Expert Columns

Real Estate Update

Marketplace

By Monica Paquette |

White & Case, one of New York's oldest law firms, has signed a long-term lease for nine top tower floors at the McGraw-Hill Building, 1221 Avenue of the Americas. Also, privately held brokerage group Transwestern will be moving its Northeast regional headquarters to 600 Lexington Ave.

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 "Armonk Snack Mart v. Robert Porpora Realty," and writes: When a real estate market is declining, some purchasers will attempt to “escape” their contractual obligations to close. They may try to renegotiate the price to a lower amount based on some “allegedly material” breach by the seller. In a rising market, some sellers may look to invalidate their sale contracts so that they sell the property to someone else at a higher price or try to renegotiate a higher price with their purchasers.

The First Rent Stabilization Overhaul in 14 Years

By Adam Leitman Bailey and Dov Treiman |

In their Rent Legislation column, Adam Leitman Bailey and Dov Treiman of Adam Leitman Bailey, PC, discuss several of the amendments the DHCR has made to the Rent Stabilization Code and conclude: While the new amendments do have the virtue of making the applicable law easier to find by gathering it all into one place, for the most part, these amendments will simply increase the cost of doing business, without necessarily providing the tenants a corresponding benefit.

Marketplace

By Monica Paquette |

The Kaufman Organization, in a new joint venture with Principal Real Estate Investors, has signed a 99-year net lease with Extell Development Company to redevelop four vacant Manhattan commercial buildings in Midtown South.

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 '409-411 Sixth Street v. Mogi,' involving the standard for appellate review of non-primary residence cases, 'Crestwood Loft Partners v. Crestwood Station Plaza,' dealing with anticipatory breach of contract, and 'Pitter v. Gregory', where an escrow agent's counterclaims were dismissed.

Reverse Triangular Mergers and Non-Assignment Clauses in Leases

By Peter E. Fisch and Mitchell L. Berg |

In their Transactional Real Estate column, Peter E. Fisch and Mitchell L. Berg, partners at Paul, Weiss, Rifkind, Wharton & Garrison, discuss a recent case from the Delaware Court of Chancery which suggests that reverse triangular mergers may not violate prohibitions on lease assignments—even prohibitions that specifically restrict assignments by operation of law—that do not include express restrictions on changes of control.

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 'Adler v. Ogden Cap Properties,' which held that a class action is inappropriate to determine Hurricane Sandy damages, and 'Maetreum of Cybele v. McCoy,' where a pagan religious group was allowed a tax exemption for its upstate property.

'Miller-Francis': A Disturbance in the Force

By Adam Leitman Bailey and Dov Treiman |

In their Mortgage Transactions column, Adam Leitman Bailey and Dov Treiman of Adam Leitman Bailey, P.C., discuss how the case 'Miller-Francis v. Smith-Jackson' has upset the stability of real estate transactions, specifically the enforceability of mortgages.

Marketplace

By Monica Paquette |

Securities litigation firm Murphy & McGonigle has moved and consolidated its two Manhattan offices at 1185 Avenue of the Americas. Also, Nordstrom Inc. has signed a seven-year lease for office and showroom space at 205 W. 39th St.

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 cases: 'Matter of Inquiry of Eric T. Schneiderman v. Scarpinito,' involving General Business Law §354, 'Stuart v. Stuart,' where the statute of limitations barred an action for the transfer of a family home, and 'Miranda v. Aliotta,' dealing with an oral brokerage fee.

Appellate Court Reinstates Judgment For Landlord in 'Mogi'

In their Landlord/Tenant column, Warren A. Estis and Michael E. Feinstein of Rosenberg & Estis write: When 'Mogi' I was issued in October 2012, we were concerned that at least in the Appellate Division, First Department, there were questions as to the level of deference that the appeals court would give to the trial court's factual findings in non-primary residence cases. The Court of Appeals has now put those concerns to rest.

Marketplace

By Monica Paquette |

Goldstein, Rikon, Rikon & Houghton, a six-attorney eminent domain and condemnation law boutique, has signed a 10-year lease for office space at 381 Park Ave. South. Also, the Salvation Army has sold its Chinatown Corps Community Center for $30.5 million.

