PRACTICAL REAL ESTATE LAW
Fourth Edition
Daniel F. Hinkel
New York State Supplement
By
Cathryn F. Kent, Esq.
Finger Lakes Community College
1
TABLE OF CONTENTS
Chapter 1: Introduction to the Law of Real Property
Real Property Law
5
Ethics: An Introduction
6
Chapter 2: Concurrent Ownership
Types of Concurrent Ownership
7
7
Chapter 3: Surveys and Land Descriptions
The Survey
5
9
9
Chapter 4: Public Regulations and Encumbrances
Public Regulation
10
10
Private Encumbrances
12
Chapter 5: Easements and Licenses
14
Easements 14
Chapter 6: Contracts 15
Requirements of a Valid Contract
15
Written Agreements 17
Real Estate Broker 17
Listing Agreements
17
Chapter 7: Preparation and Review of a Real Estate Contract
Elements in a Real Estate Contract
18
2
18
Chapter 8: Deeds
Types of Deeds
21
21
Requirements of a Valid Deed
21
Chapter 9: Financing Sources in Real Estate Transactions
Types of Loans
23
Permanent and Construction Loans
23
Chapter 10: Legal Aspects of Real Estate Finance
Mortgages, Deeds of Trust, and Security Deeds
Foreclosure and Other Mortgage Remedies
Chapter 13: Title Insurance
27
28
Bona Fide Purchaser for Value Rule
Examining Title to Real Property
24
27
Security Agreement and Financing Statement
Chapter 12: Title Examinations
24
24
Chapter 11: Mortgage Forms and Provisions
Owner’s Policy
23
28
29
30
30
Commitments for Title Insurance
30
Chapter 14: Real Estate Closings
31
Contact with Seller, Purchaser, and Broker by the Legal Assistant
The Closing and Aftermath
32
Chapter 15: Government Regulation of Real Estate Closings
3
34
31
Chapter 16: Real Estate Closing Forms and Examples
Chapter 17: Condominiums and Cooperatives
Time-Shares
36
36
Chapter 18: Leases
37
Common Law and Leases
37
Commercial Lease Provisions
38
Appendix A: Property Condition Disclosure Statement
Environmental
Structural
35
40
42
43
Appendix B: Durable General Power of Attorney, New York Statutory Short Form
4
48
CHAPTER 1
INTRODUCTION TO THE LAW OF REAL PROPERTY
REAL PROPERTY LAW
Textbook page 2
Laws That Govern Real Property Transactions
Textbook page 2
The laws governing real property transactions in the State of New York are primarily found in
the following statutes:
New York Real Property Law
New York Real Property Actions and Proceedings Law
However, it should be noted that many other New York State statutes contain provisions
regarding real property and its transfer, several of which will be mentioned in this supplement.
Further, case law also serves as a primary source of real property law.
Real Property versus Personal Property
Textbook page 2
Real property is narrowly defined to include “real estate, land, tenements, and hereditaments”
whether tangible or intangible. NY Gen. Const. Law § 40. Personal property is broadly defined to
be anything that is subject to ownership which is not real property. NY Gen. Const. Law § 39.
Physical Elements of Real Property
Textbook page 2
Water Rights
Textbook page 3
5
New York State follows the common law doctrine of riparian rights.
Fixtures
Textbook page 5
New York UCC 9-102(41) defines fixtures as “goods that have become so related to particular
real property that an interest in them arises under real property law.”
Methods of Acquiring Ownership to Real Property
Textbook page 7
Inheritance and Devise
Textbook page 7
In New York, if an individual dies without a Will, the State provides for the manner in which
property will be distributed among the decedent’s legal heirs. NY EPTL § 4-1.1. The law further
provides that if a person dies without a Will and there are no identifiable legal heirs, the property
escheats to the State. NY EPTL § 4-1.5.
Adverse Possession
Textbook page 7
In New York, in order to obtain real property through adverse possession, one must possess the
property for 10 years if the property is privately owned and for 20 years if the property is owned
by the State. NY Real Prop. Acts. Law § 511; NY CPLR §§ 211 & 212.
Ethics: Introduction
Textbook page 14
The ethical rules which govern New York attorneys are called the “Code of Professional
6
Responsibility” and are found in the New York Judiciary Law.
7
CHAPTER 2
CONCURRENT OWNERSHIP
TYPES OF CONCURRENT OWNERSHIP
Textbook page 18
New York recognizes three forms of co-ownership: tenancy in common, joint tenancy with rights
of survivorship, and tenancy by the entirety. It does not recognize community property laws.
Tenancy in Common
Textbook page 19
In New York, a deed to two people who are not legally married to each other creates a tenancy in
common, unless otherwise indicated. NY EPTL§ 6-2.2.
Partition
Textbook page 21
Real Property Actions and Proceedings Law Article 9 provides for partition proceedings.
Tenancy by the Entirety
Textbook page 21
A transfer of real property to a husband and wife in the state of New York will create a tenancy
by the entirety unless the deed clearly indicates otherwise. NY EPTL § 6-2.2.
Dower and Curtesy
Textbook page 23
New York abolished dower and curtesy rights for couples who were married after September 1,
1930, and replaced it with the Elective Share Statute discussed in the following section.
8
Elective Share
Textbook page 23
In New York a child can be disinherited but one spouse cannot totally disinherit the other spouse.
Since 1930, a spouse in New York has had a right to “elect” against the Will of his or her
deceased spouse if the decedent was a domiciliary of New York. New York EPTL §§ 5-1.1 & 51.1-A. The right of election is calculated upon the decedent’s gross estate plus testamentary
transfers and is either the greater of fifty thousand dollars or one-third of decedent’s net estate.
The elective share may be exercised by either a surviving husband or a surviving wife,
irrespective of gender.
9
CHAPTER 3
SURVEYS AND LAND DESCRIPTIONS
In New York, several methods are utilized for the legal description of real property; the most
prevalent method is the metes and bounds description.
THE SURVEY
Textbook page 37
One of the most important elements in the contract of sale or deed is an accurate description of
the property. Street addresses are not legal descriptions. Not only must the buyer inspect the
property she/he is purchasing, but she/he must know its exact location and size and be able to
identify easements and encroachments. The buyer will want to visually note any structural
changes as this could be a “red flag,” and must make sure the proper building permits and final
certificate of occupancy were obtained. A survey that states “proposed dwelling” is not
acceptable. Any structural changes or improvements to the property that are not shown on the
existing survey may result in the buyer having to obtain a new survey. The actual dwelling and
any additions should be noted in detail on the survey along with the boundaries of the property
and other significant findings regarding the same.
When representing a seller in a real estate transaction, the existing survey should be reviewed as
soon as possible. If the survey is complete and recently prepared, there might not be a need to
have a new survey done; an “updated survey” may be sufficient. This will save the client both
time and money. However, if the seller has been in the home a number of years, or there have
been physical changes to the property, the client will most likely have to order a new survey. It
will be up to the buyer’s attorney, lending company, and title insurance company to determine
what will be considered to be an acceptable survey.
