If you are buying or selling a home in Buffalo or WNY, you might be confused on what you should do.  It’s important to have someone direct you along the way. Buffalo Real Estate Attorney Richard Cole has created the New York Real Estate Law Guide to help you along the way with buying, selling, and litigation matters.

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Buying and Selling in Western New York

Purchasing or selling property it is often the largest financial investment a person or corporation undertakes. Each transaction offers exciting opportunities as well as risks. Some of this is acceptable risk, the price of a future reward. Other risks are avoidable. Whether you’re looking for a bigger house for your growing family, purchasing a fixer-upper to flip, investing in a rental property, selling a piece of inheritance, or moving your business, you owe it to yourself to seek expert help before you make a purchase or a sale. Educate yourself about the timelines, hazards, opportunities, and best practices of typical real estate transactions. Then look for an experienced real estate attorney who can appraise you of your options, draft and review contracts, offer pre-signature counsel, and help protect you in your sale or investment.

Landlord and Tenant Rights

New York has strict rules to protect the rights of both landlords and tenants. These laws aim to create a fair relationship and ensure that both parties uphold their responsibilities. For landlords, they must provide a habitable property and repair any damage that affects the tenant’s safety or comfort. Tenants, in return, must pay rent on time and keep the property clean and undamaged.

A landlord cannot evict a tenant without going through a legal process. Eviction requires a court order, and landlords cannot simply lock out tenants or cut off utilities to force them to leave. Tenants who face unlawful eviction have the right to file a complaint and may receive compensation if the court finds the landlord at fault.

New York State also offers rent control and rent stabilization laws in some areas, especially in New York City. These laws limit how much landlords can increase rent each year. Rent control applies to buildings constructed before 1947, while rent stabilization applies to newer buildings. Tenants in rent-stabilized apartments have the right to lease renewals, and their rent increases are limited to the amount allowed by the Rent Guidelines Board.

New York State Laws on Short-Term Rentals

One of the most important things to understand about short-term rentals in New York is the Multiple Dwelling Law. This law makes it illegal for most buildings with three or more units to be rented for fewer than 30 days unless the permanent tenant is living in the unit during the rental period. This means that if you own or manage a property with multiple units, you may not be allowed to rent them out for short stays unless you live there at the same time. This law was put in place to address concerns about safety and overcrowding, as well as to protect the city’s housing stock.

In addition to state laws, many cities and municipalities within New York have their own regulations regarding short-term rentals. New York City, for instance, has some of the strictest rules in the country. In fact, it is nearly impossible to legally rent out an entire apartment in most parts of the city for fewer than 30 days. Short-term rentals that violate the city’s laws can result in fines of up to $7,500 per violation.

Zoning Restrictions and Building Regulations

Zoning laws also play a major role in determining whether short-term rentals are allowed in certain areas. Different zones are established for various uses, such as residential, commercial, or mixed-use. In many residential zones, short-term rentals may be prohibited or heavily restricted. If your property is in a commercial or mixed-use zone, you may have more flexibility. However, even in areas where short-term rentals are permitted, there may be building code regulations to follow. This includes safety requirements such as smoke detectors, fire extinguishers, and emergency exits.

Additionally, certain buildings may have their own rules against short-term rentals, even if they are allowed by the city or state. Condominium and cooperative buildings, for example, often have bylaws that prohibit owners from renting their units on a short-term basis. It is crucial to review your building’s bylaws or consult with the building’s board to ensure you are in compliance.

Zoning laws are regulations that define how land can be used and developed in a specific area. These laws have a significant impact on the real estate industry in New York State, as they dictate what types of buildings can be constructed, where they can be located, and how they can be used. In this blog post, we will explore the impact of zoning laws on the New York State real estate market.

The Basics of Zoning Laws

Zoning laws were first introduced in the United States in the early 1900s as a way to regulate land use and promote public health and safety. Today, zoning laws are still used for these purposes, as well as to encourage economic growth, preserve natural resources, and maintain the character of neighborhoods.

Zoning laws are typically divided into several categories, including residential, commercial, and industrial. Each category has its own set of regulations, such as minimum lot size, maximum building height, and the types of activities that are allowed. Zoning laws also specify the conditions under which a property can be subdivided, the amount of parking required, and the setbacks required from the street and neighboring properties.

The Impact of Zoning Laws on New York State Real Estate

Zoning laws have a significant impact on the New York State real estate market, as they dictate what types of buildings can be constructed, where they can be located, and how they can be used. The following are some of the ways in which zoning laws affect the real estate industry in New York State:

Property Values

Zoning laws can have a significant impact on property values. For example, if a property is zoned for residential use only, it may have a lower value than a property that is zoned for commercial use. This is because commercial properties are typically more valuable due to their potential to generate income.

Development Opportunities

Zoning laws can also affect development opportunities. If a property is zoned for residential use only, it may be difficult or impossible to develop a commercial property on the site. This can limit the potential for economic growth in certain areas.

Neighborhood Character

Zoning laws also play a role in maintaining the character of neighborhoods. For example, if a neighborhood is zoned for single-family homes only, it will likely have a different character than a neighborhood that is zoned for multi-family homes or commercial buildings.

Environmental Impact

Zoning laws can also have an impact on the environment. For example, if a property is located in a flood zone, zoning laws may require that the building be raised above the flood level to prevent damage in the event of a flood.

Public Safety

Zoning laws can also promote public safety. For example, if a property is located near a busy intersection, zoning laws may require that a buffer zone be created to protect pedestrians and motorists.

