Guide To Adult Guardianship

Unfortunately, many older adults experience periods toward the end of life when they cannot make decisions for themselves due to dementia, strokes, accidents, general cognitive decline, or other serious medical conditions.

If the person who is unable to make decisions previously made an estate plan including a durable power of attorney and healthcare proxy, he or she has already appointed someone to make financial and medical decisions on their behalf.

But what if your friend or family member has only one of these documents? Or neither? Or there are important decisions not covered in those documents? That’s when an adult guardianship might be needed. It usually requires a lawyer and always requires Court intervention. However, it could help solve a big problem regarding who makes major decisions when your friend or family member can’t do so alone.

What Is Adult Guardianship?

If someone can’t make critical decisions and/or is unable to manage their activities of daily living, a Court can appoint a legal guardian to act on that person’s behalf.

Someone appointed to make decisions about the person’s medical care and other aspects of their personal life is called a guardian of the personal needs. Someone appointed to manage finances is usually called a guardian of the property management. Often, one person serves as the guardian of both the estate and the person.

The Pros and Cons of Adult Guardianship

There are advantages and disadvantages to establishing a guardian for an incapacitated person. The following pros and cons demonstrate how adult guardianship can be positive or negative to help you see all sides of the process before making a decision.

Pros

• Allows family members know that someone with full cognitive abilities is making decisions.

• Can help prevent elder financial abuse.

• Gives clear legal authority to deal with third parties.

• Provides a process to have a Court approve major decisions.

Cons

• Costly to set up, requiring a lawyer, legal papers, and a Court hearing.

• Time-consuming, including extensive ongoing paperwork.

• Can be emotionally difficult if family members disagree about who should be the guardian.

• The incapacitated person may be resistant to a guardian or feel hurt by family members’ decision to seek guardianship.

When Is Adult Guardianship A Good Idea For an Elderly Family Member?

Adult guardianships are not the right thing for all families, but they can be valuable and appropriate under certain circumstances. For an adult guardianship to make sense, two things must be true. First, the person must be physically or mentally incapable of making important decisions for themself. The other circumstance is that they do not already have an estate plan in place that cover decisions about personal and financial matters.

If they have not prepared a durable power of attorney for finances, a guardian of the property management can help ensure the person’s finances and assets are managed responsibly.

If they do not have a healthcare proxy or living will, they might need a guardian of the personal needs to make healthcare decisions. Even if the person has a healthcare proxy, they might still need a guardian to decide on matters not covered in the proxy.

How Do I Set Up Adult Guardianship For a Family Member?

An adult guardianship requires the filing of formal legal papers, followed by a Court hearing in front of a judge. Legal papers have to clearly spell out the person’s physical and mental condition and how this leads to an inability to manage his or her activities of daily living. Family members must be notified and given a chance to file their own legal papers, either supporting or contesting the proposed guardianship or the proposed guardian. And the alleged incapacitated person in question, too, must also be given a chance to contest the guardianship.

As you can see, the process is quite involved, and for good reason. The strict legal process surrounding adult guardianship is designed to help prevent exploitation and financial abuse, which is especially important for seniors. The process of filing for guardianship can be daunting, especially if you’re concurrently handling an elderly loved one’s physical or mental health challenges. To help you navigate the legal process and ensure you don’t miss any steps, you may seek the help of a lawyer, ideally one with adult guardianship experience.

How Does a Court Determine That Someone Can’t Manage Their Activities of Daily Living?

It’s not always easy to determine whether someone is capable of making decisions and managing their activities of daily living. In some cases, it’s obvious that a guardian is necessary — for example, for a person who’s unconscious or semiconscious, or who has dementia. But many other people have physical or mental limitations that diminish but don’t totally erase their decision-making capacity. In that case, a Court has to weigh opinions and options.

If the person can communicate, a Court may want to speak directly to them or have a court evaluator do so, in addition to reading reports from doctors and family members. The Court or evaluator will ask whether they understand the court proceedings, whether they want a guardian, and whether they feel they can make their own decisions.

If, after a preliminary investigation, it’s still not clear whether they need a guardian or who that guardian should be, the Court may appoint a lawyer to represent the person in the proceedings.

Courts also can replace the guardian with someone else if the guardian repeatedly makes poor decisions or neglects his or her duties. A family member or any other interested person could request a change by filing papers with the Court detailing the reasons the guardian should be replaced.

Who Should Act As a Guardian and What Are The Duties?

When seeking a guardianship of the personal needs, It’s usually best for someone who lives with or close to the person to act as guardian. Often, this ends up being an adult child or sibling, but it can also be a court-appointed representative, especially when there are concerns about the ethics of the family members. For a guardian of the property management, it should be someone who is familiar with handling finances, particularly if those finances are substantial or complicated.

In either case, it has to be someone who can give the time necessary to manage their affairs. If no family member lives near the person, or if no family member has enough financial savvy, a Court might appoint a professional guardian — either a nonprofit organization or a private, paid guardian.