10
CHAPTER 4
PUBLIC REGULATIONS AND ENCUMBRANCES
PUBLIC REGULATION
Textbook page 67
Zoning
Textbook page 67
New York gives zoning powers to local government authorities. They determine the use to which
a particular parcel can be put. All real property within a municipality is divided into certain
zoning districts. In New York, zoning districts are usually identified by a letter of abbreviation: R
(residential); C (commercial); and I (industrial). There are classifications within each of these
categories, such as R-1 (single family residential) and C-1 (commercial-retail). Zoning can affect
the building height, building size, type of structure, and so on. New York State and local
governments also have regulations to preserve buildings in historic areas. These are called
“landmark preservation districts” and owners of properties in these areas may be restricted in
their ability to alter the facade or even to choose which color paint will be used.
In New York, the various levels of government have planning commissions that prepare master
plans and set out zoning districts. If an area is zoned for single-family residences, there may be a
reason to request a variance, that is, a right to improve property in a way not authorized by
existing zoning laws and regulations. It may involve placing a building closer to the building line
than previously authorized, or it may require a change form commercial use to residential use.
The zoning board of the local municipality would have a public hearing after giving notice to all
neighboring property owners and the board would decide whether to permit or deny the variance.
Building Codes and Subdivision Regulations
Textbook page 68
11
New York State, along with local governments, has specific building standards called building
codes. These codes require certain materials for electrical wiring and so on. Before one can build,
he or she must get a building permit from the local municipality; municipal officials will verify
that the proposed building is in compliance with building codes and zoning ordinances. After the
structure is built, the appropriate official will then issue a certificate of occupancy (C of O).
Environmental Protection Laws
Textbook page 68
New York State has environmental conservation laws to protect the environment. The purpose of
these laws is “to conserve, improve, and protect its natural resources and environment and
control water, land, and air pollution, in order to enhance the health, safety, and welfare of the
people of the state and their overall economic and social well being.” NY Envtl. Conserv. Law §
1-0101. The Department of Environmental Conservation (DEC) is the New York State agency
which regulates the environmental laws of New York.
Power of Eminent Domain
Textbook page 72
In New York, once the government has determined that private property is needed for a public
purpose, the property owner has no choice but to sell. The process of taking private property for a
public good is governed by the New York Eminent Domain Procedure Law.
Taxation
Textbook page 73
In New York, the local municipalities impose taxes on real estate and these pay for many local
services such as fire, police, schools, libraries, and water and sewer districts. These taxes are
imposed on real estate based upon the property’s assessment. Property is periodically reevaluated and a uniform tax rate for the municipality is applied. More and more municipalities
are moving to full assessment. The more traditional method would assess the property for a
12
fraction of its value then the tax rate would be based on that fractional share. In full assessment,
the property is assessed for its fair market value and the tax rate is based on that fully assessed
amount. This is thought to be more equitable, with more valuable properties having higher taxes.
Each year the property owner has a period of time to protest the assessment (i.e., file a grievance)
and if the assessment is not changed, the property owner may begin a lawsuit to reduce it.
New York allows a partial exemption from property taxes for veterans and religious
organizations. In addition, New York has enacted the School Tax Relief Exemption, common
known as the STAR Program. NY Real Prop. Tax Law § 425. The STAR Program grants partial
to full exemptions from school taxes for persons with lower incomes or persons over the age of
65.
County, city, town and village taxes are collected in January of each year; school taxes are due in
September of each year. When representing a buyer in a real estate transaction, it is important to
make sure that all taxes are paid to-date; otherwise, any taxes owed will become a priority lien
upon the real property. Further city and county tax liens are not subject to a statute of limitations
and remain valid until paid. NY Real Prop. Tax Law § 902.
PRIVATE ENCUMBRANCES
Textbook page 74
Judgment Liens
Textbook page 74
In New York State, a judgment lien is good for 10 years and can be renewed. NY CPLR § 5203.
A judgment may be executed by forcing the sale of the debtor’s property.
Mechanics’ and Materialmen’s Liens
Textbook page 74
In New York, mechanics’ and materialmen’s liens are governed by the New York State Lien law.
13
Any contractor, subcontractor, or supplier/sub-subcontractor can file a lien on real property for
services rendered or materials supplied. NY Lien Law § 3. In the State of New York, it is
important to distinguish whether the work is to be (or was) performed on privately-owned real
property or on public property. If the work is to be (or was) performed on private property, the
lien will attach to the real property itself and will be used as a guarantee for payment. If the work
is to be (or was) performed on publicly-owned property, the lien will attach to money set aside by
the appropriate governmental authority for the public improvement. NY Lien Law § 5.
In New York, a notice of a mechanics’ or materialmen’s lien must contain the statutory
information that follows:
1.
The name and residence of the lienor (the contractor, subcontractor, or supplier); and if
the lienor is a partnership or a corporation, the business address of such firm, or corporation, the
names of partners and principal place of business; and if a foreign corporation, its principal place
of business within the state;
2.
The name and address of the lienor’s attorney, if any;
3.
The name of the owner of the real property against whose interest therein a lien is
claimed, and the interest of the owner as far as known to the lienor;
4.
The name of the person by whom the lienor was employed, or to whom he or she
furnished or is to furnish materials; or, if the lienor is a contractor or subcontractor, the person
with whom the contract was made;
5.
The labor performed or materials furnished and the agreed price or value thereof, or
materials actually manufactured for but not delivered to the real property and the agreed price or
value thereof;
6.
The amount unpaid to the lienor for such labor or materials.
7.
The time when the first and last items of work were performed and materials were
furnished;
14
8.
The property subject to the lien, with a description thereof sufficient for identification;
and if in a city or village, its location by street and number, if known;
NY Lien Law § 9.
Once prepared, a Notice of Lien is filed in the Office of the Clerk of the county in which the real
property is located. NY Lien Law § 10. The notice may be filed at any time but no later than 4
months after completion of the work or supplying of materials for a single-family dwelling and 8
months on all other properties. NY Lien Law § 10. The lien attaches immediately upon filing.
Within 30 days of filing the Notice of Lien with the appropriate county clerk, a copy of the
Notice of Lien must then be served on the property owner (and, if appropriate on the contractor—
if the lien was filed by a subcontractor). Within 35 days of filing the Notice of Lien, the lienor
must file an affidavit of such service with the county clerk. NY Lien Law§ 11. Failure to file an
affidavit of service of the Notice of Lien within the requisite time frame will be fatal to the lien.
If the lienor follows the appropriate statutory requirements, the lien will be good for 1 year and
may be renewed. NY Lien Law § 17.
15
CHAPTER 5
EASEMENTS AND LICENSES
EASEMENTS
Textbook page 96
Creation of Easements
Textbook page 96
Express Grant
Textbook page 97
Easements created by express grant in the State of New York are prepared with the same
formalities required for deeds. NY Real Prop. Law § 243.
Consideration
New York does not require consideration be exchanged in the granting of an easement.
Prescriptive Easement
Textbook page 100
Similar to obtaining property via adverse possession, a prescriptive easement in the State of New
York must meet the requirements of open, adverse, and notorious use for 10 years. NY RPAPL
§521; Thury, et. al. v. Britannia Acquisition Corp., 292 A.D. 2d 373, 738 N.Y.S. 2d 82 (Second
Dept., 2002).
