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.

Top 3 Disputes that Occur When Buying or Selling a Home

Whenever you form a business connection with someone, you want the relationship to be as harmonious as possible. This is especially true in the buyer/seller relationship that accompanies the purchase of a home. Whether you’re the buyer or the seller, the relationship requires a certain degree of trust, communication, and honesty. Even with the best intentions, the relationship can encounter its share of disagreements. Read on to find out about top three disputes that occur when buying or selling a home and how a New York real estate lawyer can help.

1. Deposit Disputes: A very common dispute revolves around deposits. Deposits are used as a fallback to lessen the blow for an unsuccessful transaction. In general, the purchase agreement will clearly state who has the right to the deposit in the event that the transaction doesn’t go forward. However, if the purchase agreement is misleading, then it can lead to issues. A dispute is likely to occur under these circumstances because both parties may argue that they’re entitled to the deposit.

2. Disputes about the Failure to Disclose Defects: Disclosure involves conveying important information about defects in the property. Some defects must be disclosed, while others aren’t required to be revealed. For instance, a specific disclosure mandated by the law is a disclosure about lead paint. A general disclosure is that the seller is required to tell the buyer about any known housing defects, even if the buyer doesn’t ask about the information. This is one of the many reasons the purchaser of the property should consult with a professional to survey the property before the sale. If there is a defect that isn’t discovered until after the purchase, a dispute could arise. 

3. Disputes about Contracts: Each transaction is a unique situation, and the contract should be drafted specifically to reflect the specific situation involved; this applies to both the parties and to the property itself. However, real estate agents aren’t always good about contemplating the buyer’s and the seller’s needs and tailoring the contract to fit those needs. This can result in issues later on in the process.  

Get Help with Your Property Sale Dispute from an Experienced Attorney

If you’ve involved in a New York home purchase, you should do your best to avoid disputes in the first place. However, sometimes they can’t be avoided. An experienced real estate attorney can be a valuable ally when it comes to resolving a home purchase dispute. Get in touch with a skilled MOWK real estate attorney who is ready to assess your situation. 

money bags on a scale with a house

Is a Reverse Mortgage Right for Me?

You’ve watching your favorite sports event or true crime series when you see a commercial encouraging you to get a reverse mortgage. If you’re near retirement age and own your home, you may consider this type of loan. Read on to learn about reverse mortgages and whether it is a good fit for you for your total New York estate plan. 

What is a Reverse Mortgage?

A reverse mortgage is a loan for homeowners that are 62 years old or older. This type of loan allows the senior homeowner to borrow against their home equity, as long as they reside in their home as their primary residence. The loan amount is based on the following:

  • The homeowner’s age
  • Their financial assessment
  • The current interest rates
  • The appraised value of the senior’s home

Unlike most mortgages, the reverse mortgage doesn’t require monthly payments. However, you must still pay for property taxes, homeowner insurance, and maintenance. As the homeowner, you also retain title to your home. Deferment of the repayment occurs until the last of the homeowners dies, sells, or moves out of the home. 

Those who choose a reverse mortgage may opt to receive the loan funds as a lump sum, a line of credit, a monthly payment, or a combination of these payment options. Because a reverse mortgage is a nonrecourse loan, the homeowner’s estate and heirs aren’t liable for paying the lending institution more than the value of the home when the loan is due. 

What are the Benefits of a Reverse Mortgage?

There are several advantages of a reverse mortgage, including the following:

  • You can remain in your own home for the rest of life (as long as you pay the property taxes, homeowners’ insurance, and maintenance).
  • You can satisfy your need for supplemental income and increased cash flow since it’s tax free.
  • You don’t have to make monthly payments to the lending institution. 
  • You can select the method of loan payments from the lending institution.

What is the Downside to a Reverse Mortgage?