You might feel you’re the best person to be the guardian, but another family member might disagree. Before you file any court papers, discuss with your family who should be the guardian. Hashing out this question ahead of time can do a lot to reduce stress and make for a smoother and less expensive legal process.

What Responsibilities Does a Guardian Have?

Being a guardian can mean different things in different cases. When it comes to seniors, the guardian will typically have to make decisions about the person’s routine care. The guardian may also have to make significant personal or financial decisions, such as how best to spend the person’s assets or where they’ll live. The guardian also has to handle administrative matters — for example, dealing with doctors, Medicare, insurance, or a long-term care agency or facility. This includes applying for whatever benefits, pensions, medical coverage, and the like she might be eligible for.

The guardian also has to keep careful records of decisions and expenditures made on the person’s behalf. This information has to be regularly reported to the Court: how often and in how much detail depends on the Court’s orders in one’s particular case.

A Court might also require the guardian to come back to court regularly to report on what’s happened since the last court appearance. Or they might require the guardian to come back into court before making certain major decisions, such as selling her home, or moving her into a nursing facility or out of the state. In all cases, it’s important to completely comply with all legal requirements and stay on top of reporting duties. Remember, the processes surrounding adult guardianships help protect seniors, and keeps the process transparent for all.

Call or email The Donaldson Law Firm to schedule a free consultation to discuss adult guardianship.

A Guide To Temporary Guardianship

Under New York law, temporary guardianship means what it sounds like: a Court appoints a qualified individual as a temporary guardian for a person who is allegedly incapacitated. However, how to go about getting a temporary guardian appointed and what a temporary guardian can and cannot do is a bit more intricate.

TEMPORARY GUARDIANSHIP: PERSONAL NEEDS AND PROPERTY MANAGEMENT

First, a temporary guardian can have authority involving personal needs, property management, or both.

Typical statutory personal need powers commonly include determining who shall provide personal care or assistance, making decisions regarding social environments, authorizing access to confidential records, etc.

A temporary guardian’s powers over property management are generally more extensive and usually include marshaling income and assets, paying bills, entering into contracts, applying for government and private benefits, etc.

Regardless of whether a temporary guardian is granted powers over personal needs or property management (or both), it’s important to note that a Court will only grant those powers that constitute the least restrictive environment.

TEMPORARY GUARDIANSHIP LEGAL STANDARD

Section 81.23 of the Mental Hygiene Law explains what a petitioner needs to allege so the Court has the requisite authority to appoint a temporary guardian:

“[T]he court may, upon showing of danger in the reasonably foreseeable future to the health and well-being of the alleged incapacitated person, or danger of waste, misappropriation, or loss of the property of the alleged incapacitated person[.]”

So what constitutes a danger to the health of the alleged incapacitated person or waste, misappropriation, or loss of property? Here are some of the most common circumstances that can warrant a temporary guardianship.

Eviction and Risk of Homelessness

In the face of drug and alcohol abuse, dementia, or other disabilities that affect one’s cognition, forgetting to pay bills is often one of the first things to fail. While many utilities and other providers will continue to provide services despite past due balances, landlords are usually not so forgiving. This is even more important now considering New York is preparing to lift the stay on landlord-tenant eviction proceedings.

The same is true for persons suffering from hoarding conditions. The author has personally witnessed many, many living conditions around New York that result in allegedly incapacitated persons packing every inch of their living spaces with mounds of newspapers and other items most people would consider trash. Because of the hazards such hoarding conditions create, i.e., fire safety, bedbugs, etc., landlords are not wrong to want to evict tenants when their hoarding results in severely unsafe circumstances.

Accordingly, if you’re concerned that someone lacks the ability to appreciate that paying the rent means not getting evicted, or if they’ve reached a point where they are living, eating, and sleeping atop several feet of rubbish, those are usually sufficient grounds for a Court to appoint a temporary guardian.

Scams and Financial Abuse

Another telltale sign that a person might need the appointment of a temporary guardian is susceptibility to online and phone scams. 

Having acted as both temporary and permanent guardian for incapacitated persons, the author has fielded many questions and concerns from wards regarding phone calls involving the suspension of social security numbers, ridiculous financial demands from foreign embassies, etc.

While such scam tactics may seem obvious to the rest of us, people who are unable to manage their activities of daily living likely find them a lot more genuine and, as a result, are much more likely to unwittingly provide pedigree and financial information to scammers.

Such circumstances represent serious allegations which Courts will give considerable weight and are usually grounds for the appointment of a temporary guardian.

Repeated Hospitalizations

Of course, there are instances when people find themselves in the hospital again and again yet due to no fault of their own. That’s called bad luck.

However, repeated hospitalizations can also result from one’s failure to remain compliant with medications prescribed for conditions like schizoaffective disorder and, as a result, they end up experiencing mental states in which they are unable to distinguish between reality and fantasy. And, if their behavior becomes erratic enough, they become prone to short but involuntary hospitalizations.

