Governor Pursuing Changes to NYC Housing Laws

Governor Pursuing Changes to NYC Housing Laws

New York Governor Kathy Hochul has proposed several reforms to the state’s housing system which, if enacted, could dramatically impact NYC’s real estate market.[1] Many of the proposals are intended to spur new development to remediate NYC’s housing crunch.[2]

First, the Governor plans to repeal a New York state law that restricts the amount of residential space a developer can build on a given lot.[3] If the legislature adopts her plan, developers would be able to build many more units – hopefully expanding NYC’s supply of affordable condo units.[4] Second, the state will support New York City Mayor Eric Adams’ efforts to convert some of the NYC’s excess office space into new housing units.[5] The regulatory relief would make it easier for developers to change existing commercial space into new condo and rental homes.[6] Finally, the Governor will simplify the process for city homeowners to bring garden and basement units into legal compliance.[7] Off-market basement and garden-level units have been common in some parts of the Five Boroughs. With the suggested amnesty proposal, NYC may see more of these units on the market as rentals or condos.

Notes:

[1] See Press Release, Kathy Hochul, Governor, State of New York, Governor Hochul Announces Statewide Strategy to Address New York’s Housing Crisis and Build 800,000 New Homes, (January 10, 2023), https://www.governor.ny.gov/news/governor-hochul-announces-statewide-strategy-address-new-yorks-housing-crisis-and-build-800000

[2] Id.

[3] Kathryn Brenzel, Hochul plan for resi towers is tall order, TheRealDeal, (January 19, 2023) https://therealdeal.com/2022/01/19/hochul-plan-for-resi-towers-is-tall-order/

[4] Id.

[5] Greg David, In State of the State Speech, Hochul Backs Adams Housing Agenda,, The City, (January 10, 2023) https://www.thecity.nyc/2023/1/10/23549102/state-of-state-speech-hochul-adams-housing

[6] Id.

[7] Id.

Illegal Subletting in Co-Ops and Condos

The New York Times article by Ronda Kaysen, “Is It Worth the Risk to Sublet an Apartment Illegally?,” discusses a possibility that many unit owners in co-ops and condos may have considered: can I get away with subletting my unit without my co-op or condo’s approval?[1]

As you may have guessed, the answer is no.[2] Kaysen approaches the issue via the dilemma of a tenant who wished to extend her sublease by continuing to live in a unit without the Co-op’s approval.[3] Unfortunately for the tenant, the unit owner would likely be brought into turmoil with the co-op board, pressuring the unit owner to force out the tenant.[4] Some of the methods a co-op or condo can reprimand a shareholder for subleasing their unit without board approval include:

  • Fines;
  • Suing the shareholder; and
  • Forcing the sale of the apartment.[5]

All of these tools a co-op or condo may have in their arsenal are likely very unappealing to you as a shareholder. We strongly urge that you abide by your co-op or condo’s rules to avoid such reprimand.

If you wish to view Kaysen’s full article, please find it here:

 

Notes:

[1] Ronda Kaysen, Is it Worth the Risk to Sublet an Apartment Illegally?, The New York Times (Oct. 29, 2022), https://www.nytimes.com/2022/10/29/realestate/illegal-apartment-sublet.html.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

What to Consider When Purchasing Real Estate

What is important to consider (outside of the unit itself) when purchasing real estate in New York City? While some may be okay with walking 15 minutes to the nearest subway station, others may wish to live right next to one or prefer to drive instead. Considering your preferences is crucial, so that you do not experience buyer’s remorse down the line.

Some relevant considerations include:

  • The distance to the nearest subway station from your apartment and where it leads;[1]
  • Bus service;[2]
  • Whether the building is a “walk-up” and what floor you would be living on;[3]
  • School districts;[4]
  • Nearby stores/businesses (this could include your grocery store of choice or a gym);
  • Availability of cycling infrastructure;[5]
  • and, of course, anything else you find relevant.

We propose that you order these considerations in order of importance and take a mental note of any non-negotiables. Doing so will allow you to streamline your homebuying process and improve your chances of finding not only a home you love, but also a neighborhood that you enjoy just as much.[6]

Should you wish to learn more, please visit Margaret Heidenry’s discussion of some of these factors in her article How’s the Commute? And Other Factors You Should Consider in New York City,[7] linked here for your convenience. We also recommend consulting a real estate agent as part of your property search, as they will have the necessary expertise to help answer your questions.