There are several disadvantages of reverse mortgages, including the following:

  • You are responsible for paying fees, including those for loan origination, appraisal, third-party counselor, and loan servicing fees, as well as mortgage insurance premiums and closing costs.
  • You may have less equity in your home to pass to heirs.
  • The loan balance increases over time and interest and fees accumulate.
  • The reverse mortgage may negatively affect your eligibility for government benefits (for example, Supplemental Security Income).

Depending on your situation, you might find that a reverse mortgage is the ideal thing. It depends on how you feel about financial independence and how important it is for you to stay in your home. Also, keep in mind your need for supplemental income and cash flow and your comfort level. Another issue as to if it works for you is whether you have children or other heirs that you want to pass equity in the house to. 

Considering a Reverse Mortgage? Discuss it with an Experienced Attorney

If you’re thinking about a reverse mortgage, then you want to make sure that you consider all your options. Consulting with and retaining skilled lawyers is crucial if you’re considering this type of loan. MOWK Law has experienced New York estate planning attorneys who can help you with establishing your complete estate plan. We can help you break down the complexities of reverse mortgages and help you decide if it’s the right move for you. Contact us today. 

animated attorneys ripping a contract in half

Common Breaches in Real Estate Contracts

Real Estate Contracts: The Basics

Being a party in a New York real estate contract can be a frustrating place to be because of all the complexities of the law that is involved. It can be even more frustrating if the other party doesn’t perform their contractual duties. Typically, when the buyer signs a residential real estate contract, they provide the contract deposit and the contract to the seller’s attorney. The deposit is then placed into escrow. It will remain there until closing, unless a breach of contract occurs. If the closing doesn’t happen, either the buyer or the seller can demand the contract deposit. 

When is a Real Estate Contract Breached?

A breach of a real estate contract can occur when there is a violation of any of the contract terms. The wronged party will be able to recover damages on the basis of whether the breach is a material breach or a minor breach. Although every real estate contract is unique, certain breaches are common among pretty much all real estate deals.

Breaching a Real Estate Contract: Buyer’s Breach

The main task of the buyer is to provide the money to complete the real estate sale. Here are some common breaches that the buyer can commit:

  • Not having adequate funds to make a contract deposit, to the extent that the check bounces
  • Not tendering the balance of the purchase price
  • Purposely defaulting under the real estate contract (for example, withholding documents from the bank, including not providing them with a mortgage commitment letter)
  • Not providing accurate and honest warranties and representations
  • Not coming to the transaction in good faith, when it concerns preclosing matters

Breaching a Real Estate Contract: Seller’s Breach

Obviously, the seller is expected to do certain things so that ultimately the buyer can take possession of the property. Here are some common breaches that the seller can commit:

  • Failure to deliver the deed, or failure to deliver the correct deed
  • Failure to deliver the property in a timely manner
  • Not remedying the agreed-upon problems with the property before turning the property over
  • Not curing defects in the property title
  • No providing accurate and honest warranties and representations

Remedies for the Breach of the Real Estate Contract

Liquidated damages are usually the only way that the seller can retain the contract deposit when the buyer breaches the real estate contract. However, if the seller is the breaching party, the buyer can seek remedies including money damages and specific performance, which in this case, would be the forced sale of the property or rescission of the contract. If the buyer and seller can’t reach an agreement about who gets the contract deposit, then they have to take the issue to court or resolve it in mediation or arbitration.  

Discuss Breach of Contract with an Experienced New York Real Estate Attorney

If you’re dealing with a real estate contract breach, as either the buyer or seller, you want to be sure that you’re getting the benefit of your bargain. The experienced New York real estate lawyers at MOWk Law are here to help you on your way to resolving your issue. They will help you sort out the details and give you direction on next steps in reaching satisfaction. Contact us immediately to learn more. 

hand holding keys hand holding house

How to Execute a Tax-Free New York Real Estate Exchange

Generally, if you plan to make a real estate sale, you must deal with paying taxes. When the transaction involves investment property, you can be taxed on any profits (capital gains) that you’ve made on the sale. However, if you reinvest the money in a similar property within a certain time period, you can delay paying taxes on the property. This property swap method is known as a 1031 Exchange. Here’s some information on how to execute a tax-free New York real estate exchange. 

