Residential Real Estate Transactions
Landlord / Tenant Disputes
Everybody loves their landlord, right? Even though that’s the case for a ton of people, the fact is that most people have some issues with their landlord. Whether they’ve unlawfully kept your deposit (their are strict rules in NYC regarding this for example), didn’t keep a promise about certain maintenance tasks that were supposed to have been done, or worse a dangerous or illegal condition is present at the premises, you are not without recourse. The Law Office of Barry E. Janay, P.C. has experience representing both landlords and tenants in court, we can consult with landlords as to how best avoid running afoul of the often complex rules governing residential landlords which can vary significantly depending on the locale. Our firm has also represented numerous tenants who have found themselves in premises that were not kept up by the landlord in a habitable condition or in which they were deprived of their use and quiet enjoyment of the premises.
Buying or Selling a Single Family Home, Condominium or Co-op
Home ownership is a goal for most Americans. Buying your first home is a huge learning experience; The Law Office of Barry E. Janay, P.C. helps everyone from first home buyers to experienced home owners who have multiple properties (which can be put into separate business entities that can have enormous tax / estate planning benefits). Below you will find a short primer on one of the most important aspects of the process, that is Reviewing the Contract of Sale, this will govern the entire transaction and there are a few key parts that every seller / purchaser should be aware of.
REVIEWING THE CONTRACT OF SALE
1. The Contract of Sale is usually a standard pre-printed form that is only modified as to the terms directly related to the unique particulars of your sale which are entered into the form(parties, premises, purchase price, closing date, mortgage contingency). The terms in the pre-printed form are pretty much non-negotiable, while the terms that are entered into the pre-printed forms are usually discussed between the broker and the parties to the transaction, these are terms that are contained on the memorandum of sale.
2. Following the contract of sale is a Rider, the rider is not a pre-printed form, most attorneys have their own riders that they choose to use based on issues that they have seen in the past, it is a way that they’ve found helps address concerns not included in the pre-printed form. Often times after inspection items will come up that will need to be addressed at the premises, many times those items that need fixing (plumbing, structural deficiencies, electrical, etc.) will be contained in a rider paragraph that states that the seller is responsible for fixing it prior to closing or that the seller will get an estimate from a licensed home improvement contractor and provide a credit at closing for the same amount. The rider needs to be paid very close attention to.
3. Generally speaking, you want to make sure that the particulars of your transaction are accurate and that the closing date is acceptable, the mortgage contingency is in line with the mortgage that your lender has advised you that you may qualify for, and the personal property inclusions/exclusions are all as you had discussed with the broker.
4. Finally, don’t overthink it… The terms of the contract are construed under New York law to be interpreted by their “plain language “ or “plain meaning” minor or obvious typographical errors do occur and it does not mean that someone is trying to sneak something by or take advantage of you.
An Overview of the sale process for New York real estate:
Seller list the property typically with a broker, the broker finds a buyer (hopefully vetted) then prepares the Memorandum of Sale.
1) Broker Memo which lays out the basic monetary terms of the sale and timeframe, the memo however is not legally binding,
2) Attorneys draft and negotiate the Contract of Sale based on a standard form that can be modified to a particular deal on things like inclusions (chandelier, washer/dryer, other fixtures, etc.) the big items are usually whether there’s a mortgage contingency and what the closing date will be and whether it will be “time is of the essence” which most are not, most are “on or about” which generally means within about 30 days until one side can send a “time is of the essence” letter.
3) the buyer does an inspection before the contract is signed and any repairs that are necessary or items that come up in the inspection are negotiated and either a reduction in the purchase price is given as a concession or the seller agrees to repair them out of pocket prior to closing and supply proof that they have been repaired these items and decisions typically go in a Rider that gets signed contemporaneously with the Contract of Sale.
4) After the contract is finalized it’s signed by the parties the buyer if he/she needs a loan goes out and searches for a lender that will give a loan, lenders mainly look at two ratios (Debt to Income and Loan to Value) there are exceptions especially if there’s a guarantor or other collateral the bank can use to secure the loan in addition to the mortgage on the property.
5) as part of the buyer’s due diligence he/she should order a title report on the property, a title report will show everything that could affect the property from tax liens, liens by creditors of the Seller that could affect his/her ability to transfer the property and a bunch of other “clouds on title.”
6) If the buyer can’t obtain the financing and there is a mortgage contingency then they can cancel the loan so long as they notify the seller prior to a “time is of the essence” demand has expired.
7) If the buyer can obtain financing then the seller is obligated to clear any title conditions on the title to make sure that they can close the loan.
8) Once the financing is set up and the conditions for title closing have been met a closing is scheduled at a time agreed upon by the buyer/seller/and bank.
9) At the closing the buyer and bank supply the checks to cover the purchase price minus any amounts the seller hasn’t paid for maintenance and taxes which are prorated for the number of days in the tax period or maintenance period that the seller was in possession. The seller executes a Deed which conveys title and tax forms are filled out to notify the municipality and state that the transfer took place so that a) the new owner of record receives tax bills and b) the state and municipality can receive tax for the sale of real property.
Hope the above helps, let me know if you have any questions.
An Overview of the sale process for New Jersey real estate:
1) Broker writes the contract of sale, the parties execute the contract. Unlike many other states in NJ a real estate agent is allowed to prepare a standard residential real estate contract. Be careful before signing this and get an attorney lined up beforehand since once the contract is duly signed by the buyer and seller there is a three (3) day period to have an attorney review the contract.
2) Attorney review period begins and usually has a stipulated or agreed to end time. During the attorney review, the parties can terminate the contract or propose changes to the contract. Since every property and every transaction is unique and only by having your own attorney looking after your rights and interests can you really be assured that you are protected and getting the benefit of what you’re bargaining for and not falling into a trap.
3) Next, comes the home inspection…. During this phase, an evaluation is done to determine the condition of the property and any fixtures, mechanical items, or other items that are part of the contemplated transfer. After the inspection, the attorneys involved in the transaction may contact one another to negotiate repairs or discounts for anything that came up which may have been adverse.
4) Unless it is a cash-only purchase a mortgage would need to be procured and a buyer will have to work diligently and expeditiously to qualify and obtain a commitment. The language of the deposit may depend, typically however if a buyer cannot qualify then they are entitled to get a refund of their deposit.
5) Before the closing the seller needs to obtain a certificate of occupancy and to obtain and smoke detector certificate from the municipality.
6) a Title Company will examine the previous transfers of the property to make sure that the seller in fact has the right to sell the property (i.e. ensures that all liens will be paid off at closing and that there are no “defects” in the title. Additionally, every title policy comes with insurance designed to protect the buyer from any defects or liens that may have come up.
7) A survey of the property is usually required by the mortgage company, the survey will show the property line and boundary issues as well as easements and rights of way that affect the property. A thorough review by your attorney should be conducted to ensure that there are no issues that would adversely affect the property.
8) The seller’s attorney prepares the new deed, seller’s affidavit of title, and other closing related documents.
9) The lender prepares the mortgage documents and a list of costs associated with the mortgage. It is the buyer’s attorney’s responsibility to prepare a HUD-1 settlement statement. The HUD-1 settlement statement is a government document that contains all closing costs associated with the transaction.
10) Buyer’s attorney arranges and prepares the closing statement that indicates all of the payments that will be made in order to consummate the transaction contemplated by the Contract of Sale.
11) After the closing, any prior mortgages would need to be canceled and any amounts held in escrow get transferred based on the escrow terms.