Category: REAL ESTATE ARTICLES

THE CERTIFICATE OF OCCUPANCY*
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THE CERTIFICATE OF OCCUPANCY* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

We have all heard the term “Certificate of Occupancy” when involved with a real estate transaction but many of us do not the full ramifications of what it is and what the New York City Building Department (DOB) requires. Don’t underestimate the importance of the Certificate of Occupancy. Whether you’re buying, renovating, or in a legal tussle with a landlord, you’ll occasionally hear talk of the “CO,” “C of O,” or Certificate of Occupancy. And while this legal document isn’t exactly the sexiest part of any real estate transaction, there’s a whole lot of power in this little piece of paper, so much so that it has the clout to win legal cases, end negotiations, put the kibosh on your mortgage, and more.

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DECIDING TO PURCHASE A CONDOMINIUM OR COOPERATIVE APARTMENT*
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DECIDING TO PURCHASE A CONDOMINIUM OR COOPERATIVE APARTMENT* | Eric P. Gonchar

©Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

Before purchasing a condo or co-op apartment, it is imperative that the Purchaser understand the significant differences between the two types of ownership. There are numerous legal and financial differences.

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How to Leverage Your Real Estate Broker
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How to Leverage Your Real Estate Broker | George Grace

One important reason to hire an exclusive real estate professional “Why hire an exclusive real estate broker to represent you when finding space?” is a question that I find fairly often. Some benefits, like managing the logistics of viewings, are easy to imagine, but there are others that many would-be tenants do not come to appreciate until they are in the process. In the interest of getting around that gap in understanding, in this post, I offer a case study.

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LEGAL REPRESENTATION FOR REAL ESTATE PURCHASES AND SALES*
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LEGAL REPRESENTATION FOR REAL ESTATE PURCHASES AND SALES* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

The selection of a seasoned, competent and communicative attorney may be the single most important relationship in a real estate transaction. Now more than ever choosing an attorney who is sufficiently competent and whose fee is reasonable and customary is not the only two criteria to select a lawyer. A seller or purchaser should retain an attorney who is competent and experienced, who can protect your interests, who understands the market and who can help and not hinder the transaction.  Remember, if your attorney fails to include important provisions or negotiate a provision properly, the only person that will suffer is the client.

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A CO-OP’S GUIDE TO REFINANCING AN UNDERLYING MORTGAGE*
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A CO-OP’S GUIDE TO REFINANCING AN UNDERLYING MORTGAGE* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

Refinancing an underlying mortgage of a cooperative corporation is a complex, time· consuming and expensive transaction. There are numerous tasks a corporation can do to prepare for a successful closing. The following is an outline of what can be done by the Board of Directors to pre-qualify the cooperative corporation for an underlying mortgage with a lender.

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SAVING NEW YORK STATE MORTGAGE RECORDING TAX*
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SAVING NEW YORK STATE MORTGAGE RECORDING TAX* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

Purchasing a new home can be a very costly venture for a purchaser. The costs involve more than just the price of the property. Purchasers will face a string of settlement costs especially when a loan is involved. These loan costs include everything from loan origination fees to appraisal charges to credit report costs to lender legal fees. Each year closing costs continue to rise because lenders are required to comply with the ever-changing mortgage regulations and stricter lending requirements.

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NEW LAWS AFFECTING AIRBNB STARTING 2017*
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NEW LAWS AFFECTING AIRBNB STARTING 2017* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

As most of know, Airbnb is a peer-to-peer online marketplace and network enabling people to list and rent short-term lodging in residential properties, with the cost of such accommodation set by the property owner.

Airbnb was founded in August of 2008 and is based in San Francisco, California. It has become a trusted community marketplace for people to list, discover, and book on-line o from a mobile phone, unique accommodations around the world at any price point and for any type of property (ranging from a small apartment to a large mansion). The company receives percentage service fees from both guests and hosts in conjunction with every booking. In 2006, Airbnb was said to have over 2,000,000 listings in 34,000 cities and 191 countries. While there are other recognized companies like Homeaway, One Fine Stay, For Rent by Owner, Airbnb has been the leading company for people to monetize their extra space and showcase it to an audience of millions.

