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Garden City, NY Estate Planning & Complex Litigation Blog

Friday, December 6, 2019

What is an SNDA and Why is my Landlord's Lender asking me to Sign it?

As a condition of a mortgage loan, a lender may require that the borrower (or landlord) obtain a signed Subordination, Non-Disturbance and Attornment Agreement (SNDA) from the tenants. A SNDA is a tri-party agreement between the lender (the mortgage), the borrower who uses the proceeds to purchase the property (the landlord) and the tenant. 

A SNDA will reference the lease, lease parties and execution date.  The purpose of the Agreement is the provide that the lease (and any modifications to the lease) will be “subject to” and “subordinate” to the mortgage lien.  This is the “S” in SNDA.  In exchange for the tenant’s agreement to remain behind the lender’s rights to the property, the lender agrees to give tenant protections in the event of a foreclosure. 

A foreclosure of the property would occur if the borrower/landlord failed to pay its mortgage or breached the loan documents and lender could take possession of the property.   In this situation, the ender agrees to leave the tenants in possession and not disturb the tenancy, provided that they have not breached the lease.  The covenant of non–disturbance is the “ND” in the SNDA.  


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Friday, November 22, 2019

Violating Helmet Laws: After a Motorcycle Accident

In 2006, the risk of death in motorcycle accidents was 35 times greater than that of car accidents. By 2016, the risk of death in motorcycle accidents had declined to 28 times that of car accidents – a 20% reduction. Much of this decline is attributed to the adoption of helmet laws across the U.S. Currently, 19 states and the District of Columbia mandate that a helmet must be worn at all times by riders.  

Due to the unprotected nature of motorcycle riders, motorcycle accidents will always be more damaging than car accidents. What would be a minor fender-bender in a car can result in a motorcycle rider being launched across the street and suffering traumatic injury including broken bones, lacerations, head trauma, and spinal cord damage. While broken bones and lacerations are costly and painful, they do not often result in long-term medical expenses. Conversely, head trauma and spinal cord injury often result in significant medical expenses spread out over the duration of the rider’s life.

If you’ve been involved in a motorcycle accident, you may be entitled to bring a personal injury action against the party at fault for your accident. Additionally, you may be able to file a claim with that party’s insurance company. The decision to file a personal injury lawsuit or file a claim with insurance should be the result of concise and deliberate conversations with an experienced personal injury attorney.


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Friday, November 15, 2019

What is the Difference Between a Commercial Lease and a License to Occupy Business Space?

When one party agrees to let another party use its business space, they must agree on the terms of use, the fee, the term and how the occupancy will come to an end.  This is referred to as a license to occupy space, which is different from a commercial lease.  A commercial lease is an agreement between a landlord/lessor and tenant/lessee to lease real property.  The landlord-tenant relationship creates a leasehold interest.  A license to occupy real property, on the other hand, is merely a privilege to use the real property and no property estate is created.  

A license is generally revocable by either party upon notice, at will – with or without cause and is usually not assignable the way a lease can be assigned to another entity with the landlord’s consent.  A license to occupy is generally a personal right of the party to the license. The tenant and landlord have a relationship governed by the terms of the lease, and all the rights and remedies available under landlord tenant laws (including the eviction laws), whereas the laws of contract govern a licensee and licensor.  

Generally, a license is for a shorter term than a lease.  The parties may prefer a license agreement for an event to be held in business space for a seasonal duration (such as a Halloween store or a Christmas shop) or as a “pop up store” (which is test run to see if the business location works).  Also, in the retail context, a license for space in a larger department store is often called a “concession.” An example of a concession is a makeup counter in a retail outlet. 


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Friday, November 1, 2019

Pedestrian InuriesWhile Walking Outside the Crosswalk

“Pedestrians always have the right of way.” This is an often-repeated phrase, and one that is likely best to follow, but is it legally correct? If you’re driving down the street and someone walks into the road and is struck by your car, are you responsible? The answer is murky.

Pedestrians have the right of way in crosswalks, whether marked or unmarked. If within a crosswalk, any injuries sustained will likely be the fault of the driver. However, even when outside of the crosswalk, drivers may still be at fault. Most states apply a standard of “reasonable care” to both drivers and pedestrians. This means that a driver must always exercise reasonable care and pedestrians must do the same.

