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Real Estate Law Blog

Blog

COVID-19 UPDATE

Posted on March 21, 2020 at 6:52 PM Comments comments (605)
COVID-19 Update:

At the Law Office of Jeanne Reardon, the health and safety of our staff and clients is our top priority.  Since you rely on us for your legal needs, we remain ready to help you in this difficult time as we face many health and financial challenges.  Accordingly, we are taking a number of steps to minimize health risks during this health crises while serving our current clients as well as new clients coming on board.

Our law firm will be adhering to the guidelines presented by the Centers for Disease Control and our local health officials, and we continue to monitor them for updates as they are released. We have implemented a plan to protect the safety of our work environment while allowing us to continue to service all of our clients.

We are taking precautions with respect to non-essential meetings and face-to-face interactions. That includes telephone consultations and conference calls whenever possible. With respect to our real estate practice, we will endeavor to utilize Powers of Attorney, pre-signed deeds, and Escrow Closings, where available, in order to close title when the transaction permits us to do so.

Do not hesitate to contact us if you have any questions or concerns regarding your current real estate transaction or if you are just getting started and are looking to hire a real estate attorney for an upcoming sale or purchase of a home.  As always, we are committed to handling our clients' matters with the utmost care and respect, and are available to assist both current and new clients.

We hope that you and your family remain safe and healthy!

Jeanne Reardon, Esq.

Why a Home Buyer Needs Title Insurance

Posted on June 3, 2018 at 8:36 PM Comments comments (40)
Title insurance is crucial for a home buyer because it protects you and the lender from the possibility that your seller doesn't -- or previous sellers didn't -- have free and clear ownership of the house and property and, therefore, can't rightfully transfer full ownership to you. Problems with the title can limit your use and enjoyment of the property, as well as cause you financial loss.  This is why you need title insurance.  

Your real estate attorney will arrange the process of getting you title insurance soon after your Contract of Sale is signed.



What Could Happen If You Don't Get Title Insurance?

Title insurance protects against the following common hidden risks just to name a few:

  • Errors or omissions in deeds
  • Mistakes in examining records
  • Forgery
  • Undisclosed or missing heirs
  • False impersonation of the true owner of the property
  • Instruments executed under invalid or expired power of attorney
  • Mistakes in recording legal documents
  • Misinterpretations of wills Deeds by persons of unsound mind
  • Deeds by minors
  • Deeds by persons supposedly single, but in fact married
  • Fraud
  • Liens for unpaid estate, inheritance, income or gift taxes


Title Insurance: Lender's Policies and Buyer's Policies

Title insurance is typically a combination of two policies: a lender's policy and a borrower's policy. Your lender -- assuming you're taking out a mortgage, will require that you buy a lender's policy (also called a "mortgagee's policy") to pay for its legal defense costs and reimburse any mortgage payments you can't make because you've lost the house to someone else's claim on it.

The lender may also require you to buy an "owner's policy," covering your own legal fees and other losses, as yet another step toward protecting the lender's collateral. Your title insurance policy remains in effect as long as you, or your heirs, retain an interest in the property.  Title insurance will give you the peace of mind in knowing that the investment that you have made in your home is a safe one.

The Law Office of Jeanne M. Reardon assists New York property owners with title insurance matters. To speak with an experienced New Yorkreal estate attorney, call us at (516) 314-8433 or e-mail us.


Zoning Limitations: The Need for a Zoning Variance

Posted on November 19, 2011 at 11:26 PM Comments comments (71)
Zoning  is a device of land use planning used by local governments. Zoning may be use-based (regulating the uses to which land may be put), or it may regulate building height, lot coverage, and similar characteristics, or some combination of these.

The primary purpose of zoning is to segregate land uses that are thought to be incompatible. In practice, zoning is used to prevent new development from interfering with existing residents or businesses and to preserve the "character" of a community or neighborhood. Zoning is commonly controlled by local governments such as counties or municipalities.

Most zoning systems have a procedure for granting variances (exceptions to the zoning rules), usually because of some perceived hardship caused by the particular nature of the property in question.

Variances enable a property owner to utilize the property in a manner that is not allowed by the local zoning laws.  To obtain a variance, a property owner must establish difficulties or "unnecessary hardship" in complying with the zoning law. 

The two most common types of zoning variances are a use variance and area variance.


Use Variance

A use variance allows a property owner to use the property for some purpose prohibited by the local zoning laws.  When a use variance is sought, the applicant demonstrates "unnecessary hardship" by establishing that:

          a.  the land cannot yield a reasonable return if used for zoned purposes;

          b.  the property owner's difficulty is due to unique circumstances and not to general conditions throughout the           
               neighborhood (the hardship must be unique or peculiar to the property for which the variance is sought); and

          c.  the sought-after use will not alter the essential character of the neighborhood.

Although it is permissible for a municipality to impose conditions on a use variance, the conditions must regulate the property use and not the activities of the applicant (property owner).


Area Variance

An area variance enables the property owner to maintain, build or subdivide on a parcel smaller than that required by the zoning law.  To obtain an area variance, the property owner need only show "practical difficulties" in complying with the law.

Even though self-creation of a difficulty is certainly a factor to be taken into account in considering an application for an area variance, it is less significant a consideration in those cases than in applications for use variances.  It is not the sole determining factor, and a finding of self-created hardship, normally should not in and of itself justify denial of an application for an area variance.

