enforced. With the help of one of our Manhattan attorneys, selling your own home can be a hassle-free and pleasant experience. Contact us today at (212) 729-4090 to schedule a free consultation.

source https://www.avenuelawfirm.com/who-draws-up-the-contract-in-a-for-sale-by-owner-transaction/

What is a Quitclaim Deed in New York?

In New York, filing a quitclaim deed (or quit claim) is one of the fastest ways to transfer property ownership. A quitclaim deed is a type of deed that allows a grantor to transfer any interests they may have in the ownership of a property to a grantee without the need for a title search or title insurance. While this may be an efficient way for a property to change hands and indeed a useful tool in some cases, a quitclaim deed provides the least security in the hierarchy of real estate deeds in New York. 

To learn more about quitclaim deeds and whether they are the right choice for your real estate transaction, it is important to consult with an experienced New York City real estate attorney. At Avenue Law Firm, we provide quality legal counsel in matters of real property law to New Yorkers. We may be able to help you with understanding the legal processes involved with a quitclaim deed and in drafting your documents. Call us today at (212) 729-4090 to schedule a complimentary consultation with one of our skilled New York quitclaim deed attorneys.

Quitclaim Deeds in New York Defined

Quitclaim deeds are legal documents that transfer the grantor/’s ownership interest in a real estate property to a grantee. As referred to, the grantor “quits” any “claim” they have on a property. It can also be used in cases where there are issues with the original title of a property.

However, a grantor quitting their claim on a property does not mean that the grantee will have sole ownership. Filing a quitclaim deed only means that the grantor is relinquishing ownership of their share of the property. If the property is owned by two or more people and one person quitclaims their share to another person, they can only quitclaim and transfer the share they own. 

A quitclaim deed gives no warranties or guarantees to the grantee. A quitclaim deed also does not require a title search or insurance nor does it provide actual proof that the grantor has a relationship with the property. Quitclaim deeds only serve as proof that the grantor is transferring any sort of relationship they have on the property to the grantee.

In comparison to other deeds, a quitclaim deed provides the least security and should not be used in real estate transactions with valuable payment. When a property changes hands through a quitclaim deed, no consideration is given as to whether there are any liens or encumbrances. After a quitclaim deed is recorded, it may be difficult to hold a grantor liable for any issues with the ownership. This makes it important to only agree to a quitclaim deed if you trust that the grantor has ownership of the property.

While a quitclaim deed may not be advisable to use in actual real estate transactions, it may still be useful in the following situations:

• Giving a spouse co-ownership of a property after a marriage
• Giving an ex-spouse sole ownership of a property after a divorce
• Transferring a co-owner’s interest in a commercial property to another co-owner
• Transferring ownership of a property to a family member
• Transferring ownership of a property to a revocable trust

It is also important to note that a quitclaim deed does not change or affect the liability on any mortgages on the property. If you are a grantor filing a quitclaim deed, you may want to make sure that your name would be excluded from any liability on mortgages related to the property that you quitclaimed. 

This also applies to any taxes owed on the property. If the transfer is being conducted as part of a gift, a gift tax might be owed. Taxes such as capital gains tax might also be owed on the property. The matter of who should pay taxes should be a part of the discussion before a quitclaim deed is filed. To ensure that you won’t have any tax liabilities on the property you will be receiving as a grantee, consider getting the help of an experienced New York real estate attorney. 

At Avenue Law Firm, our team of New York real estate attorneys is dedicated to providing quality legal counsel when it comes to real estate transactions. We may be able to help you by doing due diligence on your property and determining any legal issues you may face. Contact us today at (212) 729-4090 to schedule a free consultation.

How do you file a quitclaim deed form in New York?

As with any real estate transaction, the filing of a quitclaim deed requires several steps. It is important to make sure that the steps are strictly followed to avoid wasting time and money. 

Drafting

For a quitclaim deed in NY to be valid, it needs to be in writing. The document would also need to include the following details:

• A legal description and address of the property being deeded
• The county the property is located in
• The date of the transfer
• The grantor’s (person relinquishing ownership) name
• The grantee’s (person receiving ownership) name
• The amount of the price paid for the transfer, if any

Real Property Law § 258 of the New York state legislation dictates how quitclaim deeds should be written. 

QUITCLAIM DEED.

