What You Need to Know About Estoppel Certificates in Commercial Leases

Estoppel certificates (also known as estoppel letters) are important documents used for due diligence in many real estate activities. Read on to learn how this impacts your New York commercial lease

What is an Estoppel Certificate?

An estoppel certificate is a statement, which acknowledges that a commercial lease agreement exists. The tenant’s signature on this will confirm the current status of their lease and confirm that certain details of the lease are valid, including the absence of defaults and the agreement to pay rent (on a specific date) to the landlord. 

It basically lays out the make-up of the landlord and tenant relationship and when the landlord needs to negotiate with a third party when selling the property. Because they are evidence of cash flow, the agreements are of a particular importance to lenders or potential buyers. 

Landlords generally require tenants to sign estoppel certificates as part of due diligence items because they show evidence of cash flow. In these cases, the landlord might have to prove to the lender or potential buyer that the tenant is current in the financial obligations. Then the lenders, and would-be investor/buyers rely on this to show what the landlord said about the monthly deposits is valid and that the term of the lease will be in place. When the tenant signs this document, they are verifying the conditions and status of the lease.   

Must Tenants Sign the Estoppel Certificate? 

Generally, the certificates usually don’t pose any risks for tenants. However, the document isn’t intended to be used in place of a lease, and the tenant should read it thoroughly to note differences. 

If the original lease states that a tenant is required to complete an estoppel certificate, then they are legally required to do so. If tenant doesn’t sign, they can be in breach of the lease and face eviction. In the context of commercial real estate, it’s typically a good idea for the tenant to complete the certificate because it may include details not in the original lease.   

What Are the Benefits to Involved Parties?

The estoppel certificate provides assurance to landlords and lenders that the tenant’s promises are kept. When the landlord and the potential buyer are negotiating, this acts as the purchaser’s due diligence for ongoing cash flow and assists with dodging unexpected expenses.   

For tenants, the certificate provides confirmation that the landlord won’t alter the terms of the lease. It also keeps them in compliance with the lease if the lease requires them to sign an estoppel certificate.

Additionally, the contract has information about upcoming lease extensions and renewals. Estoppel certificates also reveal issues that can indicate if either party has breached any duties over the course of the lease. 

Get Your Estoppel Certificate Questions Answered by an Attorney

Typically speaking, estoppel certificates are a straight-forward feature of commercial leases. However, there are times when they can cause certain issues to spring up that you may need an attorney’s help with. If you have problems in this area, don’t hesitate to get a lawyer involved to answer your questions. Contact us here at MOWK Law for assistance with this and all your New York real estate concerns.

What is Time of the Essence in a Real Estate Contract?

If you’re involved in a home purchase, then you might find yourself coming across with a “time is of the essence” provision. You might have heard of this term before but weren’t sure what to make of it. What exactly, is time of the essence and why is it important in your New York real estate contract?

Definition of Time of the Essence

The term “time of the essence” is a legal term of art that is used to state the timeline in which one party must complete their contractual duties. Completing the time is not only a priority but also a necessary part of the completion. If they fail to meet the deadlines agreed to with regard to “time of the essence,” it is considered a breach of the contract. 

Time of the Essence Letters

While this provision can be used in various types of contracts, it is very common in real estate transactions. In this context, it is sometimes applied in a time of the essence letter, instead of explicitly stated in the contract. 

For the court to view the time of the essence letter as valid, it should include the following:

  • A reasonable timeline
  • Clear conditions
  • Information about the consequences if the party doesn’t meet the stated timeline

What Types of Acts Can Be Subject to “Time of the Essence” Deadlines?

Basically, anything that should be completed within a given amount of time in a real estate transaction is ripe for a “time of the essence” provision. For example, this can include notices, document delivery, termination procedures, and the closing date of the transaction. A real estate agreement should include specific completion dates for the tasks that have time contingencies.

What Happens if Time of the Essence Deadlines are Not Met?

If there is a “time is of the essence” clause in the contract, there are consequences for the failure to meet the timeline. For instance, suppose the contract requires you to provide an inspection report in 5 days. If you don’t provide the report to the other party within the 5 days, you would be subject to the consequences, such as facing potential termination of the contract.   

