Staten Island NY Legal FAQ

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If the seller and I can’t agree to terms do I get re-imbursed for my expenses?

Typically no, but you should consult with your attorney as all situations are different. If you feel you can establish that the seller acted improperly (false representations etc) you may wish to try to sue in Small Claims Court to recover your expenses but recovery is not guaranteed.

What does “on or about” mean?

In NYC a closing date in the contract is typically an “on or about” date. This means the date is a target date and not actually a scheduled date. Either side to the transaction is permitted a “reasonable” adjournment or postponement of the “on or about” date. There is no iron clad rule as to the length of an adjournment and the Courts have held the entitled adjournment must be reasonable based on the circumstances of each particular case. In Staten Island, the general rule of thumb is 30 days.

What does “as is” mean?

“As is” means the house must be delivered at closing in the same condition it was in when the buyer viewed it and made their offer. Most NYC residential real estate transactions are “AS IS” transactions. Most residential real estate contracts in NYC also contain language that states that the plumbing, heating, electrical, central A/C systems and appliances will be in working order at closing and that the roof must be free of leaks.

Every transaction is different, so be sure to discuss these issues with your attorney.

What is a survey?

A survey is a drawing of the outline of the property lines and an outline or footprint of the house and/or improvements that are located on the property. Fences, curb walls, sidewalks and hedges are also depicted on the survey. The size of the lot and the location of improvements on the property in relation to the property lines are depicted. Encroachments and variations of fences, curbs etc. from the property lines will be disclosed.

Do I need a new survey?

A new survey is advisable whenever real property is being purchased as it will freeze in time, as of the date of the survey, the actual state of facts that exist at the property. It will tell you where the buildings, improvements, fences, hedges, curbs etc. are located with respect to the property lines. It will tell you details about the structure that can be compared with building department records. Reliance on an old survey could result in you discovering after closing that the fence depicted on the survey that you thought was on the property line was actually replaced after the survey was drawn and is now not located on the property line but on your neighbors property or in from your property line resulting in the potential loss of several feet of your property to your neighbor.

If I don’t get approved for my loan do I get my deposit back?

That will depend on the specific terms of your contract but generally, as long as you have filed your application with a lender in a timely fashion, have been cooperative with the lender and have provided truthful and accurate documentation to the lender and acted in good faith, if the application is denied through no fault of your own, the deposit will be refunded.

What does escrow mean?

In NY escrow refers to someone holding money for someone else’s benefit. The purchaser's contract deposit paid when the contract is signed is held in the seller's attorney's escrow or trust account. The check is cashed so be sure the funds necessary for the check to clear have been transferred.

Is money held in escrow to guarantee there are no problems with the house after closing?

No, however, in NYC, if possession of the premises is not delivered to the buyer at closing, money will be held in escrow to insure the seller vacates the premises on the agreed upon date (typically 5 days after closing) and the property is delivered in accordance with the terms of the contract. Check with your attorney what the practice is in your community.

What is property condition disclosure credit (pcdc)?

New York Law requires a seller (trusts and estates, banks who foreclosed and  governmental entities are exempt) of a 1 or 2 family residential dwelling (condos and co-ops are exempt) to provide the buyer, prior to the execution of a contract by the buyer, with a disclosure statement essentially listing any defects or problems the seller had with the property. Should the seller elect not to provide the disclosure statement they must give the buyer a $500 credit at closing as and for a penalty for not complying with the law. Giving the credit does not insulate the seller from a post closing lawsuit, but merely puts the parties on an even footing should the buyer commence a lawsuit.

The full bill that enacted the PCDC can be viewed at http://assembly.state.ny.us/leg and enter the bill # S05339.

For a copy of the PCDC form go to http:/www.dos.state.ny.us/lcns/licensing.html#disclosure and click on "Property Condition Disclosure Statement"

Do I need a permit for a deck?

Any question relating to the legality of any alteration or addition to a structure should be answered by an architect. That being said, most if not all alterations require a permit and signoff by the NYC Building Department, however the reality of life on Staten Island is that most alterations and additions (i.e. decks, Florida rooms, kitchen or bathrooms in the basement, dormers, conversions of attics to bedrooms, added bathrooms) have not been done with permits. While the existence of these illegal additions generally will not be an impediment to closing, a buyer must understand that once they close, the house as altered is their responsibility. They should also be aware that certain illegal improvements could affect or void their home owner’s insurance coverage in the event of a loss or claim. The problem is many alterations or additions are incapable of being legalized so a buyer should be sure to disclose the existence of any such issues to their attorney so language can be inserted into the contract that would allow the buyer to cancel the contract and receive a refund of the contract deposit should the lender raise an objection to the alteration or addition.

How do I find out what the real estate taxes are?

Check the NYC Department of Finance website for the current assessed value and the current tax rate to determine what the real estate taxes are. Assessed value multiplied by the tax rate percentage (%) will give you the annual taxes. Do not rely on what the seller says they are paying because they may have an exemption which would lower their taxes but to which you may not be entitled (senior citizen, veteran, disabled, STAR)

What is a certificate of occupancy (c of o)?

