Real Estate Update

Warren A. Estis and Michael E. Feinstein

'Hamilton': Enforcement of Holdover Rent Provisions

By Warren A. Estis and Michael E. Feinstein |

In their Landlord-Tenant column, Warren A. Estis and Michael E. Feinstein discuss 'Hamilton 65th Partners, LLC v. Smallbone Inc.', which illustrates how a landlord's conduct may preclude enforcement of a holdover rent provision.

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 'Aponte v. N.Y. City Housing Authority,' where tenants were granted a directed verdict on NYCHA's liability in failing to eradicate a bedbug issue.

Bruce J. Bergman

The New Foreclosure Statutes: A Review of the Perils

By Bruce J. Bergman |

In his Foreclosure Litigation column, Bruce Bergman discusses the new omnibus foreclosure law and he addresses the numerous issues created by changes to certain aspects of the law such as judgment and sale, conveyance impositions, settlement conferences, maintenance obligations and the expedited procedure for vacant and abandoned properties.

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 'Pfeffer v. N.Y. City Depart. of Finance', where class certification granted in ADA suit over rent freeze program's administration by agency; and 'Houdek Real Estate Co. v. Bayport Postal Realty’, where a landowner's adverse possession claim failed, but its prescriptive easement assertion was allowed to proceed.

Anthony S. Guardino

Exhaustion of Remedies is Often Key to Seeking Relief

By Anthony S. Guardino |

The well-known doctrine of exhaustion of administrative remedies applies in land use and zoning matters. In his Zoning and Land Use Planning column, Anthony Guardino discusses this doctrine and also the important exceptions to it.

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 'Dolomite Products v. Town of Ballston,' where a challenge to a zoning decision was held not 'ripe' because the final decision on the underlying project was never issued.

Jeffrey B. Steiner and Jason R. Goldstein

Pitfalls of Relying on General Indemnities

By Jeffery B. Steiner and Jason R. Goldstein |

In their Financing column, Jeffery B. Steiner and Jason R. Goldstein write: Lenders cannot rely exclusively on generic catch-all indemnification provisions to recover all of their loan expenses from their borrowers. To the extent that lenders expect to enter into hedging transactions when extending credit, the loan documents should delineate the circumstances when the borrower will be liable for losses arising from unwinding any such transactions, including upon an early prepayment.

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 'Old Country Road Realty v. Zisholtz & Zisholtz', where the court rejected a tenant's claim of five percent late fee as usurious, granting the landlord summary judgment; and 'Women in Need, Inc. v. Allen', where the respondent was granted vacatur of judgment in a non-payment proceeding.

Kenneth M. Block and Joshua M. Levy

Ensuring Additional Insured Status in Construction Agreements

By Kenneth M. Block and Joshua M. Levy |

In their Construction Law column, Kenneth M. Block and Joshua M. Levy discuss how the ruling in 'Gilbane Building v. St. Paul Insurance Co.' has heightened uncertainty among those who believe they are protected by their status as an additional insured under a policy, and advise that owners and their counsel should either review the language of the blanket additional insured endorsements carefully or require that any necessary entities be clearly named in specific additional insured endorsements.

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 'East Village Re Holdings v. McGowan,' 'City Club v. Park Trust,' and 'NSA 2015 Owner v. Frederick.'

Warren A. Estis and Jeffrey Turkel

Conditional Rentals Can Lead to Default Rent Formula

By Warren A. Estis and Jeffrey Turkel |

In their Rent Regulation column, Warren A. Estis and Jeffrey Turkel discuss how some landlords have been known to insert clauses into leases where the incoming tenant represents that they will not be a primary resident of the apartment. This is usually part of a scam to "deregulate" an apartment that was otherwise subject to rent stabilization. They explain that such clauses are illegal and discuss how these clauses have resulted in adverse consequences to both individual landlords and the real estate industry as a whole.

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 'Thurston v. Sisca,' 'Morgan Stanley Mtge. Loan Trust v. Morgan Stanley Mtge. Capital Holdings,' and 'Cushman & Wakefield of Connecticut v. Access Private Duty Services.'

Ezra Dyckman and Daniel W. Stahl

New Regulations Disregard Partnership 'Bottom Guarantees'

By Ezra Dyckman and Daniel W. Stahl |

In their Taxation column, Ezra Dyckman and Daniel W. Stahl write that partners have long enjoyed the ability to influence a partnership's allocation of its liabilities by making a "bottom guarantee" of partnership debt, and conclude: "We have known that the end was coming for bottom guarantees since the issuance of proposed regulations by the Treasury Department in 2014. That expectation has now become a reality, as temporary regulations regarding bottom guarantees were issued earlier this month."

