Real Estate Update

Ezra Dyckman and Daniel W. Stahl

IRS Rules On Qualified Liabilities

By Ezra Dyckman and Daniel W. Stahl |

In their Taxation column, Ezra Dyckman and Daniel W. Stahl discuss the welcome development where the IRS recently issued a private letter ruling that interprets the new category of "qualified liability" in a favorable manner.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law discusses “Lorne v. 50 Madison Avenue Condominium,” where the court held that a condo board was not responsible for repairs to structural defects in the plaintiff’s unit.

Kenneth M. Block and Joshua M. Levy

Ensuring Third-Party Beneficiary Status to Owners

By Kenneth M. Block and Joshua M. Levy |

In their Construction Law column, Kenneth M. Block and Joshua M. Levy write: One of the more common questions asked in the construction contracting arena is whether an owner of a construction project can enforce the terms of a subcontract or its architect's consulting agreement with engineers directly against the subcontractor or engineers as a third-party beneficiary. The answer is "yes," but with some caveats.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law discusses “Coliseum Tenants. v. Benmark,” where the petitioner's holdover proceeding for lease violation was dismissed because petitioner failed to prove that alterations to the respondent’s co-op had been done without board approval, and “364 93rd Street LLC v. Clementine,” where a landlord was awarded judgment of possession due to tenant's harassing conduct which the court found constituted nuisance.

Adam Leitman Bailey and Dov Treiman

Contesting Relocation Liens: Innocent Landowners Get Burnt

By Adam Leitman Bailey and Dov A. Treiman |

In their Housing Litigation column, Adam Leitman Bailey and Dov A. Treiman discuss 'Rivera v. HPD,' a decision "stronger on emotion than analysis" where the Court of Appeals "eliminated a building owner's path to determining the validity of liens placed against its building in relocating the building's tenants when the building became the subject of vacate order."

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law discusses 'Goldstein v. Lipetz,' a landlord-tenant case where although the majority found the defendant had "exploited the governmentally-conferred privilege of her rent-stabilized tenancy" by profiting from subletting her apartment through the company Airbnb, the dissent argued that "there is a question of fact as to whether defendant engaged in profiteering, or rather used Airbnb to enable herself to continue to live in her long time home, which would not be inconsistent with the purposes of the Rent Stabilization Law."

Warren A. Estis and Michael E. Feinstein

Court Clarifies Extent of 'Familial Exception'

By Warren A. Estis and Michael E. Feinstein |

In their Landlord-Tenant Law column, Warren A. Estis and Michael E. Feinstein discuss how the Appellate Term limits the extent of the "Familial Exception" to the maintenance of a summary proceeding.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Building Service Local 32B-J v. 101 Limited Partnership,' 'Rent Stabilization Assoc. v. N.Y. City Rent Guidelines Board,' and 'Bank of America v. Lilly.'

Bruce J. Bergman

Resolved at Last: No 90-Day Notice a Year Later

By Bruce J. Bergman |

In his Foreclosure Litigation column, Bruce Bergman discusses a recent case in the Appellate Division that finally banishes what had been a thorny and eventually time consuming lender dilemma.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law discusses 'Hendel v. Torah,' where the court found that the subject tenants no longer maintained a right of first refusal in their lease as month-to-month tenants, and 'Royal Park Investments v. HSBC Bank,' where the court denied the use of sampling of loans to prove liability.

Anthony S. Guardino

Spot Zoning Challenges Rarely Are Successful

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony Guardino uses several New York court decisions to show that rezoning decisions which are carefully thought out and well-reasoned are unlikely to be reversed as "spot zoning."

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Rinaldi v. Anchorage Construction,' where the court granted a non-party's motion to intervene in a breach of contract action.