Statutory Form D. (Individual)

This indenture, made the ……. day of ……….., 20……..,
between ……………, (insert residence), party of

the first part, and ………….., (insert residence), party of the

second part:

Witnesseth, that the party of the first part, in consideration of

………… dollars, lawful money of the United States, paid by the

party of the second part, does hereby remise, release, and quitclaim

unto the party of the second part, …………… and assigns forever,

all (description), together with the appurtenances and all the estate

and rights of the party of the first part in and to said premises.

To have and to hold the premises herein granted unto the party of the

second part, ………… and assigns forever.

In witness whereof, the party of the first part has hereunto set his

hand and seal the day and year first above written.

In presence of:

The grantor must sign the deed and have it acknowledged before a notary. The deed must be stamped and signed by the notary as a confirmation of the grantor’s authentic signature. Once the grantee receives the document, acknowledgment of the acceptance in writing may also be necessary.

Depending on the county, the additional details of the deed may need to be verified such as the description of your property. To ensure that the information on your quitclaim deed is accurate and would be legally binding, you may also ask a qualified New York real estate attorney to fill it out for you.

Recording

To ensure that the quitclaim deed is effective against other people seeking to get ownership of the property, it must be filed per the rules of the County Clerk or City Registrar of the locale where the property is located. 

A quitclaim deed does not expire. However, if a deed is filed twice from the same grantor, the deed of the person who recorded it first will take precedence. As such, it is important to make sure to file a quitclaim deed as soon as possible.

Filing

In addition to the quitclaim deed, you must also fill out two additional forms. The location of your property will determine which forms you need to file.

If the property is located in NYC:

• Form TP-584-NYC
• RP 5217 NYC form 

Quitclaim deeds on properties located in New York City may be filed online using the Automated City Register Information System (ACRIS)

If the property is located outside of NYC:

• Form TP-584
• Regular RP 5217 form instructions (Cannot be used for Herkimer County aside from NYC)

It is important to note that the RP-5217-PDF cannot be a handwritten or a typewriter-entry document. The downloadable PDF versions allow the direct editing of the documents through the use of a computer or a mobile device.

The fees involved in filing a quitclaim deed depend on the type of real estate being transferred. Filing a deed for a farm or residential property typically costs $125 and $250 for other types of property. There may be additional fees involved when filing your forms. It is best to consult an experienced New York real estate attorney to get an estimate of how much the process of filing a quitclaim deed may cost.

Should I use a quitclaim deed for my real estate transaction?

Whether you should use a quitclaim deed to transfer ownership of property depends on your specific case. Quitclaim deeds are still a quick and effective way to transfer property when you are sure that the person acting as the grantor and executing the exchange has the right to give you the property. Regardless, it is a wise decision to immediately file a quitclaim deed as soon as possible to make sure that your document takes precedence over any deed the grantor might initiate over the same property.

It is also a good idea to consult a skilled New York real estate attorney to prepare your quitclaim deed and accompanying documents and to make sure that it is filed with the right offices. At Avenue Law Firm, we have assisted and facilitated the transfer of ownership for properties in and out of New York City. Our team of experienced New York real estate attorneys may be able to help you in making sure that your rights are protected and your best interests are kept in mind during the transaction. Contact us at (212) 729-4090 or fill out our online form to schedule a free consultation.

source https://www.avenuelawfirm.com/what-is-a-quitclaim-deed-in-new-york/

How are property taxes determined in New York City

How are property taxes determined in New York City?

Although taxes are not the most interesting subject, nor are they likely to bring much happiness to anyone having to pay them, they are a necessary part of government. New York City residents know all too well how expensive property tax bills can be.  About 45% of all NY City tax dollars collected each year come from real estate taxes.  So how does the government go about calculating residential property tax bills? And is there any way to have property taxes lowered? For more information, speak with an experienced NYC real estate lawyer.

Properties in New York City are split into four classes. Class 1 includes one to three unit residential properties. Class 2 includes residential properties with more than 3 units, including cooperatives and condominiums. And Class 3 includes utility company equipment and special franchise property. Finally, Class 4 includes all other real property, such as office buildings, factories, stores, hotels, and lofts.

In this post I’ll concentrate on Class 1 properties.  The first step the government takes in calculating Class 1 residential property tax bills is determining the market value of your residence. Government determines the market value by using statistical analysis that incorporates data such as recent selling prices of similar properties in your neighborhood. Similar properties are classified as those that are close in size, style, and age to your property.