16
CHAPTER 6
CONTRACTS
Almost all real estate transactions begin with an agreement called a contract. Contracts are used
to bind the parties and may provide the basis for the purchaser obtaining a mortgage. The
contract is one of the most important documents in the real estate transaction, as it dictates the
contents of the “deal.” When problems arise, the parties go back to see what the contract
provided for. New York requires all contracts for the sale of real property to be in writing to be
enforceable. New York adopted the “plain language law” for contracts which requires that certain
written agreements for the sale or lease of residential property be written in a clear and coherent
manner using everyday words.
All sellers of residential real property in the State of New York (other than those exempted by
statute) must provide a signed Property Condition Disclosure Statement to the buyer prior to
entering into a purchase contract. If the buyer and seller then enter into a contract, the buyer
must, as well, sign the statement which will be attached to the back of the purchase and sale
contract. NY Real Prop. Law §§ 462, 463. The statute requires the seller to inform the buyer of
the property’s condition as is known to the seller at the time of contract; in other words, the
seller is not required to undertake an inspection of the real property or to search public records
for information regarding the same. A copy of the statutory form of the statement is found in
Appendix A of this supplement.
REQUIREMENTS OF A VALID CONTRACT
Textbook page 113
Legal Capacity to Contract
Textbook page 113
To enter into a binding contract for real estate in New York, a person must be 18 years old and of
sound mind. Persons younger than 18 may enter into a valid contract, but it is voidable by the
minor until a reasonable time after reaching the age of 18.
17
Corporations
Textbook page 114
A contract entered into by a corporation must be signed by the corporate officer as follows: XYZ
Corp. by DJK, President. It is always best to get a copy of the corporate resolution authorizing
the sale.
Partnerships
Textbook page 114
A general partner of a partnership in New York may enter into a contract for the partnership
unless the partnership agreement provides otherwise. In general, a review of the partnership
agreement should be done. It is not necessary for all of the partners to join in.
Limited Liability Companies
Textbook page 115
A member of a limited liability company in New York may enter into a contract for the company
unless the operating agreement provides otherwise. A review of the operating agreement should
be completed.
Personal Representatives
Textbook page 115
A fiduciary may be an executor or an administrator. The fiduciary’s authority to act should be
verified.
Trustees
Textbook page 115
Trustees in New York are bound by the Prudent Investor Act which requires that they always act
18
in the best interest of the trust and its beneficiaries. The trustee may be granted additional powers
by the trust document. The document should be carefully reviewed.
Agents
Textbook page 116
New York rules governing powers of attorney are found in the New York General Obligations
Law § 5-1501. The law provides that the principal must initial each power that she or he wants
the attorney in fact to exercise. The principal can choose whether to grant durable powers, that is,
powers which survive disability or incapacity. The power of attorney form cannot be used to
authorize health care decisions for the principal. It is important to note that a power of attorney
expires at the death of the principal. Therefore, a power of attorney cannot execute a deed
subsequent to the owner’s death. A sample New York power of attorney is included in Appendix
B of this supplement.
WRITTEN AGREEMENTS
Textbook page 118
All contracts for the transfer of real property (other than a lease for less than 1 year in duration)
in the State of New York must be in writing. NY Gen. Oblig. Law § 5-703.
REAL ESTATE BROKER
Textbook page 123
The New York Secretary of State, through the Division of Licensing Services, has proscribed the
laws for the employment of a real estate broker. The manual issued by the Department of State
states that a real estate broker’s license does not give one the right to give legal advice or to draw
up legal documents. There are standard forms for real estate transactions, but one must have legal
knowledge to fill-in the blanks, to delete clauses, and to choose additional clauses. Traditionally,
real estate brokers fill-in contract forms which have been approved by local bar associations.
LISTING AGREEMENTS
19
Textbook page 125
There are three forms of listings in New York: (1) open listing; (2) exclusive agency listing (if
you, the property owner, find a buyer, you will not have to pay a commission to the broker); and
(3) exclusive right to sell (if you, the property owner, find a buyer for your house or if another
broker finds a buyer, you must pay the agreed upon commission to the broker). New York does
not allow the use of an automatic extension of a listing agreement.
20
CHAPTER 7
PREPARATION AND REVIEW OF A REAL ESTATE CONTRACT
Many times an attorney’s initial notification of representation of a client in a real estate
transaction occurs when the purchase and sale contract is faxed to his or her office. The attorney
will generally have 5 business days to review the same and send an approval letter to the other
party’s attorney.
ELEMENTS IN A REAL ESTATE CONTRACT
Textbook page 137
The Property
Textbook page 138
The property is generally identified by its common description: 121 Elm Street, Victor, New
York, and by its structural features: a single family dwelling with an attached garage. The
primary aim of the description is that the property in question is clearly identifiable from all other
real property.
Any personal property to be included in (or excluded from) the sale should be described in detail;
for example, the contract might state, “Items to be included in the sale are as follows: dining
room drapery, kitchen microwave, and front porch swing; items to be excluded from the sale are
as follows: dining room crystal chandelier.” The more detailed the description of such personalty,
the less likely there will be confusion as to what will stay and what will go at closing.
The Method of Payment
Textbook page 139
In New York, the most common method of payment is by certified or cashier’s check at closing,
made payable to the seller. If the purchaser is seeking FHA or VA financing, the contract must
state that. If the purchaser is not seeking VA or FHA financing, the mortgage contingency will
21
provide for a conventional loan.
22
Seller Financing
Textbook page 140
If seller takes back a mortgage, the contract should indicate who will prepare the mortgage
documents.
Possession of the Property
Textbook page 142
In New York, prepossession by buyers or post-possession by sellers is somewhat common. In
these situations, the attorneys generally draft a separate agreement which provides the parties
with additional protections in the unfortunate event that a closing fails to occur or sellers refuse
to vacate.
Closing or Settlement Documents
Textbook page 143
Generally, the contract sets a closing date which is interpreted to be “on or about” such date, and
the parties normally have a reasonable period, usually 60 days, to close. Closing rarely takes
place on the date called for in the contract. Further the contract will provide a location for the
closing to occur. Once again, closing rarely takes place at the location specified, which is usually
the county clerk’s office. The closing is more likely to occur at the lender’s attorney’s office.
Condition of the Property and Risk of Loss
Textbook page 145
New York follows the Uniform Vendor and Purchaser Risk Act, which provides that the seller
(vendor) must bear the loss from destruction or a taking by eminent domain which occurs before
the title passes to the purchaser or the purchaser takes possession, whichever is earlier. NY Gen.
23
Oblig. Law § 15-1311.
Time Is of the Essence
Textbook page 149
As stated previously, a real estate closing rarely, if ever, takes place on the date indicated in the
contract. However, if the contract or some later memorandum states “time is of the essence,”
then the closing date is crucial and the contract must be performed on or before that date.
Whoever refuses to close on or before the specified date is in default and liable for damages.
Zahl v. Greenfield, 162 A.D. 2d 449, 556 N.Y.S. 2d. 393 (Second Dept., 1990). This type of
clause could penalize either side and should be used with caution.