Steiner-Goldstein

Enforcing Prepayment Premium Clauses

By Jeffrey B. Steiner and Jason R. Goldstein |

In their Financing column, Jeffrey B. Steiner and Jason R. Goldstein discuss how the prepayment of a loan in commercial real estate transactions may result in unanticipated economic consequences and write: Counsel representing lenders must take care when drafting provisions designed to protect their clients against the risks associated with prepayments by borrowers. For the broadest protection, such provisions should clearly and unambiguously call for the payment of a prepayment fee upon borrower's default and lender's acceleration of the loan, whether prepayment occurs before, after or during a foreclosure action.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews ‘Hagman v. Swenson,’ dealing with an interior design contract viewed as a ‘mixed' transaction of a sale of goods and sale of services, and ‘River Park Residences v. Reed,’ where the court denied a motion seeking an order restoring tenants to possession of premises.

Todd Soloway and Bryan Mohler

Assessing Risk to Hotels in the Age of Data Breaches

By Todd E. Soloway And Bryan T. Mohler |

In their Hospitality Litigation column, Todd Soloway and Bryan Mohler explore the issues surrounding liability that may flow from a hotel data breach. Among the questions answered are which party or parties may bring actions after a data breach, against whom, and for what damages.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews "2 Perlman Drive v. Stevens," where the court denied the landlord's motion for possession, without prejudice, where the tenant refused access to exterminate for bedbugs, and "Chatham Square Owners v. Roth," where a landlord's holdover proceeding based on respondent's status as a licensee was dismissed.

Warren A. Estis and Jeffrey Turkel

Landlords Win in Two First Department Cases

By Warren Estis and Jeffrey Turkel |

In their Rent Regulstion column, Warren Estis and Jeffrey Turkel discuss two recent decisions, "Matter of Park v. NYSDHCR," and "Dixon v. 105 West 75th Street," where the Appellate Division, First Department held, over rigorous tenant objections, that the apartments in question were exempt from rent stabilization.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law discusses “7825 Realty Associates v. Doll,” where the respondent’s succession claim was rejected because the court did not find evidence that he was a non-traditional family member, and “CP JBAM Holdings v. Shapiro,” a contract case where it was held that the agent for the principal was not liable for the owner's obligations under the agreement.

Ezra Dyckman and Daniel W. Stahl

IRS Ruling Limits Exclusion to COD Income

By Ezra Dyckman and Daniel Stahl |

In their Taxation column, Ezra Dyckman and Daniel Stahl write: While cancellation of indebtedness generally results in ordinary income for the debtor (COD income), the Internal Revenue Code provides for several exceptions under which COD income can be excluded. Of particular importance for owners of real estate is Section 108(c), under which a taxpayer can elect to exclude COD income that results from the discharge of "qualified real property business indebtedness" under certain circumstances. The IRS recently interpreted one of the requirements for debt to constitute QRPBI in a manner that will cause debt secured by condominium units held for sale to fail to qualify.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Horrigan Development v. Drozd', 'Jit v. Johnson' and '21-25 Convent Avenue Realty v. Semper'.

Jason Bergman

Cash and the Residential Property Purchase: a New Paradigm

By Jason C. Bergman |

Jason Bergman of Kensington Vanguard National Land Services discusses the new disclosure requirements for certain high-end residential real estate purchases in New York City made with cash. Title companies will be bound to gather this information, and purchasers’ counsel will need to be very careful in the advice given about using cash in light of this change in the arena.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews three landlord-tenant cases: "H.W. Hinkley Realty v. Romulus," "121 Irving MGM v. Perez," and "Roc-Jane Street v. Riffon."

Adam Leitman Bailey and Dov Treiman

A Practitioner's Guide to Understanding Interest

By Adam Leitman Bailey and Dov Treiman |

In their Mortgage Litigation column, Adam Leitman Bailey and Dov Treiman write: While on its surface, the concept of "interest" appears to be a simple matter of calculating a percentage of what someone owes, the legal development of interest in New York law shows far greater complexity beneath the surface and far greater importance in understanding the amount of money that can be charged and collected.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews '204 Columbia Heights v. Manheim,' where a lease combining apartments was held to be valid.