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 'RSP 100 Property LLC v. Brant,' where nuisance allegations made to justify terminating a landlord/tenant relationship were held unproven; and 'Deutsche Bank v. Flagstar Capital Mkts,' where the court held that a 2015 Court of Appeals ruling mandated dismissal of a 2014 breach action as time-barred.

Mitchell L. Berg and Peter E. Fisch

Greater Clarity Needed for New HVCRE Regulations

By Mitchell L. Berg and Peter E. Fisch |

In their Transactional Real Estate column, Mitchell Berg and Peter Fisch discuss the new high volatility commercial real estate, or "HVCRE" rules and conclude: "The full impact of the new HVCRE regulations on the commercial real estate industry is still unclear, with banks continuing to develop their positions on the issue and borrowers testing alternatives for their financing needs. This lack of clarity should dissipate over time as market practice develops and if regulators issue guidelines and clarifications that provide more direction to lenders and borrowers."

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: 'Pena v. Lockenwitz,' 'ROC Century Associates v. Papavasiliou,' and '1120 Bergen Street v. Beckford.'

Adam Leitman Bailey and Dov Treiman

Post-Lease Expiration Nonpayment Proceedings

By Adam Leitman Bailey and Dov Treiman |

In their Housing Litigation Column, Adam Leitman Bailey and Dov Treiman write: As a general rule of thumb, when there is a definitive appellate pronouncement on a principle of law in one judicial department and the other departments are silent, the other departments will follow the departments who have spoken to the issue. However, this has not been happening in the lower courts of the First Department who continue to adhere to a position contradicted by authority controlling in the Second and Third Departments: that summary nonpayment proceedings do lie after the expiration of a lease.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen reviews cases involving the fiduciary duty owed by tenants-in-common, the requirements of a notice of nonrenewal based on a landlord's assertion he was recovering the subject apartment "for the use and occupancy of himself and his immediate family," and the impact of a subsequent amendment to a land use code during an appeal.

Warren A. Estis and Michael E. Feinstein

Due Process Requirements Regarding Section 8 Tenants

By Warren A. Estis and Michael E. Feinstein |

In their Landlord-Tenant Law column, Warren A. Estis and Michael E. Feinstein discuss 'West Farms Estates v. Aquino' where a landlord attempting to evict a Section 8 tenant based on her son's criminal activity was held to have violated the tenant's constitutional rights.

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 'Garry v. Ryan & Henderson, P.C.,' where the court found issues of fact existing as to whether a landlord promptly repaired premises' parking garage; and 'Matter of City of New York v. 2305-07 Third Ave., LLC,' where an EDPL Article 4 Eminent Domain Proceeding for certain Harlem parcels was held timely brought by the city.

Anthony S. Guardino

When a Municipality Makes a Mistake

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony S. Guardino discusses how estoppel is rarely applied against a local government, which allows zoning and other kinds of errors to be corrected.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen reviews 'Congel v. Malfitano,' where the court dealt with determining the value of a partnership interest post dissolution; and 'Colleen & John Austin v. Town of Farmington,' where a fair housing claim was revived in a property restoration suit.

Jeffrey B. Steiner and Jason R. Goldstein

The Importance of Reviewing Term Sheet Contingencies

By Jeffrey B. Steiner and Jason R. Goldstein |

In their Financing column, Jeffrey B. Steiner and Jason R. Goldstein discuss term sheets contingencies and write: Term sheet disputes can be frustrating but they are a natural result of a fast-paced negotiation that seeks to distill a couple hundred pages of loan documents down to a ten-page letter agreement. A well-written term sheet will protect a lender from being obligated to lend on terms that, following diligence or complete loan document negotiation, turn out to be unacceptable to the lender.

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 'Graham v. 420 East 72nd Tenants Corp.,' '729 Prospect Realty Service Corp. v. Rodriguez,' and 'Fuller v. 79 Hamilton Place Housing.'

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 “Jack Kelly Partners v. Zegelstein,” where the Appellate Division ruled on issues of fact as to frustration of purpose, recission and breach of contract.