1. Ensure the replacement property meets the 1031 requirements: There are rules regarding the replacement property that must be met, including the following:

  • The replacement property (in addition to the property being sold) must be for investment or business purposes only.
  • Compared to the property being sold, the replacement property must be similar or “like-kind”, which the IRS defines as “property of the same nature, character, or class.” The rules refer to the exchange of commercial investment property for residential property (and vice-versa) to be considered “like-kind.” An exchange involving a U.S. property for a foreign property, however, is not considered “like-kind.” 
  • The replacement property should be of equal or greater value to the one being sold.
  • If there are mortgages, the amount on the replacement property must be the same or greater than the mortgage on the property being sold. If it’s less, the difference in value is treated as “boot” and it’s taxable. 
  • The replacement property must be identified within 45 days.

2. Understand how the exchanges are structured: The exchange can be performed in a few different ways: 

  • Simultaneous exchange: make a disposition of the relinquished property and acquire the replacement property at the same time 
  • Deferred exchange: dispose of one property and subsequently exchange for one or more other like-kind properties within the required time frame  
  • Reverse exchange: acquire the replacement property where an intermediary acts as an exchange titleholder for no more than 180 days. During this time frame, you must dispose of the relinquished property in order to complete the transaction. 

3. Use a qualified intermediary: To successfully execute the reverse exchange, an intermediary’s involvement will ensure that that you’re in compliance:

  • Their role is to be your agent when you sell the original property and hold the proceeds.
  • Then you will inform them when you identify potential replacement properties.
  • Next, the intermediary will use the funds to acquire the replacement and complete the exchange within the time frame.   
  • After the contract terms are agreed upon, the intermediary should receive copies. 

4. Report the exchange: After the exchange is complete, you must send all copies of the sales and purchase documents so that the IRS will be notified. Otherwise, you would be subject to taxation and this would defeat the purpose of all of this effort!

Talk to an New York Real Estate Attorney about a Tax-Free Exchange

Executing a tax-free real estate exchange requires a lot of knowledge about the intricate steps to perform. You will want to be sure to get information from an experienced New York Real Estate lawyer to ensure that the process runs smoothly. The attorneys of MOWK Law are well-versed in real estate transactions and are ready to help. Contact us today for more information. 

person holding mask over a model of a house

What to Know About New York’s Updated Guidelines for Residential Real Estate Sales Showings During Coronavirus

As New York and the rest of the country have begun slowly emerging from stay at home orders in place to protect against the Coronavirus, real estate professionals are looking towards updating the way they conduct elements of residential real estate sales transactions. The Real Estate Board of New York (REBNY) has issued recommendations for New York City real estate agents based on guidance from New York State and City Health Departments and the CDC covering nearly every aspect of sales transactions. Below is a brief overview of what you may see in the course of your next residential real estate purchase. 

Accessing the Property In-Person

If in-person showings are imminent, not only are agents to abide by building and management protocols for showings, it’s also recommended they obtain signed limitation of liability forms from anyone visiting the property in-person. The form advises of potential COVID-19 exposure risks and requires the signatory to assume the risk of visiting the property. 

General New York Real Estate Showing Precautions

Agents should require everyone attending an in-person showing to complete a health screening questionnaire to determine if anyone:

  • Has received a positive COVID-19 test in the last 14 days
  • Experienced any COVID-19 symptoms in the last 14 days
  • Knowingly been in close contact with anyone who has tested positive for or had symptoms of COVID-19 in the last 14 days

To comply with Fair Housing regulations, any agent taking this step must uniformly implement it with everyone prior to all in-person showings.

Not only are social distancing guidelines to be followed at all times, agents showing any spaces too small to conform with the 6-foot guidelines should schedule additional showings to accommodate all parties. 

