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On Jan. 5, 2023, the Federal Trade Commission issued a proposed rule (see https://bit.ly/3T5ixuM] (“Notice of Proposed Rulemaking” or NPRM), that would ban employers from imposing non-compete clauses and agreements on employees. The public comment period for the NPRM ends on April 19, 2023. The rule’s genesis stems from an Executive Order issued by President Biden in July 2021, which focused on promoting competition in America. The FTC describes the use of non-compete provisions as a “widespread and often exploitative practice that suppresses wages, hampers innovation, and block entrepreneurs from starting new businesses.” Those who oppose the FTC’s view argue that non-compete provisions are vital, long-standing tools that protect an employer’s legitimate business interests and protect businesses from harm caused by departing employees.

Continue reading “LEGAL CORNER: The Impact of FTC’s Proposed Rule Banning Non-Compete Clauses”

In early 2023, it is clear that cryptocurrency, blockchain technology and the metaverse are on track for a significant recovery. In 2020 and 2021, increased interest in blockchain technology and significant investment in cryptocurrency and the metaverse became a major focal point for companies and investors alike. Throughout 2022, however, we witnessed what has been termed an extreme “crypto winter.”

With the fall of FTX in late 2022, as well as other companies in the crypto space, the belief of investors, both retail investors (i.e., individual investors) and professionals is that investment in cryptocurrency, and in companies that utilize its underlying blockchain technology for a variety of projects as a viable investment vehicle, was shaken to its core. Many pundits have called cryptocurrency a Ponzi scheme, a scam, and have called for its total collapse altogether. Many believe that it cannot be regulated and should not even be permitted to exist.

Continue reading “LEGAL CORNER: Where Do Cryptocurrency, Blockchain Technology And the Metaverse Stand in the R.E. Industry in 2023?”

Real estate investment and housing make up a very important and critical component of the U.S. economy. Housing averages roughly 15% to 18% of the Gross Domestic Product (GDP) annually. The National Association of Home Builders (NAHB) explains that the contribution of real estate and related services to GDP occurs in two ways: (1) “Residential investment (averaging roughly 3-5% of GDP), which includes construction of new single-family and multifamily structures, residential remodeling, production of manufactured homes, and brokers’ fees” and (2) “Consumption spending on housing services (averaging roughly 12%-13% of GDP), which includes gross rents and utilities paid by renters, as well as owners’ imputed rents and utility payments.” [See https://bit.ly/3ZjOrqa].

Real estate, in one way or another, affects almost every aspect of an individual’s daily life. In 2023, it will be important to track developments in the real estate industry as they relate to increased Federal Reserve interest and mortgage rates, inflation, availability of housing supplies, and legislative initiatives.
Continue reading “LEGAL CORNER: A Tumultuous 2022 and an Optimistic Look Ahead at 2023”

An essential and important element of any real estate transaction is the agreement entered into by the parties. There are a variety of agreements that are entered into by the various parties in a real estate transaction, such as the listing or agency agreement between the seller and the seller’s agent, the agency agreement between a purchaser and purchaser’s agent and the formal contract of sale entered into between a seller and purchaser relating to the ultimate sale of the property.

While there are certain exceptions where a written agreement is not required, such as a real estate brokerage agreement (discussed further below), it is always recommended that a clear and definitive agreement be entered into so that the rights and remedies of the parties are clearly set forth within the “four corners” of the agreement. In the event of a dispute, the parties will know exactly what their rights are and what remedies are available to them. In Savignano v. Play (see https://bit.ly/3VO8xqz), the Appellate Division strictly applied the four corners doctrine in overturning the lower court’s decision.

Continue reading “LEGAL CORNER: The Contract, The ‘Four Corners’ Doctrine And a Recent Appellate Division Decision”

There are many critical issues real estate licensees and real estate attorneys should be aware of when it comes to representing the estate of a deceased individual. It is important for these professionals to have a basic knowledge of these issues before being formally engaged by an estate, the nominated representative of an estate, or the trustee of a decedent’s trust, to sell real property or a cooperative apartment.

Often individuals who are a named (nominated) executor in the Last Will and Testament, or who is the trustee in a decedent’s Trust, will contact a real estate agent before contacting an attorney in order to sell the property of a decedent because they believe they are automatically authorized to sell the property on behalf of the Estate or Trust. The individual will provide a copy of the decedent’s Will or Trust to an agent and the agent may believe that the agent is authorized to enter into a listing agreement with that person simply because that person is the named executor in the Will or the named Trustee.

Continue reading “LEGAL CORNER: Representing a Decedent’s Estate: Important Issues When Selling Real Property and Co-ops”

While many real estate professionals are familiar with the concept of adverse possession, few consider the issues that can arise when selling and purchasing real property. The concept has been around for ages. In its basic form, the concept allows a person who takes possession of real property, makes improvements to it, possesses it in a public manner, and continues to do so for an extended period of time (10 years or more) continuously, to acquire an ownership interest in the real property.