A Certificate of Occupancy (C of O) is issued by the NYC Building Department and it states the manner in which a structure can be utilized (i.e. one family, two family, retail store etc.)

For houses built prior to 1938 in Staten Island, the lack of a C of O is not an impediment to occupancy as it is generally accepted that C of O’s are not required for buildings existing prior to that year as long as they have not been altered or modified. Always consult with an architect if there is any question regarding the legality of a particular structure.

What is title insurance?

Title insurance is a policy of insurance purchased at the closing of real property. The fee or owner's policy insures the buyer and the loan policy insures the lender, if any. Title insurance insures that the property is the size you think it is, the structure sits within the property lines, the seller has the legal right to sell the property, and there exist no liens or encumbrances which would interfere with the use and enjoyment of the property. Title insurance does not insure that the building is legal so if there is any question about the legality of the structure an architect should be consulted.

The premiums for title insurance are regulated by the New York Board of Title Underwriters and are the same regardless of the title insurance company your attorney uses. The premium is a one-time payment and there is no future bill received for the insurance. The buyer pays for both policies at closing and the policies stay in effect until there is a transfer of title or the mortgage is paid off. You can determine the cost of the title insurance premiums for your transaction by using the First American Title Insurance Company calculator. Title agencies also collect the fees for deed and mortgage recording (based on the number of pages and vary from County to County) municipal searches and service fees that vary from company to company. Be sure to receive a written estimate of your title and related closing costs from your attorney before you sign your contract.

What is the difference between a mortgage broker and a bank?

A mortgage broker performs many of the administrative tasks relating to your loan application that a loan officer in a bank performs and then should shop your application to various lenders to get you a loan that best meets your needs and budget. The mortgage broker can not issue you a commitment for a loan but secures a commitment for you from a lender.

A bank processes your loan application and advises the buyer/borrower on the different loan programs that bank can offer. The bank issues a mortgage commitment directly to the buyer/borrower.

There is an interesting article on the subject by Lisa Prevost entitled "Choosing Between Mortgage Broker or Bank" published in the New York Times.

What is a mortgage commitment?

A mortgage commitment is a written offer form a lender to make a loan to a buyer of real property in exchange for the buyer executing a mortgage against the property in favor of the lender which secures the re-payment of the debt by putting the property up as collateral. The commitment will state the amount of the loan, the term of the loan (15/20/30 years) and the interest rate charged (unless the rate is not locked or is "floating"). The loan will be either a fixed rate loan or an adjustable which means the rate can change at pre-determined times and with pre-determined increases. Adjustable loans carry risk that the rate can go up and are usually based on a published index plus a pre-determined percentage. Commitments usually expire 30/60/90 days from either the date of application or the issuance of the commitment depending on the lender and sometimes on the loan program.

Should I get a house inspection?

It is strongly advised that all buyers have the house inspected to disclose any defects or problems that the buyer was not able to detect during their viewing of the home. The inspection should be done by an engineer or a licensed home inspector. The inspection is typically done pre-contract after the buyer’s offer is accepted. While the inspection is not intended to serve as a bargaining or negotiating tool, if a condition is disclosed by the inspection that the buyer did not take into consideration when making their offer, they may want to consult with their real estate professional and modify their offer.

If I am selling my house what does my lawyer need from me to represent me?

Your attorney will need a copy of your deed, a copy of your survey, a copy of your title insurance policy, a copy of you Certificate of Occupancy and a copy of the most recent mortgage statement for all mortgages affecting the property. If you have an equity line of credit you should obtain a freeze of the account provided you do not anticipate you will need to access any equity prior to the closing. If you will need to access the equity line of credit to put a deposit down on a new home, you should take the advance and then freeze the account. If you paid off your mortgage and received a satisfaction of mortgage from your lender but did not record it, you should provide your attorney with the original so it can be recorded. If any of the owners have died you should provide you attorney with original death certificates. If you are divorced and you judgment of divorce dictate the terms of the sale of the property you should give your attorney a copy of the judgment. If you are in the midst of a divorce proceeding, you should advise your attorney of the name, address, telephone number and email address of your attorney and your spouses attorney. You should also advise your attorney of any alterations or additions that were done to the premises either by you or a prior owner. If you live outside of New York State and are selling property located within New York state, you should provide your attorney with a form IT2663 that was prepared by your accountant if the property is not exempt from the payment of estimated capital gains tax.

What is an “HOA”?

An HOA is an acronym for Home Owners Association. The most common reason on Staten Island for an HOA is when newly constructed homes share a common sewer line or drain. State law requires the establishment of an HOA to collect a monthly fee from each affected homeowner and maintain those funds to cover the costs of repairing or replacing that common sewer line or drain as well as covering the taxes that the HOA will be required to pay and the associated administrative fees (accountants, management company etc.) Some HOA's are also PUD's or Planned Unit Developments which simply put, are HOA's that also have some shared amenity like a playground, common parking area or a pool. Your attorney can tell you if the property is subject to a HOA declaration and monthly fee. Some seller's are not even aware that their properties are subject to an HOA declaration because many of them are "inactive". This can present some problems in a transaction so it is important to speak to your attorney about this issue pre-contract.

Contact Michael M. Walsh Attorney at Law in Staten Island NY today.