Seller’s Agent Requirements and Guidelines

Per the CDC and other health authorities, there are some protocols a seller’s agent must comply with when in-person showings occur:

  • No handshakes.
  • The seller’s agent must clean and disinfect all frequently touched surfaces and areas before and after each appointment
  • The seller’s agent must also provide hand sanitizer or soap and paper towels to all visitors on arrival. 
  • The seller’s agent may not permit a buyer or their agent to touch anything in the property except essential surfaces such as handrails. 
  • The seller’s agent should, when possible, open windows to introduce fresh air.
  • The seller’s agent, along with all other parties, must wear face coverings. Failure to bring a face covering may be cause for cancellation or postponing the showing without penalty or prejudice.
  • Anyone may cancel without penalty or prejudice if they are presenting COVID-19 or flu-like symptoms. 

New York Real Estate Attorney

Buying residential real estate in New York was complicated enough prior to the onset of the Coronavirus pandemic. The alternation of the showing and sales process has made it difficult to keep up with what is expected of you not only as a potential seller or purchaser, but as a real estate agent as well. If you are unsure of your rights, responsibilities, or the process of residential real estate sales in the current climate, the experienced New York real estate attorneys at MOWK Law are here to answer your questions. We can evaluate your unique situation, provide counsel on the appropriate course of action, and look out for your best interests. Contact us today to learn more and get started. 

What Does New York’s Extended Eviction Ban Mean for Tenants?

As the coronavirus pandemic drags on across the country, initial orders issued by New York and other states inch closer to expiration – including moratoriums on evictions of tenants unable to pay their rent. To alleviate concerns of renters and lessees in New York, Governor Andrew Cuomo recently announced he was extending his March 20 eviction moratorium order through August. However, the extension may not change what might happen to some delinquent tenants past the order’s original June 20th expiration date. 

Who Qualifies? 

The extended eviction moratorium announced by the Governor applies only to New York tenants who are “eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic.” The original moratorium granted protection to all commercial and residential tenants. However, a “financial hardship” is not specifically defined and no parameters have been set as to who qualify for this protection as of now.

Undocumented Immigrant Status

Some people worry that the new standard for extended protection may negatively impact individuals with undocumented immigration status. There is a question of whether a tenant who is brought to court will willingly demonstrate whether they were impacted and reveal their immigration status to help their credibility with the court – especially knowing that some landlords in New York City recently have called Immigration and Customs Enforcement (ICE) upon finding out their status and their inability to pay rent or abide by the terms of their existing lease.

Tenants Who Do Not Qualify

For other tenants, they are not protected from a landlord’s initiation of a holdover proceeding. This is an action filed with the court by a landlord who wants to evict you and is demanding possession of the apartment. This follows either a notice to terminate or notice to cure, not necessarily for failure to pay rent. Even though there may be a holdover proceeding, the only one who has the power to order you to move is the court. However, until housing courts are able to reopen landlords are still not able to commence a new eviction proceeding.

New York Real Estate Attorney

Though many people will qualify for extra protections from eviction during the pandemic, some will not and may need additional help. Many tenants may not be sure if the extension applies to them, as many parts of the new order are unclear, and some terms are not explicitly defined. If you have questions about how or if the eviction ban extension applies to you, or if you need help dealing with a problematic landlord, the experienced New York real estate attorneys at MOWK Law can help. We are here to help evaluate the situation, fight for your rights, and work towards the best resolution possible. Contact us today with your questions.

Can I Break My Lease in New York Over Coronavirus Concerns?

Due to concerns over the coronavirus pandemic and mounting financial difficulties in places where rent is high but unemployment is rampant, many renters in New York City and other densely populated cities are wondering if they can break their lease and move to more remote areas or move in with family. Some landlords are accommodating tenant requests, but if your landlord will not let you break your lease or have someone take it over you may wonder what your options are. 