Adverse possession may also be used to establish ownership rights to a specific tract of land even where a prescriptive or actual easement exists. In a recent decision, CJA Realty Holdings, LP v 14 Phila St. LLC, the Appellate Division, Third Department, deals with this very issue and whether an individual could establish adverse possession rights to a portion of the adjoining owner’s property where there existed an easement for egress and ingress. The case provides a useful review of the doctrine of adverse possession as well as the changes to law that occurred in 2008.

Continue reading “LEGAL CORNER: Recent Court Decision and a Review of Adverse Possession”

Just over a year ago, on Sept. 1, 2021, New York City and surrounding areas were severely affected by Hurricane Ida. In just a few hours that day, unprecedented flash flooding caused horrible death and devastation. The flooding caused by Ida took the lives of 29 people in New Jersey and 16 people in New York City. In New York City, 11 of the individuals died in illegal basement apartments. Sadly, it has been over a year, and very little has been done to address the problems so clearly made evident in the wake of Ida. While there has been no specific legislation introduced, there has been some movement.

On Aug. 30, 2022, the Office of the New York City Comptroller issued an extensive report entitled “Bringing Basement Apartments into the Light” [see https://on.nyc.gov/3L7HCRO] in an attempt to bring the focus back on this critical issue and move forward with the introduction of potential legislation at the city and statewide levels. New York City and the surrounding areas have long had problems with illegal basement apartments, which number in the tens of thousands. With the hurricane season upon us again, it is imperative that state and local leaders act quickly before another tragedy strikes. Findings in the New York City Basement Report estimate that there are between 300,000 and 500,000 individuals living in illegal apartments throughout New York. It is critical for homeowners, tenants, real estate agents, real estate attorneys, and other real estate professionals to be aware of the dangers and the potential liability that exists in connection with these illegal apartments. It is also important that they support legislation in this area.

Continue reading “LEGAL CORNER: The Status of The Legalization of Basement Apartments And Protecting Tenants, a Year After Hurricane Ida”

In New York, as in many other states, the closing process is a long and arduous one and the new Remote Online Notarization (“RON”) law [see https://bit.ly/3SIBHX8] provides one of the tools to speed up the process in the future. Remote notarization laws in New York and across the nation move the closing process one step closer to a full “remote” closing. While more and more people are working remotely and attending meetings and events remotely, it only makes sense that a real estate closing move to a “remote” setting as well.

Continue reading “LEGAL CORNER: The ‘Remote’ Closing and the Future of Remote Online Notarization”

On June 30, 2022, the Supreme Court in Albany County found the “Good Cause” Eviction Statute to be null and void. The Supreme Court in Pusatere v. City of Albany found that Albany’s Good Cause Eviction law (Local Law F of 2021 [see https://bit.ly/3Rt4yOa]) was in direct conflict with and preempted by New York State law. The court’s decision is a major victory for landlords and property owners. The plaintiffs argued that Albany’s Good Cause Eviction law “attempts to regulate rental rates and tenant evictions at the local level, which is preempted by State law.” Even the name of the legislation, “Prohibition of Eviction Without Good Cause Law,” clearly evidences the existence of a conflict as there is no requirement under New York State law to establish “good cause” in order to evict a tenant.

Continue reading “LEGAL CORNER: Major Victory For Landlords: Albany’s Good Cause Eviction Statute Found to be Null and Void”

On June 10th, the U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 8.6% in May from a year ago, which marks the highest increase since December 1981. [See https://bit.ly/3Hg0hZP]. The increase in inflation was much higher than expected and will continue to put downward pressure on the economy into the foreseeable future. Unfortunately, with inflation coming in above expectations, the Federal Reserve must continue on its path of increasing interest rates. Increased interest rates are already having a noticeable impact on the real estate market, which will continue in the coming months.

According to the National Association of Realtors in its monthly report issued on May 19th, existing-home sales fell for a third straight month through April. NAR reported that “Total existing-home sales, https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, slid 2.4% from March to a seasonally adjusted annual rate of 5.61 million in April. Year-over-year, sales dropped 5.9% (5.96 million in April 2021).” Nevertheless, the inventory of available real estate remains at historically low levels, which continues to make this a “seller’s market.”

In the coming months, with demand easing, purchasers may begin to experience increased bargaining power, but for now, it seems that leverage will continue to remain with sellers. It is more critical now than ever before, for real estate agents and attorneys to question whether it is in the best interest of purchasers to waive inspection, mortgage, appraisal contingencies and sale contingencies in order to win a successful bid on a property.

Continue reading “LEGAL CORNER: The 2022 Real Estate Market May Be Slowing But Buyers Are Still Waiving Critical Contingencies”