Time is of the Essence Principles 

While the details will differ for each contract, there are certain conditions that should be present: 

  • All parties must be aware of its existence: If any party is unaware of their obligations, then it will not be enforceable; everyone involved in the transaction needs to know the deadlines and the consequences of missing them.
  • All parties may request a reasonable postponement of closing day: The parties are entitled to ask to postpone the closing day. However, it must be reasonable, and the other party must agree. 
  • Amendments are available: If someone breaches, it is still possible to remedy by amending the original clause. If both parties don’t agree to amend the breached provision, the missed time frame can end with major consequences.

Let an Attorney Help with Your “Time is of the Essence” Real Estate Transactions

The purpose of a “time of the essence” clause is to maintain accountability during the real estate transaction. If you want to include this in your agreement, you can work with an experienced MOWK Law real estate attorney. When the deadlines and consequences are determined, both buyer and seller can advance to a satisfying closing day. Contact us today to get started.

5 Tips for NY HOAs Rule Enforcement

Homeowners’ associations (HOAs) in New York and elsewhere exist to maintain home values, make amenities available that enhance the living situation and must establish policies that apply to all of the properties in the association. When a homeowner doesn’t follow this, the Board should act. Read on to learn about helpful tips to enforce HOA rules. 

1. Act Quickly: Once you’re aware of a violation, you should act quickly. For example, instead of waiting for an owner to complete construction on a project that breaks HOA rules, you should nip this in the bud. You would lessen the amount of time that the property is in violation and could also possibly save the homeowner money as well.   

2. Deliver a Written Warning: This is a good beginning course of action. The warning will include the specific details of the incident. In many cases, this is enough to dissuade many homeowners from breaking any further rules. 

3. Levy Monetary Penalties and/or Take Away Privileges: Breaking the rules should bring penalties and hitting a homeowner in the pocketbook with fines is something that can help to discourage rule-breaking. But the HOA must ensure that they don’t impose an unreasonable amount and must strive to strike a balance between the offense and trying to make a major difference in behavior. While a homeowner may resent being hit with a fine, the longer the fines remain unpaid, the more penalties they incur; the HOA may have to take legal action. Because amenities like clubhouses, terraces, and other perks are part of HOA living, another alternative is to suspend the violator’s privileges. 

4. Place Liens on the Property: If there is a serious rule violation, the HOA can place a lien on the homeowner’s property. However, placing the lien doesn’t necessarily equal compensation. A lawsuit could ensue. Also, if the homeowner chooses to sell their property, the new owner may need to pay the lien settlement as part of the purchase.  

5. Use a Standard Procedure/Don’t Engage in Selective Enforcement: While enforcing rules can sometimes be difficult, you can make it easier to follow through by incorporating a standard procedure. That way when a violation comes up, you know exactly how to handle it and are less likely to deviate from the practice. 

You may feel compelled to deal with an HOA rule violation with leniency if you know the reason why an individual committed the violation. However, this is not a good approach because inconsistent rule enforcement may lead to allegations of discrimination even if this was not the intent.  

Contact an HOA Attorney about Rule Enforcement

It’s critical for HOAs boards to set out rules and to enforce discipline when owners break them. The governing documents should contain specific instructions for dealing with violations. If they don’t, you will want to correct this. This is where an experienced attorney can assist you. Fortunately, the lawyers at MOWK Law are well-versed in this area and will work hard to come up with viable solutions for your rule enforcement issues. Contact us today for further information.

What Are Some Contingencies in New York Real Estate Contracts?

When you purchase or sell a home or other real estate, you will typically make an offer that may have some contingencies. A contingency is a condition that the parties may put into their real estate contract. Their presence is a way to protect the investment and to get out of the situation, depending on whether particular situations arise (as they often do). Read on to learn about some contingences you should be aware of if you’re purchasing a home in New York. 