 

Notes:

[1] Margaret Heidenry, How’s the Commute? And Other Factors You Should Consider in New York City, Realtor.com (Sept. 1, 2018), https://www.realtor.com/advice/guide/new-york-city-neighborhood-factors-to-consider/.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

Spoofing and Phishing Attempts, and How to Protect Yourself

In today’s digital world, scammers are constantly finding new ways to take advantage of others. One such method is to fraudulently impersonate someone else by “spoofing” and/or “phishing.”[1] Spoofing is a means by which a scammer is able to forge or imitate the identity of someone else.[2] Subsequently, they may use the spoofed identity to trick others into handing over valuable private information, known as phishing. [3] Real estate transactions can be tempting targets for would-be scammers, due to the large amounts of money moving back and forth between parties, so what steps can we take to keep ourselves and our private information safe?

First, you can take preventative steps, such as keeping your technology up-to-date, investing in security software, and enabling multi-factor authentication whenever possible.[4] Proactive steps such as these can prevent someone from spoofing your emails, text messages, or other communication platforms.

To protect yourself from phishers’ attempts at gaining your information, a few options exist:

  • “Never give out personal or financial information in response to unsolicited emails;”
  •  “Look for phishing clues;”
  • “Check your credit card and bank account statements regularly;” and
  • “Install anti-virus and firewall software.”[5]

It is important to be mindful of who sends you emails or other communications.[6] Oftentimes, “phishing emails are designed to look like they come from a reputable company,” however, there may be slight errors in the company name or other clues that can alert you that something is off.[7] In fact, most “legitimate companies won’t email or text with a link [concerning] your payment information.”[8] If an email asks you to click on a link or provide any payment information, proceed with caution. For more information, the New York State Attorney General’s Office website hosts valuable resources for identifying and avoiding spam emails.

If you do fall victim to a phisher, the incident can be reported to the New York State Attorney General’s Office at “reportphishing@apwg.org.”[9] Furthermore, the NYPD invites victims who have lost money to a phisher to report the crime to their local precinct.[10] You can’t go wrong by reporting to both city and state authorities, so that they can protect you from any further harm and possibly provide you with some type of remedy.

Even those who diligently keep an eye out for phishers may fall victim to such fraudulent activity. Many of us may even be able to recall a family member or friend’s family member who fell victim to a phishing scheme in the past. However, by taking some preventative steps, we can increase our chances resisting attempted fraud.

 

Notes:

[1] Phishing Information, Office of the New York State Attorney General, https://ag.ny.gov/internet/phishing-information (last visited Nov. 1, 2022).

[2] Id.

[3] Id.

[4] How to Recognize and Avoid Phishing Scams, FTC Consumer Advice (Sept. 2022), https://consumer.ftc.gov/articles/how-recognize-and-avoid-phishing-scams.

[5] Office of the New York State Attorney General, supra note 1.

[6] Id.

[7] Id.

[8] FTC Consumer Advice, supra note 4.

[9] Id.

[10] NYPD Raises Awareness About the Risk of Phone Scams, NYC.gov (April 30, 2019), https://www1.nyc.gov/site/nypd/news/pr0430/nypd-raises-awareness-the-risk-phone-scams#/0.

From CNN: Home Sales Increase, Defying Expectations

As reported by CNN, home sales rose during November 2022 for the second month in a row despite a bleak forecast. This rise runs counter to both continuing high mortgage rates and increasing home prices (which dropped slightly this month), as well as a typical slowdown of sales during the winter holidays. For more information, see the original article here, and if you are looking for an attorney for a purchase or sale in NYC, feel free to give us a call!

Proposed Changes to Address Housing Needs in NYC

In New York City, many struggle with “homelessness, living in poor quality housing, or . . . keep[ing] up with housing costs.”[1] As a result, New York City released a blueprint aimed to address these issues. The five main goals the City seeks to accomplish are:

  1. Transforming NYCHA housing;
  2. Addressing homelessness and housing instability;
  3. Creating and preserving affordable housing;
  4. Improving the health and safety of New Yorkers; and
  5. Reducing administrative burden.[2]

The city plans to use multiple methods to meet these goals, such as prioritizing people over parking, where a neighborhood is “transit-rich.”[3] By sacrificing parking space, developers can use that land to construct additional housing.[4] Along with this, the city also plans to rezone neighborhoods so that there is a wider variety of units to accommodate different housing needs.[5]

The city plans to engage various other tools as well, in order to make housing more equitable for all New Yorkers.[6] To see all the methods that the city plans to employ in reaching their goals, view the full report here:

 

Notes:

[1] NYC, Housing Our Neighbors: A Blueprint for Housing and Homelessness 8 (2022), https://www1.nyc.gov/assets/home/downloads/pdf/office-of-the-mayor/2022/Housing-Blueprint.pdf.

[2] Id. at 8–9.

[3] Id. at 60.

[4] Id.

[5] Id. at 57–58.

[6] Id. at 56.

Changes to Emission Standards of NYC Co-ops & Condos

In 2019, New York City passed Local Law 97, dubbing it “one of the most ambitious plans for reducing emissions in the nation.”[1]

What is Local Law 97?

