Real Estate Update

Todd Soloway and Bryan Mohler

Settlement Agreements With Airbnb Violate Separation of Powers

By Todd E. Soloway and Bryan T. Mohler |

In their Hospitality Litigation column, Todd Soloway and Bryan Mohler discuss the act introduced in the New York State Senate and Assembly to curtail the advertisement of short-term rentals in New York, and explain how, in settling subsequent litigation with Airbnb, Governor Cuomo and Mayor Bill de Blasio have, in an effort to protect Airbnb, undercut the express language of the statute. In so doing, the executive branch has usurped the power of New York's legislature, in direct violation of the separation of powers doctrine. Their article explores this situation and potential avenues for aggrieved parties to enforce the law against Airbnb.

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 'Portofino Realty Corp. v. N.Y. State Division of Housing,' where the court held that the creation of the Tenant Protection Unit does not deprive landlords of Due Process.

Adam Leitman Bailey and John M. Desiderio

When Email Exchanges Become Binding Contracts

By Adam Leitman Bailey and John M. Desiderio |

In their Real Estate Contracts column, Adam Leitman Bailey and John M. Desiderio discuss when emails will be deemed a real estate contract and how to prevent or create such a binding contract.

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 'Taylor v. 72A Realty Assoc.,' involving a tenant's allegations of fraud over apartment improvements for an apartment that was improperly deregulated, and 'Statler v. Dioguardi,' involving a Yellowstone injunction and constructive eviction allegations.

Warren A. Estis and Michael E. Feinstein

Notice Requirement(s) for an 'Owner's Use' Proceeding?

By Warren A. Estis and Michael E. Feinstein |

In their Landlord-Tenant Law column, Warren A. Estis and Michael E. Feinstein raise the question of whether both a "Golub" notice and a notice of termination are required in "owners use" proceedings. Caselaw seems to offer different opinions.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen discusses three landlord-tenant cases—'408 St. John's Place v. Estate of Bartholomew,' 'The Grove v. Suquilanda,' and 'Prospect Union Associates v. DeJesus,' and a Toxic Substances Control Act case—'USA v. Accolade Construction Group.'

Anthony S. Guardino

'Public Trust' Ruling Puts a Brake on Development

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony S. Guardino discusses how a decision by the New York Court of Appeals blocking construction of a project in Queens may reverberate across the state.

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 'Reinhard v. Connaught Tower Corp.,' where a judgment of liability against a co-op board based on second-hand smoke was reversed by the Appellate Division which found that the source of smoke was never identified and the plaintiff only stayed in the apartment occasionally, and 'One Eighteen Housing Development Fund v. Smith,' where a holdover petition failed to state causes of action under two of three lease sections.

Steiner-Goldstein

Material Modifications of Building Loans

By Jeffrey B. Steiner and Jason R. Goldstein |

In their Financing column, Jeffrey B. Steiner and Jason R. Goldstein remind practitioners to be cautious when representing lenders that modify building loans.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen discusses '541 Union v. Rivera,' where a tenant was awarded succession of tenancy where he was able to prove he was a "non-traditional" family member, and '279 E 92nd Street Corp. v. Grose,' where the landlord failed to show a default so unjustified as to warrant a finding of violation of tenancy.

Mitchell L. Berg and Peter E. Fisch

Proposed EB-5 Visa Program Reforms

By Peter Fisch and Mitchell Berg |

Peter Fisch and Mitchell Berg write: The EB-5 visa program has become a major source of real estate financing nationwide, and in particular for large real estate development projects in New York City such as Hudson Yards in Manhattan, the New York Wheel on Staten Island, and the Pacific Park development in Brooklyn. While the real estate industry has to date been the primary beneficiary of investment dollars generated by the EB-5 program, proposed changes to the program's rules could imperil what has been a reliable source of funding for new development projects.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen discusses '159-MP Corp. v. CAB Bedford,' where the plaintiff/lessor of a Food Town grocery store failed to get an injunction against the landlord of a Whole Foods store opening up nearby.

Warren A. Estis and Jeffrey Turkel

Luxury Deregulation: Excuses, Excuses

By Warren Estis and Jeffrey Turkel |

In their Rent Regulation column, Warren Estis and Jeffrey Turkel highlight several DHCR orders to show how although the division will frequently forgive tenants in luxury default proceedings, its capacity for such forgiveness is not unlimited.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen discusses 'Oren Apartments v. Torres,' where a split authority on deregulation was resolved, and '415 Realty v. Abel Campos,' where a defendant wife succeeded to tenancy when it was found that the landlord was aware that the husband had permanently vacated the premises.

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.

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.

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.

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.