For some, medication by itself is insufficient, but when the issue is compliance, there is often a need for a temporary guardian, and that brings us to what temporary guardians can and cannot do. 

WHAT A TEMPORARY GUARDIAN CAN DO

Preventing Eviction

While a temporary guardian lacks the authority to stop an eviction proceeding, the Court who appoints a temporary guardian does have that authority. Under New York law, if the petitioner asserts allegations that an allegedly incapacitated person is facing eviction, the Court will likely restrain the eviction until such time that the guardianship proceeding is complete.

The idea is that, if a tenant lacks the cognition to timely pay their rent or is unable to control their hoarding, then the Court is simply requiring that the landlord allow more time in the hopes of avoiding an eviction if a guardian is appointed who can subsequently address rental arrears and/or hoarding.

Marshal Income and Assets

This is important – extremely important. In 2017, the author was appointed temporary guardian of a person who had been missing for several years. Having been granted the authority to marshal the income of the missing person, the author started by visiting the local social security offices with the Court order.

Not long after his visit, one of the representatives from the office called to explain the missing person had recently updated their address – they had been living in a homeless shelter nearby! As of the date of this article, the person is no longer homeless, is living in a suitable apartment, and is no longer subject to a guardianship because she’s managed to remain compliant with her medication.

That said, he who controls one’s finances also controls how far one can go – a very useful power for temporary guardians.

Further, it’s also important that a temporary guardian have the power to marshal income and assets to make sure the bills get paid which, in turn mitigates financial loss, waste, misappropriation, etc.

Residencial Key Access

If there are concerns or allegations relating to hoarding or other matters involving a house or apartment, the Court may give a temporary guardian key access. While it may seem invasive, a temporary guardian would be powerless without such authority if the allegedly incapacitated person refused to answer the door and let the guardian inside!

It’s equally important for a temporary guardian to have firsthand knowledge of whether anyone other than his or her ward is living in the home. Without key access, this would not be possible. It is not an uncommon circumstance to find some people attempting to leverage their relationship with an elderly grandparent by living in their home, eating their food, and spending their retirement funds to the detriment of the allegedly incapacitated person. A temporary guardian would be unable to stop such behavior if he or she can’t access the home.

WHAT A TEMPORARY GUARDIAN CAN NOT DO

Have Someone Committed

Having someone “committed” is a phrase one hears here and there, usually in reference to an unruly or criminal family member, meaning one is going to make a phone call and the family member is going to end up wearing a straight-jacket in a padded cell.

Nothing could be further from the truth – at least in New York.

There are no laws on the books in New York that allow one person to remove the civil liberties of another person without significant legal and Court involvement. And that’s a very good thing. Imagine what life would be like if someone you inadvertently upset had the power to put you away for a few months if they picked up the phone and called 911.

See? It would be horrifying.

That said, temporary guardians do not have the authority to force an allegedly incapacitated person into a hospital or other institution against that person’s wishes. Rather, if a temporary guardian becomes concerned for the immediate safety of a ward, he or she can call 911 and the authorities who arrive will be the ones who determine whether a ride to a hospital is necessary. And, if that happens, then qualified medical professionals will make a further determination about the level of care and/or intervention that is needed.

Mandating Medication

Just like a temporary guardian cannot have a person “committed,” a temporary guardian cannot force a ward to take medication. Encouragement is one thing – demands are another.

Absent a Court order, even physicians cannot force their patients to take medications over their objections so, when it comes to medication, such authority is well beyond the scope of a temporary guardian.

Paying Professional Fees

Compared to hospitalizations and medication over objection, paying an accountant to prepare an annual tax return might seem like small potatoes and, usually, it is. However, while a Court order appointing a temporary guardian may allow the guardian to retain such professionals, Courts prefer to retain final decision making over how much of the person’s money is spent actually paying the professionals hired.

Acting as a temporary guardian is no small feat. Petitioning the Court to obtain approval to act as a temporary guardian can be equally complex. Having acted as temporary guardian many times and having represented petitioners seeking their own appointment as temporary guardians, Stephen Donaldson, Esq., is uniquely positioned to help answer your questions. Give us a ring or shoot us an email to schedule a free consultation.

Tips For The Final Walkthrough

What Is A Final Walkthrough?

For those who are unfamiliar, the final walkthrough is an opportunity for a home buyer to inspect the property before closing. The final walkthrough is normally done after the seller has moved out, which allows a buyer to confirm that any agreed-upon repairs have been made, the appliances are in working condition, there’s no new damage, etc.

Essentially, the final walkthrough allows a buyer to do one final check before handing over large sums of money to the seller. It’s a way of making sure the property is in the same condition compared to when the parties signed the contract of sale, as well as ensuring the seller made any additional repairs to which the parties previously agreed.