The second step is determining a property’s assessed value. A property’s assessed value is a percentage of its market value. The good news is that the state law limits the increase of assessed value of a Class 1 property in New York City. For a Class 1 property, the assessed value cannot rise more than 6% in one year or 20% over five years, no matter how quickly the market value of your home increases. This is true unless you make a physical change to the property, such as an addition or renovation. Because of the caps, it is possible that the assessed value of your property continues to increase even if your market value decreases. This is because it can take years for assessed value to “catch up” to the market value.

Assessed value can change for many reasons, including but not limited to (1) your property’s market value changing; (2) making physical changes to your home, such as additions or renovations. These physical changes are not subject to the annual or five year caps on increases to your assessed value for that year; (3) You lost a tax exemption or abatement, or its value was reduced; (4) your assessed value is catching up to prior changes in market value.

The third step is applying exemptions that are on file. Exemptions reduce your assessed value before your taxes are calculated. The City of New York offers exemptions to seniors, veterans, clergy members, people with disabilities, and other homeowners. If you are granted an exemption, the amount of the exemption is subtracted from the assessed value of your home.  This reduces your taxable value.

One common exemption in NYC is School Tax Relief (STAR), which is available to owners of houses, co-ops, and condos with less than $500k annual adjusted gross income. Typically this exemption earns you tax savings of approximately $300 per year.

By subtracting any exemptions from the assessed value of your property, you will get your taxable value. This leads to step 4, the final step the government takes to calculate Class 1 residential property tax bills, which is applying the city’s tax rate for Class 1 properties to taxable value, and then subtracting any applicable abatements. The city’s tax rate percentage for Class 1 properties is set annually by the city council based partially on state law requirements.

However, you can still get a discount on your final tax bill if you qualify for certain tax abatements.  Abatements reduce your taxes after they’ve already been calculated. This means that once the tax rate percentage is applied to the taxable value of your property, abatements can further reduce the bottom line. Standard abatements provided by the government include:

• cooperative and condominium abatement,
• green roof abatement,
• major capital improvement (MCI) abatement, and
• solar roof abatement.

Every January the Department of Finance will send a Notice of Property Value (NOPV) to homeowners explaining the determination of their property’s market and assessed values, and listing applicable exemptions. If you feel that the assessed value on your property is too high, you have the right to appeal to the New York City Tax Commission. To have the Tax Commission lower your assessment, you must prove that your property’s value is less than its effective market value (assessed value before exemptions divided by 6%).

Property taxes in New York City can be painful, both to your bank account and to understand. Although taxes are certain, if we arm ourselves with knowledge we can make them a little less painful.

Written by Petro Avenue, Esq

Real Estate Attorney NYC

source https://www.avenuelawfirm.com/property-taxes-determined-new-york-city/

CONDO vs COOP

One of the most popular topics that come up during my conversations with first-time home buyers looking for an apartment in New York is Co-op vs. Condo.  Unlike everywhere else in the US co-ops constitute the majority of apartments in NYC.   Around 70% of all residential buildings are co-ops, while condos constitute the majority of apartments built in the past 20 years.  Aside from the age of the apartment building, there are many crucial differences between coops and condos and the choice usually depends on the client’s situation and personal inclinations. For more information, speak with a reputable New York City real estate attorney.

DIFFERENCES IN OWNERSHIP BETWEEN A CO-OP & A CONDO

1.    Ownership – Purchasing a condo is similar to purchasing a house.  At the closing you will receive a deed to your new apartment as well as share of the interest in the building’s common areas.  If you purchase a co-op, you technically do not own your apartment from a legal standpoint. Rather, the entire building is owned by a single corporation. At the closing you are purchasing shares in this corporation as opposed to the actual apartment. In most cases, the larger and more expensive the apartment you are purchasing, the more shares you will receive.  At the closing, simultaneous with the purchase of shares, corporation will sign a lease with you that gives you the right to occupy the apartment you have just bought.

CONDO VS CO-OP PRICES IN NEW YORK

2.    Costs to Purchase – In NYC, the purchase prices of co-ops are usually much less expensive than condos, and you can receive more bang for your buck, so to speak, when it comes to square footage. Purchasing a condo can also mean higher closing costs, since you will be required to purchase a title insurance and pay a mortgage tax if you choose to finance your new home; neither of which are required when purchasing a co-op.

