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Recent ransomware attacks and major hacks have thrust into the spotlight the importance of businesses, including those in the real estate industry, having the necessary protocols and protections in place to protect themselves and their clients from cybercriminals. During the COVID-19 pandemic there has been a substantial rise in cybercriminal activity. The recent ransomware attacks and cyber-attacks on targets such the Colonial Pipeline Co. (which runs a major East Coast fuel pipeline), JBS, S.A. (one of the world’s largest meat processors), the Washington D.C. Metro Police Department, and New York City’s Law Department, to name a few, should make businesses aware of the very real threat of such attacks and the widespread disruption they can cause.
Continue reading “Recent Ransomware and Cyber Attacks: The Real Estate Industry Must Beware!”

On May 4, 2021, Gov. Andrew Cuomo signed legislation (see https://bit.ly/2RIW8bq) extending the statewide ban on certain residential and commercial evictions and foreclosures in New York. The bill extends the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 and the COVID-19 Emergency Protect Our Small Businesses Act. The legislation extends protections prohibiting residential and commercial evictions, foreclosure proceedings and credit discrimination and negative credit reporting related to the COVID-19 pandemic until Aug. 31, 2021.

The bill’s sponsor, New York State Senator Brian Kavanagh, cited the findings of the Center for Disease Control that these moratoriums help prevent the spread of the COVID-19 virus because they provide individuals with a stable place to live. Similarly, President Trump and the CDC had also put in place nationwide bans on evictions. However, on May 5, 2021, a federal judge struck down the CDC’s Order extending the nationwide ban on evictions. The Federal District Court decision would not affect the validity of the New York State ban.
Continue reading “The State of Eviction and Foreclosure Bans in New York and at Federal Level”

Two years ago, on March 4, 2019, the 2nd Circuit Court of Appeals in New York in Francis v. Kings Park Manor, Inc. (see https://bit.ly/2Kd38bo) (“Kings Park Manor I”) held that a landlord could be liable under the Federal Fair Housing Act (see https://bit.ly/2WBzEdH) and the New York State Human Rights Law (see https://dhr.ny.gov/law) for failing to protect a tenant from harassment and discrimination by another tenant. At the time, it was an important decision as it was only the second time a court imposed an obligation on a landlord to take affirmative steps to curtail tenant-on-tenant discrimination.

More than two years later, the 2nd Circuit Court of Appeals reversed course and, in a decision issued on March 25, 2021 (see https://bit.ly/2Ov4rpX) (“Kings Park Manor II”), held that “…landlords cannot be presumed to have the degree of control over tenants that would be necessary to impose liability under the FHA for tenant-on-tenant misconduct.” This decision now limits the exposure that landlords and property managers have under the FHA and NYSHRL.
Continue reading “The 2nd Circuit Reverses Course: Landlord is Not Found Liable Under Fair Housing Laws”

The following occurrences all highlight the importance of real estate licensees having a working knowledge of antitrust laws and dangers associated with any violation of antitrust laws: the recent antitrust lawsuits in the real estate industry, the focus on large technology and social media companies by Congressional leaders, the Department of Justice antitrust lawsuit and settlement with the National Association of Realtors (see https://bit.ly/38o41Iy), and large real estate firms like Zillow becoming licensed brokers and members of multiple listing services.

Brian Levine, Esq., In-House Counsel and Director of Legal Services and Professional Standards for HGAR, highlighted in a recent article (see https://bit.ly/3t5E4W9) the dangers of agents engaging in behavior that could be deemed a violation of federal and state antitrust laws especially where a new player, namely Zillow, has entered the real estate field. On March 9, 2021, a complaint was filed in the United States District Court Western District of Washington in Seattle, by Rex – Real Estate Exchange, Inc. against Zillow, its affiliated entities, Trulia and NAR for antitrust violations (see https://bit.ly/3qy7vyx).
Continue reading “Antitrust Issues are Back in the Spotlight”

On Jan. 8th, the U.S. Department of Labor issued its final rule (“Final Rule”) clarifying the standard for employee versus independent contractor status under the Fair Labor Standards Act (see https://bit.ly/371n8rp). The new rule was set to go into effect on March 8th, however, the Biden administration has delayed the rule’s effective date to May 7th. It may ultimately be withdrawn altogether. Whether or not the Final Rule goes into effect, it is important to review it and the independent contractor versus employee analysis as it relates to the real estate industry.

In New York, and nationwide, it is a widely accepted practice for real estate salespersons to be treated as independent contractors. Over the years there has been litigation brought against brokerage firms because agents have been requested to fulfill mandatory office hours, complete mandatory training and undertake other office responsibilities (e.g., answer phones, attend to the reception desk, etc.) that have traditionally been fulfilled by office staff rather than salespersons. This article will address the state of the law, particularly federal and New York law, as it applies to employment classification.
Continue reading “The ‘New’ Federal Rule and Employee Versus Independent Contractor Analysis”

On Dec. 27, 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 [see https://bit.ly/3qb3WOP] which passed overwhelmingly by both the House and Senate. The Appropriations Act is the largest bill (over 5,000 pages) ever passed by Congress. It includes $900 billion in pandemic relief funds to assist businesses and provide important funding and resources for vaccination measures. This article will focus on the major aspects of the COVID-19 relief measures included for businesses.

