New York Real Estate Lawyer Blog

January 29, 2010

Legal Malpractice after the Client “Settles” the Case?

Two parties settle a long running dispute, then one become disenchanted, can that party sue her attorney for negligence in “forcing” a settlement. There are all sorts of ramifications, both for the clients and their attorneys. Here’s one case.

In 2005, Joseph and Teresa Guidos settled a shareholder dispute with Allstates WorldCarger Inc. Two years later, the Guidos filed a malpractice suit against their attorneys from the settlement alleging that Joseph Guido was ‘stripped’ of his majority shareholder as a result of ineffective representation. The New Jersey Supreme Court decided a client can sue for malpractice if ‘particular facts’ serve as evidence of as attorney incompetence even in light of the fact that the client might have originally accepted the settlement. Does that make sense?

Dismissed on summary judgment, but reversed on appeal, the appellate court found that genuine issue of material fact as to whether the clients would have taken the settlement, whether the attorneys reasonably explained the significant details, and whether the clients understood the ramifications of the settlement before it became final. The attorneys argued that the “malpractice claim” was based on ‘hindsight bias’ or ‘buyer’s remorse” because the clients simply wish they had acted differently.

January 25, 2010

More on the Recent Power of Attorney Changes in New York.

by Peter Klose

As reported in prior entries on this blog, corporate, real estate, and estate planning attorneys in New York are concerned about the ramifications of the new Power of Attorney laws. The New York Law Journal published a recent article discussing the possible pitfalls to parties in New York. [Article— Joel Stashenko 01-22-2010].

The problems include well-established areas of commercial transactions, because they should not apply to the creation of valid proxies for the voting of shares of stock held by investors of New York corporations and non-New York corporations.

Practically speaking, the new form are very unwieldy because they require notarization of signatures by an agent being designated as having power of attorney.

January 24, 2010

Why no Property Disclosure Statement in New York?

by Peter Klose

For years most attorneys representing sellers of real estate in New York State have been counseling not to complete a Property Disclosure Statement. This recent case is an example of why, in New York, the Property Condition Disclosure Statements (PCDS) can cause trouble.

Sellers in New York are required to either “disclose” what they know on a 32 question Property Disclosure Statement, or give the buyers a $500 credit in lieu of such disclosure. The problem, however, is that these property “disclosures” are mini-representations, which can lead to all sorts of claims for misrepresentation, fraud, or concealment. The question for the disgruntled buyer is always whether, when completed and delivered, the owners-sellers may be liable for buyer actual damages stemming from any willful failure to describe the property conditions asked about on the “form.”

In one recent case, the the buyers purchased a residential property from the defendants in “as is” condition after having been given notice through the form PCDS that the Sellers (defendants) of a previous kerosene leak on the property. Shortly after taking possession of the property, however, the plaintiffs discovered that the septic system had failed, the heating system was inadequately established, debris had been left on the property, kerosene had spilled in the basement, and the house was infested with mice.

January 20, 2010

If your thinking Rockland County, Pearl River–NYTimes article of the Life and Times.

by Peter Klose

So your thinking of living in Pearl River, Rockland County. Originally called Muddy Brook, the town was renamed in around 1870 after a resident said he had discovered pearls in mussels from the waterway.

The community boasts wonderful people, active community involvement and modestly priced homes. Read a recent New York Times Article here, and hire the very best real estate attorneys in Rockland County.

January 18, 2010

Sometimes a Lawyer Needs to Think before He Sues!

by Peter Klose

I saw this in a Texas case recently. On November 23, 2009, a lawyer filed a property litigation alleging that his neighbor, a Church Cathedral was a private and public nuisance because they essentially operated church-sponsored services for homeless people. It seems that the complaining land owners objected to the Church providing homeless services nearby (such services included free meals and counseling).

Arguing the Church services (and their clients-homeless people) constituted a “private nuisance,” the plaintiffs (attorneys) described those who were served by the homeless center as “derelicts.”

One of the patrons of the services, a former navy officer, sued the attorneys for defamation, discriminatory practices, emotional distress, and mental anguish. In his colorful description of the attorneys, he claimed that they had a “twisted heart full of unwashed socks, with a soul full of gunk Grinch type rappie act(s).” He is seeking $2.4 million in actual and punitive damages and a published apology.

January 14, 2010

RULES TO CLARIFY COST OF MORTGAGES AND TO GIVE NEW YORKERS CLARITY?

by Peter Klose

As of January 1, 2010, the federal government will enforce rules that require mortgage lenders and brokers to prepare a three-page ‘Good Faith Estimate’ report that provide home loan estimates to consumers. Implemented by the Real Estate Settlement Procedures Act (RESPA), lenders and mortgage brokers must now give consumers standard estimate forms within three days of receiving loan applications. RESPA aims to prevent millions of Americans making poor loan choices particularly those who do not know that the lowest loan rates may not be the most beneficial option. To distinguish and compare plans with different combinations of rates, fees, and other terms, the ‘Good Faith Estimate’ report standardizes lender estimates by requiring lenders to provide an ‘origination fee,’ or payment to establish a bank or broker to handle the loan process, cannot increase. Other charges including title insurance, however, may increase.