Some common contingencies are:

  • Home Inspection Contingency: This contingency requires a certified home inspector to inspect the property within a specified time period. It’s up to the buyer to select the inspector and to schedule the inspection. Generally, the contract will contain language that provides for the termination of the contract if the inspection unearths issues that the seller isn’t willing to fix or negotiate. If the inspector does find problems, then you can request repairs or a lower price. This should be contemplated in the contract and should include how long it can take to remedy. If the seller refuses, then you can either allow the contingency to expire or terminate the contract and recover your deposit.
  • Appraisal Contingency: This contingency is based on the property being appraised to confirm its value for your mortgage lender. Before your mortgage is set, the lender wants to make sure that the purchase price syncs up with the fair market value. The lender usually determines appraisal values based on comparable recent home sales, tax records, and an in-person evaluation of the property by a third-party appraiser. If the appraisal is in line with the purchase price, the sale will go on, but if the appraisal comes in lower than the purchase price, you should discuss options with your loan officer. If you can’t work out a loan restructure, the appraisal contingency allows you to rescind your offer without losing money.    
  • Financing Contingency: This contingency (aka mortgage contingency) is a provision that allows you to back out of the purchase if you can’t secure financing within a certain timeframe. You can cancel the transaction and recoup your earnest money. 
  • Sale Contingency: If you’re already a homeowner, and you want to buy a new one, there’s the issue of whether you sell your existing home first. This contingency provides a specific timeframe for you to sell your current home. If you can’t sell it in by the deadline, you can withdraw your offer and recoup your earnest money deposit.  

Get Legal Help with Contingencies

Sometimes you may not want to have a contingency. Perhaps, you’re trying to make an offer more attractive to the seller. But if you need it, it’s something that a skilled attorney can help you with. Get in touch with one of our knowledgeable MOWK Law attorneys who can help tailor your contract to meet your needs and expectations. Contact us right away to get started.

How Long is Probate in New York?

When your loved one dies, the probate process might be a necessary avenue to manage and distribute their estate. Even if you don’t know much about probate, you’ve probably heard that it’s something to avoid if possible and that the time to take to complete it is something people often worry about. Typically, most estates are probated in about a year. However, various factors can prolong the process or can make it go even quicker. Read on to learn about how long the probate process can take in New York.

What is the Probate Process?

Let’s clarify what probate is before beginning a discussion about how long you should expect it to take. Probate refers to the legal process in which a deceased person’s affairs are handled; the resolution of this includes obtaining their assets, paying off debts and expenses, and distributing any of the decedent’s remaining assets to their named beneficiaries and heirs.

Appointment of the Executor

A starting point in the process is the appointing of an executor (or administrator). This is the individual in charge of managing the issues of the estate and probate process. Although the executor/administrator has been chosen by the decedent in their will, the executor must still be appointed by the court. Beneficiaries of the estate can challenge the appointment of an executor, in addition to the validity of the will.

Settlement of the Estate

Once the executor is approved, they act on the estate’s behalf and begin the work of settling the estate. This includes:

Finding assets and safeguarding them
Paying debts and expenses
Paying taxes

Closing the Estate

For this, there is a summary of assets and liabilities, or a final accounting of the estate, that must be approved by the court or signed off by the beneficiaries. Any funds that remain are distributed to the named beneficiaries.

Length of Time it Takes for Completing Probate Steps

Appointment of Executor/Administrator: Approximately 4-6 months
Settling the Estate: Approximately 6-9 months
Closing the Estate: Approximately 1-3 months

The Timing of the Probate Process

This sound simple and most cases take an average about 12- 15 months but can range from several months to up to 3 years. Considerations that may impact the length of process include:

Accounting costs
Beneficiaries try to remove the executor/administrator
Creditors’ claims against the estate
Difficulty with locating assets
Substantial assets in the estate
The complexity of the specific estate
Will contests

Is Probate Required in New York?

Probate is generally necessary, regardless of whether or not an individual had a will. However, New York law does not require it for small estates (estates with less than $50,000 in assets). In these instances, the court will either appoint an executor named in the decedent’s will, or an heir of the descendant if they left no will, as a voluntary administrator. Then the court will issue a certificate for each asset that is collected and distributed by the administrator.

Understand Probate in NY with an Attorney’s Help

With proper estate planning, it’s possible to have your loved ones avoid unnecessary problems inheriting your property after probate is complete. An experienced attorney understands the pros and cons of ways to transfer property and can help navigate the system and use several estate planning tools to take away certain assets away from the probate estate. You can contact one of our skilled MOWK New York estate planning lawyer to help you get started.