Speaking of mortgages, condos may offer more flexible options if you do not have a large amount of cash for a down payment. Some co-op boards require a higher down payment than condo buildings, in addition to a year or two worth of mortgage and maintenance charges left over in your checking or saving account after the down payment. This is called a liquid assets requirement and the exact amount varies from building to building.  Although by purchasing a co-op you’ll save on the title insurance and mortgage tax some co-op buildings have a flip tax.  Flip tax is not an actual tax.  It is a transfer fee charged by the co-op to the buyer or seller and can be as much as 3% or more of the entire purchase price.

HOW MUCH WILL IT COST ME TO OWN MY APARTMENT?

3.    Monthly Expenses – Both condos and co-ops have monthly charges (respectively referred to as common charges and maintenance fees) which you will be required to pay toward the operation and maintenance of the building’s common areas. These monthly charges vary and things like the size of the building, number of amenities, etc. will affect the amount that you will end up paying. Both condos and co-ops can also charge assessment fees for building renovation projects, such as the installation of a new elevator. The main difference between a condo’s common charges and a co-op’s maintenance fees is that the maintenance fees include charges for a percentage of the building’s property tax, calculated according to the number of shares you own. If you own a condo, you are responsible for paying your unit’s property taxes directly to the government, which will likely cause your overall monthly costs to be greater than they would be for a similarly sized co-op.

DO CONDOS HAVE BETTER AMENITIES THAN CO-OPS?

4.    Location and Amenities – Many of the newer developments in NYC are condos rather than co-ops. These buildings usually include many luxury amenities such as fitness centers, spas, pools, concierge services, etc., and have an overall newer, trendier feel. However, most of the classic, “Old New York” pre-war buildings are co-ops. These buildings often have larger apartments with more ornate décor such as crown moldings, fireplaces, etc. Of course, this is all a matter of personal preference. Location may also play a factor as well. For example, many of the buildings in the Battery Park and in the Financial District are condos, while many of the buildings located around Central Park, on the Upper East Side, and in Gramercy Park are co-ops.

CAN THE CO-OP BOARD PREVENT ME FROM BUYING OR SELLING MY APARTMENT?

5.    The Board Approval Process – While both condos and co-ops elect a board of directors to make important decisions regarding the maintenance and upkeep of the building, the co-op board wields MUCH greater power.  In extreme cases, the co-op board can even evict a shareholder that it deems disruptive. When buying a co-op, you must go before the board and submit to a potentially arduous approval process. The board will go over your finances and credit, and review your debt-to-income ratio, which they usually expect to be between 25% and 30%. The process involves a great deal of paperwork, which may often require the assistance of an attorney to prepare. The board can reject you for any reason (except for reasons of race, religion, disability, etc. which are protected by law.) However, the board does not have to specify the reason why they reject your application. There is always the risk that you will spend significant time and energy going through the approval process, only to be rejected.

Looking to sublet your apartment? Co-op boards usually have much stricter subletting policies, making condos a better choice for those looking to purchase an investment property.  Although when purchasing a condo (unless it’s a new construction) you will have to fill out the board application as well, the condo board does not have the right to reject a buyer regardless of the buyer’s financials, credit, etc.  Condo board’s have what’s called the right of first refusal pursuant to which the board’s sole remedy is to purchase the apartment from the seller upon the same terms as are being offered to the purchaser.  The chances of the board actually exercising their right of first refusal are slim to none.

SO WHAT’S BETTER CO-OP OR CONDO?

Overall, the decision between a condo and a co-op is a personal one. Both have their pluses and minuses.  Condos often cost more but allow a greater degree of freedom and flexibility than co-ops, and an easier approval process.  With co-ops you can save on closing costs, afford more square footage and have lesser monthly fees, but you may lose the flexibility that is offered by condos.