Contingencies
Textbook page 150
Contract clauses that are conditional, such as one conditioned on the purchaser obtaining a
mortgage commitment, are truly “escape” clauses for the buyer. The seller always wishes to limit
these. In New York, many contracts are sold “subject to” a satisfactory engineer’s report, termite
report, septic report, water report, or radon report. These conditions normally must be satisfied
within a short period, that is, the purchaser has 2 weeks to obtain such reports and notify the
seller if they are acceptable.
Execution
Textbook page 152
In New York, signatures of the buyer and seller on real estate contracts are customarily
witnessed.
24
CHAPTER 8
DEEDS
TYPES OF DEEDS
Textbook page 204
Commonly, deeds in the State of New York are known as:
1. Deed with Full Covenants (General Warranty Deed)
New York employs the same six covenants men tioned in the main text.
2. Bargain and Sale Deed (Limited Warranty Deed)
3. Quitclaim Deed
4. Executor’s Deed
5. Referee’s Deed in Foreclosure
6. Referee’s Deed in Partition
BASIC REQUIREMENTS OF A VALID DEED
Textbook page 207
The requirements for a valid deed in New York are:
1. Identifiable grantor and grantee;
2. Recital of consideration (generally the consideration mentioned in the deed is not actual but a
nominal amount such as $10.00);
3. Granting clause (using words of conveyance, such as “I hereby grant, covenant and demise”);
4. Proper designation of the real property in question (generally the legal description of the
25
same); and
5. Signature and acknowledgement of the grantor.
NY Real Prop. Law § 291; NY Real Prop. Law § 243; Cohen v. Cohen, 188 A.D. 933, 176
N.Y.S. 893 (Second Dept., 1919); McGurl v. Burns, 192 Misc. 1045, 81 N.Y.S.2d 51 (Supreme
Ct., Kings Co., 1948).
If the deed is to be recorded in the appropriate county clerk’s office, it must contain the addresses
of both the grantor and the grantee. NY Real Prop. Law § 333. Finally, in order to properly
transfer the property, the deed must be delivered to the grantee and the grantee must accept the
same. Diamond v. Wasserman, 8 A.D.2d 623, 185 N.Y.S.2d 411 (Second Dept., 1959).
26
CHAPTER 9
FINANCING SOURCES IN REAL ESTATE TRANSACTIONS
TYPES OF LOANS
Textbook page 239
Along with the various types of loans mentioned in the main text, the State of New York
Mortgage Agency (SONYMA) is an important source of money for New York homebuyers.
SONYMA’s sale of tax-exempt and taxable bonds allows it to finance mortgages for qualified
New York homebuyers at a lower interest rate and with a lower down payment than would
otherwise be available to them. Homebuyers must not exceed income guidelines and the property
in question must not exceed certain predefined limits. This program is generally available to firsttime homebuyers or those buying in qualified areas within the state.
Further information about SONYMA’s programs can be found on its Web site:
http//:www.nyhomes.org/sony/sonyma.html.
____________
PERMANENT AND CONSTRUCTION LOANS
Textbook page 241
Payment Plans
Textbook page 242
New York recognizes “reverse” mortgages. NY Banking Law § 6-h; NY Real Prop. Law § 280;
NY Real Prop. Law § 280-a. These mortgages do not amortize, but are future advances of
principal and deferred interest. The loan generally matures when the borrower dies. This allows
the elderly to get access to equity that has built up in their home and enables them to live more
comfortable lives. The homeowner gets a monthly payment. With each payment, the debt rises
and interest is deferred until the loan is paid off.
27
28
CHAPTER 10
LEGAL ASPECTS OF REAL ESTATE FINANCE
MORTGAGES, DEEDS OF TRUST, AND SECURITY DEEDS
Textbook page 266
New York recognizes mortgages, deeds of trust, and security deeds.
Cancellation or Satisfaction of Mortgage
Textbook page 271
Once a mortgage has been paid in full, the mortgagee must sign a satisfaction of mortgage,
deliver the same to the mortgagor, and file it in the appropriate county clerk’s office. NY Real
Prop. Law § 275.
FORECLOSURE AND OTHER MORTGAGE REMEDIES
Textbook page 273
Types of Foreclosure
Textbook page 273
New York recognizes both judicial foreclosures and power of sale foreclosures; however, the
former is the more widely used method as there are strict limitations on the latter. NY Real Prop.
Acts. §§ 13 & 14.
After a default on the payment of the debt the mortgage secures, the mortgagee may foreclose. A
lawsuit is commenced against the defaulting party. Further, any other interested parties (tenants,
secondary mortgagors, mechanic lienors, etc.) must be brought into the lawsuit as proscribed by
statute. NY Real Prop. Acts. § 1311. They are served with a summons and complaint, and the
parties are given an opportunity to raise any defenses.
29
If the defendant does not submit an answer within the proscribed statutory time frame, he or she
will be in default. If the defendant does submit an answer or otherwise appear in the action
within the requisite time, the case will proceed to trial. Whether there is a default or the plaintiff
prevails at trial, the court will enter a judgment of foreclosure and sale and direct that the
mortgaged premises be sold to satisfy the debt. NY Real Prop. Acts. § 1351.
In New York, a judicial foreclosure requires a Notice of Sale to be published once a week for 4
successive weeks or twice a week for 3 consecutive weeks in a newspaper in the county where
the property is located. NY Real Prop. Acts. § 231. The statute’s requirements regarding
publication are exact and must be followed accurately. At the foreclosure sale, the court
appointed referee will conduct the sale by reading the terms of sale out-loud. NY Real Prop.
Acts. § 231. The lender may bid on the amount outstanding on its loan, and the highest bidder
will prevail. After the sale, the court appointed referee will execute a Referee’s Deed. NY Real
Prop. Acts. § 1353. If, at the foreclosure sale, the debt is not paid off, the lender may get a
deficiency judgment for the balance, provided the sale results in less money than the judgment in
foreclosure. NY Real Prop. Acts. § 1371. The purchaser at a foreclosure sale takes title clear of
any claims of the parties to the foreclosure action. NY Real Prop. Acts. § 1353.
Power of Sale Foreclosure
Textbook page 274
In 1998 New York adopted the power of sale form of foreclosure. However, because of the
absence of judicial oversight, this form of foreclosure has strict statutory requirements which
must be followed precisely in order to assure the mortgagee that the sale will not be invalidated.
NY Real Prop. Acts. Article 14.
A power of sale foreclosure is not available to most mortgages securing residential real property
as provided in the following statutory section:
(a)
a residential building containing less than six dwelling units, including structures and
improvements appurtenant thereto, or
30
(b)
a residential condominium unit in a residential building owned in a condominium form of
ownership, or
(c)
a residential building, including structures and improvements appurtenant thereto, owned
by a qualified cooperative apartment corporation, or
(d)
a building located in a city with a population of one million or more where the number of
units occupied by residential tenants is equal to or greater than sixty-five per centum of the total
number of units in the building, containing a provision that, upon a default of the mortgage, or
the note, bond, or other obligation secured thereby, the mortgagee shall have the right to sell the
mortgaged property.