Local Law 97’s goal is to reduce greenhouse gas emissions by requiring certain buildings to meet new energy efficiency standards.[2] However, these restrictions only apply to certain buildings:

• “Buildings that exceed 25,000 gross square feet;
• Two or more buildings on the same tax lot that together exceed 50,000 square feet;
• Two or more buildings owned by a condo association that are governed by the same board of managers and that together exceed 50,000 square feet.”[3]

Such buildings will be subject to an “Emissions Intensity Limit [that is] multiplied by Corresponding Gross Floor Area.”[4] Should a building subject to Local Law 97 exceed the total emissions limitation, the building will be charged “the difference between the building emissions limit for such year and the reported building emissions for such year, multiplied by $268.”[5] Local Law 97 will go into effect as soon as 2024.[6]

Potential Ramifications of Noncompliance with Local Law 97:

While $268 is not a huge amount of money, that number will drastically increase when multiplied by actual emissions. One such example is mentioned by Joe Lovinger’s article NYC Condos, Co-ops Face Costly Emissions Bill.[7] In his article, Lovinger provides that “One57 . . . [a] condo tower . . . emits more than 5,600 tons of carbon a year . . . . [b]ut Local Law 97 allows One57 no more than 5,000 tons. That means the building could be fined $200,000 a year.”[8] Resultingly, if imposed, such fines may financially burden a co-op or condo.

To read Joe Lovinger’s full article, please see the attached link here:

 

Notes:

[1] Local Law 97, NYC Sustainable Buildings, https://www.nyc.gov/site/sustainablebuildings/ll97/local-law-97.page (last visited Nov. 3, 2022).

[2] Id.

[3] Id.

[4] Greenhouse Gas Emission Reporting, NYC Buildings, https://www.nyc.gov/site/buildings/codes/greenhouse-gas-emission-reporting.page (last visited Nov. 3, 2022).

[5] Id.

[6] Id.

[7] Joe Lovinger, NYC Condos, Co-ops Face Costly Emissions Bill, The Real Deal (Oct. 31, 2022), https://therealdeal.com/2022/10/31/nyc-condos-co-ops-face-costly-emissions-bill/.

[8] Id.

Purchasing a Condo: What to Expect at the Closing Table

Congratulations! You are almost to the finish line of your Condominium purchase. Please take a moment to review the information below so that you may better understand what to expect as we approach your closing day. Please note that some of the specifics described below may change based on the particular circumstances of your transaction. Please let us know if you have any questions or concerns regarding this information so that we may discuss further with you.

1. Closing Statement:

The closing statement includes a breakdown of closing expenses and payments, stating how they will be paid and from where. You will generally receive this between 1-3 days prior to the closing, however, there are certain circumstances where the receipt of the closing statement may be delayed further. For example, in order for us to tell you how much money to bring to the closing and to whom the funds should be made payable, we must receive information from the Seller’s Attorney about the Payee(s). If there is a Lender involved, we often need to receive information from the Lender’s Counsel as to the precise amount of money that will be available to you (this is referred to as your “net proceeds,” and is comprised of the loan amount minus the Lender’s expenses).

  • Once received, please review the closing statement, and let us know if you have any questions.
  • Remember that funds for the closing will need to be NY certified bank checks, so please make sure that all the funds anticipated for the closing are in a NY branch bank account (and not Schwab, Fidelity, or any investment fund/credit union that may limit how much you can withdraw per day). If you are unsure, please reach out to your bank to confirm whether they can provide certified checks on the day of closing so that there is no issue.

2. Walkthrough:

Please coordinate the walkthrough with your Broker. The standard NY practice is to perform the final walkthrough the day before the closing (and sometimes even the morning of the closing). Issues discovered during the walkthrough may be troublesome due to limited time for the Seller to correct them (assuming the Contract states that the Seller is required to make the repairs). If you spot any walkthrough issues, we would strongly recommend seeing if the super can come and look at them while you are there – sometimes they are able to resolve the issue(s) or give initial insight and an estimated cost to repair.

    • Please take a detailed look at the unit, and ask your Broker any questions that you may have.
    • Let your Broker and Attorney know as soon as possible if you spot any issues.
    • If there are walkthrough issues that remain unresolved prior to closing, we can discuss your options, as there are some options that still allow you to close but with a credit, escrow or other solution.

3. At the Closing Table:

We generally advise clients to allot about 2 hours for closing, though some closings can take longer if there are matters for the parties to resolve, such as: bank-related issues, parties running late, etc. At the closing you can expect to see the Title Company, the Seller’s Attorney, the Seller, the Bank Attorney (where applicable), and an attorney from our office appearing on your behalf. In addition, if the Seller has a mortgage, the Title Company’s closer will typically pick up the Seller’s mortgage payoff check and file the Deed with the county.  Note that the Condominium (or their management company) typically does not send a representative to the closing as they usually provide their documents and schedule of fees owed prior to the Closing date.