Marketplace

By Monica Paquette |

Relocating downtown, Revlon Inc. will be moving its corporate offices to One New York Plaza from 237 Park Ave. Also, Sherwood Equities Inc. has signed two new five-year leases with tech companies Travel Tripper and Virtusa Corporation at 370 Lexington Ave.

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 two condominium cases: ‘Tucciarone v. Olde Oyster Bay Homeowners Association,’ where the association’s board was enjoined from enforcing its by-law fines procedures, and ‘Caton Court Condominium v. Caton Development,’ which involved a professional malpractice claim against the architect of the building.

Court Finds Village's Zoning Plan Discriminatory

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony S. Guardino of Farrell Fritz discusses the Garden City Village case and writes: The court’s holdings on standing, mootness, and liability almost certainly will be used as a roadmap for challenges in other courts to the zoning rules of other villages and towns across the state by plaintiffs advocating for affordable housing.

Marketplace

By Monica Paquette |

Toronto-based Oxford Properties Group has an agreement to purchase 450 Park Ave. for $575 million from seller Somerset Partners and the Tabor Family Trust. The deal is expected to close in a couple of months.

Leasehold Mortgagees May Have Faster Route to Collateral

By Joshua S. Sohn Jason R. Goldstein and Joseph B. Rothenberg |

In their Financing article, Joshua S. Sohn, Jason R. Goldstein and Joseph B. Rothenberg of DLA Piper write: Institutional real estate lenders and their counsel generally believe that leasehold mortgages are inferior to mortgages encumbering fee interests in real property, however, when it comes to enforcing the lender’s remedies, the leasehold mortgagee may have an advantage over its “better-secured” fee mortgagee counterpart.

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 ‘Chan v. Driggs 808’, a case dealing with an option to purchase and the sufficient material terms needed in such an agreement, and ‘Miller-Francis v. Smith-Jackson,’ a foreclosure case where the homeowner alleged that the lender was on notice of an alleged fraudulent scheme.

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 two recent cases: 'Extell Belnord v. Uppman,' involving a landlord/tenant agreement held unenforceable notwithstanding DHCR's "imprimatur," and 'Cohen v. G&M Realty,' where the court denied a motion for preliminary injunction to prevent the destruction of graffiti art commonly known as 5 Pointz.

Marketplace

By Monica Paquette |

Dallas-based Haynes and Boone has expanded its office at 30 Rockefeller Plaza. Meanwhile, Emery Celli Brinckerhoff & Abady will be increasing its size by moving to 600 Fifth Ave. from 75 Rockefeller Center.

The Need to Reform the Scaffold Law

By Kenneth M. Block |

In his Construction Law column, Kenneth M. Block of Tannenbaum Helpern Syracuse & Hirschtritt agrees with proponents of scaffold reform and writes: The time has now come to bring New York in line with every other state in the union and permit the consideration of comparative liability in a Scaffold Law litigation.

Marketplace

By Monica Paquette |

Sony Corporation of America and Credit Suisse Group have signed new agreements at 11 Madison Ave., between 24th and 25th streets, in the Flatiron District.

Luxury Deregulation After J-51 Benefits End

By Warren A. Estis and Jeffrey Turkel |

In their Rent Regulation column, Warren Estis and Jeffrey Turkel of Rosenberg & Estis write: Although the rules for rent stabilized apartments are clear, it remains to be seen how other courts will view DHCR's ruling that high income deregulation is forever prohibited for rent controlled apartments where the building in question has received J-51 benefits.

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 recent cases - one involving a holdover proceeding where the court found a former wife to be a "family member" and not a mere licensee, a second involving New York City's Pet Law, and a third involving a prescriptive easement.

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 two foreclosure cases—one in which the court found that lack of understanding of the legal process is not a reasonable excuse for failure to serve an answer or otherwise appear, and a second where a lender failed to comply with RPAPL Section 1304.

Marketplace

By Monica Paquette |

To meet an increasing need for legal services to the poor, New York Legal Assistance Group has expanded the size of its headquarters at 7 Hanover Square. Also, the New York City Department of Design and Construction is expanding its operations at The Feil Organization's Queens Atrium in Long Island City.