Opponents of the new rules argue the new forms will not only add costs to lenders but ultimately make no mark on the shopping choices of consumers who often end up basing loan decisions on the recommendation of a real estate agent or broker.

When will the Banks tell prospective borrowers the true cost of their loan by giving them the Annual Percentage Rate (APR). As many people don’t know, the APR is the only true cost comparison when it comes to shopping for a mortgage. The APR is a function of the cost of the money over the entire course of the loan, with the bank fees and costs rolled into the calculation. If each broker and lender confessed how their fees impacted the actual cost of the loan, consumers would be in a position to quickly and easily understand which loan cost more.

January 11, 2010

Tools to Grieve your Taxes Exist– the Government Provides Them in Dutchess County, New York.

by Peter Klose

Real Property Taxes are at the front of everyone’s mind these days because property values in New York have declined so dramatically. Did you know that the tools to grieve your taxes are often right at your finger tips.

For example, in Dutchess County, the Real Property Tax Service Agency’s Parcel Access system provides tax assessment information for your parcel and your neighbor’s parcel, including development plans, property tax estimates and other information supplied by local municipal governments. Updated twice a year to coincide with the submission of Tentative Assessment Rolls every May and every July of each year, the Parcel Access allows Search Tools by type of property, name of debtor, and by map.

The website’s main objective is to function as a tool for real estate buyers and sellers to have access to and view assessment information. If a seller disagrees with a listed assessment, however, value the home owner may “grieve” those taxes by seeking a review first by the assessor and then by a formal review with the Board of Assessment Review.

January 7, 2010

Adverse possession, Walling decision, and its application in the 1st, 2nd, 3rd Departments.

by Peter Klose

As a result of recent Court of Appeals and Statutory Changes in New York, litigation and law suits relating to adverse possession are wending their way through trial and appellate courts throughout the state.

Adverse possession is a method of gaining title to property. Although not the favored means to procure land, a person may acquire title to land by adverse possession if she holds the property in a manner that conflicts with the rights of the true owner for a period of time.

There are five elements that establish a claim of adverse possession. Possession must be 1) hostile and under claim of right, 2) actual, 3) open and notorious, 4) exclusive, and 5) continue for the specified period as determined by jurisdiction. Adverse possession is generally a question of fact to be decided by a court. Recent decisions in New York have included:

December 22, 2009

New York’s Seizure of Private Land for Public Good?

by Peter Klose

Last month, the New York Court of Appeals ruled that the state of New York may legally seize private land for private developers use. In the 6-1 decision, the court allowed the seizure of a 22-acre plot located in downtown Brooklyn – effectively allowing the Atlantic Yards Project to proceed – reasoning it would allow for improvements on the “blighted conditions” of the property. The recent ruling falls in line with the 2005 decision by the Supreme Court in Kelo v. City of New London that similarly allowed a corporation to seize private homes and businesses to build a research campus.

The New York court’s ruling has raised arguments from opponents that ownership rights amount to being worthless if a government deems private land for the ‘public good.’ The Atlantic Yards Project, headed by Forest City Ratner Cos., seeks to develop office towers, apartments, and most notably an $900 million arena for the NBA’s New Jersey Nets. The only dissenter on the court’s bench stated, “It might be possible to debate whether a sport stadium open to the public is a ‘public use’ in the traditional sense, but the renting of commercial and residential space by a private developer clearly is not.” The New York Court of Appeals, however, ultimately ruled that the definition of ‘blight’ is a matter for the legislature, not the courts, to change.

November 25, 2009

Recent Highlights in the Neighbor Wars-Adverse Possession

by Peter Klose

This blog has identified recent legislation in the State of New York discussing adverse possession. Adverse possession is a method of gaining title to property based upon use of the property (not written). Although not a favored means to procure land, depending upon the facts a person may acquire title to land by adverse possession if she holds the property in a manner that conflicts with the rights of the true owner for a period of time.

There are five elements that establish a claim of adverse possession in New York. Possession must be 1) hostile and under claim of right, 2) actual, 3) open and notorious, 4) exclusive, and 5) continue for the specified period as determined by jurisdiction. Adverse possession is generally a question of fact to be decided by a court. Since the enactment of the statute and recent decisions by the Court of Appeals in New York, it is important to consider what judicial department you might be located.

For example, in the First Department, in the case entitled Eller Media Co. v. Bruckner Outdoor Signs, the plaintiffs constructed a billboard on a disputed parcel and surrounded that billboard with a chain-link fence. The defendants appealed the trial court’s summary judgment in favor of the plaintiffs arguing that the disputed parcel was held by a city for a public purpose. The court disagreed and determined that the plaintiffs or claimants had not only satisfied the elements of adverse possession because its use was hostile, open and notorious, exclusive, and continuous for more than the ten year statutory period, but that the parcel was not held for a public purpose and therefore not immune to the plaintiff’s adverse possession claim.

At Klose & Associates, we handle real estate litigation including adverse possession claims in the first department. You should always contact a specialized New York real estate litigation attorney if you have concerns about adverse possession.
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