The Home Equity Theft Prevention Act

Have you ever heard of the term “short sale”? If you are a lawyer, did you ever represent a buyer purchasing from a seller who was either in default on his mortgage or against whom a foreclosure action had already been commenced?
If you are buying from a homeowner whose property is in foreclosure or has defaulted on her loan, or as a lawyer you represent such a buyer, then you need to be aware that New York has passed a strict and somewhat draconian notice requirement to effectuate a sale.

This law can be found in the Real Property Law 265-a, and is known as the Home Equity Theft Prevention Act. It governs sales of homes that are in foreclosure or default. If the sale is protected by the Act, and the buyer fails to fulfill any of the requirements listed below including attaching a notice of rescission, a seller may be able to legally cancel the contract; even years after the house was sold. A seller may also be able to sue the buyer for triple damages.

WHY DON’T MANY REAL ESTATE LAWYERS CARE OR KNOW ABOUT THE STATUTE?

Dangers of Lending Money to Your Business

            

Owners of small businesses continually fail to realize that their corporation or LLC is a separate legal entity that owes certain duties to its creditors. While it is tempting to lend money to your company in times of hardship and to pay yourself back once some money comes in, there is a very good chance you will have to eventually turn the money over to the company’s judgment creditors.

Both New York and New Jersey have Debtor and Creditor Laws, which protects creditors from fraudulent actions of their debtors. The laws have their own definitions that are different from what might be commonly believed. If a judgment creditor sues an owner of a company for taking money out of a failing business in fraud of creditors, the usual defense is that it was just a repayment of an existing loan and so there was fair consideration for the payment. In New York that defense will usually fail. First, most owners will fail to document the loan by a promissory note or by some other document. Failure to provide documentary evidence of the loan is fatal to the defense in both New York and New Jersey.

DISCOVERY IN BETH DIN AND OTHER ARBITRATION TRIBUNALS

Obtaining discovery in a Beth Din is quite a lot different than in court or in the more national, secular, arbitration tribunals. The Federal and State judiciary forums have developed extensive and comprehensive rules of exchanging documents in discovery and obtaining pretrial depositions in order to avoid trial by ambush before jury or the bench. This discovery process is subject to abuse and adds many months, if not years, onto a process before there can be a final resolution of the dispute.

Arbitration is often chosen to avoid the rigors of discovery in an effort to obtain some rough justice in a relatively short period of time. To that means, many arbitration tribunals like AAA, JAMS and FINRA discourage or outright prohibit pretrial depositions, yet at the same time they are open to a more broad scope exchange of documents. This is not to say that one cannot get pretrial depositions at the AAA, but it is more uncommon.

SEXUAL HARRASSMENT SETTLEMENTS NON-DEDUCTABLE IF THERE IS A NON-DISCLOSURE AGREEMENT

This past year has shown that many famous men had covered up their predatory sexual abuse of women (and sometimes other men) by non-disclosure agreements. $45 million dollars were paid by or on behalf of Fox News host Bill O’Reilly to settle sexual harassment claims, almost none of which was publicly revealed due to confidentiality agreements.

Congress has sought to do something about this in the new tax law but, in most cases, it will have little or no effect on big businesses, religious organizations or Congressmen who abuse. It will harm little businessmen who care about their reputations and it will even harm victims of abuse. The Internal Revenue Code was amended to read that no tax deduction will be allowed for any settlement or payment made related to sexual harassment or abuse if such settlement is subject to a non-disclosure agreement. It also forbids anyone from deducting attorney’s fees arising from such a settlement. 

How to execute a will that will hold up legally and halachicly.

As it is well-known, that according to Jewish law there are many strict rules for wills and inheritance (Yerusha in Hebrew). The basic rules that people commonly wish to circumvent are the requirement that a man’s sons are his sole heirs, and the bechor (legal firstborn) would receive a double share. Wives and single daughters receive living expenses from the male heirs, although to fully comprehend these divisions requires much scholarly study and is beyond the scope of this article.

The issue with writing a simple will that allows the wife to inherit fully, or all children to receive equal portions, is that the contract does not take effect until after death, at which time a person has no authority to make monetary transfers according to Jewish law. The Rabbis therefore advise a method to enable a will that accords with halacha and will be upheld in Beth Din. There are three basic steps to the procedure:

NJSLAW CLE: Mortgage Contingency Clause and Ethical Issues in NJ Real Estate Contracts

Live Webinar on April 3, 2017 @ 3:00 PM. Register Here!

The mortgage contingency clause is one of the most important clauses in real estate contracts. However, many attorneys don’t bother to read it. This is a mistake since the terms of the clause, which may differ from contract to contract, can have an immense impact on your client.  

In this program, Alexander Novak and Kim Juhase, will provide an overview of this clause and will discuss the problems that could arise if the wrong language is used. In the second half of the program, they will discuss possible ethical problems that might arise in real estate transactions. They will also provide a brief overview of NY law for those who are dually admitted.