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REAL ESTATE DUE DILIGENCE (Part 2 of 2)*
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REAL ESTATE DUE DILIGENCE (Part 2 of 2)* | Eric P. Gonchar

©2013 Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

This is part 2 of a 2 section article about conducting due diligence on real estate transactions and should be read in conjunction with the sister article.

Financing The Purchase – While Condominiums generally do not set limitations on how much a purchaser may borrow, co-ops generally do. The purchaser must first determine if the co-op will allow the buyer to purchase the apartment with a loan which is secured by a pledge of the shares of the co-op. Many older co-ops do not allow financing at all. For those co-op’s that do allow financing, it is important to determine what the financing limitations are before the contract is signed. If the purchaser wants to finance 80% of the sales price but the co-op only allows 70%, then the transaction should not proceed.

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REAL ESTATE DUE DILIGENCE (Part 1 of 2)*
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REAL ESTATE DUE DILIGENCE (Part 1 of 2)* | Eric P. Gonchar

©2013 Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

This is part 1 of a 2 section article about conducting due diligence on real estate transactions and should be read in conjunction with the sister article.

One of the most important, if not the most important, parts of any real estate transaction is conducting a thorough due diligence review of the property to be purchased. The prospective purchaser should investigate the property thoroughly before signing a contract of sale.

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CUSTOMARY PROVISIONS IN A LETTER OF INTENT FOR A COMMERCIAL LEASE*
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CUSTOMARY PROVISIONS IN A LETTER OF INTENT FOR A COMMERCIAL LEASE* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

In a prior article, we examined the preliminary considerations for a Tenant in leasing retail or commercial space. Once the Tenant has a space picked out, it is time to understand the lease terms and negotiate the lease. The terms of the Lease will be summarized in a document called a “Letter of Intent.” This can be a complicated process, especially considering all the legal terminology and lease-speak that is often more confusing than it is helpful.  Keep in mind, a larger more well established Tenant may have more of an ability to negotiate better terms than a new start-up company without any experience.

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PRELIMINARY CONSIDERATIONS FOR A TENANT IN LEASING RETAIL OR COMMERCIAL SPACE*
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PRELIMINARY CONSIDERATIONS FOR A TENANT IN LEASING RETAIL OR COMMERCIAL SPACE* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

There are many considerations a Tenant must take into account before deciding to lease commercial space. But even before finding the right space, in the right neighborhood at the right rent, the Tenant must be prepared to provide certain financial and personal information to the Landlord.

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Authority vs. Responsibility
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Authority vs. Responsibility | George Grace

Throughout my career, I have seen many situations in which doing business is made difficult by a dysfunctional power structure, but there are two that are particularly vexing:

1. A person has all of the authority, but none of the responsibility; or

2. A person has all of the responsibility, but none of the authority.

Authority: Landlord Responsibility: Project Manager I once worked on a project that was overseen by a tenant’s project manager and the landlord. The two did not get along, which is very typical because the project manager is usually holding the landlord’s feet to the fire.

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CLOSING DATES & “TIME OF THE ESSENCE” CLOSING*
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CLOSING DATES & “TIME OF THE ESSENCE” CLOSING* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

Sometimes the most negotiated point in a contract of sale for the purchase of real property (including the purchase of a co-op) is the closing date. There are many variables that affect the closing date some of which are in the control of the seller and purchaser and some of which are not.

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LOT LINE WINDOWS – BUYERS BEWARE!*
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LOT LINE WINDOWS – BUYERS BEWARE!* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

A “lot line window” is a window that is built on a side of a building that shares a boundary line with a neighboring property.  If the adjacent building is built up to or higher than this window, then the lot line window will likely need to be sealed off. For example, Unit 8A has a living room window that faces North. The adjoining property owner on the North builds a 10 story building blocking the windows of Unit 8A. Lot line windows will not affect an owner as an apartment dweller unless your neighbors build up to the level of your apartment or higher.  The concern for a purchaser is that a lot line window that is never disclosed and years later an adjoining building is constructed resulting in the window being permanently closed. In the event such obstruction occurs, the owner would be required to close up the window (usually at the owner’s own trouble and expense), losing both natural light and view.