Certain activities are frequently found to violate the pedestrian’s standard of reasonable care. Jaywalking, or crossing outside of the crosswalk, is often found to violate the duty of care. Thus, if a pedestrian were hit outside of a crosswalk, it is likely that the pedestrian would be found to have contributed to the accident. Whether a pedestrian is at fault is paramount to any personal injury suits that the pedestrian may bring.


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Thursday, October 24, 2019

What is Title Insurance?

A new home is often the biggest financial investment for many individuals and families. With the down payment and all the costs of closing on a home, a buyer may seek to cut costs, however, title insurance is not the place to do this. Most consumers are familiar with health insurance and car insurance, but title insurance can be a bit confusing.

A Primer of Title Insurance

When a buyer purchases real property, the seller is conveying (i.e. transferring) title or legal ownership.  Ownership of real property can be held by a person, a husband and wife, two or more individuals or by a corporate entity, partnership or LLC.   A title company offers insurance that the title transferred is good and without defects. The amount of insurance taken is based on the value of the real property and is paid in one lump sum at closing.  It is not a continuing monthly payment like a mortgage. 

There are two types of title insurance policies -- a homeowner’s policy and a lender’s policy.  A bank will not want to give a mortgage to a borrower/buyer without the lender’s policy.  The bank wants to protect its interest in the real property, as does the homeowner. 

The buyer customarily orders and pays for both the homeowner’s policy and the lender’s policy.  The policy will vary depending on the type of ownership – condominium, cooperative, freestanding house or commercial property.  A title company will issue the title policy and provide the insurance. 

The policy will contain an abstract (i.e. summary) of the chain of title/transfers and will accurately describe the property with a legal description (referred to as “Metes and Bounds) that is more detailed than merely the address. The policy will also contain a list of any liens on the property such as tax liens or mechanic’s liens (for unpaid work performed by contractors), as well as a list of any “encumbrances” such as other mortgages.

A buyer wants to obtain “clear title” without any legal doubts or possible litigation.  A title company will provide some “exclusions” or items it will not insure against.  Examples of exceptions are an easement or right of way over the property or a mortgage by the prior owner (which should be paid off or assumed before transferring the property). 

Title insurance is also designed to protect against fraud in the transfer.  The title examiner will look for long lost heirs or an ex-spouse who could claim rights to the real property being transferred.  The title policy will run bankruptcy and Patriot Act searches on the buyer and the seller to ensure the transfer is not in violation of any bankruptcy or anti-terrorism laws.  The title company may also run environmental searches to determine if the property is located in a flood or tideland zone, which may affect its insurability.

When there is a tenant occupying the real property, a recording of the parties and a memorandum of lease is recorded in the county clerk’s records where the property is located. This provides notice of the tenancy to the potential buyer, and is listed on the title searches.

The Bottom Line

Title insurance is a critical component of buying a home. As with any financial purchase, selecting a reputable title company is key as is shopping around for competitive prices.  American Land Title Association otherwise known as “ALTA” is an industry organization that attempts keeps high standards for title insurance companies.  Ultimately it is a valuable tool that will provide you with peace of mind when making such a large financial investment.

 


Friday, October 18, 2019

Legal Options After Being Hit by a Drunk Driver

In 2010, more than 1.4 million drivers were arrested for driving under the influence of drugs or alcohol. Additionally, nearly one-third of the U.S. adult population self-identifies as having driven while impaired by alcohol each year. The risk that impaired drivers place others in is often understated. When driving impaired, a driver’s reflexes are slowed and his or her judgment is compromised. As a result, states are taking a tougher stance against drunk driving. Recently, the State of Utah reduced it’s per se BAC limit from 0.08 to 0.05. This means that if your BAC is 0.05 or higher, you are deemed to be driving while intoxicated regardless of any challenge you may bring regarding your capacity. If you’ve been the victim of a drunk driver, then you know all too well the threat that drunk driving poses to others on the road. However, you may not be aware of your legal options after being hit by a drunk driver. 