When To Perform The Final Walkthrough

Best practice means doing a final walkthrough as close to the closing as possible, usually either a few hours before or, at the latest, the day before. During the walkthrough, a buyer and their realtor will go literally walk through the property and check that there’s no new damage, that all the systems and appliances included in the sale are still working and that the home is in a clean, “broom swept” condition.

If the seller moved out some time ago, a buyer should also be on the lookout for things that could’ve gone wrong since the property was vacated.

Participating in a final walkthrough is crucial. Not only is a buyer about to make a substantial purchase, but he or she is also about to become legally and financially responsible for the property. Skipping a final walkthrough could mean inadvertently taking on a big financial burden, having to pay for a repair a buyer already negotiated with the seller to cover, or worse.

Final Walkthrough Checklist

In the excitement of finally closing, it can be easy to overlook issues, so it is helpful to know ahead of time what a buyer should look for to avoid getting sidetracked thinking about all the ideas for your beautiful new kitchen.

In general, a buyer wants to make sure that all of the seller’s stuff has been removed, that everything included in the sale is still there, that any negotiated repairs have been completed, and that there aren’t any new problems or damage to the property, e.g., damage suffered when the sellers moved out.

It’s helpful to carry a checklist when a buyer attends the final walkthrough. Here are some ideas to ensure the property is in good shape, inside and out.

Outside The Property

• Ensure garage door openers are working and that the seller has the remotes to turn over at the closing.

• Check for debris outside the house.

• Look for obvious signs of pests.

• Look for damage to the yard, mailbox, or other signs of disrepair.

• Make sure yard items that were sold with the house – storage sheds, landscaping, etc. – remain with the home and haven’t been taken or dug up.

Inside The Property

• Check that light fixtures and outlets are in working condition.

• Test faucets, check for leaks, test the hot water, make sure all drains are clear, etc.

• Check for mold and/or water damage.

• Test all appliances, including the stove, washing machine, and dishwasher.

• Make sure the fridge is cold.

• Check that doors and windows open, close, and lock.

• Ensure that all fixtures have remained in the home.

• Flush the toilets.

• Inspect walls and floors for damage.

• Check the garbage disposal and exhaust fans.

• Test the thermostat and check out HVAC systems.

• Ensure the home has been swept or vacuumed and isn’t excessively dirty.

In addition to having a checklist, a buyer should ask their real estate agent to join the walkthrough. If a buyer took the time to find a reliable agent, he or she will be an old pro at knowing what to look for during the walkthrough.

A buyer can also consider re-hiring the professional who performed the home inspection. Because they make a living from inspecting almost everything a buyer would check during a final walkthrough, a home inspector is a great way of ensuring nothing falls through the cracks as it relates to the physical character of the property.

What If Something’s Wrong

If issues come up during the final walkthrough, the seller must work with the buyer to find a solution that satisfies the seller’s obligations and the buyer’s rights according to the contract of sale.

Usually, the closing still occurs because most issues that come up are usually minor in nature. As a result, the most common solution to addressing such issues includes holding some of the seller’s proceeds in his or her attorney’s escrow account to cover the costs of fixing the problem.

Final Walkthrough Preparation For Sellers

To make sure a seller is prepared for the final walkthrough, they should read the contract of sale and consult with their attorney. Doing so will explain what repairs need to be made and what items must be left with the property in order to complete the closing.

Completing Repairs

If the contract of sale stipulated that the seller would complete repairs before closing, getting those done in a timely manner is necessary for a successful closing. Be sure to be communicative about the repairs and, if there are delays, make sure to be transparent with a buyer.

Keep Receipts

Be sure to keep any receipts or other paperwork related to the completion of the repairs. If problems come up later, having the receipts will help when reaching out to contractors who completed the work.

Do Some Light Cleaning

Make sure the house is clean and that nothing is being left behind. Even if the seller thinks they’re doing a buyer a favor by leaving a couch or leftover paint, chances are more likely a buyer will ask that such items are removed before the closing can occur.

The general rule is to leave the property in “broom swept” condition, which means that the property should be swept or vacuumed and cleared of clutter. A buyer will likely do a deep clean after moving in, but the seller should still make sure they’re not leaving behind a dirty home that could complicate the closing and eventually cost the seller money unnecessarily.

 Know What Stays And What Goes

An important thing for a seller to remember is that the house must remain how it was when the buyer signed the contract of sale. Disputes can (and likely will) arise if the seller took something that a buyer assumed would stay with the property.

When it’s time for the seller to move out, there are certain things that must remain with the property. The seller should talk with their real estate agent regarding the difference between personal property and fixtures.

Items such as furniture, electronics, and decor move with the seller because they’re considered personal property and are usually excluded from the sale. Things affixed to the property such as chandeliers, built-in bookshelves, etc., are considered fixtures and are legally considered to be part of the property. If the seller wants to keep these items, they need to negotiate for as much during the contract stage.

When in doubt, reference the contract of sale. The last thing anyone wants is for a buyer to back out because the seller dug out the garden to bring with them to their new house.