Warren A. Estis and Michael E. Feinstein

Tendering of Renewal Lease Vitiates the Right to Evict

By Warren A. Estis and Michael E. Feinstein |

In their Landlord-Tenant column, noting a split of authority, Warren A. Estis and Michael E. Feinstein discuss '757 Miller Owners v. Smith,' which held that the tendering of a renewal lease under Rent Stabilization Code vitiates a previously issued notice of termination.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews '149 St. LLC v. Siciliano,' 'Boreland v. Blackwood,' and '5510 345 Lefferts Blvd v. Jean-Baptiste.'

Todd Soloway and Bryan Mohler

CPLR 6312(b)'s Bond Requirement: A Shield for Hotel Owners?

By Todd Soloway and Bryan Mohler |

In their Hospitality Law column, Todd Soloway and Bryan Mohler write: Aside from questions regarding the enforceability of such an injunction provision, an independent issue arises concerning the appropriate quantum of injunction bond that, pursuant to CPLR 6312(b), a hotel operator should be directed to post in order to secure an injunction depriving a hotel owner of its power to terminate an HMA. This article explores this issue, including whether the undertaking requirement is a potential additional barrier to hotel operators effectively enforcing "contractual injunction" provisions in HMAs.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Kwai & Wong v. Hodges,' where a single fire incident by a tenant in the premises did not constitute a nuisance, and 'Bartis v. Harbor Tech,' where it was held that housing accommodations that are in a building converted from a commercial to a residential building after Jan. 1, 1974, are exempt from rent stabilization.

Anthony S. Guardino

Eligibility of Residential Developments for IDA Benefits

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony Guardino discusses 'Matter of Ryan,' which upheld what has long been understood to be the rule: Residential developments are eligible to receive industrial development agency benefits.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Miller v. Falco,' where an unlicensed home improvement contractor was held not able to recover on claims for breach of contract, quantum meruit or unjust enrichment, and 'Estrada v. Browand,' where a tenant was restored possession of the subject apartment after the landlord's actions where held to constitute an illegal lockout.

Steiner-Goldstein

Local Considerations in Jury Trial Waiver Enforcement

By Jeffrey B. Steiner and Jason R. Goldstein |

In their Financing column, Jeffrey B. Steiner and Jason R. Goldstein discuss the inclusion of pre-dispute jury waiver provisions in loan documents as a means to circumvent a trial by jury in commercial cases. They use a recent California case, 'Rincon v. CP III Rincon Towers,' to highlight the issue.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law discusses 'Rehabilitation Support Services v. Town of Esopus,' where a zoning board's finding was held not to constitute a final decision on the proposed residence at issue.

Kenneth M. Block and Joshua M. Levy

Recurring Issues With Contract Indemnities

By Kenneth M. Block and Joshua M. Levy |

In their Construction Law column, Kenneth M. Block and Joshua M. Levy discuss two common misconceptions with regard to construction contract indemnities.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews “11-01 36 Avenue v. Quamar,” dealing with time-of-essence letters, and “Roger Morris Apt. v. Varela,” where a factual dispute barred summary judgment.

Warren A. Estis and Jeffrey Turkel

Commercial to Residential Substantial Rehabilitation

By Warren A. Estis and Jeffrey Turkel |

In their Rent Regulation column, Warren A. Estis and Jeffrey Turkel discuss the topic of "substantial rehabilitation" and look at whether units converted from commercial to residential use are exempt from "stabilization per se."

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law discusses 'Klyczek v. Shannon', a civil rights case dealing with discrimination and the definition of "single-family house" under the Fair Housing Act.

Ezra Dyckman and Daniel W. Stahl

Regulations Address Partner Reimbursements

By Ezra Dyckman and Daniel W. Stahl |

In their Taxation column, Ezra Dyckman and Daniel W. Stahl discuss new treasury regulations that were issued on Oct. 5, 2016 which provide that the amount that can be distributed to a partner as a tax-free reimbursement of capital expenditures is limited to the partner's share of the qualified liability.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'WDF v. The Trustees of Columbia Univ.', where the court held that "no damage for delay" clauses are generally enforceable, while also discussing the exceptions to this rule.