In recent years, there has been a growing recognition of the impact of zoning laws on housing affordability in New York State. In particular, many advocates argue that restrictive zoning laws contribute to a shortage of affordable housing, as they limit the supply of new housing that can be built. This is particularly true in desirable areas where zoning laws may restrict the construction of multi-family housing, forcing lower-income residents to seek housing in less desirable areas

Short-Term Rental Taxes in New York

Another important consideration when offering a short-term rental is the tax implications. In New York, short-term rental income is subject to both state and local taxes. The most common taxes that apply to short-term rentals include sales tax and hotel occupancy tax. The sales tax rate in New York varies by location but is typically around 8 percent. The hotel occupancy tax, which also varies by location, is often around 5 percent.

In New York City, for instance, short-term rental hosts are required to collect a sales tax of 8.875 percent, plus an additional hotel room occupancy tax of 5.875 percent. Failure to collect and remit these taxes could result in penalties and fines. Many rental platforms like Airbnb will automatically collect and remit these taxes on behalf of their hosts. However, it is your responsibility as a host to make sure this is done properly and that all required taxes are paid.

In addition to these taxes, you may be required to pay income tax on the rental income you earn. Whether you need to report your rental income depends on various factors, such as the amount of time you rent out your property and the total amount of rental income you earn during the year. It is advisable to consult with a tax professional to ensure you are complying with all tax obligations.

Insurance Considerations for Short-Term Rentals

Offering a short-term rental property comes with certain risks, and it is important to have the proper insurance coverage in place. Standard homeowners’ insurance policies may not cover damages or liability claims that arise from short-term rentals. For instance, if a guest is injured while staying at your property, your regular insurance policy might not provide coverage for medical bills or legal fees. Additionally, damage caused by guests may not be covered under your existing policy.

To protect yourself, you may need to purchase additional insurance specifically for short-term rentals. Some companies offer policies that are designed for this purpose and provide coverage for both property damage and liability. Additionally, many short-term rental platforms, such as Airbnb, offer host protection programs that provide a certain level of coverage. However, these programs may not cover all types of claims, so it is important to review the terms carefully and consider purchasing your own insurance policy for added protection.

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Licensing and Registration Requirements

Depending on where your property is located, you may be required to obtain a license or register your short-term rental with local authorities. In New York City, for example, hosts are required to register their short-term rental with the city’s Office of Special Enforcement. Failure to do so can result in fines and penalties.

Other cities in New York, such as Buffalo and Rochester, may also have registration or licensing requirements for short-term rentals. These rules are typically designed to ensure that short-term rental properties meet safety and health standards and do not negatively impact the surrounding community. Be sure to research the specific requirements in your area and complete any necessary registration or licensing procedures before offering your property for rent.

Assembling a Trusted Team

As with any serious job, it’s important to know you’ve assembled the right team to help you through your real estate transaction. If you’re a young person moving into a new apartment, you might have a group of friends coming over to lift boxes and paint the walls. If you’re a newly married couple buying a first home, you’re a tight-knit team of two – though you probably have parents, cousins, friends, aunts, and uncles helping in various ways, watching children, bringing over food and housewarming presents, and giving you advice (maybe too much advice!) about the joys – and headaches – of homeownership. If you’re a real estate investor, regularly buying, refurbishing, and selling properties, your team is probably an extended network – you have a “plumbing guy,” an “HVAC guy,” a “tax guy,” and so on.

If you’re moving toward a real estate transaction, you may already have a trusted team assembled – but be sure not to leave out any key players. An experienced attorney will be indispensable in navigating the legal issues of real estate.

If you’re a seller, you’ll have a:

• Realtor
• Attorney
• Surveyor
• Title insurance company retained by your attorney

If you’re a buyer, you’ll have a:

• Lender
• Loan broker
• Realtor
• Home inspector
• Attorney
• Insurance agent

All of these individuals are experts in their respective areas, but don’t forget that you lead the team. These professionals should be communicating regularly and working together to assist you.

>> How can an attorney help me in a real estate transaction?

Whether you are a buyer or a seller, your attorney will assist you from the time you enter the contract all the way through the closing and beyond. Once your attorney receives the contract, he or she will reach out to you to discuss the contract and its terms, assess your personal situation – whether you will be selling, buying, or renting a home, and whether you’re coming from out of state or moving out of state – to understand how to assist you.

Following that conversation, the attorney can prepare the attorney approval letter under the terms of the contract. They next steps depend on whether you’re buying or selling.

If you’re the seller, your attorney will ask you to gather certain documents. If you are the purchaser, the next step is the title examination and a discussion about the terms of your mortgage.

Your attorney should advise you about the contract, including the timeline of the transaction, any significant or unusual terms, and your obligations under the terms of the agreement.

>> What if I sign a contract without an attorney seeing it?

You can enter a contract without any attorneys seeing it. The Erie County Bar Association contract, which is widely used in Western New York, allows attornetrys three business days to review and approve a contract after they receive it. This is called the attorney approval contingency.

The essential point is that within the allotted time an attorney can either approve the contract, conditionally approve the contract, or disapprove the contract.

If the attorney disapproves the contract, the transaction is over, but if the attorney approves the contract conditionally, the parties can meet and work through the conditions until the contract has unconditional approval.

>> Why do I need a real estate broker to buy or sell a home?

