Over the past several years significant headway has been made in the area of Co-op Disclosure legislation in various areas in New York State, and particularly in Westchester County. While similar co-op transparency legislation has been introduced in New York City and at the state level, those measures have yet to be enacted.
Recently, the decision in Stromberg v East River Housing Corp. [see https://bit.ly/3HkWDPs] brings to light some of the issues that exist with regard to the co-op approval process and the restrictions that burden purchasers and sellers in co-op transactions. This article will review the decision in Stromberg, revisit some of the key requirements under the Westchester Co-op Transparency legislation, and discuss the state of the legislation introduced in New York City and at the state level.
Continue reading “LEGAL CORNER: Recent Co-op Decision: Stromberg v. East River Housing Corp. and a Review of Co-Op Disclosure Legislation”
Since January 1996, “Legal Corner” columnists in Real Estate In-Depth (and the Westchester Realtor prior to that) have had the honor and privilege of providing critical insights, guidance, legal updates, and general information for real estate licensees, attorneys, other real estate professionals, and the entire real estate industry. Since this is going to be the final physical paper print edition before moving to the fully digital, online version of Real Estate In-Depth (and along with it, the Legal Corner), I thought it would be only fitting to take this opportunity to review our firm’s archives (dating back to 1990), and revisit some of the amazing topics and developments covered over the past 33 years.
Continue reading “LEGAL CORNER: An Amazing Look Back and the Exciting Journey Ahead”
The real estate industry has certainly been facing significant legal and economic headwinds in the past few months. On October 31, 2023, the real estate industry was dealt a major blow when a Missouri jury issued a $5-billion verdict against the National Association of Realtors, Inc., Keller Williams, Anywhere, RE/MAX and HomeServices of America (including two of its subsidiaries, HSF Affiliates and BHH Affiliates) in the Burnett-Sitzer case [see https://bit.ly/3Sutacn. The jury found that these defendants were involved in a conspiracy in violation of antitrust law which had the “effect of raising, inflating, or stabilizing broker commission rates paid by home sellers.” The industry and the defendants did not expect this result.
Continue reading “LEGAL CORNER: The Real Estate Industry Under Attack: Major Legal, Economic Obstacles Agents Will Need to Overcome”
On Sept. 22, 2023, New York Gov. Kathy Hochul signed critical legislation amending Sections 262, 265 and 267 of New York’s Real Property Law (“RPL”) known as the Property Condition Disclosure Statement Act (PCDSA) [see https://bit.ly/3FeUEem]. The newly enacted amendments to the act will take effect on March 20, 2024. The original PCDSA (“2002 PCDSA”) went into effect on March 1, 2002.
The Newly Enacted Amendments of the PCDSA
The Removal of the $500 “Opt-Out” Credit
One significant change to the act is the elimination of the provision, which provided that if a seller of a one-to-four family residential real property did not deliver a completed Property Condition Disclosure Statement (PCDS) to a purchaser prior to entering into contract, the seller would be required to provide the purchaser with a $500 credit at closing. This is a significant change in real estate transactions, particularly in downstate New York where almost no seller ever provides the PCDS.
Continue reading “LEGAL CORNER: Critical Changes to the New York Property Condition Disclosure Statement Act Effective on March 20, 2024”
It is disheartening, but this column yet again has to address the very real threats that cyber-attacks and ransomware incidents pose to industries, including the real estate industry, and individuals. Recently there has been a wave of serious cyber and ransomware attacks against well-known companies, such as Rapattoni, one of the largest national companies providing hosting services to more than 100 multiple listing services (MLSs), as well as hotels and casinos, notably Caesars and the MGM Grand in Las Vegas [see https://bit.ly/3LoiFTO].
A few weeks ago, it was also reported that another individual in New York City lost $746,000 in connection with a real estate purchase when she was “duped” into wiring funds to a cybercriminal who hacked into her attorney’s e-mail account. When these attacks occur, the FBI and local law enforcement usually become involved immediately. These attacks result in billions of dollars of losses each year. In connection with ransomware attacks, companies are often forced to pay these criminals substantial amounts in ransom in order to regain access to their systems. On the other hand, when individuals are targeted, many times these individuals lose their entire life savings.
Continue reading “LEGAL CORNER: Ransomware and Cyber Threats: The Real Estate and Other Industries Are Under Attack, Again!”