Restoring Historic Landmarks While Saving on Taxes

By Ezra Dyckman and Libin Zhang |

In their Taxation column, Ezra Dyckman and Libin Zhang of Roberts & Holland review the safe harbor created by the IRS which allows an historic rehabilitation tax credit for partnerships or LLCs that meet the requirements. They explain the revenue procedure against the background of the Atlantic City Convention Hall case.

The Duration of the 90-Day Notice

By Bruce J. Bergman and Peter Sullivan |

The 90-day notice mandate before a foreclosure can begin has been widely discussed, but one aspect merits remedial analysis: a section intended to stop abusive borrower shell games that some have interpreted too liberally.

Realty Law Digest

By Scott E. Mollen |

A review of recent cases involving the tax assessment of a not-for-profit organization, standing in a foreclosure action, and a landlord's allegations of an ongoing illegal business occurring in a tenant's apartment.

Marketplace

By Monica Paquette |

The defense litigation law firm of Lester Schwab Katz & Dwyer will leave 120 Broadway to move the short distance to 100 Wall St. Also, AEW Capital Management has bought 240 W. 40th St. for $63 million.

Attorney Fees Under RPL Section 234

By Warren A. Estis and Michael E. Feinstein |

In their Landlord-Tenant column, Warren A. Estis and Michael E. Feinstein of Rosenberg & Estis write how, in a 3-2 decision, the First Department resolved the "conflict" in the department as to whether a lease provision invokes a reciprocal mandate of Real Property Law Section 234.

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 two recent cases: One, a foreclosure action where the lender's blanket mortgage was deemed a "first mortgage," entitled to priority over the condominium's lien for unpaid common charges, and a second commercial landlord/tenant case where a subtenant had not exercised the option to renew, leading the court to hold that the tenant was "not relieved of consequences of the untimely renewal notice."

Marketplace

By Monica Paquette |

The law firms of Goldberg Segalla and Moritt Hock & Hamroff have expanded their offices at The Treeline Companies' Garden City Plaza complex in Long Island. Also, Google Inc. has added 17,658 square feet to its New York City headquarters in Chelsea Market.

The Enforceability of Letters of Intent

By Todd E. Soloway and Joshua D. Bernstein |

In their Real Estate Litigation column, Todd E. Soloway and Joshua D. Bernstein, partners at Pryor Cashman, examine the question: What happens when parties execute a letter of intent involving a real estate transaction, but, instead of finalizing the transaction, the deal falls through? Is the letter of intent an enforceable agreement that would give rise to liability?

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 two Landlord-Tenant cases—one in which the New York City Housing Authority was ordered to pay more than $19,000 in civil contempt penalties for failing to restore hot water to a tenant's apartment, and the second, where the Housing Court found a tenant was deprived his due process rights when he lost his rent-controlled apartment after failing to respond to eviction proceedings because he was incarcerated.

Marketplace

By Monica Paquette |

Creating a new office space and a new name were a priority for 50-attorney Otterbourg when the New York-based firm signed a 15-year extension for 45,000 square feet at 230 Park Ave. Also, Barneys New York is returning home to Chelsea with a new store.

Marketplace

By Brian Baxter |

Almost a decade after opening on Columbus Circle across from the southwestern edge of New York City's Central Park, the Time Warner Center is set to be sold by its namesake inhabitant to an investor group that helped construct the 55-story edifice.

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 two recent cases involving Eminent Domain and the Interstate Land Sales Full Disclosure Act.

Parkland Reservation: The 'Findings' Requirement

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony S. Guardino, a partner at Farrell Fritz, writes: New York law allows local governments to require that an applicant for a residential subdivision or site plan approval set aside land for park and recreation purposes or pay a fee in lieu thereof. The statutes, however, specifically require that the municipality first must find that the new development creates the need for additional recreational facilities, a finding which municipalities have sometimes neglected.

Marketplace

By Monica Paquette |

Starting this fall, St. John's University will welcome students to its new Manhattan campus at 51 Astor Pl., in the East Village. The campus will be moving from its Tribeca location at 101 Murray St., which the university sold last year for $223 million.