A real estate broker has expertise that you need, either in establishing a sale price or determining a purchase price to offer. If you’re a seller, a realtor can help manage your expectations, suggest low-cost improvements to increase curb-appeal, and counsel you away from lowball offers. If you’re a buyer, you can save a lot of time, gas money, and dashed hopes by talking with a realtor about your needs and expectations. He or she can direct you to the right price range and neighborhood.

>> Do homeowners associations need attorneys?

The board of a co-op, condo, or homeowners association has a lot of responsibility and power. Balancing fiduciary duties with the needs of each member can be quite a struggle, and all board members – generally not legal experts – must follow all the laws and codes governing the residential property. A co-op, condo, or homeowners association may want to retain a lawyer for services including:

• Handling disputes with and between shareholders and members
• Financing
• Modification and preparation of leases and by-laws

Guide to Buying Real Estate

If you’re buying a house for your family, that’s a long-term investment. You’re making this purchase to provide a safe, comfortable, pleasant environment for yourself and your loved ones. If you’re buying a project-property, you’re probably thinking about improvements and short-term gains, with a sale price in mind even as you make an offer to buy. If you’re looking for a new office space, a garage or shop, or a rental property, you’re making a long-term bet on your business affairs. No matter the reason you’re looking to buy, the real estate purchase you hope to make will be a serious investment. Make sure you’re prepared for all the steps between you and the closing date, and get the right people to help you through the process.

>> What are the first steps to purchasing a home?

As soon as you decide to purchase a home, reach out to a lender and obtain a preapproval or prequalification letter. The lender will perform a cursory analysis of your finances and draft a letter which generally states that you qualify for a mortgage up to a certain dollar amount. When you are ready to make an offer on a specific home, you will use that document to offer the seller a certain level of security that you’re able to afford that home.

After you get your prequalification letter, you should ask the loan officer about the additional documents you’ll need to complete the application process and when you should get those documents to your lender.

Next, select a realtor with whom you feel comfortable to assist you in viewing various homes, choosing a home on which to make an offer, and preparation of a real estate purchase contract on your behalf, tendering that offer to the seller’s listing agent.

Once you have entered a contract, you will retain a real estate lawyer to assist you in completing the transaction. The attorney should speak with you about the details of your transaction and your needs, gather information about where you’re presently residing and whether you need to meet any specific deadlines for vacating those premises, and take other precautions to protect you throughout the transaction. He or she will examine the property’s title, all sale documents, and all lender documents on your behalf, and then attend the closing with you to complete the transaction.

>> What should I know before entering a real estate contract as a purchaser?

Entering a contract as the purchaser means you are making an offer to purchase a piece of property. This isn’t binding – until the seller signs. Upon receipt of your offer, the seller has the right to refuse outright, accept outright, or reply with a counter offer. An outright acceptance would make your contract legally binding. Likewise, if you accept the counteroffer, that counteroffer becomes a binding contract.

>> What happens after I sign a real estate contract?

Between the signing of a contract and closing, real estate transactions pass through several phases.

Attorney Appraisal – Attorneys for both parties have three days to review the contract. They can accept it outright, reject it outright, or offer a conditional approval, initiating negotiations.

Home Inspection – The buyer’s home inspector will find the property satisfactory as-is, or list issues the buyer and seller need to address and negotiate.

Title Examination – The seller gathers certain relevant documents, including a title search, survey, paid tax receipts, and mortgage statements, and provides them to their attorney who will update the title search and survey and send them to the buyer’s attorney. Once the buyer’s attorney reviews those title documents, he or she will undertake a title examination.

Final Review – As soon as the title examination is completed, the buyer’s attorney forwards a title report to the seller’s attorney and the attorney for the bank. It will outline the documents required to complete the sale and circulate them back to the buyer’s attorney for final review before closing. During that process, the buyer works with the lender to get the loan cleared to close as soon as the title documents have been examined, all title deficiencies addressed, and the loan cleared to close. Then, the parties proceed to the closing table.

Investing in real estate is a significant decision that requires careful consideration and thorough research. When it comes to investing in one of the most iconic and dynamic real estate markets in the world – New York City – the stakes are even higher. New York real estate offers a unique blend of opportunities and challenges, making it essential for potential investors to evaluate several key factors before making their move. Whether you’re a seasoned investor or a newcomer to the real estate market, here are the top factors to consider when investing in New York real estate.

Location, Location, Location

In New York real estate, location is the single most critical factor that can significantly impact the value and potential return on investment. The city is divided into various neighborhoods, each with its own distinct characteristics and market dynamics. Proximity to public transportation, amenities, schools, and attractions can greatly influence the desirability of a property. Areas that are undergoing revitalization or are in close proximity to popular districts often offer great potential for future appreciation.

Market Trends and Economic Indicators

Understanding the current and projected market trends is crucial for making informed investment decisions. Keep an eye on key economic indicators such as job growth, population trends, and local industries. A strong job market and a growing population can indicate sustained demand for housing, driving property values higher. Researching historical price trends can also provide insights into potential future appreciation.

Property Type and Investment Strategy

New York offers a diverse range of property types, including condos, co-ops, townhouses, and multi-family buildings. Your investment strategy will depend on factors such as your risk tolerance, budget, and long-term goals. Condos might offer easier management and potential rental income, while townhouses could provide more space and potential for appreciation. Co-ops often have stricter ownership requirements and may require higher down payments. Clarifying your investment strategy early on will help narrow down your property search.