The Bottom Line

The final walkthrough is a fundamental step in the home buying process. Buyers need to make sure they know what to look for to ensure that what they’ve agreed to purchase is what they’re getting.

If you have questions about final walkthroughs, contact The Donaldson Law Firm.

How To Value Your Bicycle After An Accident

With few exceptions, a road bicycle is going to sustain its own injuries when a motor vehicle of any size strikes a rider and his or her bicycle, so it’s important to know how to approach an insurance company when negotiating a property damage claim.

Claims For Personal Injuries And Claims For Property Damage Are Handled Separately

The way most insurance companies are run, they will assign your claims to two different adjusters: one for personal injuries and one for property damage. And even though one adjuster will be tasked with handling your claim for damage to your bicycle, he or she may not have the foggiest idea of what bicycles are worth and, therefore, may have no idea how to go about evaluating your claim.

So what can you do? The more you’re prepared with information, the better off you may be with the final result.

Placing A Value On A Used Bicycle

The first and easiest way to try and value your bicycle would include starting at the purchase price you paid when you bought the bike and then work backwards from there. The more recently you purchased the bike and, considering how much you’ve ridden it (or not), could serve as a way to try and calculate approximate depreciation.

There are also online calculators such as BicycleBlueBook.com. As good of a tool as it is, the options are limited. For example, Canyon is not listed as a manufacturer so, if I were trying to value my 2019 Canyon Ultimate using BicycleBlueBook, it wouldn’t be of much help.

Another option may include performing online searches to find the same bicycle you were riding before it was damaged to identify a range of sale prices based on age and condition.

Replace Or Repair

Other factors to consider when negotiating a property damage claim includes whether a damaged part can be repaired or whether it needs to be replaced.

Of course, an insurance company will attempt to save as much money as possible, so attempting to argue that a head unit that suffered a few superficial scratches but is otherwise in good working condition must be replaced will be met with resistance.

Likewise, if an accident results in several broken spokes but otherwise left the rest of the wheels unscathed, then identifying the cost of the repair will result in an easier negotiation rather than attempting to demand an entirely new wheelset.

Conversely, any adjuster who believes that a frame cracked in several spots can be repaired probably isn’t familiar with how a bicycle works so, in that event, it is best for the cyclist to push hard for the frame to be replaced.

In the event that most of the damage can be repaired, it’s worthwhile to collect a few written estimates from local bike shops that you can be provide to the adjuster.

However, it’s important to remember that you should NOT attempt any repairs and you should NOT replace any parts until your property claim is settled. Your bicycle is the only evidence you have of the damages sustained, so don’t take any action that would disturb that evidence.

Settlements Are Negotiable

Discussions with insurance adjusters are negotiations. Like most business offers, it is best to reject the first offer presented and, rather, submit a counteroffer. But to be successful, you need to have your ducks in a row by way of sufficient information.

How do you do that? Provide screenshots of used bikes for sale that are comparable to your bike. Provide written repair estimates from your local bike shop. Send screenshots of replacement parts readily available on Amazon and other online sellers. In other words, give the adjuster the information he or she will need to create a value for the repairs and replacements required to get your bike back to where it was before their driver messed up everything.

Remain Professional

Above all, try to (a) keep emotion out of your discussions with an insurance adjuster, and (b) try to remain reasonable. Attempting to take the position that the insurance company owes you a new $10,000 Pinarello when you were riding a $2,500 Giant will only frustrate the process rather than facilitate it.

Accidents happen. The insurance company doesn’t want to be having the conversation any more than you do but, if you try to approach it professionally and reasonably, you might end up in a better position than you were previously.

Comparative Negligence: Why It Matters

In every personal injury case, including bicycle accidents, a plaintiff asserts that he or she suffered injuries because the defendant was negligent, meaning the defendant did something that should have been done, e.g., texting while driving, speeding, ran a STOP sign, etc.

In return, defendants assert that the plaintiff’s injuries were the result of the plaintiff’s own negligence: riding two abreast, general failure to abide by the rules of the road, etc.

In New York, there is a legal principle called comparative negligence, which means that when an accident occurs, the fault or negligence of each party involved is based upon their respective contributions to the accident.

Why does the law account for comparative negligence? Because it’s rare that one party is 100% liable for an accident. The quintessential exception is when a driver is rear-ended while waiting for a traffic light. If you’re sitting in your car while at a complete stop waiting for a red light when another driver slams into you from behind, you can be confident that you did nothing wrong and, as a result, you in no way contributed to the negligence that caused the accident.

Again, however, that’s the exception. Who’s at fault when two drivers approach an intersection controlled by 4-way STOP signs and end up colliding when both of them fail to slow down? Sounds like both drivers would be found to having negligently contributed to the accident having occurred, so maybe 50/50? Possibly, but we would need more facts: did either driver slow, how fast were they driving, did one driver reach the intersection first and, therefore, have the right of way, etc.

If you’ve been injured in a bicycle accident, why should you care about comparative negligence? Because it has an impact on a possible settlement or verdict. The math behind it is simple but important.