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THE BOARD APPLICATION PROCESS*
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THE BOARD APPLICATION PROCESS* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

Every cooperative and condominium apartment purchase generally requires some sort of board application. Some applications can be very lengthy (particularly co-op applications) while others can be quite simple. Recently, condo applications have become very cumbersome particularly for luxury buildings. Co-op’s have always had some control as to who buys in the building by requiring a detailed board application from the purchaser. But now condominiums have gotten on the band wagon and have started to require very detailed and lengthy applications.

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POST CLOSING OCCUPANCY AGREEMENTS*
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POST CLOSING OCCUPANCY AGREEMENTS* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

Working out the logistics of a seller moving out of one apartment and into a new apartment can be very sensitive and complicated. If the two closings cannot be handled simultaneously, then the seller will need to move out of the existing property, place his or her belongings in storage and stay in a hotel until the purchase can be completed. This can be a very large hassle and expense to the seller.

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Should I Buy a New Home Before I Sell My Own?
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Should I Buy a New Home Before I Sell My Own? | Peter Roach

Should I buy a new home before I sell my own? The short answer is: It depends. If you want to minimize your financial risk, then you should sell your current house first and then buy a new one. If on the other hand, you want to minimize your inconvenience, then you should buy your new house first and then sell your current one. If you value your convenience more, you should buy your new house first. It is much more convenient because you can take as long as you like to find your “perfect house” and then move into it whenever you want.

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Getting Out of the City and Into Paradise
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Getting Out of the City and Into Paradise | George Grace

Have you ever taken a moment to appreciate the curves of a quiet country road surrounded by bursts of yellows, reds and a last touch of green? It truly is a pleasure to drive in and out of rock formations, farmland, and forests – with bends and rises just gentle enough to let you satisfy your need for speed. When I spend time at my place in the Catskill Mountains, approximately 2.5 hours from New York, I notice a world of difference in terms of geography, topography, and economics.

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What Is Your Real-Estate Specialty?
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What Is Your Real-Estate Specialty? | Mendy Lipsker

{3:12 minutes to read} When people need auto repair, they go to an auto mechanic who can probably fix whatever is wrong with their car. A successful vehicle repair person will specialize in foreign, luxury, sports, and/or racing vehicles. You will get the best service from the mechanic who specializes in the problem you have or the type of vehicle that you own.

When someone is not well, they go to their doctor. In medical school, doctor’s usually become an expert in a particular field of study, so going to your cardiologist and saying, “I’ve got pink eye,” is probably not going to get your condition treated.

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There’s No Substitute for Leg Work in Real Estate
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There’s No Substitute for Leg Work in Real Estate | George Grace

I was at a networking event recently where we were asked to do an intellectual exercise. The speaker posed the question: If you had a magic wand, what would you change—even if it was disruptive—to make your life better? The point of the exercise was to get us thinking about our businesses and the services we offer from a different perspective. As I listened to other people respond, I had a realization: there can never be a magic wand in the real estate business.

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Guest Blogger: Scott Evans Talks About HELOC
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Guest Blogger: Scott Evans Talks About HELOC | Robert Bordett

In my last blog, I had an article by Scott Evans about ARM Rates. This is a continuation of mortgages.  Scott Evans wrote about Home Equity Line Resets. Home Equity Line Resets For some, other looming issues are Home Equity Line of Credit (HELOC) loans that were taken out between 2006 and 2008. A typical HELOC provides a 10-year interest-only payment option but then will convert to a fully amortizing 15 or 20-year loan (where you would be paying the principal back).

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What It Means to Be “Judgement-Proof”
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What It Means to Be “Judgement-Proof” | Peter Roach

Prior to the establishment of the United States, people in England who did not pay their debts were sent to debtor's prison. Today, in the United States, there is no debtor’s prison and creditors can only enforce judgments if they can locate the assets of the judgement debtor, and have them sold to liquidate the debt or by garnishing their wages. If a debtor truly has no job or assets, he is said to be “judgement proof” because a judgment creditor has nothing to sell or garnish.

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Why New York Mortgage Lenders May Actually Want To De-accelerate Their Loans
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Why New York Mortgage Lenders May Actually Want To De-accelerate Their Loans | Peter Roach

The foreclosure crisis of 2008 resulted in a multitude of new consumer protection statutes, regulations, procedures, and a complete change in attitude amongst court personnel, all of which has caused a tremendous delay in the foreclosure process. In New York, the commencement of many foreclosures are delayed while the banks and servicers satisfy the "pre-foreclosure requirements" (see article - New York Foreclosure Referrals - Get It right BEFORE you start); and once they are finally initiated, there is an inordinately long process until the foreclosure is dismissed.