Affordability and Financing

New York City is known for its high real estate prices, so affordability is a significant consideration. Determine your budget and secure pre-approval for financing before you start your search. Explore different mortgage options and lending institutions to find the best terms that align with your financial goals. Be prepared for potential fluctuations in interest rates and market conditions that could impact your borrowing costs.

Legal and Regulatory Factors

Navigating the legal and regulatory landscape is a vital aspect of investing in New York real estate. Co-op boards and homeowner associations may have specific rules and requirements that potential buyers must adhere to. Zoning regulations, property taxes, and potential rent control laws can also impact your investment. Consulting with legal experts who specialize in New York real estate can help you navigate these complexities.

Property Condition and Inspection

Conduct thorough property inspections to assess the condition of the property before purchasing. In a competitive market like New York, properties can sometimes be listed at a premium due to their location, leading some sellers to overlook necessary repairs or maintenance. Hire qualified inspectors to identify any potential issues, such as structural problems, plumbing, electrical, or HVAC systems.

Rental Market and Cash Flow

If you’re considering renting out the property, evaluate the local rental market and potential cash flow. Rental demand can vary widely across neighborhoods, so research average rental rates and occupancy rates. Calculate your potential rental income against your expenses, including mortgage payments, property management fees, maintenance costs, and property taxes, to determine the property’s profitability.

Long-Term Investment Horizon

New York real estate can be a long-term investment, so consider your holding period and exit strategy. Are you looking for short-term appreciation, long-term rental income, or a combination of both? Your investment horizon will influence your decision-making process and property selection.

Investing in New York real estate offers unique opportunities for financial growth and diversification. However, due diligence is paramount to making a successful investment. Consider factors such as location, market trends, property type, affordability, legal considerations, property condition, rental potential, and your long-term investment horizon. By carefully evaluating these factors and seeking expert advice when needed, you can make informed decisions that align with your financial goals in the vibrant and dynamic New York real estate market.

>> What should I know about applying for a mortgage?

Once you have a property inspection addendum, you can apply for a loan. Typically the contract for sale and purchase specifies a short window after the home inspection within which the buyer must apply for the loan – often five days. Because of this short window, you should immediately bring your application and supporting documents to the loan officer.

Following your loan application, the lender will evaluate your finances to make sure you can repay the amount you’re borrowing, and make sure the property value matches the agreed-upon purchase price – this is an appraisal. The lender will hire a third-party contractor to provide an honest assessment of the property’s value to support the bank in analyzing the value of the property and the cost of the loan. If the house doesn’t appraise at a value high enough to correspond with the purchase price, the lender may not lend you the money to complete your purchase.

Sometimes you will get a mortgage commitment. This is a preliminary stage after your application and an initial bank review; the commitment is the lender’s promise to lend you money under certain conditions. These might be the completion of an appraisal, an agreement to continue sending financial information to the lender, or the seller tendering clear title to the buyer. The commitment is a binding contract between you and the lender.

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>> What is a title examination?

Title examination is among the most important elements of a real estate transaction. The buyer’s attorney will receive an updated search and survey, tax receipts and a proposed deed from the seller’s attorney. The title examiner will prepare the report to ensure that the property is free and clear of any deficiencies in the chain of title or boundaries.

The title will follow the property’s ownership back at least 80 years, assuring the title examiner that there are no breaks in the chain of title and that no one from the past can attempt to assert a prior claim of ownership.

The survey is a bird’s-eye view of the property showing where the house and any other structures are situated on the lot. It shows the property’s boundaries and indicates whether anything owned by others may be encroaching upon your property. The buyer’s attorney will address any form of encroachment before closing.

The completed title examination will identify – along with the standard transfer documents such as the deed and its supporting papers – any additional documents the seller’s attorney needs to prepare before the transfer of the title.

Those documents may include affidavits relating to an estate, judgments involving people with names similar to that of the seller, or anything that affects the property’s boundary, such as a fence that might encroach over a boundary line.

Once those documents are finalized, they’re forwarded to the bank’s attorney who will prepare the bank’s loan package, and the process will progress toward closing.

>> What happens during the home inspection?

As a buyer, it’s very important to understand the importance of the home inspection. The buyer retains a licensed expert to evaluate the house’s mechanicals, structure, and cosmetic features and provide a complete picture of the house, including all its strengths and weaknesses. The buyer, the buyer’s realtor, and the buyer’s attorney will examine the results of this inspection and  decide whether any deficiencies need to be addressed. Any documented flaw that makes the buyer legitimately uncomfortable – such as major foundational issues or the need for a new roof – is an opportunity for him or her to walk away from the transaction, regardless of the contract.

For less severe deficiencies that present health, safety, or code challenges, the buyer may request the seller to address those issues before closing. At that point, the seller is not required to remedy those issues, but will have to take action to move forward. Since the seller is likely to face the same issues with the next potential buyer, he or she will probably repair such defects or give the buyer a credit to cover the cost of such repairs.

Unless you’re buying a brand-new house, there are likely to be cosmetic issues or minor flaws. You may not want to bring up every little problem during negotiations with a seller because that could discourage the seller from moving forward with the transaction. You can address small cosmetic issues and minor repairs over time and at your convenience.