Continue reading “The New COVID-19 Relief Package: Highlights of the Second Round”

On March 4, 2019, the 2nd Circuit Court of Appeals in New York in Francis v. Kings Park Manor, Inc. (see https://bit.ly/2Kd38bo) found that a landlord can be held liable under the Federal Fair Housing Act (“FHA”) (see https://bit.ly/2WBzEdH) and the New York State Human Rights Law (“NYSHRL”) (see https://dhr.ny.gov/law) for failing to protect a tenant from harassment and discrimination by another tenant. While the Court’s holding may seem an obvious result, especially in light of the egregious behavior of the defendants, the issue decided in this case is a novel one and it is only the second time that a similar issue has been reviewed by the courts (see Wetzel v. Glen St. Andrew Living Community, LLC (U.S. Dist. Ct. Northern Dist. Ill. (July 27, 2016) at https://bit.ly/2MEXocA). It is important for landlords and property managers to know that their exposure to liability under the FHA has been expanded. Real estate professionals should also be aware of the decision in Francis, as it could significantly impact their landlord and property management clients.
Continue reading “Proposed Changes to the DOS Advertising Regulations and NAR’s New Clear Cooperation Policy”

In a recent decision, Widlitz v. Douglas Elliman, LLC, (see https://bit.ly/2AZ2BTH), the plaintiff commenced an action against her real estate broker and attorney based on a variety of claims, such as breach of fiduciary duty, negligent misrepresentation, and fraudulent misrepresentation, because the newly constructed condominium unit she was in contract to purchase did not have views of New York City but rather views of the walls of neighboring buildings. Both the real estate broker and attorney moved to dismiss the lawsuit. The Supreme Court (New York County) upheld the motion to dismiss made by the attorney, however, the Court held that there was a sufficient basis for the lawsuit to move ahead against the plaintiff’s real estate broker.
Continue reading “I Told You That I Wanted A View of the City!”

In a recent decision, Sanjana v. King (see https://bit.ly/2kDGf5K), the Appellate Division, First Department, affirmed the Supreme Court’s decision (see https://bit.ly/2Mw924T) which held that a seller could retain the purchasers’ downpayment of $110,000 as liquidated damages where the purchasers failed to timely cancel the contract of sale in accordance with its terms when the purchasers obtained a conditional mortgage commitment and the lender refused to move forward with the loan.

The Relevant Mortgage Contingency Provisions in Sanjana

The parties entered into a contract for the sale of a condominium unit in New York City. The standard language in the contract provided as follows: “The obligations of Purchaser hereunder are conditioned upon issuance, on or before thirty (30) days from the date hereof (the “Commitment Date”) of a written commitment from an Institutional Lender pursuant to which such Institutional Lender agrees to make a loan other than a VA, FHA or other governmentally insured loan to Purchaser, at Purchaser’s sole cost and expense, of $800,000 or such lesser sum as Purchaser shall be willing to accept.” This is customary language and is similar to language included in many of the various forms of contract (see below).

Continue reading “My Lender Would Not Proceed with My Loan and I Just Lost My Downpayment!”

Since the passage of the Statewide Housing Security and Tenant Protection Act of 2019 (the “2019 Act” or “Act”) [see https://bit.ly/2xA6lth] on June 14, 2019, the Hudson Gateway Association of Realtors, Inc. (“HGAR”) has been receiving many calls from its members and licensees regarding the Act. Among some of the questions asked are: (1) whether additional pet deposits can be collected by a landlord; (2) whether the new rental laws apply only to rent regulated apartments or all apartments; (3) whether the 2019 Act applies only to New York City tenants or tenants statewide; whether the Act applies to one-to-four family residential; (4) whether a landlord is able to request the first and last month’s rent; and (5) whether a landlord is allowed to require a tenant to reimburse for the rental fee. The 2019 Act is causing widespread confusion amongst real estate professionals throughout the state and even many legal experts are having difficulty interpreting the changes. On July 15th several landlords filed a lawsuit claiming that the new legislation is unconstitutional. HGAR and the Bronx-Manhattan Association of Realtors on August 7th hosted a panel of real estate experts [see https://bit.ly/2yZ5brL] who discussed the widespread impacts that the 2019 Act will have on the rental market as well as the sale market for rental and investment properties. Overall, the consensus amongst real estate professionals is that these new laws have caused confusion and angst.
Continue reading “The New Rent Laws: Confusion and Anger”