NY Real Prop. Acts. § 1401.
Effect of a Valid Foreclosure Sale
Textbook page 274
The right of redemption is extinguished upon the sale of property at foreclosure and the
successful bidder owns the property. NY Real Prop. Acts. §§ 1352 & 1410.
31
CHAPTER 11
MORTGAGE FORMS AND PROVISIONS
Security Agreement and Financing Statement
Textbook page 340
If the Uniform Commercial Code-1 (UCC-1) Statement is filed as a fixture filing, it will be filed
in the appropriate county clerk’s office where the real property to which it refers is located.
However, if the UCC-1 Statement is not to be filed as a fixture filing, it must be filed with the
Secretary of State located in Albany. NY UCC § 9-501.
32
CHAPTER 12
TITLE EXAMINATIONS
BONA FIDE PURCHASER FOR VALUE RULE
Textbook page 358
In New York, all instruments affecting the chain of title must be recorded in the appropriate
county clerk’s office or be void as to any subsequent bona fide purchaser for value. NY Real
Prop. Law §§ 266 & 291; Doyle v. Lazzaro, 33 N.Y. 2d 981, 309 N.E. 2d 138, 353 N.Y.S. 2d
740 (1974).
Recording Statutes
Textbook page 360
New York is a “race-notice” jurisdiction. Priority is established by the date of recording, not the
date on the deed or document. Therefore, it is important that all documents are recorded
promptly. NY Real Prop. Law §§ 291 & 317.
Practice Tips for Ordering a Title Examination
Textbook page 362
While it is best to order a title examination as soon as possible, this is usually not done until the
client obtains a mortgage commitment. At the closing, the title agent calls in to make certain
there are no changes in the quality of title. New York title companies insure the gap between the
closing and the recording of the instruments.
Information Needed to Do an Examination
Textbook page 363
Along with the information needed to order a title examination suggested by the main text, many
33
New York counties require owners to have a document called an “Abstract of Title.” An Abstract
is a certified compilation of the documents recorded at the appropriate county clerk’s office
which affect the premises. An Abstract is created by searching the county clerk’s office records
and must begin with a warranty deed. Attorneys examine the Abstract of Title to determine the
status of the title to the premises. An Abstract is updated or continued each time a transaction
occurs with respect to the premises. Either attorneys or title insurance companies may prepare
updates of the Abstract of Title.
EXAMINING TITLE TO REAL PROPERTY
Textbook page 364
Period of Examination
Textbook page 364
In New York, a search usually goes back 40 to 60 years. If a problem is discovered with the title,
it may go back even further. The search will begin in either the grantor/grantee index or the lot
and block index, depending on the county being searched.
Other Things to Examine
Textbook page 366
Judgments
Textbook page 366
Money judgments in New York are good for 20 years. NY CPLR § 211. The title company does
an update of the title search up to the time that title closes to make sure that no last minute
judgments have been filed.
Probate Court Records
Textbook page 368
34
Probate Court is called “Surrogate’s Court” in New York.
Role of a Legal Assistant and Practice Tips
Textbook page 376
A legal assistant will generally order, and may conduct, the title search at the county clerk’s
office; however, the actual title examination will be done by the attorney.
35
CHAPTER 13
TITLE INSURANCE
OWNER’S POLICY
Textbook page 383
In New York, when a mortgagee title insurance policy is being issued, all borrowers must be
notified that they have the right to purchase an owner’s title insurance policy which equals the
amount of the market value of the property in question at the time of the discovery of the title
defect. NY Ins. Law § 6409 (c).
COMMITMENTS FOR TITLE INSURANCE
Textbook page 397
After the commitment, but no later than the closing, the title company runs a “continuation”
search to make sure there are no new judgments or liens affecting the premises. In New York, the
legal assistant reviews the title report and makes sure all the exceptions can be satisfied prior to
or at closing.
In the New York City area, law firms do not generally act as title agents. In upstate New York,
attorneys often act as agents for title insurance companies and prepare the title insurance binder,
handle the recording of closing documents, mark up the title binder at closing, and then issue the
final policy, post-closing.
36
CHAPTER 14
REAL ESTATE CLOSINGS
Closing, settlement, transfer of title—all of these refer to the day the buyer pays the entire
purchase price and gets a deed. All the promises made in the contract must be completed. The
deed is exchanged for money. Usually the mortgage loan closes at the same time as the transfer
of title.
Customarily, closings take place at the lending institution or the office of the seller’s attorney,
but it can be anywhere the parties agree. Attendees generally include the bank representative
and/or bank attorney, buyer and seller, their respective attorneys, and, on occasion, the real estate
brokers.
Within 24 hours prior to the closing, the buyer generally will check the premises with a thorough
“walk-through.”
CONTACT WITH SELLER, PURCHASER, AND BROKER BY THE LEGAL
ASSISTANT
Textbook page 442
The legal assistant is the lifeline of any real estate closing. He or she will make contact with the
client, determine and prepare whatever documents are needed for the closing, track down all
needed information, and coordinate the date and time of closing with the attorney, the client, and
all other parties involved.
Ordering the Title Examination
Textbook page 446
In New York, once the parties know the deal is firm, that is, the mortgage commitment has been
obtained, the seller’s attorney orders the title search performed and an updated Abstract of Title
to be prepared, both of which will then be forwarded to the buyer’s attorney.
37
Ordering the Survey
Textbook page 448
The seller will be responsible for ordering the survey. However, the buyer must inform the seller
as soon as possible as to whom the certifications on the survey must be made. Generally, the
certifications are made to the buyers, the buyers’ attorney, and the mortgage company. This way,
if the survey is not accurate, the named individuals to whom the survey was certified can proceed
against the surveyor. If there is already a complete survey of the property, the purchaser and or
mortgagee may be satisfied with an updated survey, which can be obtained for a lower fee than a
brand new survey.
Ordering Hazard and Fire Insurance
Textbook page 448
If the buyer is to obtain a loan for the real property, the mortgage company will require proof of
paid hazard and fire insurance on the real property at the time of closing in the form of an
insurance binder.
Obtaining the Termite Clearance Letter or Bond
Textbook page 449
In the State of New York, there is no requirement that the seller produce a termite clearance letter
or bond.
Satisfaction of Loans and Liens
Textbook page 449
It is a good idea to obtain a recent mortgage statement from the seller which will contain the
lender’s name and telephone number, as well as the account number and approximate
outstanding balance. This information will be helpful for requesting a “payoff” letter.
If there are unpaid taxes, they will need to be satisfied. If there are judgments of record, check to
38
see if they are against the seller. They may simply be judgments against a party by the same
name, that is, there are many Sarah Smiths in the area. If they are not against the seller, the title
company will take an affidavit to that effect. If they are against the seller, they must be satisfied
and paid prior to or at the closing.
THE CLOSING AND AFTERMATH
Textbook page 462
Once the closing date is set, the legal assistant must then begin determining the financial
adjustments to be made to the purchase price. This is done on a “closing statement.”