Guide to Selling Real Estate

Maybe you’ve inherited a house and you have no need to live there. You have an opportunity to make a significant gain if you sell – but you also have the challenge of appraising the house, learning about the market, and investing serious cash in improvements. Maybe your family has grown, you’ve advanced in your career, and you’re ready to leave your “starter home.” This is a great moment for you, and with the right advice, you can sell your property and pay off much of your new residence – but selling one house and buying another means you’ll have to juggle two closing dates and three sets of realtors, lenders, and attorneys. You’ll want to make sure your attorney has the experience and savvy to make this swap as quick and as clean as possible. Even if you do this regularly – if you’re a house-flipper and have a lot of experience with demolition and construction, plumbing and electricity, carpentry and landscaping – you’ll have more than enough work on your plate without worrying about the sale as well. When you’re ready to sell a house you’ve improved, you’re probably thinking about the next purchase and the next job. No matter the reason you’re in the market to sell, you need an attorney you can trust to make the process smooth, and avoid legal and financial hold-ups.

>> What complications can arise when buying and selling at the same time?

Selling one home and buying another creates a set of complexities that goes beyond those of a regular real estate transaction because the sale and the purchase must take place concurrently, following a mirrored path that allows both to close on the same day.

To do this you’ll need to involve additional people. Your attorney (handling both the purchase and the sale) will have to coordinate with the attorneys of your old home’s buyer and your new home’s seller, as well as all the other individuals involved in both transactions.

If that is impossible – for example, you’re buying in one county and selling in another – you may have to consider obtaining early entry into the home you’re purchasing and completing that transaction on a separate day, or delaying your purchaser’s occupancy of the home you’re selling so that you can move out a day or two after closing.

Early entry and post-closing occupancy can be tricky because everyone involved must agree. You essentially enter into a short-term lease agreement to cover the days of post-closing occupancy during which you no longer own the home.

One issue that can arise in such a transaction is sale contingency. In this case, a person seeking to buy a home is relying on money from the sale of the home in which he or she currently resides to complete the purchase of the new one. This person’s attorney can execute a rider setting a specific number of days within which the buyer must enter a bona fide sale contract for his or her residence to keep the purchase contract alive.

A bona fide contract requires the buyer not only to enter a contract for sale of the home, but also to overcome the attorney approval and home inspection contingencies. If both of those items are accomplished within the requisite time, the sale and purchase will proceed – presumably with simultaneous closings. As the buyer, you will complete your sale first, and then immediately take the money from that sale to the closing of your purchase to complete that transaction.

A closing contingency is slightly different. If you are already under contract to sell your home but that payment is still pending, then the contract for your purchase will be contingent upon the closing of your sale.

When selling property in New York, there are many important legal considerations to keep in mind. Property transactions in this state can be complicated, and it is essential to understand the laws and regulations that govern the process. From understanding contracts to navigating closing procedures, every step requires attention to detail. If you are selling a home, commercial property, or land, knowing the legal framework can help you avoid problems and ensure a smooth sale. Cole, Sorrentino, Hurley, Hewner & Gambino, P.C. provides comprehensive legal guidance and support throughout the real estate process, ensuring that clients navigate transactions smoothly and protect their interests effectively.

Understanding the Contract of Sale

One of the first and most important steps in selling property in New York is drafting and signing the contract of sale. This document lays out the terms of the sale, including the price, any contingencies, and the timeline for completing the transaction. It is crucial to ensure that the contract accurately reflects your intentions and protects your rights.

A contract of sale is legally binding, so once you sign it, you are obligated to follow through with its terms. Before signing, it is important to carefully review the document. You need to make sure that the purchase price, closing date, and any conditions, such as financing or inspections, are clearly stated. If anything in the contract is unclear or concerning, it is advisable to seek legal advice before proceeding.

In New York, it is common for both the buyer and seller to have attorneys involved in the transaction. Having an attorney review and negotiate the contract of sale can help protect your interests and ensure that the contract is fair. The contract of sale must also comply with local laws and regulations, including zoning laws and disclosure requirements.

Disclosure Requirements in New York

Sellers in New York have a legal obligation to disclose certain information about the property to potential buyers. This includes any known defects or issues that could affect the property’s value or safety. These disclosures are required to be provided through a document called a Property Condition Disclosure Statement.

The Property Condition Disclosure Statement asks the seller to answer questions about the condition of the property, such as whether there are any structural problems, environmental hazards, or issues with the plumbing or electrical systems. If you are aware of any problems with the property, you must disclose them to the buyer. Failing to provide accurate information could lead to legal consequences, including the possibility of the buyer canceling the sale or seeking compensation for repairs.

New York law also allows sellers to offer a credit of $500 to the buyer instead of completing the Property Condition Disclosure Statement. Many sellers choose this option to avoid the risk of missing a disclosure and facing liability later on. However, this decision should be made carefully and with the advice of an attorney.

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Title and Deed Considerations

Another important legal aspect of selling property in New York is transferring the title and deed. The title is the legal ownership of the property, while the deed is the document that transfers ownership from the seller to the buyer. To successfully sell property, the seller must have clear title to the property, meaning there are no legal issues or disputes over ownership.

Before the sale can be completed, a title search is typically conducted to verify that the title is clear. This process checks for any liens, judgments, or other claims against the property. If any issues are found, they must be resolved before the sale can proceed. Liens, such as unpaid property taxes or outstanding mortgages, can prevent the transfer of title until they are paid off.

Once the title is clear, the seller must sign a deed to transfer ownership to the buyer. There are different types of deeds in New York, including warranty deeds and quitclaim deeds. A warranty deed guarantees that the seller has clear title and is responsible for any issues that arise after the sale. A quitclaim deed, on the other hand, transfers the seller’s interest in the property without any guarantees. The type of deed used in the transaction should be carefully considered based on the circumstances of the sale.