If you’ve been hit by a drunk driver, you can bring a personal injury lawsuit to recover for damages suffered as a result of the wreck. However, you cannot bring a criminal action against a drunk driver. Criminal prosecution is a power reserved by the state. Thus, while the prosecutor may consult with you regarding the drunk driving case, the prosecutor is not bound to honor your wishes or act in a certain way as directed by you. As a civilian, your legal options reside fully within the civil courts.

When bringing a personal injury lawsuit, you can recover a variety of damages resulting from your injury. Damages seek to compensate you for your injury. While damages cannot turn back the clock, they can help you with expenses and life-changing circumstances. Some claimable damages include:

  • Out of pocket medical expenses – Any expenses that you incurred as a result of the wreck may be claimed as damages.
  • Future medical expenses – Any expenses which you will be required to incur as a result of your injuries may be claimed as damages. For individuals suffering substantial injury, future medical expenses may be the most important damages to recover. 
  • Personal property damage – any personal property that was damaged in the wreck may be claimed as damages. This includes your car and smaller items, such as a phone which may have been destroyed.
  • Lost wages – Any foregone earnings as a result of the wreck may be claimed as damages. For example, if you were unable to go to work for two weeks following the wreck and had to forego $2,000 in pay, then you may be able to claim that $2,000 as damages.

Proving damages is a complex legal process that requires a skilled personal injury attorney. If you have been injured by a drunk driver, consult an experienced personal injury attorney near you to discuss your legal options.


Monday, October 7, 2019

What You Should Know About A Brokerage Agreement Before You Sell Your House

When engaging a realtor to list a home, the realtor will ask a seller to sign a listing agreement which will detail the broker arrangement and the terms of paying the commission.  You should consult an experienced real estate attorney before you sign a brokerage agreement  

Key Terms of a Real Estate Brokerage Agreement

A brokerage agreement should properly identify the property (by address or block and lot) and the price the home is offered for sale.  Additionally, the agreement should list a term and expiration date. If the house doesn’t sell during this time (usually 6 months or less then a year) the seller may want to engage a new broker to sell the home.  

In any event, a seller should not enter into a brokerage agreement with no end. In addition, there will often be a “grace period” whereby if anyone that the agent showed the property to buys the property within thirty (30) days after the termination of the listing agreement, the agent is entitled to the commission.  The agreement should provide the percentage of commission the listing agent will receive as well as the commission the buyer’s agent will receive. A total commission of 2-6 percent of the sale price is customary and varies from locale to locale.   

An exclusive agency agreement means the realtor is entitled to a commission even if the seller brings the buyer.  In some instances a seller may ask for exclusions to the exclusive agreement, meaning the agent is not paid if a neighbor or relative of the seller’s buys the home after the seller showed the property.  

A seller will want to be clear if the agreement is with a particular agent at a real estate office.  If the seller enters into the agreement without a named agent (i.e. “Christian W. Breyers” of We Sell Homes Realty), anyone in the real estate office who consummates a sale is entitled the listing commission.   

When a listing agent who represents the seller also brings the buyer, that is called a “dual agency” and both parties (Seller and Buyer) must be notified that the agent represents both and that each party should provide written informed consent to any conflict of interest.  The agent’s fiduciary duties of disclosure and undivided loyalty will not be the same in a dual agency. 

The agreement should list the methods the agent will use to market the property, such as internet sites, newspaper listings, and open houses. The agreement should state who pays the expenses of marketing and photographing the property (generally the agent’s expense.)

The Takeaway

A listing agreement to sell a home is an important agreement in a real estate transaction that should be reviewed by your attorney for the foregoing issues.


Friday, September 20, 2019

Spinal Cord Injuries Overview

The spinal cord is a long “cord” of nervous tissue that extends from the brainstem to the lower portion of the back. The spinal cord is the communication highway for the human body. It facilitates the communication between your brain and the rest of your body. When the spinal cord is damaged, the brain’s ability to communicate with the rest of the body is often impaired. 

How serious is a spinal cord injury?

Exceptionally. Because the spinal cord allows for communication within your body, the inability to communicate can result in the loss of feeling or control of body parts that can no longer communicate with the brain. This can cause numbness in limbs and paralysis in more severe cases. In the most extreme cases, a spinal cord injury is deadly.

How are spinal cord injuries diagnosed?