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 two landlord-tenant cases: One involving a commercial tenant/car wash owner who sued his landlord for tortious interference with business relations, and another where the court found a termination notice lacked sufficient facts to support a claim of illegal activity at the tenant’s apartment.

Protecting the Enforceability of Guarantees in Loan Modifications

By Jeffrey B. Steiner and Jason R. Goldstein |

In their Financing column, Jeffrey B. Steiner and Jason R. Goldstein of DLA Piper, explore effective methods for obtaining the requisite guarantor consents.

Grimm Case Sows More Confusion

By Warren A. Estis and Jeffrey Turkel |

In their Rent Regulation column, Warren A. Estis and Jeffrey Turkel of Rosenberg & Estis, first review 'Grimm v. New York State Division of Housing and Community Renewal,' where the Court of Appeals held that the Division of Housing and Community Renewal or a court can ignore the four-year look-back period for rent overcharge claims where the tenant raises a "colorable" claim of fraud. They then discuss 'Boyd v. New York State Division of Housing and Community Renewal,' where the court held that the tenant had raised a colorable claim of fraud, which DHCR had failed to properly investigate.

Marketplace

By Monica Paquette |

Syracuse-based law firm Bond Schoeneck & King is doubling the size of its Manhattan and Garden City offices after acquiring two small firms in December.

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 'Charron v. Weiner,' an appeal involving the issue of when a class-action settlement requires subclassing of the plaintiff class to ensure adequacy of representation pursuant to Federal Rules of Civil Procedure [FRCP] 23(e) and (a)(4).

Marketplace

By Monica Paquette |

One of New York City's classic hotels, the Park Lane Hotel, at 36 Central Park South, has been sold for $660 million. Also, Brookfield Office Properties Inc. has acquired One North End Ave. in lower Manhattan for $200 million.

No Need to Substitute Plaintiff Upon Mortgage Assignment

By Bruce J. Bergman |

In his Foreclosure Litigation column, Bruce J. Bergman of Berkman, Henoch, Peterson, Peddy & Fenchel, discusses case law which has thrown a wrinkle into the general rule that there is no mandate to submit an order to change the caption of an action to reflect the name of a new mortgage holder as the plaintiff.

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 recent cases involving a co-op board reversing a prior resolution with the board's then president, and a mechanic's lien being cancelled on the grounds that it had been willfully exaggerated.

Marketplace

By Monica Paquette |

Goldberg Segalla will be moving its New York City office to 600 Lexington Ave. The Buffalo-based law firm has signed a five-year lease for 12,487 square feet, more than double the size of its current space at 780 Third Ave.

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 "County of Suffolk v. Givens," "Deutsche Bank National Trust v. Hinds," and "Weason v. Permanent Mission of Romania."

Recovery of Non-Permitted Distributions

By Mitchell L. Berg and Peter E. Fisch |

In their Transactional Real Estate column, Mitchell Berg and Peter Fisch of Paul, Weiss, Rifkind, Wharton & Garrison, explore the recourse that may be available to buyers under the Delaware Limited Liability Company Act and under corresponding statutory law in other jurisdictions when sellers default on post-closing liabilities.

Marketplace

By Monica Paquette |

Kasowitz, Benson, Torres & Friedman, after considering relocating its headquarters and largest office, has signed a new 20-year lease at 1633 Broadway, where it has been a tenant since 2000. Also, the U.S. Postal Service has signed a 10-year sublease for the street-level retail space of a residential co-op building at 333 E. 14th St.

Predicate Notices Issued by Agents of the Landlord

By Warren A. Estis and Michael E. Feinstein |

In their Landlord/Tenant column, Warren A. Estis and Michael E. Feinstein of Rosenberg & Estis review the issue of when is it appropriate for an attorney or agent of the landlord to issue a notice to cure or notice of termination on the landlord's behalf.

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 two recent landlord-tenant cases. The first involves the rejection of a tenant's defense that repairs would be economically infeasible. In the second case, the court held that based on the evidence, a tenant's sporadic yelling did not constitute a nuisance.

Marketplace

By Monica Paquette |

Brooklyn Friends School's upper school will be moving to 1 MetroTech Center. The school signed a 20-year lease with Forest City Ratner Companies, a subsidiary of Forest City Enterprises Inc., for nearly 45,000 square feet, covering the first, second and third floors, at the 23-story MetroTech Center building.