The closing statement is one of the most important documents prepared for the closing
(secondary to the deed, note, and mortgage) because it contains all the financial information for
the transaction. Approximately 1 to 2 days prior to closing, the legal assistant for the seller and
the legal assistant for the buyer will review the “numbers” for closing. That is, they will make
sure that all credits have been made to their respective clients, they will prorate any outstanding
costs, and they will insure they have an identical dollar amount to be paid by the buyer for the
seller at closing. The buyer must then be advised to bring a certified check or money order to the
closing in that amount.
On the date of closing, the legal assistants for the buyer and the seller should make sure the file is
ready for the attorney, with all necessary paperwork. Further, there should be several blank
checks included in the file in the event that the attorney must make disbursements on behalf of
the client.
After the closing, any checks made payable to the attorney or law firm must be deposited as soon
as possible in the appropriate account. Further, the legal assistant will prepare a formal closing
statement to be mailed to the client.
39
CHAPTER 15
GOVERNMENT REGULATION OF REAL ESTATE CLOSINGS
The information contained in the main text is applicable in the State of New York.
40
CHAPTER 16
REAL ESTATE CLOSING FORMS AND EXAMPLES
Law firms tend to have their own personalized affidavits which are used to satisfy the legal
requirements for the closing. In addition, the New York State Bar Association publishes
Residential Real Estate Forms, which is available for purchase. The residential real estate
practice forms have a complete selection of real estate documents (see Practice Forms). You can
find more information regarding the same at http://www.nysba.org.
41
CHAPTER 17
CONDOMINIUMS AND COOPERATIVES
Beginning in the 1970s, in New York, many owners of buildings decided to change the
ownership of these buildings and convert them to condominiums or cooperatives. To do this, the
sponsor (generally the property owner) prepares an offering plan which must follow in detail the
regulations prescribed by the New York State Attorney General and the New York General
Business Law. A copy of this proposal is then submitted to each tenant and the New York State
Attorney General for review.
Once the Attorney General decides it is in compliance, the proposal is accepted for filing. The
sponsor then issues a “black book” (black lettering on the cover) and the sponsor can begin to
sell apartments. The building can be converted according to an “eviction” or “noneviction” plan.
In an eviction plan, 51% of the tenants must purchase their units. Once 51% of the tenants
purchase, the other tenants can be evicted after 3 years (the elderly and disabled are exempt form
eviction by statute). If the sponsor decides to offer a noneviction plan (which is the much more
prevalent form today), the sponsor must sell only 15% of the apartments for the plan to be
effective. Under this plan, no tenants can be evicted.
NY Gen. Bus. Law § 352-eeee.
TIME-SHARES
Textbook page 568
When a time-share is offered for purchase in the State of New York, the promoter of the timeshare must provide a buyer of the same with written disclosure of all restrictions and stipulations
of such contract for sale within 5 business days of the date of the agreement. The contents of
such disclosure are mandated by statute. Upon receipt of the written disclosure of the parties’
agreement, the buyer will have 3 days to rescind his or her consent to the same. NY Gen. Bus.
Law § 157-a
42
CHAPTER 18
LEASES
COMMON LAW AND LEASES
Textbook page 596
Leases are contracts between the landlord and tenant. Most residential leases are uniform;
landlords use preprinted form and add riders if necessary. All residential leases in New York
must be:
1. Written in a clear and coherent manner using words with common and every day meanings;
2. Appropriately divided and captioned by its various sections. NY Gen. Ob. Law § 5-702(a).
The rights of tenants in New York State are protected under many different laws. The Multiple
Dwelling Law (three or more apartments) applies to cities with a population of 325,000 or more.
NY Mult. Dwelling Law § 3(1). The Multiple Residents Law applies to “all cities of less than
three hundred twenty-five thousand population and to all towns and villages.” NY Mult. Res.
Law § 3(1).
Every residential lease in New York contains an implied warrant of habitability, that is, the
tenant is entitled to a safe and livable apartment. NY Real Prop. Law § 235-b. The failure to
provide heat, hot water, or to get rid of insect infestations are examples of violations of the
warranty of habitability. If the landlord breaches this warranty, the tenant can sue for a rent
reduction.
In New York, a lease may not restrict occupancy to just the named tenant. In residential buildings
use may include the named tenant, his immediate family, and one other person. NY Real Prop.
Law § 235-f. In 1989, the New York State Court of Appeals extended the definition of “family”
in a lease to include those who, although they are not related by blood or by law, have a special
relationship characterized by emotional and financial interdependence. Braschi v. Stahl
Associates Co., 74 N.Y.2d 201, 543 N.E.2d 49, 544 N.Y.S.2d 784 (1989).
43
Rent Control
New York City and other select locations around the State of New York have rent control and
rent stabilization laws which are found under the Real Property Laws of the State of New York.
These laws impose guidelines and limits to the amount of rent charged, as well as govern the
rights and obligations of the tenants and landlords. Rent regulation is administered by the State
Division of Housing and Community Renewal (DHCR).
In New York City, rent control laws arose because of the housing shortage that followed World
War II, and they generally affect properties that were built before 1947. When an apartment is
vacated, it moves under the rent stabilization laws or is completely removed from the rent control
and stabilization laws.
Rent stabilization laws also apply to New York City dwellings and arose due to a shortage of
affordable rental apartments. The law attempts to balance the needs of the landlord and tenant
and generally affects buildings constructed between February 1, 1947 and January 1, 1974.
Outside New York City, rent stabilization applies to communities that adopted the Emergency
Tenant Protection Act (ETPA). Where rent stabilization is in effect, maximum rent increases are
set by the local rent stabilization boards.
More information on rent control/rent stabilization laws can be found on the Web at
http://www.dhcr.state.ny.us.
New York State Law prohibits discrimination in real estate transactions. A landlord may not
refuse to lease property because of race, creed, color, national origin, age, sex, disability, marital
status, or presence of children. NY Exec. Law § 236. Owners of two-family homes who live in
one of the units are exempt. NY Exec. Law § 236.
In New York, security deposits are considered trust funds which must be put in an interestbearing account. They cannot be commingled with the owner’s funds. NY Gen. Oblig. Law § 7103.
COMMERCIAL LEASE PROVISIONS
44
Textbook page 596
Landlords’ Remedies for Tenant’s Default
Textbook page 605
The following information applies to both residential and commercial lease proceedings.
When a tenant breaches any lease provision, the landlord may sue. If the landlord breaches a
lease provision, the tenant may similarly sue. In New York, the bases for which landlords can sue
include nonpayment of rent, illegal use of premises, remaining in possession after the lease ends,
and bankruptcy of the tenant. NY Real Prop. Acts. § 711. In order to evict a tenant the landlord
must commence an eviction proceeding known as a “summary proceeding.” The law which
governs such actions is found in the New York Real Property Actions and Proceedings Law.
There are two different lawsuits that can be brought and each requires notice to the tenant prior to
commencing the lawsuit: (1) nonpayment action, where the landlord seeks to get the rent due;
and (2) holdover proceedings, where the goal is to evict the tenant.
The tenant may have some defenses to an eviction proceeding, for example, if there are building
code violations (after they have been reported and inspected), failure to provide heat, breach of
warranty of habitability, or constructive eviction (if premises are not habitable).