If you believe that you may have suffered a spinal cord injury, you should consult a doctor immediately. Only a doctor can accurately diagnose a spinal cord injury. In diagnosing spinal cord injuries, doctors will employ X-rays, computerized tomography (CT) scans, and magnetic resonance imaging (MRI) to evaluate whether the spinal cord has been damaged. Additionally, the doctor may employ tests such as sensitivity and muscle strength tests to determine whether there is a communication issue between the brain and the rest of the body. 

Can a spinal cord injury heal on its own?

Rarely. Due to the specific make-up of nervous tissue and the scar tissue that forms around the injured nervous tissue, the spinal cord is generally unable to heal itself. For those who have suffered a spinal cord injury, the effects are likely to be permanent without proper treatment. 

What treatments are available for spinal cord injuries?

At the moment, no known treatment exists to effectively reverse spinal cord damage. Unfortunately, damage to the spinal cord is most often permanent. However, this does not mean that there aren’t treatments and other remedies available to help individuals recover, regain mobility, and return to their normal lifestyles.

Currently, prostheses and medications are used to help patients cope with spinal cord injuries. New treatments are constantly under research, but at the moment, there is no federally approved treatment that can help the spinal cord heal. However, a recent study by the German Center for Neurodegenerative Diseases found that the cancer drug epothilone reduced the formation of scar tissue surrounding spinal cord injuries and stimulated growth in damaged cells in animals. This treatment is still far from involving human patients, but it presents significant progress in the search for spinal cord injury treatment. 

Spinal cord injuries are life-changing and can result in exorbitant medical expenses. If you have suffered a spinal cord injury, consult with an experienced personal injury attorney to determine what actions may be available to you.


Friday, September 13, 2019

What You Should Know About a Brokerage Agreement for the Lease of Commercial Space

A landlord and a broker typically enter into a brokerage agreement in connection with the leasing of commercial space. The best way to protect your interests is to consult an experienced real estate attorney before signing such an agreement. 

Key Terms of a Commercial Lease Broker Agreement

A broker who finds a tenant for a landlord of commercial space is entitled to a commission. The broker will want the agreement to be “exclusive” which means the broker gets paid the commission regardless of which party brings the tenant.

The landlord should verify that the broker is licensed in the state where the rental property is located. The agreement should identify the rental space (office or retail) and the building address. Generally, the commission will not be earned until a lease is signed, the tenant has paid the first month’s rent in advance and taken possession of the property.  

The agreement will describe the rate of commission for the initial term of the lease and any renewal periods. If a lease has an escalating rent provision, the parties may agree on a flat commission or a commission based on a percentage of ech years’ rent. Certain items that are not included in the rent may be excluded when calculating commissions such as the utility costs, any free rent or construction costs.  The agreement should also consider the rate of commission if the tenant takes on additional space in the building (whether adjacent or on another floor).  

An example a commission rate schedule for a five (5) year lease with an option to renew: 

For the first (1) year of the lease, or any fraction thereof               5%

For the second (2) and third (3) year, or any fraction thereof        4%

For the fourth (4) and fifth (5)year, or any fraction thereof            3%

Any renewals                                                                                  2%

While a commission rate may be calculated based on the changing rental rate, the commission is usually paid in one lump sum at the time of lease signing. It should be noted that if a tenant terminates, or violates a provision of, the lease, the landlord can sue the tenant to recover damages --  the amount the commission paid to the broker.

The agreement may provide a protective clause known as a broker indemnity whereby both parties state there are no other brokers entitled to the commission.  If the brokerage commission is not paid, the broker can place a lien on the property.  

A landlord may want certain key individuals in a brokerage agency to work on the lease the property and may name such individuals.  Then, a new broker can only be placed on the matter if the landlord consents to such broker.  

The Bottom Line

In the end, a commission agreement for the lease of property varies from a commission agreement for the sale of the property and the forgoing issues deserve serious consideration.


Friday, September 6, 2019

How the IRS Treats Personal Injury Awards

You've reached the end of your personal injury lawsuit and finally have the award you deserve. Court costs, attorney's fees, medical costs, and other expenses will need to be paid. But what about the IRS?