By the program’s end, Juhase and Novak will aim to answer the following questions:

• What are the best terms for the Buyer or the Seller?
• To whom must the Buyer apply for a mortgage loan and in what time period?
• Do conditional commitments satisfy the contract?
• What happens when a mortgage commitment is revoked by the lender?
• How can one avoid malpractice or a grievance complaint in real estate transactions?

Learning Objectives:

1. Understand how different terms on a mortgage contingency clause affect your client
2. Learn how to avoid ethical problems in real estate transactions

Click here to register!

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March Madness: Is NCAA Tournament Gambling Legal?

March Madness is here, and all over America people will be furiously filling out their brackets. Whether you join an office pool or a competition with friends, everyone usually throws a few bucks in the pot for the winner. According to the American Gaming Association, 40 million people fill out brackets each March and will wager an estimated $10.4 billion this year. Of that amount only $65 million is bet legally, with $2 billion being bet in the kind of pools in which you're probably partaking.

As a matter of state law, pay-to-enter NCAA Tournament pools are illegal if they constitute "games of chance." Courts apply various different tests to determine if a game constitutes as “chance”. Under all tests, the likelihood is that NCAA Tournament pools would involve a high level of chance. Remember a couple years ago, when Warren Buffet offered 1 billion dollars for anyone that could predict a perfect bracket? While that was a much longer shot (1 in 9.2 quintillion to be exact) than just coming in first place in your pool, it just goes to show how unpredictable the whole game is. This year Buffet is actually giving any Berkshire Hathaway employee, that can pick the Sweet 16 correctly, $1 million a year, for life. Only 14 out over 11 million brackets predicted that correctly in2015.

What Type of Apartment Do You Own?

      How you hold your residential apartment will have enormous legal consequences.  The three major ways of doing so is renting, as a co-op, or a condominium.  However, many people do not realize the differences between them.

            The most familiar one is renting.  A landlord rents one of his apartments to you pursuant to a written lease which sets forth the details of the landlord-tenant relationship. The tenant has no interest in or responsibilities for the common areas. In a multiple dwelling, the landlord is required to maintain not only the common areas by also the tenant’s apartment under a warranty of habitability and quiet enjoyment.  A landlord may be held liable even for damage caused to your apartment by another tenant.

Your Private Emails Can Be Read By Your Employer

Many people, like our former Secretary of State, consider their work e-mail as their own private lifeline to the outside world.  Crude jokes, funny stories about your bosses or put-downs of minorities are exchanged.  However, doing so can get you fired because your emails are not private. Your employer can read them and use them against you in any disciplinary proceedings.

A federal law, the Electronic Communications Privacy Act of 1986, prohibits the interception of email communications and accessing stored emails without authorization.  Unfortunately, these apparent protections are illusory for employees.  The courts have very narrowly interpreted the statute.  In the first instance, they have interpreted “interception” as being the simultaneous reading of an e-mail as it is being sent.  Reading an email already transmitted does not qualify.   As for stored emails, the law allows for searches by communication service providers.   If your email is stored on your employer’s email server, you are out of luck.  Generally, the courts have also held that employees have no reasonable expectation of privacy in their work computers.

Do not use your work computers for private communications.  Gmail and other servers are free and most of us have smart phone where we can read our emails and texts.  Don’t be another Hilary Clinton. 

Kim Steven Juhase, ESQ.
Partner, Novak Juhase & Stern

Check us out on Facebook, LinkedIn, and at njslaw.com  

A Dog, a Cow and a Cyclist Ride into a Bar

       People get injured and they look to blame someone and if that someone has an insurance policy, a lawyer may be there to help.  Not every injury is awarded compensation.  For instance if you trip over a inch difference in the grade of a sidewalk, the courts will not likely award you anything. 

       What happens if you let you cow roam around the neighborhood?   In 2013 in a decision by the Court of Appealsin Albany, the highest court in the State, a woman was allowed to sue the owner of a cow she crashed into with her van. 
Sounded like the Court of Appeals felt people have to keep their animals on a leash or be liable for mishaps.  Or so that it is what two lower courts ruled.   The names of those cases were  Doerr v. Goldsmith and Dobinski v. Lockhart. The cases involved Wolfgang Doerr, who was injured in 2009 after crashing into a 45-pound shepherd mix on Central Park’s bicycle loop road, and Cheryl Dobinski, who fell from her bike in 2012 when she tried to avoid two German shepherds that ran onto the road near their rural home south of Buffalo.  In the New York City  case the lower court awarded significant damages to a cyclist who collided with a dog.  After a trial  the jury awarded the plaintiff $1,000,000.  On appeal the next highest court reduced that to $600,000.  I can only assume there was an insurance company funding the defense because this case was taken to the Court of Appeals.
 