Once you get settled in at the table, a series of documents will be exchanged between and among the parties. We will explain to you the documents that you need to sign and their significance in the transaction. If you have any questions, you will have an opportunity to ask us at that time.

Examples of documents you may encounter at the closing:

    • Bank Documents. If you are getting a loan, we will have bank documents for you to sign. It is important to sign these documents first because the bank documents will likely need to be sent to the bank’s closing department for funding approval, which can take some time.
    • City/State transfer documents. These documents are commonly referred to as ACRIS documents. These documents let the State/City know who is involved in this transaction and the amount of tax to be paid on the deal, and by whom. Please note: if your purchase price is above one million dollars, you will be required to pay a mansion tax at closing.
    • Condominium documents. As mentioned above, the Condominium typically does not send a representative to the closing (though in some rare cases they will). Either way, the Condominium will likely require certain basic information, such as emergency contact information, unit power of attorney, and other similar documents.
    • Title documents.  The title company may require you to sign a document acknowledging the title charges, as well as an affidavit acknowledging that you are not hiding any pertinent information not otherwise disclosed. If the title company will be making a payment for upcoming property taxes, they may require an Escrow agreement for same.

 

Once you have signed everything, any walkthrough issues have been resolved, and your lender has funding approval (if you have a loan), the Title Company representative will confirm with the Buyer and Seller that we are clear to close.

The Title Company Representative will make copies of all documents exchanged for the Seller/Buyer/Bank. If you have a bank loan, make sure you receive copies of all bank documents signed at the closing, since our office typically does not retain these documents subsequent to the closing unless we also represent the Lender. The Title Company Representative will also take the Deed and file it with the appropriate authority. Deeds are public record, so if anyone reaches out to you after closing asking you to pay them money for a copy of your Deed, that is a scam. If ever unsure, scan us a copy of what you receive, and we will look over it for you.

If the Seller has a mortgage, then the Title Company will deliver the payoff to their lender.

If the Seller has not handed you the keys already, they will provide the keys to you. Please note that in some closings, the keys are left with the doorman or with the Brokers. We recommend that you seek clarification if you have not received your keys before leaving the closing.

Congratulations! By this point, you have made it to the finish line and are now closed. Please keep in mind that you will need to coordinate your move-in with management. After the closing, we will send you the final closing statement, which you can provide to your accountant during tax time.

If you have any questions about the above summary, please let us know – we want to make the process as smooth and seamless as possible for you!

 

 

From CNN: New York’s Skinniest Skyscraper Completes Construction

Steinway Tower, a luxury apartment building on the site of the former Steinway & Sons piano company, recently finished construction. While it’s only the third tallest building in New York City, it is being touted as the skinniest skyscraper in the world, with a height-to-width ratio of 24:1, and follows the trend for similar narrow “pencil towers” worldwide.

For more info about the building, please check out the article at CNN here:

What does it mean for a clause to be “Boilerplate?” A Primer

The term “boilerplate” is often thrown around without knowledge of its origins. This term is deeply rooted in the legal profession, but do most lawyers know how it evolved?

“Boilerplate” describes the standardized text in a contract or legal document. This expression emerged in the 19th century, when steel plates were used as templates to produce steam boilers. The usage of the term “boilerplate” first gained popularity in the newspaper industry, as these standardized metal plates reminded editors of the unmodified work that some writers assembled for publication.[i] In the mid-1950s, the legal profession deployed this term to describe standard clauses in contracts that typically remain unchanged. In 1954, the Bedford Gazette published an article criticizing boilerplate provisions on the basis that companies frequently used the fine print of boilerplate provisions to mischaracterize the law.[ii]

As implied by its origin, boilerplate provisions are considered standard templates. They are typically found at the end of most legal documents, often hidden in a section titled “Miscellaneous” or “General.” These provisions are necessary for outlining essential terms of the contract and governing the relationship between the parties involved in the transaction. After signing what may feel like hundreds of closing documents, these boilerplate provisions can seem like general contractual provisions one may overlook. However, this may not be the case, and the misinterpretation or neglect of a boilerplate provision can lead to unnecessary litigation. It is essential to familiarize yourself with these boilerplate clauses to ensure you understand what they entail and avoid legal consequences in the event of a dispute.

 

Notes:

[i] Chen, James. “Boilerplate Language, Uses, History, Examples, Pros & Cons.” Investopedia, Investopedia, 16 Oct. 2022, https://www.investopedia.com/terms/b/boilerplate.asp.

[ii] “Boilerplate.” Worldwide Words, https://www.worldwidewords.org/qa/qa-boi1.htm.