Assignments, Subletting, or Mortgaging of the Leased Premises
Textbook page 611
Generally, the lease says the tenant may assign or sublease with the landlord’s consent. New
York Real Property Law has detailed requirements that a tenant must follow to make a written
request to sublet or assign. NY Real Prop. Law § 226-b.
45
APPENDIX A
PROPERTY CONDITION DISCLOSURE STATEMENT
Name of Seller or Sellers:
Property Address:
The property condition disclosure act requires the seller of residential real property to cause this
disclosure statement or a copy thereof to be delivered to a buyer or buyer’s agent prior to the
signing by the buyer of a binding contract of sale.
Purpose of statement: this is a statement of certain conditions and information concerning the
property known to the seller. This disclosure statement is not a warranty of any kind by the seller
or by any agent representing the seller in this transaction. It is not a substitute for any inspections
or tests and the buyer is encouraged to obtain his or her own independent, professional
inspections and environmental tests and also is encouraged to check public records pertaining to
the property.
A knowingly false or incomplete statement by the seller on this form may subject the seller to
claims by the buyer prior to or after the transfer of title. In the event that a seller fails to perform
the duty prescribed in this article to deliver a disclosure statement prior to the signing by the
buyer of a binding contract of sale, the buyer shall receive upon the transfer of title a credit of
five hundred dollars against the agreed upon purchase price of the residential real property.
“Residential real property” means real property improved by a one- to four-family dwelling used
or occupied, or intended to be used or occupied, wholly or partly, as the home or residence of one
or more persons, but shall not refer to (a) unimproved real property upon which such dwellings
are to be constructed, or (b) condominium units or cooperative apartments, or (c) property on a
homeowners’ association that is not owned in fee simple by the seller.
Instructions to the seller:
(a) Answer all questions based upon your actual knowledge.
46
(b) Attach additional pages with your signature if additional space is required.
(c) Complete this form yourself.
(d) If some items do not apply to your property, circle “na” (non-applicable). if you do not know
the answer circle “unkn” (unknown).
Seller’s statement: the seller makes the following representations to the buyer based upon the
seller’s actual knowledge at the time of signing this document. The seller authorizes his or her
agent, if any, to provide a copy of this statement to a prospective buyer of the residential real
property. The following are representations made by the seller and are not the representations of
the seller’s agent.
General information
1. How long have you owned the property?
2. How long have you occupied the property?
3. What is the age of the structure or structures? Note to buyer—if the structure was built before
1978 you are encouraged to investigate for the presence of lead-based paint.
4. Does anybody other than yourself have a lease, easement, or any other right to use or occupy
any part of your property other than those stated in documents available in the public record, such
as rights to use a road or path or cut trees or crops?
Yes No Unkn NA
5. Does anybody else claim to own any part of your property?
Yes No Unkn NA (If yes, explain below)
6. Has anyone denied you access to the property or made a formal legal claim challenging your
title to the property?
Yes No Unkn NA (If yes, explain below)
47
7. Are there any features of the property shared in common with adjoining landowners or a
homeowners association, such as walls, fences, or driveways?
Yes No Unkn NA (If yes, describe below)
8. Are there any electric or gas utility surcharges for line extensions, special assessments, or
homeowner or other association fees that apply to the property?
Yes No Unkn NA (if yes, explain below)
9. Are there certificates of occupancy related to the property?
YES NO UNKN NA (If no, explain below)
ENVIRONMENTAL
Note to seller—In this section, you will be asked questions regarding petroleum products and
hazardous or toxic substances that you know to have been spilled, leaked, or otherwise released
on the property or from the property onto any other property. Petroleum products may include,
but are not limited to, gasoline, diesel fuel, home heating fuel, and lubricants. Hazardous or toxic
substances are products that could pose short- or long-term danger to personal health or the
environment if they are not properly disposed of, applied, or stored. These include, but are not
limited to, fertilizers, pesticides, and insecticides; paint including paint thinner, varnish remover,
and wood preservatives, and treated wood, construction materials such as asphalt and roofing
materials; antifreeze and other automotive products; batteries; cleaning solvents including septic
tank cleaners, household cleaners and pool chemicals; and products containing mercury and lead.
Note to buyer—If contamination of this property from petroleum products and/or hazardous or
toxic substances is a concern to you, you are urged to consider soil and groundwater testing of
this property.
10. Is any or all of the property located in a designated floodplain?
Yes No Unkn NA (If yes, explain below)
48
11. Is any or all of the property located in a designated wetland?
Yes No Unkn NA (If yes, explain below)
12. Is the property located in an agricultural district?
Yes No Unkn NA (If yes, explain below)
13. Was the property ever the site of a landfill?
Yes No Unkn NA (If yes, explain below)
14. Are there or have there ever been fuel storage tanks above or below the ground on the
property? Yes no unkn na if yes, are they currently in use? Yes no unkn na if yes, where
are their location(s)? Are they leaking or have they ever leaked?
Yes No Unkn NA (If yes, explain below)
15. Is there asbestos in the structure?
Yes No Unkn NA (If yes, state location or locations below)
16. Is lead plumbing present?
Yes No Unkn NA (If yes, state location or locations below)
17. Has a radon test been done?
Yes No Unkn NA (If yes, attach a copy of the report)
18. Has motor fuel, motor oil, home heating fuel, lubricating oil, or any other petroleum product,
methane gas, or any hazardous or toxic substance spilled, leaked, or otherwise been released on
the property or from the property onto any other property?
Yes No Unkn NA (If yes, describe below)
19. Has the property been tested for the presence of motor fuel, motor oil, home heating fuel,
49
lubricating oil, or any other petroleum product, methane gas, or any hazardous or toxic
substance?
Yes No Unkn NA (If yes, attach report(s))
STRUCTURAL
20. Is there any rot or water damage to the structure or structures?
Yes No Unkn NA (If yes, explain below)
21. Is there any fire or smoke damage to the structure or structures?
Yes No Unkn NA (If yes, explain below)
22. Is there any termite, insect, rodent, or pest infestation or, damage?
Yes No Unkn NA (If yes, explain below)
23. Has the property been tested for termite, insect, rodent or pest infestation, or damage?
Yes No Unkn NA (If yes, please attach report[s])
24. What is the type of roof/roof covering (slate, asphalt, other)? Any known material defects?
How old is the roof? Is there a transferable warrantee on the roof in effect now?
Yes No Unkn NA (if yes, explain below)
25. Are there any known material defects in any of the following structural systems: footings,
beams, girders, lintels, columns, or partitions?
Yes No Unkn NA (if yes, explain below)
Mechanical systems and services
26. What is the water source (circle all that apply) well, private, municipal, other? If municipal,
is it metered?
50
Yes No Unkn NA
27. Has the water quality and/or flow rate been tested?
Yes No Unkn NA (if yes, describe below)
28. What is the type of sewage system (circle all that apply)
Public sewer, private sewer, septic, or cesspool?
If septic or cesspool, age? __________
Date last pumped? __________
Frequency of pumping? __________
Any known material defects?