Most personal injury awards are not subject to federal taxes. The tax treatment of your award will be the same, whether it was reached through trial or settlement. However, personal injury awards are complex and contain both taxable and non-taxable parts.

Non-taxable

The portion of your award that compensates you for physical injuries is generally not taxable. Medical bills are perhaps the most significant portion of your award that falls under this category. 

Pain, suffering, and emotional distress damages are also not usually taxable. But these must be directly related to your physical injuries. Property damage is another type of award that typically does not get taxed. The IRS views all of these as reimbursement to the victim and so excludes them from federal taxes.

Taxable

On the other hand, lost wages are taxed. This is an award intended to compensate someone for work that was missed due to an injury. However, had the person not been injured and had earned that money, it would have been taxed. The IRS therefore will tax any portion of damages covering lost wages. Some plaintiffs also deduct out-of-pocket medical costs on previous tax returns. If you wrote off these sorts of eligible expenses in a previous tax year, the compensation you receive for them will likely be taxed.

In some personal injury cases, the court awards punitive damages. These are designed to punish particularly offensive behavior on the part of the defendant. The IRS considers these awards to be in addition to the actual losses incurred by the plaintiff, and so they will be subject to tax.

It's important to understand how exactly your personal injury award is divided up among all of the different types of damages. Failing to make this distinction could subject the entire amount to taxes. Talk to your personal injury attorney so you understand exactly what you have been awarded.

One way to manage personal injury taxes is to use what are called structured settlements. These pay the plaintiff over time instead of all at once, which could lighten the tax burden. 

When you've received news of your award or settlement, have your attorney categorize each part. Talk with a tax professional who can provide assistance specific to your situation, and who can also advise as to any tax consequences from your state taxing authority. Tax laws and regulations change every year, so be sure to get the most updated advice from an expert.


Friday, August 30, 2019

What You Should Know Before You SIgn a Co-Working Space Agreement

Co-working is a popular, flexible work style for sharing a workspace and reducing overhead costs for the users. Users can choose an unassigned seat at a desk or a more formal private office setting. Co-working is on the rise in many industries but special care and concern should be noted for professions such as law that require confidentiality.  

What is a user office agreement?

There are many companies that offer co-working facilities, especially in urban environments and these providers will often require the user to sign a User Office Agreement.  The agreement should clearly state that it is not a landlord/tenant lease. In fact, the landlord is the owner of the building, where as the co-work provider is the tenant and the member is a co-work user. 

Co-working agreements resemble a gym membership more then a lease agreement.   For example, the user agreement will list certain “house rules,” which give users the day-to-day rules regarding using the space and sharing it with other users.  Some of the key provisions to look for before signing a user agreement in addition to the fees to be paid are:

  • Term -- A user should review the term of the agreement. Is it month-to-month or annual?  How does a user cancel? Is there a notice period?  
  • Amenities -- A user will want to understand what amenities comes with the member’s agreement, such as use of copy machines (or is there a printing fee?), coffee, refreshments, mail delivery services, networking events and file storage/lockers.  
  • Access -- Can the user access the space 7 days a week/365 days a year (24 hours a day) with a key card or does the particular facility have closed hours.  
  • Relocation Rights --  If a user selects a formal office with walls and locked door, the user should be aware of any relocation rights the provider may have. Relocation rights basically give the provider the right to move the user to a different office, which may or may not have the same square footage, to accommodate a new user.
  • Internet -- The provider may provide free WiFi along with certain disclaimers regarding liability and damage to the user’s business.  Some providers will request users waive any rights in the event of a data breach.  This provision should be reviewed carefully especially for legal or financial industry users who may work with sensitive information.  
  • Disputes -- As with many other contracts, the method for resolving disputes -- arbitration, mediation or litigation -- should be specified.

The Bottom Line

Co-working is becoming a popular alternative to the traditional office lease. Users should review the user agreement to ensure that it provides for a productive and economical work style.


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Lawrence M. Gordon, Attorney at Law, P.C. has offices in Garden City, NY and assists clients throughout Long Island, including: the north shore of Long Island, The Town Of Oyster Bay, The Town Of North Hempstead, The Town Of Hempstead, The Town Of Huntington, Nassau & Suffolk Counties & throughout the Five Boroughs of The City Of New York.



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