Let’s say a cyclist suffers a broken ankle as the direct result of a being hit by a car. And let’s say both sides agree that the monetary value of the injury is about $100,000. If the defendant is believed to be 100% liable for the accident, then the plaintiff is entitled to the full 100%. But if the plaintiff is found to be 20% at fault for the accident, then the $100,000 is reduced by 20%, so the settlement is now only $80,000.

How are such percentages quantified? It’s probably more art than science, but here’s another example.

Chris Cyclist is heading west on his new Pinarello Dogma and he’s approaching an intersection controlled by a traffic light. At the same time, Don Driver is behind the wheel of his 1998 Chevy Suburban driving north toward the same intersection. The speed is 35 MPH. Chris Cyclist is pedaling along at 20 MPH, well below the limit. Don Driver, on the other hand, is barreling at 60 MPH, almost twice the limit.

Chris reaches the intersection a second or two before Don Driver. Chris has a red light, so New York Vehicle & Traffic Law obligates Chris to stop for the red light. Unfortunately, Chris doesn’t even slow when he begins making a right turn. Maybe he’s thinking that, because he’s making a right and he just passed one of those SHARE THE ROAD signs, he doesn’t have to come to a stop. Instead, Chris makes his turn albeit while staying near the solid white line on the side of the road.

Don Driver reaches the intersection half a second after Chris Cyclist, still chugging along at 60 MPH. He has a green light so he has the right of way despite being 25 MPH above the limit. He sees Chris Cyclist failing to yield to his right of way so, while he usually tries to give cyclists a few extra feet of space when passing, he instead thinks, “Eff this guy,” and keeps his Suburban in the center of the lane.

Even when such a large SUV drives in the middle of a lane, there’s usually still a few feet of space that separate a cyclist and the motor vehicle so long as the cyclist is staying as far right as possible. However, at this particular intersection, there are a sh*t-ton of potholes littering the solid white line. Because Chris Cyclists’ new Dogma cost him close to $8,000, there’s no way he’s riding through those so, without giving it a second thought, he quickly swerves to the left.

It is extremely scary for both Chris Cyclist and Don Driver when the passenger side of Don’s Suburban swipes Chris’s left shoulder. It’s even more horrifying when the side view mirror knocks Chris clear off his bike into the grass on the side of the road.

Both driver and cyclist are more than upset but Chris is the only one who ends up with a busted collar bone. If Chris decides to hire a lawyer to bring a claim for his injuries, how will the attorneys decide who is at fault?

Under those circumstances, it appears that both Chris and Don were negligent to some degree: Chris failed to stop at a red light and Don was speeding. So how does that play out under the principle of comparative negligence?

It may be that Chris could be considered to be more than 50% responsible for causing the injuries. Even if Don had been driving at the limit of 35 MPH, the accident still could have occurred, but perhaps the injuries would not have been so severe. However, had Chris stopped at the red light and yielded to Don’s right of way, then perhaps the defendant’s argument is that the accident could have been avoided entirely.

Ultimately, we would want more information, i.e., Don’s driving record, whether Chris had ever injured that collar bone previously, etc.

But, again, the idea of comparative negligence is important. Bicycle accidents involving cars happen all too often, unfortunately, but the more that cyclists obey the rules of the road, the more advantage they hold in the face of an accident at the hands of a negligent driver.

Closing Dates and Time Is Of The Essence Letters

In New York, every contract of sale for real estate, whether it’s a $4,000,000 ten acre estate $4,000,000 in Bedford Hills or an 875 square foot cooperative apartment in Manhattan, includes a provision that specifies a date when the transaction will “close,” meaning a date when the real estate transfers from seller to buyer.

Most contracts of sale will usually state that the closing will occur “on or about” sixty days from the date of the contract. The “on or about” language makes the closing date a moving target. This is done by design: all of the parties involved, including lenders, have their respective schedules, rights, and obligations to satisfy between contract and closing, so picking a firm date at the time of contract is a recipe that will likely fail. Rather, it’s a better practice to inject some flexibility into when the transaction will close rather than one party or the other being disappointed when a closing doesn’t occur on the exact date that was specified months earlier.

In an ideal world, every transaction progresses smoothly, the closing occurs about sixty days after the contract is signed, and the keys to the home pass from seller to buyer. However, there are transactions when the closing date comes and goes and the closing is still not yet scheduled. At that point, an attorney may issue what’s called a “time is of the essence” letter.

In plain English, “time is of the essence” pretty much means that the “on or about” language in the contract is no longer valid. It means that the attorney for one party is putting the attorney for the other side on notice that, if the closing does not occur within a reasonable amount of time, i.e., about 30 days, then the party who is not yet ready to close will be in default. If the party in default is the buyer, that means possible loss of the contract down payment.

This may sound like a very powerful tool that could allow a seller to pocket a down payment that may be tens or even hundreds of thousands of dollars. Or it could entitle a buyer to specific performance, meaning the property must be transferred to the buyer.