Yes No Unkn NA (if yes, explain below)
29. Who is your electric service provider? __________
What is the amperage? __________
Does it have circuit breakers or fuses? __________
Private or public poles? __________
Any known material defects? __________
Yes No Unkn NA (if yes, explain below)
30. Are there any flooding, drainage, or grading problems that resulted in standing water on any
portion of the property?
Yes No Unkn NA (if yes, state locations and explain below)
31. Does the basement have seepage that results in standing water?
51
Yes No Unkn NA (if yes, explain below)
Are there any known material defects in any of the following:
(if yes, explain below. Use additional sheets if necessary)
32. Plumbing system?
Yes No Unkn NA
33. Security system?
Yes No Unkn NA
34. Carbon monoxide detector?
Yes No Unkn NA
35. Smoke detector?
Yes No Unkn NA
36. Fire sprinkler system?
Yes No Unkn NA
37. Sump pump?
Yes No Unkn NA
38. Foundation/slab?
Yes No Unkn NA
39. Interior walls/ceilings?
Yes No Unkn NA
40. Exterior walls or siding?
52
Yes No Unkn NA
41. Floors?
Yes No Unkn NA
42. Chimney/fireplace or stove?
Yes No Unkn NA
43. Patio/deck?
Yes No Unkn NA
44. Driveway?
Yes No Unkn NA
45. Air conditioner?
Yes No Unkn NA
46. Heating system?
Yes No Unkn NA
47. Hot water heater?
Yes No Unkn NA
48. The property is located in the following school district __________
Yes No Unkn NA
Note: The buyer is encouraged to check public records concerning the property (e.g. tax records
and wetland and flood plain maps)
The seller should use this area to further explain any previous item. If necessary, attach additional
53
pages and indicate here the number of additional pages attached.
Seller’s certification: seller certifies that the information in this property condition disclosure
statement is true and complete to the seller’s actual knowledge as of the date signed by the seller.
If a seller of residential real property acquires knowledge which renders materially inaccurate a
property condition disclosure statement provided previously, the seller shall deliver a revised
property condition disclosure statement to the buyer as soon as practicable. In no event, however,
shall a seller be required to provide a revised property condition disclosure statement after the
transfer of title from the seller to the buyer or occupancy by the buyer, whichever is earlier.
Seller___________________________________________ date _________________
Seller___________________________________________ date _________________
Buyer’s acknowledgment: buyer acknowledges receipt of a copy of this statement and buyer
understands that this information is a statement of certain conditions and information concerning
the property known to the seller. It is not a warranty of any kind by the seller or seller’s agent and
is not a substitute for any home, pest, radon, or other inspections or testing of the property or
inspection of the public records.
Buyer___________________________________________ date _________________
Buyer___________________________________________ date _________________
54
APPENDIX B
DURABLE GENERAL POWER OF ATTORNEY,
NEW YORK STATUTORY SHORT FORM
THE POWERS YOU GRANT BELOW CONTINUE TO BE EFFECTIVE
SHOULD YOU BECOME DISABLED OR INCOMPETENT
CAUTION: This is an important document. It gives the person whom you designate (your
“agent”) broad powers to handle your property during your lifetime, which may include powers
to mortgage, sell, or otherwise dispose of any real or personal property without advance notice to
you or approval by you. These powers will continue to exist even after you become disabled or
incompetent. These powers are explained more fully in New York General Obligations Law,
article 5, title 15, sections 5-1502a through 5-1503, which expressly permit the use of any other
or different form of power of attorney.
This document does not authorize anyone to make medical or other health care decisions. You
may execute a health care proxy to do this.
If there is anything about this form that you do not understand, you should ask a lawyer to
explain it to you.
THIS is intended to constitute a DURABLE GENERAL POWER OF ATTORNEY pursuant to
Article 5, Title 15 of the New York General Obligations Law:
I, ______________________________ (insert your name and address) do hereby appoint:
__________________________________________________________________.
(If one person is to be appointed agent, insert the name and address of your agent above.)
__________________________________________________________________
__________________________________________________________________
55
__________________________________________________________________
__________________________________________________________________
(If two or more persons are to be appointed agents by you insert their names and addresses
above.)
my attorney(s)-in-fact TO ACT
(If more than one agent is designated, CHOOSE ONE of the following two choices by putting
your initials in ONE of the blank spaces to the left of your choice.)
( ) Each agent may SEPARATELY act.
( ) All agents must act TOGETHER.
(If neither blank space is initialed, the agents will be required to act TOGETHER.)
IN MY NAME, PLACE AND STEAD in any way which I myself could do, if I were personally
present, with respect to the following matters as each of them is defined in Title 15 of Article 5
of the New York General Obligations Law to the extent that I am permitted by law to act through
an agent:
(DIRECTIONS: Initial in the blank space to the left of your choice any one or more of the
following lettered subdivisions as to which you WANT to give your agent authority. If the blank
space to the left of any particular lettered subdivision is NOT initialed, NO AUTHORITY WILL
BE GRANTED for matters that are included in that subdivision. Alternatively, the letter
corresponding to each power you wish to grant may be written or typed on the blank line in
subdivision “(Q),” and you may then put your initials in the blank space to the left of subdivision
“(Q)” in order to grant each of the powers so indicated)
( ) (A) real estate transactions;
( ) (B) chattel and goods transactions;
( ) (C) bond, share, and commodity transactions;
56
( ) (D) banking transactions;
( ) (E) business operating transactions;
( ) (F) insurance transactions;
( ) (G) estate transactions;
( ) (H) claims and litigation;
( ) (I) personal relationships and affairs;
( ) (J) benefits from military service;
( ) (K) records, reports, and statements;
( ) (L) retirement benefit transactions;
( ) (M) making gifts to my spouse, children and more remote descendants, and parents, not to
exceed in the aggregate $10,000 to each of such persons in any year;
( ) (N) tax matters;
( ) (O) all other matters;
( ) (P) full and unqualified authority to my attorney(s)-in-fact to delegate any or all of the
foregoing powers to any person or persons whom my attorney(s)-in-fact shall select;
( ) (Q) each of the above matters identified by the following letters:
________________________________________________________
(Special provisions and limitations may be included in the statutory short form durable power of
attorney only if they conform to the requirements of section 5-1503 of the New York General
Obligations Law.)
________________________________________________________
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________________________________________________________
________________________________________________________
This durable Power of Attorney shall not be affected by my subsequent disability or
incompetence.
If every agent named above is unable or unwilling to serve, I appoint
____________________________________ (insert name and address of successor) to be my
agent for all purposes hereunder.
To induce any third party to act hereunder, i hereby agree that any third party receiving a duly
executed copy or facsimile of this instrument may act hereunder, and that revocation or
termination hereof shall be ineffective as to such third party unless and until actual notice or
knowledge of such revocation or termination shall have been received by such third party, and i
for myself and for my heirs, executors, legal representatives and assigns, hereby agree to
indemnify and hold harmless any such third party from and against any and all claims that may
arise against such third party by reason of such third party. This durable general power of
attorney may be revoked by me at any time.
In Witness Whereof I have hereunto signed my name this _________ day of _______________,
200__.
YOU SIGN HERE:
_______________________________________________
(Signature of Principal)
(ACKNOWLEDGEMENT)
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