Should You Sell Your Home to a House Flipper?

When you’re getting ready to sell your house, there are many things to consider. And it takes a lot of work to get it ready for the market. Depending on your situation, you might wonder whether you should sell to a house flipper, and if house flippers are worth it? There’s no quick answer to this; you will have to look at your specific situation to see if this is a good fit for you. Read on to see what questions you should ask before you decide to sell your New York home to a house flipper. 

Are you Facing a Crisis/Emergency and/or Need to Relocate? 

Maybe you are in the middle of a family emergency, such as the kind where you need to relocate in a hurry. Or you’re in a financial crisis, which means that you need money quickly and aren’t as concerned about a typical drawn-out sale. If any of this applies to you, you might be fine selling to a house flipper.

Is Your Home Falling Apart? Severely Damaged?

Has your home fallen apart? Is it in a state of major disrepair? If your home has fallen on hard times and is in a state of major disrepair, you need to contemplate how this figures into selling it. It will take a lot to bring it up to snuff and to make it marketable. If the structure must be taken down to the bare bones, it’s not the best scenario for a traditional sale and a house flipper might be an attractive option. A cash buyer may be in a much better position to purchase it than someone with a conventional or government-sponsored loan. Of course, even flippers might avoid certain things and may be leery of foundation problems or the need for termite treatment.

Are You Intimidated by the Listing Process?

If you sell to a flipper, you don’t have to do the type of work to get the property ready for market that you normally would have to do, such as staging and making videos and photos available. You won’t have to deal with the process of arranging showings and having people walking through your home. If you are intimidated or overwhelmed by these things, selling to a house flipper can ease this load.  

Are You Aware of the Flipper Pricing Model?

Do you know about the flipping industry standard 70 percent rule, which states that an investor will offer no more than 70 percent of a property’s after-repair value, (AVR), for a house they plan to flip? If a property needs repairs, those estimated costs would be subtracted from that 70 percent.

While this doesn’t assure a flipper a profit, it does allow for a prompt calculation with flexibility for expenses such as taxes, utilities, and other costs that can tear away an expected profit while the property is on the market. But if your home is such that the ARV is so low in comparison to the repairs that are need, then it’s not worth the investment.  

Will your Home Appeal to House Flippers in the Area?

Is the location in a place where buyers want to be? Not being a historic property is also important. Is it capable of rehab possibilities fairly quickly?

How Soon Do You Need to Close?

One of the greatest advantages to selling your home to a flipper is the benefit of getting a quicker closing. If you need to go it fast, consider a flipper.

Talk to a New York Real Estate Attorney

If you’re considered selling your home, your next step should be to contact a skilled NY real estate attorney. Regardless of whether you decide to sell to a flipper or not, consulting with an attorney will help to ensure a smooth transition. Contact an experienced MOWK Law attorney for help with this and your real estate law needs.   

How Can Condo Associations Prevent Violating Reasonable Accommodation Laws?

Fair housing laws at both the federal and state level have existed for decades to protect disabled tenants from discrimination and harassment. For instance, the law provides safeguards, such as the right to have emotional support animals, even for buildings that have a no-pet or no-animal policy. Additionally, besides providing things like support animals in private housing, these state and federal laws apply in the condominium context and oblige condo associations to make reasonable accommodations and/or modifications for persons with disabilities. These requirements serve to allow everyone the opportunity to use and enjoy their property.

Conscientious condominium boards do their best to navigate this complex area of law, but it can be difficult to follow. You want to keep track of what the law requires, who is responsible for the accommodation and modification costs, and how to stay in compliance with the law. Read on to learn how to avoid violating the reasonable accommodations laws.   

Notice Requirements

Under New York law, cooperatives and landlords of residential building are required to provide written notice to tenants of their right to request reasonable accommodations or modifications if they have a disability. The law also requires “conspicuous posting of the notice.” For any new tenant, they must be provided with the written notice within 30 days from the beginning of their tenancy.