Investing in U.S. Real Estate Using Domestically-Controlled REITs

By Mitchell Berg and Scott Sontag |

In their Transactional Real Estate column, Mitchell Berg and Scott Sontag discuss the advantages to foreign investors of investing through a domestically controlled REIT which include the ability to sell the stock of the domestically controlled REIT without incurring U.S. federal income tax under FIRPTA.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Matter of Peralta v. N.Y. State Division of Housing and Community Renewal', where a deputy commissioner's determination was held to be an abuse of discretion, and 'Hildred Temple v. Hudson View Owners', where the court dismissed disabled plaintiffs' complaint alleging entitlement to two parking spaces.

Acceleration Clauses in Foreclosure Actions: New Rules

By Adam Leitman Bailey and Adam M. Swanson |

In their Foreclosure Law column, Adam Leitman Bailey and Adam M. Swanson review recent case law and discuss some of the benefits and pitfalls when using an acceleration clause and how to overcome these obstacles.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Schroder & Strom v. Vazouras', where the court found that the mere filing and settling of tax assessment claims was not the practice of law, and 'Rios v. Rosado', where tenants were granted disclosure beyond the four-year look back period in a nonpayment suit.

Warren A. Estis and Michael E. Feinstein

Court Finds Powerful Remedy Against Defaulting Condo Owners

By Warren A. Estis and Michael E. Feinstein |

In their Landlord-Tenant column, Warren Estis and Michael Feinstein discuss "Heywood Condominium v. Wozencraft," where the Appellate Division, First Department, affirmed the eviction of a condominium unit owner for non-payment of common charges.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Pureform v. 2374 Concourse Assoc.,' where a commercial tenant who was able to show an ability to cure its defaults was granted a Yellowstone injunction, and 'Matter of Brown, HP,' where the court denied a motion to appoint an Article 7A administrator.

Anthony S. Guardino

Can Zoning Stop Property Owners From Renting?

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony Guardino explores a number of the significant New York court decisions that help to establish a framework for analyzing the validity of zoning restrictions and the conditions imposed by local governments on permits and variances when rental units are involved.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Waterview Towers v. 2610 Cropsey Development,' where a cooperative housing corporation was held to have established the required elements of adverse possession.

Steiner-Goldstein

Condominium Loans and Lien Priority

By Jeffrey B. Steiner and Jason R. Goldstein |

In their Financing column, Jeffrey B. Steiner and Jason R. Goldstein address some unique aspects of condominium structures which require closer examination on a case-by-case basis.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Goldman v. Bracker,' where a tenant was granted additional time to view video surveillance tapes in a non-primary residence case, and 'St. Joseph Immigrant Home v. Bulong,' where the duration of the tenants' efforts to relocate was held to be not unreasonable.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews “Garson v. Tarmy,” where an easement reserved to owners of dominant lots was held not to have created an express easement , and “Westbeth v. Gross,” where it was held that the respondent in the case could not occupy the subject premises in an individual capacity.

Warren A. Estis and Jeffrey Turkel

The 'Altman' Conundrum (Continued)

By Warren A. Estis and Jeffrey Turkel |

In their Rent Regulation column, Warren A. Estis and Jeffrey Turkel examine how the Appellate Division in 'Altman v. 285 W. Fourth, LLC' and the Appellate Term in 'Aimco 322 E. 61st Street v. Brosius' have arrived at differing interpretations of the same statutory deregulation threshold scheme.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen, a partner at Herrick, Feinstein and an adjunct professor at St. John's University School of Law reviews 'Skanska USA Building v. Atlantic Yards B2 Owner, LLC,' where a "guarantee" posted by a high-rise's builder was found to meet Lien Law §5's "undertaking" requirement.