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Subleasing, Subtenants, and Sub-Optimal Lease Durations
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Subleasing, Subtenants, and Sub-Optimal Lease Durations | George Grace

When looking for short-term space, a sublessor’s interests compete against the interest of its potential landlord. I’ve been working with a client who has been seeking a lease for a short term (i.e. under two years). The best possible scenario is a sublease from a tenant who has the extra space on a short-term basis. For the sublessor, it is found money, and for the subtenant, it gives them the short-term space they need. Additionally, the subtenant does not have to carry the burden of the liability that comes with a long-term arrangement.

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Scott Evans: Adjustable Rate Mortgages Set to Skyrocket?
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Scott Evans: Adjustable Rate Mortgages Set to Skyrocket? | Bob Bordett

One of the things I have learned over the years is that we cannot be a Jack-of-all-trades and a master-of-none. In today’s ever-changing world, we need to have connections with professionals in other disciplines and specialities. This is especially true working in the divorce area. I think it is important that we do the same thing and have our own list of specialists. The article below is by Scott Evans, CCIM, CRMS of the Family Mortgage Team, LeaderOne Financial Corporation in Marietta, Georgia.

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How Is a Collection Agency Different From a Collection Law Firm?
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How Is a Collection Agency Different From a Collection Law Firm? | Peter Roach

If you are owed a debt that you have been unable to collect, you can hire a collection agency or retain a collection law firm to collect it for you. There are significant differences between the services the two provide, as well as the fee structure charged by each.

A collection agency is comprised of non-lawyers who make phone calls and write letters on your behalf. They contact the debtors, inform them of their delinquent obligations, and try to convince them to pay what is owed. But all they can do is request the debtor to voluntarily pay the debt. 

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Introducing David Valdez
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Introducing David Valdez | George Grace

Goldman Sachs alum David Valdez officially joined Mohr Partners as a Managing Director last month to support our mission of advising our clients to navigate the complex world of New York City commercial real estate with our strategic representation and market analysis. In addition to working at Goldman, David has amassed years of experience at Cushman Wakefield and CBRE. He brings with him a whole new dimension to what we’re doing at Mohr Partners, including:

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Payoff Letters: The Newest FDCPA Landmines
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Payoff Letters: The Newest FDCPA Landmines | Peter Roach

On December 3, 2015, the United States Court of Appeals, 11th Circuit, decided the case of Kevin Prescott v. Seterus, Inc., 635 Fed. Appx. 640, 2015 U.S. App. LEXIS 20934 (11th Cir. Fla. 2015) and held that the inclusion of estimates or anticipated costs that have not yet been incurred, in a payoff or reinstatement letter, is a violation of the FDCPA. In this case, the mortgagor, Kevin Prescott, defaulted and thereafter requested a reinstatement letter.

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Interest Rates: Too Low for Too Long
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Interest Rates: Too Low for Too Long | George Grace

Recently, there was an article in Bloomberg News entitled Negative Rates Hit Global Shipping Market. The article details remarks fromNils Smedegaard Andersen, CEO of shipping giant A.P. Moeller-Maersk (“Maersk”). Andersen makes a good case for the assertion that “cheap money” is hampering consolidation in his industry. Low-interest rates have been enabling banks to keep marginal shipping companies in business, according to Andersen, and the result is lower shipping rates and excess supply. One of Maersk’s competitors, Hanjin Shipping Co. of South Korea, has recently been forced into debt restructuring in order to cope with lower revenue.

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Real Estate Agents as Independent Contractors – Part 1
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Real Estate Agents as Independent Contractors – Part 1 | Saul Bienenfeld

{3:06 minutes to read} Real estate agents have generally been classified as independent contractors by brokers, but agents, unlike independent contractors in other industries, are subject to supervision by the brokers. This level of supervision is mandated by state statutes that require brokers to exercise reasonable supervision over the activities of his or her salespersons. The statutes also require the establishment of policies, rules, procedures and systems to review, oversee, inspect and manage such areas as document management and retention, the handling of trust funds, and reports of salesperson activity.

Click here to read Alan Krystal's full article...