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 two recent cases: "Bauer v. Beekman International Center," where the plaintiff alleged that the sponsor failed to sell unsold condominium units, and "Riverdale Osborne Towers Housing Assoc. v. Keaton," which dealt with the issue of operating a day care facility in an apartment located in a HUD building.

Default Approval of Subdivision Applications

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony S. Guardino of Farrell Fritz, states: Local governments must meet various deadlines when considering zoning-related applications. But a municipality's failure to decide a subdivision application on time can lead to a unique result: its automatic approval.

Jones Day to Relocate Office Downtown

By Monica Paquette |

Jones Day has signed a 20-year lease with Brookfield Office Properties for 330,000 square feet at 250 Vesey St., at Brookfield Place. The move is expected to take place in early 2016.

Punishing 'Bad Behavior': When Non-Recourse Becomes Full Recourse

By Joshua Sohn and Jason Goldstein |

In their Financing column, Joshua Sohn and Jason Goldstein of DLA Piper, focuses on some recent cases in New York and other states that are informative to a current understanding of the ability of lenders to enforce non-recourse carve-out guarantees.

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 one recent case involving a landlord who was found in contempt for disregarding court orders, and another action commenced by families residing near the Love Canal landfill who were barred from taking soil samples unless defendants had equal access.

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 one litigation case involving the renovation by a defendant developer of a hotel where the plaintiffs sought rescission of their purchase agreement, and another involving the landlord of a commercial property who commenced a non-payment proceeding against a respondent doctor/tenant.

The Enforceability of Liquidated Damages

By Kenneth M. Block |

In his Construction Law column, Kenneth M. Block, a member of Tannenbaum Helpern Syracuse & Hirschtritt, informs that while liquidated damages are generally enforceable under New York law, there are circumstances in which New York courts will strike them down where the amount of damages provided for bears no relation to the other party's actual damages.

Marketplace

By Monica Paquette |

LexisNexis Legal & Professional, an affiliate of Reed Elsevier Inc., will be moving its New York City headquarters to 230 Park Ave. Also, Lee Hecht Harrison has leased 22,000 square feet, a portion of the sixth floor, under a 10-year lease.

Court Rejects DHCR Succession Interpretation

By Warren A. Estis and Jeffrey Turkel |

In their Rent Regulation column, Warren A. Estis and Jeffrey Turkel of Rosenberg & Estis, discuss 'Murphy v. New York State Division of Housing & Community Renewal,' where the Court of Appeals, by a 4-3 margin, determined that the DHCR had misinterpreted its own succession regulation with respect to a Mitchell-Lama tenant.

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 recent cases, one in which the court held that a not-for-profit drug and alcohol treatment organization was held a "social settlement organization," which is exempt from city water and sewer use charges.

Marketplace

By Monica Paquette |

The Watchtower Bible and Tract Society of New York is closing on the sale of five of six of its Brooklyn properties for $375 million. Also, Global One Real Estate Fund has acquired the Promenade Apartments, a state-administered Mitchell-Lama building, at 150 W. 225 St., for $18.5 million.

Marketplace

By Monica Paquette |

Expanding its New York City office, Meister Seelig & Fein has signed a long-term lease for space at 125 Park Ave., at 42nd Street. Also, the Institute of Culinary Education has found the right recipe to relocate to 225 Liberty St., formerly known as Two World Financial Center.

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 two recent cases involving a property owner who was entitled to damages caused by adjacent construction, and an adverse possession claim against the MTA which survived a motion to dismiss­.

Loan Structuring and the Equity of Redemption

By Todd E. Soloway and Stephanie R. Kline |

In their Real Estate Transactions column, Todd E. Soloway and Stephanie R. Kline of Pryor Cashman write: It is essential that when structuring loan transactions, lenders remain cognizant of the equity of redemption principle, and avoid including any provision at the outset which would interfere with the borrower's right to discharge a debt prior to a foreclosure sale. By making adjustments in timing and structure, coupled with appropriate contractual provisions, lenders can achieve their lending criteria while still protecting themselves in a way that will ultimately be upheld by the courts.