PLANNING TO BUY AN APARTMENT? CONTACT US FOR A FREE CONSULTATION WITH AN EXPERIENCED NYC REAL ESTATE ATTORNEY

Disclosure: This is a blog by NYC real estate attorney. The materials contained here have been prepared for general informational purposes only and shall not be used as a substitute for consultation with a lawyer or interpreted as legal advice.

source https://www.avenuelawfirm.com/coop-vs-condo/

Things to Consider Before Signing A Commercial Lease in NYC

If you are a new business owner who is taking the important step of leasing your first commercial space, you should be aware that commercial leases are subject to some unique considerations that would not necessarily apply to residential leases, such as an apartment lease. In many jurisdictions, commercial tenants are not guaranteed the same rights as residential tenants. In the commercial leasing environment, both tenant and landlord are persons or entities engaged in business pursuits; as such, a commercial lease is generally viewed as an equal bargaining transaction between the two business interests. For example, in New York, the respective rights and duties of the landlord and tenant are almost entirely defined by the terms of the lease itself, with very little statutory or regulatory protection for the parties. In plainer terms, the courts will not be sympathetic to issues arising out of your failure to thoroughly read and understand the terms of your commercial lease. For this reason, it is crucial to have a NYC real estate attorney experienced with commercial leasing review your lease prior to you signing it. ​
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​While this list is by no means all-inclusive, here are some important things to consider when negotiating a commercial lease:

RENT PROVISION IN A COMMERCIAL LEASE

This is not as straightforward as a rent clause in a residential lease. In addition to monthly rent your landlord may ask you to pay real estate taxes and maintenance costs. Make sure you understand if operational costs such as electricity, trash removal, water, property taxes, etc. will be handled by you or by the landlord. Almost every office and retail lease provides for some form of escalation of the rent. Most of the time rent increases by a certain percentage each year. Sometimes rent escalations are tied to Consumer Price Index (CPI).

WHO IS RESPONSIBLE FOR IMPROVEMENTS, ALTERATIONS, AND REPAIRS?

In residential leases, the landlord is usually responsible for all repairs and maintenance of the property. However, commercial properties are commonly rented “as is”. Unless specifically stated in the commercial lease, the landlord does not have an obligation to maintain or repair your premises, or to maintain the common areas. It is paramount that you understand your obligations and have a financial plan for dealing with potential emergency maintenance that you may be held responsible for.

CAN I SUBLEASE MY COMMERCIAL SPACE?

Unforeseen circumstances can pop up for the best of us. If you no longer need the entire commercial space for yourself, will you be able to sublet all or a portion of it? The right to sublease is governed by your commercial lease. Make a note of whether or not subleasing is permitted. Even if it is, most commercial leases require you to get your landlord’s consent prior to subleasing the space. It is not uncommon for landlords in New York to charge tenants for such consent or to request a portion of the rent that you will receive from your tenant. Therefore, it is very important to carefully review the portion of your commercial lease agreement that deals with your rights to sublease the rented space and to discuss the process and all the fees with your landlord prior to signing the commercial lease.

DO I HAVE AN OPTION TO RENEW MY COMMERCIAL LEASE?

It’s always good to plan ahead. Let’s say that you signed a five-year commercial lease and your business is booming at the end of this term. Many businesses depend on their location and moving may result in your business loosing clients. Would you really want to be forced to pack up and move to a new location, possibly disturbing business and confusing your clients? A good commercial lease attorney will always advise you to negotiate an option to renew the lease.

BREACH OF CONTRACT

What will happen if one party doesn’t comply with the terms of the commercial lease? Is there a procedure or timeframe for written demands before litigation? What about mediation or arbitration? If it does come down to litigation, who is responsible for attorney’s fees, etc.? Make sure that the terms are clear and fair before signing.

WILL THIS COMMERCIAL LEASE WORK FOR ME?

You may have found a perfect space, but will the lease work for you? Many commercial leases have restrictions and it’s important to consult with a real estate attorney to make sure that you will be able to run your business without breaking any of those restrictions. Will you have 24/7 access to the space? Can you place a sign? Can you renovate the space? Will your use comply with the certificate of occupancy? Are there any noise restrictions? Typically, commercial leases contain provisions that state you can’t disturb or interfere with the business operations of other tenants. For most tenants this is not an issue. But for some, such as, pre-K, recording studios, and large health care facilities, such provisions can be deal breakers.

Signing a commercial lease is a big step and one that you may have to live with for years or even a decade. It is a good idea to consult with an experienced real estate attorney before signing anything. Your attorney will have your best interests in mind and will often be able to work with the landlord or the landlord’s attorney to come up with terms more favorable to you and your business. Contact a reputable real estate attorney from Avenue Law Firm today by calling (212) 729-4090.

​Written by Petro Avenue, Esq

source https://www.avenuelawfirm.com/things-consider-signing-commercial-lease-nyc/