Bruce J. Bergman

The New 90-Day Notice Rules: A Potential Morass for Lenders

By Bruce J. Bergman |

In his Foreclosure Litigation column, Bruce Bergman discusses the implications to lenders of the changes to the 90-day notice provision for home loans, offering that while some of the changes are innocuous, others are "quite portentous and may create unintended consequences."

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 “N.Y. City Construction v. Morgenstern Bros. Realty,” where the court granted tenant a Yellowstone injunction, finding the landlord’s assertions “speculative"; and “Oceanview Manor Home for Adults v. Vargas," where the Housing Court was found to have jurisdiction over the termination of an SSL facility resident.

Warren A. Estis and Jeffrey Turkel

Newly Created Apartment is Luxury Deregulated

By Warren A. Estis and Jeffrey Turkel |

In their Rent Stabilization column, Warren A. Estis and Jeffrey Turkel discuss case law, "First-Rent Rule" case law, including 'Rubin v. Decker Assoc.,' and write: The creation of new units has always been the gold standard for raising rents and avoiding rent overcharge claims. As 'Rubin' makes clear, creating a new unit has the added benefit of permanently deregulating that unit if the first rent charged exceeds the luxury deregulation threshold.

Adam Leitman Bailey

Recent Efforts to Speed Up Foreclosure Proceedings in N.Y.

By Adam Leitman Bailey |

Adam Leitman Bailey discusses some of the changes the state Legislature and the state courts have taken to expedite foreclosure proceedings and how they will affect the New York foreclosure process.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen reviews 'Roger Morris Apt. Corp. v. Varela,' where a factual dispute barred summary judgment and failure to show 'ample need' led to a denial of discovery; and 'Matter of Shilian v. All Sons Electric Corp,' where a contractor showed good cause to allow the court to extend a mechanics' lien nunc pro tunc.

Ezra Dyckman and Daniel W. Stahl

And the Wall Came Crashing Down

By Ezra Dyckman and Daniel W. Stahl |

In their Taxation Column, Ezra Dyckman and Daniel W. Stahl discuss the Tax Court's decision in 'Alphonso v. Commissioner' which provides taxpayers with a reminder of what constitutes a casualty loss for an individual.

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: 'Git Leb, LLC v. Golphin,' 'IA2 Service LLC v. Quinapanta,' and '135 W. 13, LLC v. Judith Stolerman,' and a contract case, 'Wang v. Martinez.'

Todd Soloway and Bryan Mohler

Lifting the Veil on Hotel Management Expenses

By Todd E. Soloway and Bryan T. Mohler |

In their Real Estate Litigation column, Todd Soloway and Bryan Mohler explain the common hotel management agreement cost structure and explore some common related pitfalls and the factors a developer should consider during the due diligence and negotiation process.

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 “Kosciuszko Plaza v. N.Y. City Department of Housing Preservation and Development,” where an owner's petition challenging HPD's denial of J-51 tax benefit application was held time-barred, and “61 West 37th Street LLC v. Senevi,” where a landlord was held not to be entitled to an assignment fee.

Kenneth M. Block and Joshua M. Levy

New York Slow to Embrace the 'Design-Build' System

By Kenneth M. Block and Joshua M. Levy |

In their Construction Law Column, Kenneth M. Block and Joshua M. Levy state that the 'design-build' system attempts to eliminate the risks of the 'design-bid-build' system by the owner retaining a single entity that is responsible for providing both the design and construction of the project. They note, however, that New York lags behind other parts of the country in making use of design-build because of conflicting legal authority that has created an uncertain regulatory environment.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen reviews recent cases, including one where a co-op requested its insurer pay for structural work needed to bring the building into compliance with codes, asserting that because the need for those repairs was discovered during water damage remediation, which was covered, the structural work should be covered by the policy's 'Blanket Ordinance or Law Coverage Endorsement.'

Warren A. Estis and Michael E. Feinstein

Landlord's Noncompliance Leads to Contempt Charge(s)

By Warren A. Estis and Michael E. Feinstein |

In their Landlord-Tenant Law column, Warren Estis and Michael Feinstein discuss the case "729 Prospect Realty Service Corp. v. Rodriguez," where the court held a landlord in both civil and criminal contempt of court for what it considered "an obvious and flagrant failure" to comply with prior court orders.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen reviews 'Chateau Owners Corp. v. Monahan,' where a co-op sought to terminate a tenant's lease because the tenant had allegedly made plumbing modifications without the co-op's permission; and 'Green Tree Servicing v. Christodoulakis,' where prejudgment interest was awarded on an unjust enrichment claim.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen reviews 'Kimso Apartments v. Mateo,' where a landlord failed to establish that harboring pit bulls was a “hazardous act"; and 'Tomic v. 92 East LLC,' where plaintiffs failed to demonstrate that the current owner knew that the prior owner unlawfully deregulated the apartment.