       Just this June that Court ruled a cyclist cannot sue a dog’s owners, saying riders should be careful not to cross paths with animals that are a constant public presence.  To distinguish this decision from the 2013 cow case Judge Sheila Abdus-Salaam wrote, “In public parks, one regularly encounters dog owners with their unrestrained canine companions … whereas one ... certainly never expects to see someone taking his or her cow for a walk in the neighborhood.”  The court said the cyclists could not sue the dog owners because they had not shown that the dogs had a history of biting or attacking people.  A lower appeals court cited the cow case when it revived Doerr’s lawsuit, but the Court of Appeals last week  reversed the decision.

      I like this decision.  Dogs running after bikes is something I grew up with, it is common and that is just life.  Oh yea this has nothing to do with a bar, but I did think an award of $1,000,000 to the Central Park cyclist was a joke.



Alexander Novak, 

Partner, Novak Juhase & Stern

Check us out on Facebook, LinkedIn, and at njslaw.com

Baseball: Suing For Getting Hit by a Foul Ball

            Spring is here bringing with it the thoughts of another baseball season.  It can also bring with it thoughts of death and severe injuries. While there have been only two fans so far killed at professional league ballparks, at least 49 fans have died at amateur games and countless others have been severely injured in the stands by foul balls. Strangely enough, if you are injured or killed in the stands by a foul ball, you generally have no legal remedy.

           

Almost all states, including New York and New Jersey follow what is called the limited liability rule.  This is set forth in the 1981 New York Court of Appeals case of Akins v. Glens Falls City School District.  In that case, plaintiff attended a high school baseball game. The field was equipped with a 24-foot tall and 50-foot wide backstop behind home plate but only a three-foot high fence along the baselines.  She decided to watch the game standing behind the three-foot fence and was struck in the eye by a sharply hit foul ball, causing her serious and permanent injury.  The plaintiff sued the school district.

International Sale Of Goods Not Governed by the UCC

   Robert in New York receives a telephone call requesting he deliver a container of his pickles to Toronto from a buyer he never dealt with. Robert agrees and delivers the pickles. Shortly thereafter, the customer complains that the type of pickles he ordered was not delivered.  Robert wants to sue.  What law governs?

   

   While many businessmen (and a lot of lawyers) would say New York’s Uniform Commercial Code (UCC) governs, but they would be wrong.  Since 1988, sale of goods between the U.S. and most other countries have been governed by a treaty called the United Nations Convention on Contracts for the International Sale of Goods. Since it is a treaty, it overrides the law of all 50 states including the UCC. It has been acceded to by 83 countries including Canada, Mexico, Israel and most of Europe except for the United Kingdom.

Hey Get Your Fence Off My Land

     Sometimes it happens when you buy land, you get a new survey taken of the property, and it shows that a neighbor’s fence or hedges encroaches on your land.  You want that fence or hedge removed and set on the property line.  You go to the neighbor and ask real politely, and it is like talking to the wall (pun intended).  Hopefully your first reaction is to call Alexander Novak, your lawyer, to start a lawsuit, but that is not such great advice.  Here is why:

   

   Old encroachments on your land call into play the law of adverse possession.  If the adverse possession lasted 10 years, you lose your land.  However, in 2008 the New York Legislature changed that law to make it much easier for you, the landowner, to win and get that fence taken down. The new legislation changed the common law rule of adverse possession. Under common law, things like erecting a shed, digging a trench, mowing, planting and raking grass, constructing underground dog wire fence, installing post for birdhouse, cultivating garden, and erecting fences were all winning arguments for adverse possession, but not any more. These actions are now called “permissive and non-adverse” actions. 

   

   But do not run to court so fast!  If your neighbor had already done those things for 10 years before the new 2008 law came into effect, she or he could still win despite the new law.  The courts in New York have ruled that the neighbor is entitled to the application of the old version in effect when her claim to the disputed property allegedly ripened into title.  The NY Court of Appeals said, “although a statute is not invalid merely because it reaches back to establish the legal significance of events occurring before its enactment, . . . the Legislature is not free to impair vested or property rights.” So if the neighbor could have won in 2008, then she or he could still win today.  This lawsuit will be very fact oriented.

I Want My Ring Back! Who Keeps The Ring In A Broken Engagement?

       

     Paul and Janet had been dating for about two years when Paul proposed marriage. Janet agreed and a wedding date was set. As a sign of their engagement, Paul gave her a family heirloom, an 8-carat pure white diamond on a white gold band. Three months later, Paul thought better of it and broke the engagement. He then requested the return of the ring. Janet refused, claiming it was Paul fault for breaking off the engagement and she had a right to keep it. Who wins?

      Paul does. Our firm won the lead case on this issue, Gagliardo v. Clemente, a New York Appellate Division, 1st Department case from 1992. The court held that giving an engagement ring is only a conditional gift given in contemplation of marriage. If the marriage does not go through, the gift is not completed and the ring must be returned. It is wholly irrelevant as to who caused the breakup. Just as New York has a no-fault divorce law, there is a no-fault engagement ring rule. The rule is the same in New Jersey according to Aronow v. Silver, a 1987 NJ Superior Court case.

       What if the man is already married and gave the engagement ring upon her promise to marry him when and if he got a divorce from his current marriage?