A time is of the essence letter is a warning that such consequences might occur if the closing doesn’t happen. However, your attorney does not want to be in such a position. Why not?

First, a seller and buyer are in contract because the seller wants to sell property and the buyer wants to buy it. Both sides have invested a significant amount of time and effort up until the point when a time is of the essence letter may be issued, meaning a letter that puts the other party on notice that a default is pending defeats all of the effort invested to date – a position in which neither party wants to end up in.

Second, I’m yet to meet a buyer who was comfortable with defaulting and walking away from a down payment that is usually in the tens, if not hundreds of thousands of dollars. Further, when representing sellers, issuing a time is of the essence letter which states the buyer is in risk of default and, therefore, at risk of losing their down payment, is a difficult situation for all parties involved, especially as the attorney holding the money in escrow.

Third, when a contract that is contingent upon a mortgage, a buyer might find his or herself ready to close but the lender hasn’t het cleared the closing. In that situation, a frustrated seller might request that his or her attorney issue a time is of the essence letter to the buyer even though it’s understood that the buyer is not the party causing the actual delay.

Finally, the majority of real estate attorneys (and real estate brokers) are compensated at the time of closing, so while it may seem like an attorney for the other side may be delaying the transaction, such assumption is usually inaccurate simply due to the economics of how attorneys run their firms.

So what happens if a time is of the essence letter is issued, another thirty days goes by, and the transaction still doesn’t close?

Stay tuned for a future blog update here on www.TheDonaldsonLawFirm.com.

Did Someone Say "Clear To Close?"

When a buyer is borrowing money to buy a home in New York, the final step usually involves the lender identifying the transaction as “clear to close,” or “CTC,” for short. It’s an important part of the process because, until the lender is ready to write that big check, the actual closing itself cannot occur.

How do you get to the stage where your lender has issued the clear to close? The buyer/borrower must first satisfy all of the conditions and the lender is now ready to issue the funds needed to buy the home. The conditions commonly include initial document review, underwriting, appraisal of the property, verification of employment, a final credit check, etc.

Even when a buyer/borrower is under the impression that he or she has satisfied all of the lender’s requests in order to receive a clear to close, lenders will commonly issue a few last minute requests. Such requests usually include an overlooked affidavit or comparable document that needs to be signed and notarized by one party or the other.

Lenders require as much documentation as they do because they are in the business of making money. And I don’t say to put lenders in a negative light. To the contrary, the amount of risk lenders assume when making loans in excess of six figures is substantial, hence the need for the amount of information they demand in order to approve a loan.

However, the question commonly arises as to why home sellers often seek out all-cash buyers, meaning buyers who do not require a loan to buy a home. When a buyer can provide proof of funds showing they have sufficient resources to pay cash for a home, all of the requirements associated with a loan go away: underwriting, appraisals, employment verification, credit checks, etc., as does the time required with getting to a point where the transaction is cleared to close.

Either way, it’s important for all parties to work together to reach the stage where the lender has cleared the transaction to close so the seller can sell and the buyer can buy.

When Should I Have A House Inspected?

In New York, it’s common practice to have home a home inspected by a licensed professional. These are sometimes referred to as engineer inspections or engineer reports. Regardless of what they may be called in your local area, when you should consider having a home inspected usually depends on you’re experience with buying or selling homes, or based on advice you may have received from your real estate agent or attorney.

In our experience, buyers will have a home inspected and then make an offer based, in part, upon the findings in the inspection report. However, some buyers attempt to reach an accepted offer with a seller and, if successful, the contract of sale must be contingent upon the buyer’s approval of the inspection report. In that event, it’s important that the contract include a precisely-worded provision that gives the buyer an escape clause that lets them out of the contract if they don’t like what they see in the report.

If the buyer and seller have reached an accepted offer after the inspections have been performed, then it’s important that the contract contain a provision that does not permit the buyer to cancel the contract.

Representing both buyers and sellers, our office usually recommends that inspections are performed before going into contract based on two main reasons.

First, if a buyer goes into contract but then decides they no longer want to move forward based on the inspections performed post-contract, a buyer may be liable for the attorney fees associated with the contract having been drafted and negotiated. Had the inspections been completed prior to going into contract, the buyer could have avoided those legal fees.

Second, when a buyer signs the contract of sale before inspections, he or she is still obligated to send the down payment check to the seller’s attorney who holds the money in escrow. If the buyer decides to kill the deal based on the inspectors’ reports, now the buyer has to wait for that money to be returned, which could take a few days, at least.

Of course, there are often bigger fish to fry when it comes to buying and selling real property in New York, i.e., obtaining a loan, so we recommend having a home inspected before trying to reach an accepted offer with a seller. Doing so will likely save you time and money overall.

Riding Bicycles Side-By-Side

I’ve written about this before and, considering how often I see cyclists riding two or even three abreast when there’s little to no shoulder, I suspect I’ll be writing about this so long as I practice law trying to help injured cyclists.