Reasonable Accommodations

Everyone must have an equal opportunity to enjoy and use their property, regardless of disability status.  If a condominium association refuses to make reasonable accommodations or modifications, then it’s considered discrimination; this includes both private units and public and common use areas. This means that they must make changes to policies and buildings if a disabled tenant makes a request. 

To determine whether an accommodation is actually reasonable involves a close analysis of the specifics of the case. Generally, the tenant or unit owner is not responsible for the cost of making the accommodation or modification. And it will be something that you have to take in consideration. 

Although the cost of an accommodation is one of the factors, it alone is not enough to make an accommodation unreasonable. There has to be a discernable connection between the request and the individual’s disability.   

Examples of Reasonable Accommodations/Modifications in New York

Examples of reasonable accommodations or modification can include the following:

  • Requests for emotional support animals
  • Requests for more disabled parking places
  • Requests for wheelchair ramps
  • Requests for automatic doors

Discuss How to Comply with Reasonable Accommodations Law with an Attorney

Now that you know what the laws are, you might think that you’re completely in compliance with them. However, there may be a lot of errors on your part. Don’t take this for granted. Get the insight from an experienced attorney on your side, so that you know what to do. Contact one of our MOWK Law attorneys today. 

What should I know before signing a commercial lease

What Should I Know Before Signing a Commercial Lease?

Signing a commercial lease is an important part of running your business. If you’re in the early stages and need a storefront or other physical location, the standards for a proper commercial lease can be a difficult undertaking without doing your research beforehand. And fortunately, there’s more leeway for negotiating the terms of a commercial lease as opposed to a residential lease. Read on to learn about what to look for in a commercial lease in New York.

First Steps

Prior to getting to the negotiation stage, you obviously must identify your business’ needs in relation to the potential commercial space. You should have a good idea about this before you meet with the owner or the real estate agency. Describing the physical requirements of the business early can help in developing the precision of drafting a new lease. 

Features of a Commercial Lease

The rights that are generally associated with a residential lease don’t usually apply to a commercial one. That is why it’s important to know certain things about them before you commit to signing:

  • Who is the entity on the lease agreement: You should know the official party that is represented on the lease because individuals are allowed different lease terms than an LLC (limited liability company) or other business structure. LLCs may pose some risks for landlords, such as difficulties in the enforcement of breached leases for dissolved businesses and other complexities. 
  • Is subletting allowed: As a tenant, you may want to help lessen some risk by including a provision for subletting and/or sharing office space to alleviate the chance of insufficient revenue.
  • Are alterations permitted: Landlords will often include provisions concerning detailed procedures for altering the space and spelling out what superficial and fundamental changes are allowed.
  • Is an escalation rider included: This requirement provides an elevated risk to the tenant, who may be responsible for a sharp increase in rent because of the landlord’s real estate expenses or operating costs.
  • Does it include eviction and/or early termination clauses:  As a new business, the reality of economic sustainability is questionable at best. You may want to propose an early termination clause to the landlord. However, if the landlord wants a similar clause on their end, it could hurt your business. Because commercial tenants don’t enjoy the same rights as residential tenants, you need to be aware of language that makes it easier for the landlord to evict your business.
  • Will there be a personal guarantee: Many commercial leases in New York contain a Good Guy Clause (GGC). This is used in situations where the lease is in the name of a business entity, such as an LLC where the landlord requires an individual to sign a personal guarantee. Here, you can benefit from a GGC because it allows the landlord to release you from liability in case you don’t complete the lease period. It’s popular for start-up businesses.

Get Help with Your Commercial Lease, Talk to a Lawyer

The lease will be the quintessential indicator of your financial obligation and liability, so it’s important that you get things right. If you’re ready to expand to a new site for your business, contact an attorney familiar with commercial leases. Contact us today, so that one of our experienced MOWK Law attorneys can explore the best options for your business.

What Happens if You Don’t Buy a Homeowner’s Title Policy?

You’ve looked over the options and have made your choice: You’re ready to purchase that cozy condo or that attractive New York brownstone. Whenever you buy residential New York real estate, you aren’t merely paying the asking price. Rather, there are many other fees associated with it including a host of various closing costs. As a purchaser, you want to save money and may want to avoid a survey or an inspection as a way to keep down expenses. While some of these costs (including broker fees) aren’t negotiable, there are things that you can sidestep. 