New York Closing Process

The closing is the final step in selling property in New York, and it involves a number of legal and financial tasks. At the closing, the seller transfers the deed to the buyer, and the buyer provides payment. Additionally, all outstanding fees, taxes, and closing costs are settled at this time.

In New York, closings are typically conducted in person, with both the buyer and seller present, along with their attorneys and any other necessary parties, such as lenders or title companies. Before the closing, a final walk-through of the property is usually conducted to ensure that it is in the agreed-upon condition.

During the closing, the seller will sign the deed and other required documents, and the buyer will provide payment. The funds are usually transferred through an escrow account, which holds the money until all the necessary documents are signed and the transaction is complete. After the closing is finished, the deed is recorded with the local government, officially transferring ownership of the property to the buyer.

It is important to carefully review all documents at the closing to ensure that everything is in order. Any mistakes or issues at this stage can cause delays or legal problems down the road. Having an attorney present at the closing can help ensure that the process goes smoothly and that your rights are protected.

Tax Implications of Selling Property

Selling property in New York also comes with tax considerations that sellers need to be aware of. One of the primary taxes involved in a property sale is the capital gains tax, which is a tax on the profit made from selling the property. If the property has increased in value since you purchased it, you may owe capital gains tax on the difference between the sale price and the original purchase price.

The amount of capital gains tax you owe depends on several factors, including how long you have owned the property and your income level. There are also certain exemptions available for homeowners who meet specific requirements, such as the federal primary residence exclusion. This allows homeowners to exclude up to a certain amount of their capital gains from taxes if they have lived in the property for at least two out of the last five years.

In addition to capital gains tax, sellers in New York may also be subject to transfer taxes. These taxes are based on the sale price of the property and vary depending on the location of the property. Transfer taxes must be paid at the time of closing, and it is important to budget for these costs in advance.

New York Real Estate Commission Fees

Real estate agents play an important role in property transactions, and their services typically come with a commission fee. In New York, real estate commissions are usually a percentage of the sale price of the property and are paid by the seller. The exact percentage can vary, but it is commonly around five to six percent of the sale price.

Before listing your property, it is important to understand the commission fees and how they will impact your final proceeds from the sale. Some sellers choose to negotiate the commission rate with their real estate agent, while others may opt to sell the property without an agent to avoid paying a commission. However, selling without an agent can be more time-consuming and complex, as you will need to handle all aspects of the sale on your own.

If you choose to work with a real estate agent, it is important to have a clear understanding of their services and fees before signing any agreements. The real estate commission will be deducted from the proceeds of the sale at closing, so it is important to account for this cost when determining your final profit.

Closing on Real Estate

>> How long does it take to close on a property?

A traditional real estate closing in Western New York takes approximately eight weeks, and may extend to ten weeks.

Completion of your transaction can extend even further if a complex title issue arises requiring someone to take remedial action or gather documents from third-party sources, such as another bank or law office.

>> What do I need to know about the closing process?

The closing is comprised of two basic parts. If you are the buyer, your first part is a meeting with a bank attorney – generally around half an hour in length – during which you will sign a note, which is the bank’s promise to lend you money at a certain interest rate for a certain term. Traditionally, the note will state that you can prepay it without penalty and describe what can happen if you are late in making your payments.

You will also sign a mortgage document that protects the bank’s security interest in the property if you don’t pay your mortgage or taxes, if you fail to keep insurance in place, or if you don’t properly maintain the house.

If you fail to do any or all those things, the bank can either call the note due or foreclose upon the property, although that’s very rare.

The third document is a closing disclosure which gives a complete financial snapshot of the transaction, including the purchase price and a list of the credits that go back and forth between the buyer and the seller for taxes, initial deposits, or credits for repairs the seller needs to undertake based upon the home inspection. It will also identify various costs the buyer owes to the lender to complete their transaction, and to the local government for things like recording costs for the deed and the mortgage.

>> What should I do to prepare to close on a property?

Once the bank has examined the property’s title and cleared the loan to close, the seller and buyer have certain responsibilities. The bank, the sellers, and the buyers will schedule the closing, signaling the seller to arrange to vacate the house, leaving it in broom-clean condition, and advise the utility companies of the transfer date.

The seller should also meet with his or her attorney and sign the transfer documents required to complete the transaction, but need not – and usually will not – attend the closing.

The buyer will call the utility companies and arrange for the transfer of utilities into their name and reach out to their realtor to schedule a final walkthrough a day or two before the closing. This gives the buyer an opportunity to inspect the house, assuring that no changes – such as flood damage or broken items – have taken place since he or she entered the contract. Along with the final walkthrough and utility transfers, buyers will contact their lender to learn how much money they should bring to the closing to supplement their mortgage. Those funds will usually need to be in the form of a certified check.

Buyers will also obtain home owner’s insurance, naming themselves as an insured and the lender as an additional insured and, once these elements are complete, they will attend the closing.

>> Is the closing date a firm deadline?

The date shown in a contract is essentially a target date rather than a firm deadline. Few contracts actually close on the exact date listed in the contract. Banks traditionally begin with the projected date and work backward toward the goal of closing on or around that date – but a host of variables can affect the completion of a real estate transaction.

Flexibility is an important element of working through a real estate transaction because you won’t be sure of your actual closing date until days – or perhaps a week – before the closing takes place. You should not schedule movers until you receive an official closing date from the bank, the seller, and the buyer. That’s when you should take care of such items as utilities, final walkthroughs, movers, and insurance.