Consequences of Breaking a Lease

If you decide the best solution for you is to break your lease, you are responsible for the balance of rent that remains on the property under the lease until a new tenant moves in. Though landlords must make a good faith effort to find another renter for the property, the shelter in place orders currently in effect mean it is likely much more difficult than normal to find a replacement because less people are looking to rent apartments in heavily populated cities. 

If you do break your lease, your landlord may file a lawsuit when the courts reopen for the balance of the lease. It might be possible to negotiate a settlement after the suit begins and only pay a portion of what you owe. 

Alternative Solutions

If you want to get out of your lease but do not want to break it right away, you might be able to pursue alternative solutions with your landlord directly to see if you can reach a mutually agreeable solution. It’s advisable for you to first speak with your landlord to see if you can reach a deal that works for both of you. It may be helpful if you can figure out an amount that you’re comfortable giving up or can afford to part with as an alternative to breaking your lease. Some landlords might be willing to let you out of your lease if you forfeit your security deposit or rent for a month or two as a compromise, freeing you up to leave without facing legal action. 

New York Real Estate Attorney

Renters in New York right now are facing difficult decisions because of financial difficulties or concerns over staying healthy during a pandemic in a crowded city. In order to make sure you’re exploring all your options  and making the wisest possible decisions for your situation, contact the experienced New York real estate attorneys at MOWK Law today. We can help you exercise your rights so you can try to make the best of an uncertain, unfortunate situation. Contact us today to get your questions answered and make sure someone is looking out for your interests.  

Do New York Tenants Have Special Rights During the Coronavirus Pandemic?

With the current state of the Covid-19 pandemic in New York, many people with landlords or mortgages face reduced hours, unemployment, and financial uncertainty. To mitigate the fear of losing your home as a tenant from of abiding by the current shelter at home guidelines, New York has issued orders changing the usual laws related to foreclosures, evictions, and tenant rights. 

Current New York Coronavirus Executive Orders

  • Until at least June 19, 2020, evictions are suspended. Courts also will not accept any new eviction or foreclosure cases. 
  • No Sheriffs, Marshals, or Constables are permitted to perform evictions due to the New York Governor’s Executive Order – even if a warrant for eviction exists. 
  • No landlord is permitted to engage or participate in rent gouging by increasing your rent to capitalize on the current crisis. If you are currently in a lease, your landlord can’t increase your rent until the lease expires. If you are either in a rent-controlled or rent-stabilized property, your landlord is limited in how much they can increase your rent. Currently, the rate is a 1.5 percent increase on a 1 year renewal and 2.5 percent increase on a 2 year renewal. 
  • Month-to-month tenants or tenants at market rate whose lease is expiring must be provided with advance notice in writing if your rent will increase more than 5 percent. You must receive 90 days notice if you have lived in your apartment for 2 years or more or have a 2 year lease. You must have 60 days notice if you have lived in your apartment for more than 1, but less than 2 years. You must have 30 days notice if you have rented or leased for less than 1 year. 
  • Your landlord may not charge you increased rent – even with proper advance notice – unless you take an affirmative step such as paying the increase or signing a new lease. If you do not pay, your landlord must go to court to evict you, but currently there is a moratorium on their ability to do so. 
  • Landlords may not withhold essential services such as heat or hot water due to a failure to pay rent. 
  • Landlords may not take any action with the intention of forcing you to leave your home or sacrifice your legal rights, such as interfering with your privacy or your quiet enjoyment of your home. They also may not threaten to change locks or engage in disruptive construction in the building intended to interfere with your health, safety, or use of your home. 
  • Landlords may not engage in discrimination against or evictions proceedings with a tenant because they or someone they live with contracted or has had COVID-19 or because the landlord believes they have had the virus. This includes posting notices identifying a specific individual. 

New York Real Estate AttorneyEven though there are government resources available to help with landlords who do not abide by the current executive orders, in some situations extra help is needed. If the relationship is not going as planned, the experienced New York real estate attorneys at MOWK Law can help you deal with any issues, protect your home and your rights, and look out for your best interests. Contact us today with your questions.