However, many times mortgage lenders won’t allow buyers to do this. A close analysis of the financial information prior to closing indicates that you have to pay for title insurance not only for yourself but also for the mortgage lender. While there is usually no way to get out of buying a lender’s policy, you can opt out of a buyer’s policy. But is this something that you really want to do? Read on to learn more about making this choice and what’s at stake if you don’t buy a homeowner’s title policy.  

Types of Policies

There are two types of title insurance policies, an owner’s policy and a loan policy. The owner’s policy protects you in case there is a covered title defect in your right of ownership. If you need a mortgage to buy your home, the lender will probably require that you purchase a loan policy or lender’s policy. This policy protects the lender’s interest in the property until the mortgage has been paid in full.  

Title Insurance and Ownership Rights  

In order to get a title insurance policy, you will need to have a company carry out an exhaustive title search looking at the ownership history of the property, including any liens that require payment as part of the transaction. When you acquire a title insurance policy, it will protect you if another party eventually shows up claiming to be an owner or claiming to have the right to some other hold on the property’s title.  

First, the title insurance will pay for a lawyer to represent you in a title dispute in court. Next, if the person claiming title is successful and you lose possession of the property, then the title insurance will reimburse you for the investments that you’ve made in the property. 

However, if you don’t have a title policy and someone brings a claim against your property, you could lose out on not only the down payment that you made, but also on all of the accrued equity from payments since the closing, and the value of improvements that you’ve made to your home. 

Get Answers from an Experienced New York Real Estate Attorney

Buying a new home is one of the most fulfilling things that you can do. Ensuring that your right to own the property is secure can be equally satisfying. Understanding the aspects of a real estate transaction can assist you with making thoughtful choices prior to your closing. Get help with this by turning to one of our experienced MOWK Law attorneys who can guide you through this process. Contact us today for more information.  

Top 3 Concerns for First Time New York Home Buyers

You’re excited because you’re about to become a homeowner for the very first time. This can also come with a lot of stress, in addition to excitement and anticipation since you’re new to the home buying process. However, don’t let your enthusiasm make you overlook key issues. Here are top concerns to watch out for when you’re making your first home purchase.

1. Title Concerns: At a given point when you’re in the home buying stage, you can receive a summary of the property. When you get this, be sure to examine the details of the title summary and look out for key information about things like easements, liens, and other encumbrances and exceptions that may restrict the way that you can use and enjoy the property. 

2. Repair Concerns: Repair work is a major area that can involve many red flags. It’s important to be vigilant when it comes to this aspect of purchasing a home.

  • Sometimes property owners make repairs and cosmetic fixes to up their asking price or to get a quicker turnaround for the home sale process. Pay special attention to the actual quality of the home and look beyond the superficial enhancements. 
  • You should carefully inspect all repairs and look for indicators of subpar repairs. Shoddy work doesn’t always indicate that there are major problems that the owner is trying to conceal, but it could mean that there are larger less obvious repair issues that need to be resolved.  
  • Inspect the building and the lot to make sure that everything is completely finished and well-made.
  • Reference all repair work with the seller’s disclosure. If there is information that doesn’t line up with the what’s in the title summary or what you see when you do the physical inspection, you may want to keep looking for other house purchase alternatives.

3. Negotiation Concerns: This is a pivotal part of the home buying process and there are a lot of things to think about before approaching the seller.  

  • Don’t make the mistake of taking it for granted that every house price is negotiable.
  • However, you also shouldn’t give too low an offer because it could turn-off the seller and make them not want to deal with you at all. This may close the door on negotiations even before you get started. 
  • Alternatively, you can just leave this to the brokers. After all, it is their job to attract clients and to work on your behalf.
  • Keep in mind that this may not be your “forever” home and that you may want to sell the house someday. Therefore, you should concentrate on the location and not just fixate on the price. 

Make Home Buying Easy with Help from an Experienced Lawyer

If you’ve followed these steps, you may be able to have a fairly smooth home buying experience. However, there are numerous situations where you can use the help of an experienced New York real estate lawyer. Contact us at MOWK Law for an attorney who is ready to assist you.