Real Estate Litigation

Disputes and disagreements are common in real estate transactions. Take commercial leases, for example. Both parties have to be aware of relevant state and local laws and regulations, and buyers and sellers are not always above exploiting the other party’s ignorance. Hundreds of thousands or millions of dollars could be at stake.

The sale or purchase of a home can also land buyer and seller in court. This is one of the most common real estate transactions – and the kind of transaction that most often involves inexperienced clients. The process can be nerve-wracking and stressful. If the procedures and paperwork aren’t completed properly or on time, a relatively straightforward transaction can cause a lot of headaches – and even the loss of your home.

When something goes wrong in a real estate transaction or agreement, litigation is often the result. Real estate litigation can because of the money at stake, and because both sides often invest their emotions along with their money. Some common types of real estate litigation are:

–       Mortgage foreclosures –       Zoning and land use issues –       Breach of contract –       Specific performance –       Obtaining necessary regulatory approval

–          Commercial lease disputes –          Failure to disclose issues –          Title and deed issues –          Property partitions –       Environmental regulatory matters

–       Rent control issues, including buy-outs –       Boundary disputes –       Real estate tax assessment issues –       Eminent domain

In some cases, landlord-tenant disputes can also end up in court. Landlords and tenants can often resolve disagreements without the help of attorneys. When this doesn’t work, both sides are in a difficult position. Tenants may be worried about becoming homeless, losing personal belongings, or protecting their children. Landlords have to worry about their livelihood, being able to repossess important property, and potential legal liability for not following the proper procedures. Some landlord-tenant disputes that could end up in court include:

–          Eviction proceedings –          Illegal lockout –          Subletting agreements –          Obtaining necessary property repairs –          Collection of nonpayment of rent

–          Regulatory compliance advice –          Failure to maintain habitable premises –          Nuisance issues –          Housing discrimination –          Holdover proceedings

While you can represent yourself in court, you’ll almost certainly want an attorney. If you’re involved in a real estate dispute, you already have enough on your plate – a family, a career, a house to keep up, or other properties to manage. You’ll want to leave the filing of motions, preparation for a trial, and all other legal work to an experienced attorney. But more importantly, you can save time and money, and avoid stressful situations, by consulting with an attorney early on to avoid litigation.

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Understanding Property Tax Assessments in New York

Property taxes in New York are based on the assessed value of your property, which is determined by local assessors. This value is supposed to reflect the market value of the property as of a specific date. Assessors use various methods to calculate this value, including comparing your property to similar properties that have recently sold, evaluating the cost to replace the property, and considering the income it could generate if rented. However, assessments can sometimes be inaccurate, leading to higher taxes than what you should rightfully pay.

Preparing to Contest Your Assessment

Before you can contest your property tax assessment, you need to gather evidence to support your claim that the assessed value is too high. This involves researching recent sales of comparable properties, obtaining a professional appraisal, and reviewing the assessment roll for errors. Recent sales data can provide a benchmark for what your property should be worth — if comparable properties in your area are selling for significantly less than your assessed value, this can be a strong basis for your contest. A professional appraisal can give you an independent opinion of your property’s value. Additionally, errors in the assessment roll, such as incorrect square footage or property classification, can also form the basis of your challenge.

Backing Out as a Buyer

As a buyer in Buffalo, NY, you may have the option to back out of a real estate contract under specific circumstances. One of the primary reasons for backing out is the inclusion of contingencies in the contract. Common contingencies include:

Home inspection contingency: This allows the buyer to have the property inspected and negotiate repairs or request a price reduction if significant issues are found.

Financing contingency: This allows the buyer to back out if they are unable to secure the necessary financing for the property.

Appraisal contingency: If the property does not appraise for the agreed-upon purchase price, the buyer may have the option to renegotiate or back out.

If the contract contains one or more of these contingencies and the buyer decides to exercise their right to back out within the specified time frame, they may generally do so without facing significant legal consequences.

Backing Out as a Seller

As a seller in Buffalo, NY, backing out of a real estate contract is generally more challenging than it is for a buyer. The reason is that sellers are expected to fulfill their end of the agreement once the contract is signed, unless a buyer fails to meet the contract’s contingencies or breaches the contract in some way. In such cases, the seller may be entitled to retain the buyer’s earnest money deposit.

If a seller decides to back out without a valid reason, the buyer may have legal grounds to pursue various remedies, such as specific performance (forcing the seller to complete the sale), monetary damages, or even a lawsuit for breach of contract. To avoid these consequences, it is crucial for sellers to carefully consider their decision before signing the contract and to seek legal advice if they are unsure about any aspect of the transaction.

Legal Consequences of Backing Out

The legal consequences of backing out of a real estate contract in Buffalo, NY, will depend on the specific circumstances surrounding the withdrawal. If the party backing out has valid reasons supported by contract contingencies or other legal protections, the consequences may be minimal.

If either the buyer or seller backs out without a legitimate reason and in violation of the contract terms, the consequences can be severe. The non-breaching party may be entitled to damages, such as lost profits, costs associated with finding a new buyer or property, or even attorney’s fees.

In Buffalo, NY, a real estate contract is a legally binding agreement that carries significant consequences if breached without valid reasons. Both buyers and sellers should thoroughly review and understand the contract terms before signing, seeking legal counsel if needed. While backing out due to valid contingencies is generally acceptable, doing so without legitimate reasons can lead to potential legal repercussions. Always proceed with caution and ensure clear communication to minimize the risks and uncertainties associated with real estate transactions.