See New York Times article by Amy Gunderson, "HOME AWAY: When You Need a Zoning Variance", for further discussion on zoning variances.



Co-op Buyers Should Consider Purchasing Title Insurance

Posted on November 10, 2011 at 6:51 PM Comments comments (61)
It is a commonly accepted practice for home buyers to purchase title insurance.  Title insurance provides buyers, and their lenders with coverage up to the full purchase price of a home in the event a valid title claim is instituted against the property.  Buyers of co-ops, however, rarely purchase title insurance.

Since co-op buyers are not purchasing real estate, but rather shares in a corporation – accompanied by a proprietary lease that gives the buyer the right to live in the co-op, traditional title insurance would not cover the buyer's ownership interest in the shares.  Consequently, the Title Rate Service Association (or Tirsa) created an endorsement to the standard title insurance policy that would cover co-ops.  The Tirsa endorsement is known in the title industry as "leasehold title insurance."  This endorsement insures the buyer's interest created by the proprietary lease.

Just as title insurance provides protection in the event that the title search conducted before closing failed to uncover a valid lien against the real property, the leasehold endorsement provides similar protection in the event the lien search failed to uncover liens against the seller of the co-op.  However, the Tirsa endorsement never really caught on with co-op buyers.

As an alternative to the Tirsa endorsement, the State Insurance Department, approved the Eagle 9 policy for sale by title companies to co-op buyers.  The Eagle 9 – unlike the Tirsa policy, is not a real estate policy with an endorsement.  Rather, it is a policy specifically designed to insure the buyer's interest in the co-op.  The Eagle 9 policy insures the buyer for loss and legal expenses resulting from claims arising against previous owners of the co-op.

Additionally, the Eagle 9 policy is significantly less expensive than the Tirsa policy.  

Here are some instances where a co-op buyer should consider purchasing an Eagle 9 policy:
  • Seller is in bankruptcy
  • Buying from an estate or heirs of a deceased seller
  • Buying a foreclosed co-op (REO)
  • Federal tax lien filed against seller in another state (will not be found by a typical search in New York)

Considering the substantial investment involved in purchasing a co-op, the cost of the Eagle 9 policy, which is far less than title insurance for real property or the TIRSA endorsement, is a worthwhile outlay in order to protect your investment and give you peace of mind.



Why You Need Title Insurance

Posted on October 16, 2011 at 2:18 PM Comments comments (35)
Buying a house may be the most significant and expensive purchase you will make.  When you make such a significant investment in the purchase of a home, how can you be sure that there are no problems with the home's title?  Problems with the title can limit your use and enjoyment of the property, as well as cause you financial loss.  This is why you need title insurance.   

Title insurance will pay for defending you against any lawsuit attacking your title, and will either eliminate title defects or pay your financial losses, up to the amount of the policy.  Your title insurance policy remains in effect as long as you, or your heirs, retain an interest in the property.  Title insurance will give you the peace of mind in knowing that the investment that you have made in your home is a safe one.

There are two basic types of title insurance: Owner's title insurance, called an Owner's Policy, and Lenders title insurance, called a Loan Policy.  Most lenders usually require a Loan Policy when they issue you a mortgage. The Loan Policy is usually based on the dollar amount of your mortgage. It only protects the lender's (or any subsequent lender to whom the loan may be sold or assigned) interest in the property should a problem with the title arise. It does not protect the buyer.

Only an Owner's Policy fully protects the buyer should a covered title problem arise with the title that was not found during the title search.  The Owner’s Policy is ordinarily issued in the amount of the purchase price and protects the homeowner from the potential risks which can arise. It is purchased for a one-time fee at closing and lasts for as long as you or your heirs have an interest in the property. 

Title insurance is issued after a careful examination of the public records. Prior to issuing its title policy, a title company will perform a detailed search of the property records going back many, many years in search of title defects.  Sometimes however, title problems occur that could not be found in the public records or are inadvertently missed in the title search process. Even the most thorough search cannot absolutely assure that no title defects are present, despite the experience of professional title examiners. In addition to matters shown in the public records, other title problems may exist that cannot be disclosed in a search.  An Owner's Policy of title insurance will help to protect you in these events.

Title insurance protects against the following common hidden risks just to name a few:

  • Errors or omissions in deeds
  • Mistakes in examining records
  • Forgery
  • Undisclosed or missing heirs
  • False impersonation of the true owner of the property
  • Instruments executed under invalid or expired power of attorney
  • Mistakes in recording legal documents
  • Misinterpretations of wills Deeds by persons of unsound mind
  • Deeds by minors
  • Deeds by persons supposedly single, but in fact married
  • Fraud
  • Liens for unpaid estate, inheritance, income or gift taxes

Every homeowner must, however, carefully read the insurance policy. There are numerous coverage exclusions contained in an owner’s policy, such as:

  • Defects, liens or adverse claims not known to the insurance company but known to the insured and not disclosed in writing to the company prior to inception of the policy;
  • Taking of the property by a government (eminent domain); 
  • Any law restricting or relating to the use or occupancy of the property; the subdivision of land; environmental protection, and
  • Defects, liens, encumbrances, adverse claims, or other matters attaching or created subsequent to the date of the policy.

There are a number of such exclusions from coverage, and all buyers should discuss these issues with their attorney before going to closing.




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