Anthony S. Guardino

Guidelines for Evaluating Standing in Land Use Cases

By Anthony S. Guardino |

In his Zoning and Land Use Planning column, Anthony Guardino discusses a recent decision by the New York Court of Appeals which helps to clarify the "special injury" requirement of standing.

Jeffrey B. Steiner and Jason R. Goldstein

Guarantees: When Is a Contest 'Material'?

By Jeffrey B. Steiner and Jason R. Goldstein |

In their Financing column, Jeffrey B. Steiner and Jason R. Goldstein discuss guarantee agreements and advise: "In order to ensure that a lender's rights to exercise its default remedies are protected, guaranty agreements should always be negotiated with care to ensure that the guarantor will be held sufficiently liable for any losses incurred by the lender."

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen '805 Car Wash v. Lichter,' where a lease's proposed assignee was held to lack standing to assert a claim against the landlord of a car wash over an allegedly wrongful and unreasonable refusal to grant consent to assign the business; and 'Tomic v. 92 East LLC,' where tenants were found entitled to summary judgment in an overcharge suit.

Peter E. Fisch and Mitchell L. Berg

Exceptions in Rights of First Refusal Provisions

By Peter E. Fisch and Mitchell L. Berg |

In their Transactional Real Estate column, Peter E. Fisch and Mitchell L. Berg discuss how certain scenarios, such as foreclosure sales, are typically not intended to trigger a right of first refusal but may inadvertently be captured by such provisions that do not expressly exclude them.

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 'HSBC Bank v. Zair,' where a mortgagee bank could not be forced to accept ownership of a home destroyed by Superstorm Sandy; and 'Yashar Foundation v. Schwatzman,' where a non-profit was denied summary judgment in a holdover proceeding to recover possession for own use.

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 “Step By Step, Inc. v. City of Ogdensburg,” where the court found that animus against the disabled was a significant factor in the city's decision to deny a zoning application; and “Galanova v. Safir,” where justices dismissed a co-op tenant's defamation suit.

Warren A. Estis and Jeffrey Turkel

Individual Apartment Improvements: an Overview

By Warren A. Estis and Jeffrey Turkel |

In their Rent Regulation column, Warren A. Estis and Jeffrey Turkel discuss a landlord's right to add new equipment and improvements to an apartment, thus enabling a rent increase.

Bruce J. Bergman

Legislative Assaults on Mortgage Holders

By Bruce J. Bergman |

In his Mortgage Litigation column, Bruce J. Bergman discusses a disturbing new law just passed in New York's Town of Hempstead.

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 “1301 Properties v. Abelson,” where ex-Dewey partners were spared liability for lease payments.

Ezra Dyckman and Daniel W. Stahl

Conflicting N.Y. City and State Transfer Tax Rulings

By Ezra Dyckman and Daniel W. Stahl |

In 2015, Ezra Dyckman and Daniel W. Stahl discuss the tax on transfers of real property and two decisions involving the interaction between the rules governing a mere change in form and the transfer of a controlling interest in an entity owning real property. In one holding, New York City prevailed, but the same taxpayer on the same issue prevailed in the state case.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen reviews 'Colin Realty v. Manhasset Pizza,' where the court found that the defendant did not have any "easement, license, occupancy rights, or other right of access over the plaintiff's real property," and 'AR v. GR' where a Referee ruled that the asking price for the subject home was unrealistically high following Super Storm Sandy.

Kenneth M. Block and Joshua M. Levy

Recommended Owner Modifications to Standard AIA Documents

By Kenneth M. Block and Joshua M. Levy |

In their Construction Law column, Kenneth M. Block and Joshua M. Levy offer suggestions for modifications to B101 (Standard Form of Agreement Between Owner and Architect) and A107 (Standard Form of Agreement Between Owner and Contractor for a Project of Limited Scope) forms.

Scott E. Mollen

Realty Law Digest

By Scott E. Mollen |

Scott E. Mollen reviews 'Picaro v. Pelham 1130,' where the NYC Department of Buildings was released from liability for violation of ADA and Fair Housing Act in relation to a landlord shutting down an elevator.