Disclosure Requirements in New York

Sellers in New York have a legal obligation to disclose certain information about the property to potential buyers. This includes any known defects or issues that could affect the property’s value or safety. These disclosures are required to be provided through a document called a Property Condition Disclosure Statement.

The Property Condition Disclosure Statement asks the seller to answer questions about the condition of the property, such as whether there are any structural problems, environmental hazards, or issues with the plumbing or electrical systems. If you are aware of any problems with the property, you must disclose them to the buyer. Failing to provide accurate information could lead to legal consequences, including the possibility of the buyer canceling the sale or seeking compensation for repairs.

New York law also allows sellers to offer a credit of $500 to the buyer instead of completing the Property Condition Disclosure Statement. Many sellers choose this option to avoid the risk of missing a disclosure and facing liability later on. However, this decision should be made carefully and with the advice of an attorney.

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Title and Deed Considerations

Another important legal aspect of selling property in New York is transferring the title and deed. The title is the legal ownership of the property, while the deed is the document that transfers ownership from the seller to the buyer. To successfully sell property, the seller must have clear title to the property, meaning there are no legal issues or disputes over ownership.

Before the sale can be completed, a title search is typically conducted to verify that the title is clear. This process checks for any liens, judgments, or other claims against the property. If any issues are found, they must be resolved before the sale can proceed. Liens, such as unpaid property taxes or outstanding mortgages, can prevent the transfer of title until they are paid off.

Once the title is clear, the seller must sign a deed to transfer ownership to the buyer. There are different types of deeds in New York, including warranty deeds and quitclaim deeds. A warranty deed guarantees that the seller has clear title and is responsible for any issues that arise after the sale. A quitclaim deed, on the other hand, transfers the seller’s interest in the property without any guarantees. The type of deed used in the transaction should be carefully considered based on the circumstances of the sale.

New York Closing Process

The closing is the final step in selling property in New York, and it involves a number of legal and financial tasks. At the closing, the seller transfers the deed to the buyer, and the buyer provides payment. Additionally, all outstanding fees, taxes, and closing costs are settled at this time.

In New York, closings are typically conducted in person, with both the buyer and seller present, along with their attorneys and any other necessary parties, such as lenders or title companies. Before the closing, a final walk-through of the property is usually conducted to ensure that it is in the agreed-upon condition.

During the closing, the seller will sign the deed and other required documents, and the buyer will provide payment. The funds are usually transferred through an escrow account, which holds the money until all the necessary documents are signed and the transaction is complete. After the closing is finished, the deed is recorded with the local government, officially transferring ownership of the property to the buyer.

It is important to carefully review all documents at the closing to ensure that everything is in order. Any mistakes or issues at this stage can cause delays or legal problems down the road. Having an attorney present at the closing can help ensure that the process goes smoothly and that your rights are protected.

Tax Implications of Selling Property

Selling property in New York also comes with tax considerations that sellers need to be aware of. One of the primary taxes involved in a property sale is the capital gains tax, which is a tax on the profit made from selling the property. If the property has increased in value since you purchased it, you may owe capital gains tax on the difference between the sale price and the original purchase price.

The amount of capital gains tax you owe depends on several factors, including how long you have owned the property and your income level. There are also certain exemptions available for homeowners who meet specific requirements, such as the federal primary residence exclusion. This allows homeowners to exclude up to a certain amount of their capital gains from taxes if they have lived in the property for at least two out of the last five years.

In addition to capital gains tax, sellers in New York may also be subject to transfer taxes. These taxes are based on the sale price of the property and vary depending on the location of the property. Transfer taxes must be paid at the time of closing, and it is important to budget for these costs in advance.

New York Real Estate Commission Fees

Real estate agents play an important role in property transactions, and their services typically come with a commission fee. In New York, real estate commissions are usually a percentage of the sale price of the property and are paid by the seller. The exact percentage can vary, but it is commonly around five to six percent of the sale price.

Before listing your property, it is important to understand the commission fees and how they will impact your final proceeds from the sale. Some sellers choose to negotiate the commission rate with their real estate agent, while others may opt to sell the property without an agent to avoid paying a commission. However, selling without an agent can be more time-consuming and complex, as you will need to handle all aspects of the sale on your own.

If you choose to work with a real estate agent, it is important to have a clear understanding of their services and fees before signing any agreements. The real estate commission will be deducted from the proceeds of the sale at closing, so it is important to account for this cost when determining your final profit.

Legal Representation in Property Sales

Selling property in New York often involves complex legal issues, and it is important to have the right legal representation throughout the process. An attorney can help you navigate the legal requirements, review contracts, ensure that your interests are protected, and address any problems that may arise.

In New York, it is common for both the buyer and seller to have their own attorneys in a property transaction. Your attorney will work on your behalf to review and negotiate the contract of sale, ensure that all legal documents are in order, and represent you at the closing. Having an attorney can provide peace of mind and help ensure that the sale is completed smoothly.

Choosing the right attorney for your property sale is an important decision. It is essential to work with someone who has experience in real estate transactions and understands the laws and regulations in New York. Your attorney can help you avoid potential pitfalls, protect your rights, and ensure that the sale is legally sound.

If you are planning to sell property in New York, it is important to have the right legal guidance to ensure that your sale goes smoothly. At Cole, Sorrentino, Hurley, Hewner & Gambino, P.C., our experienced team is here to help you navigate the legal complexities of selling property. Contact us today to learn how we can assist you in achieving a successful and stress-free transaction.

 

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