Over the years, this column has reviewed various court decisions issued by New York courts on the doctrine of “Caveat Emptor” or “Buyer Beware,” which have usually been decided in favor of the seller. Two recent court cases, Striplin v. AC&E Home Inspection Corp. [see https://bit.ly/45kseul] and Wells Fargo Bank, N.A. v. Schepisi [see https://bit.ly/3Kxpf9W], have been decided in favor of the purchaser.
Continue reading “LEGAL CORNER: A Turn of Events: Recent ‘Caveat Emptor’ Decisions That Favor Purchasers”
In June, both the New York State Assembly and Senate approved passage of the Limited Liability Company Transparency Act [see https://bit.ly/3JMhqNu] (the “LLC Transparency Act” or “New York’s Act”). The bill is awaiting signature by Gov. Kathy Hochul and would go into effect 365 days after it is signed. The legislature’s stated purpose of the bill is “to end the practice of anonymous ownership of limited liability companies in New York by defining beneficial ownership, requiring the disclosure of the identities of beneficial owners upon company formation or registration, and publishing beneficial owners of limited liability companies in New York’s publicly searchable business entity database.” One of the key features of a limited liability company, which is to protect the identity of owners from being disclosed publicly, has been simply removed.
Continue reading “LEGAL CORNER: New York’s LLC Transparency Act: Yet Another Attack on Privacy Rights and Real Estate Owners”
Artificial Intelligence (AI) is certainly the new “new frontier” filled with all the promise and all the dangers that customarily accompany any new journey into uncharted territory or newly introduced technology. AI has taken front stage in our daily lives, and it is only the beginning. There are a multitude of articles and news stories that come out each day focusing on AI and its effect on business, education, investment, lending, real estate, manufacturing, the job market and every other aspect of our daily lives.
This nascent industry will undoubtedly and forever change the way people work, live, learn, educate and interact with one another. Many believe it is the next best thing to the iPhone or automobile, others believe it could possibly be the most dangerous invention since the development of the atomic bomb. Either way, it is an important technology that must be understood, developed, controlled and above all, utilized in a careful and thoughtful manner. While AI is a technology that has been in development for decades, it has gained more recent notoriety with the advent of ChatGPT introduced by OpenAI [see https://openai.com]. This article will delve into the promise and perils of AI.
Continue reading “LEGAL CORNER: Artificial Intelligence: The New Frontier”
The Banking Crisis, Commercial Real Estate, the Debt Ceiling, Fears of Recession
In January and February, the stock market had rebounded nicely from a difficult 2022, and while interest rates remained at elevated levels, they were off of the highs reached in November. Both the stock market and real estate market seemed to stabilize somewhat and, while it was evident that the growth experienced in 2020 and 2021 would not be matched, 2023 started off in a positive direction.
Two of the major headwinds, at the time, facing the economy and the real estate market were the continued high rate of inflation, which was on a steady downtrend from its peak of 9.1% in mid-2022, and the Federal Reserve continuing to raise interest rates. There was little discussion or concern about the debt ceiling debate. Fears of recession had also subsided a bit, and many were of the opinion that if there was going to be a recession, it would be a mild one and the market would experience a “soft landing”.
Continue reading “LEGAL CORNER: What a Difference a Few Months Makes”
Various state and federal court decisions have been issued recently impacting the real estate industry. At the federal level, two important decisions have been issued relating to antitrust lawsuits involving the payment of real estate commissions and the Department of Justice’s investigation initiated in 2019 into the National Association of Realtors’ Clear Cooperation Policy and Participation Rule. In New York, two lawsuits uphold the doctrines of “Buyer Beware” and “Time of the Essence”.
Moehrl v. NAR: The Commission Lawsuit Moves Ahead
On March 29th, the judge in Moehrl v. NAR [see https://tmsnrt.rs/3KNdo8j] issued an order granting class certification to the plaintiffs in the case. The class certification ordered in this lawsuit is a crucial ruling issued against NAR and the other defendants. While the case is far from over, a decision against NAR and the other defendants would not only dramatically alter the commission payment landscape across the country but could have a major impact on the entire real estate industry. The plaintiffs in the Moehrl case allege that the requirement that the sellers pay the commission in real estate transactions is a violation of federal antitrust laws by inflating the costs for sellers.
Continue reading “LEGAL CORNER: Important Recent State and Federal Court Decisions”