A big part of the reason why I continue to bring up this topic is due to the amount of misinformation that I hear from cyclists, drivers, and pedestrians alike, but let’s start with one of the biggest misconceptions we’ve all heard before.

Pedestrians have the right of way.

That statement is inaccurate because there is no law in New York State that pedestrians have the right of way at all times. Rather, here’s a summary of the New York Vehicle & Traffic Law as it relates to pedestrians.

• When traffic control signals are present, a pedestrian has the right of way whenever a traffic signal shows a steady “Walk” or a walking person.

• A pedestrian must not cross if the phrase “Don’t Walk” or the upraised hand is flashing, even when crossing signals display a countdown showing remaining time left to cross.

• A pedestrian must not cross if the phrase “Don’t Walk” or the upraised hand is steady.

• If a person has already started crossing on a “Walk” and the signal changes, then he or she can continue to a sidewalk or safety island.

• When there are no traffic control signals but there is a crosswalk, pedestrians have the right of way if there is an intersection or any marked crosswalk on the road and no traffic signals. Drivers must yield, slowing or stopping, to allow pedestrians to cross.

• When there are no crosswalks, drivers have the right of way if there are no intersections or no marked crosswalks on the road. Pedestrians must yield the right of way to vehicles.

Let’s make sure that’s clear. If a pedestrian is crossing the street when there is a DON’T WALK sign flashing, the pedestrian does NOT have the right of way. And if a pedestrian attempts to cross a street where there is no intersection or crosswalk, the pedestrian MUST yield to vehicles.

So the next time someone walks in front of you and yells, “Pedestrians have the right of way,” you can reply, “WRONG!”

But what about cyclists? What about those SHARE THE ROAD signs that show a cyclist next to a car? The ones that look like this? Don’t those mean my friends and I can ride next to each other?

 Unfortunately, there is no legal definition of SHARE THE ROAD. It’s nothing more than a polite reminder that drivers, cyclist, and pedestrians have different rights and obligations while on the road.

VTL § 1233 states a cyclist’s rights and obligations while on the road, so let’s go through those together.

First, bicycles shall be driven in a bike lane. If there is no bike lane, then bicycles shall be driven near the right-hand curb or edge of the roadway or upon a usable right-hand shoulder in such a manner to prevent undue influence with the flow of traffic.

However, there are two exceptions to when a cyclist needs to stay either in the bike lane or to the right of the road: when a cyclist is preparing to make a left turn or when it’s necessary to avoid conditions that would “make it unsafe to continue along near the right-hand curb or edge.”

That was a bit of a mouthful but, in sum, it means that (a) if there’s a bike lane, a cyclist must ride in the bike lane, and (b) if there’s no bike lane, a cyclist must stay to the right of the road unless making a left hand turn or staying to the right would make riding unsafe.

What does “unsafe” mean? The law actually goes on to say that it means, “fixed or moving objects, vehicles, bicycles, in-line skates, pedestrians, animals, surface hazards or traffic lanes too narrow for a bicycle . . . and a vehicle to travel safely side-by-side within the lane.

So there. Stay right unless there are “surface hazards” or when the lane is too narrow to allow a bike and car to travel safely in the same lane side-by-side.

What about riding side-by-side with other cyclists?

The law goes on to say that cyclists shall not ride more than two abreast, which makes it sound like it’s lawful to ride side-by-side, right?

Not so fast. The next sentence states that riding two or more abreast is permitted except when either passing another cyclist, driver, or pedestrian or “when being overtaken by a vehicle.”

That’s really, really important.

When you’re out riding with friends and you want to ride side-by-side, fine. If you’re on a road like 9W and you’ve got a 6-8 foot shoulder and you’re not interfering with the flow of vehicle traffic, go ahead and ride two or even three abreast.

However, if traffic behind you is waiting to pass and you’re riding on a road without enough of a shoulder to allow that to happen, you must ride single file. Remember, the law trumps all those SHARE THE ROAD signs.

Moreover, riding two abreast when there’s not enough room for it and there are cars behind you trying to pass only serves to fuel the ongoing fire between cyclists and drivers. I’ve been a road cyclist for fifteen years and I’ve had more than my fair share of near misses with aggressive drivers who dangerously pass within inches of my left shoulder but I still stay as far right as I can because my sense of self-preservation far exceeds any sense of entitlement that a SHARE THE ROAD sign seems to give some cyclists.

All that said, I would encourage you to ride single file on any roads that do not have shoulders wide enough to safely stay out of the way of traffic coming from behind.

Bicycle Accidents and the Serious Injury Threshold

There’s a lot that goes into any personal injury case, especially bicycle accidents. Yet whether our office or a defense attorney is analyzing a case that involves an injured cyclist, almost every aspect of a case falls into one of two buckets: liability and damages.

“Damages” means exactly what it sounds like, i.e., the injuries suffered by the plaintiff cyclist. In order to successfully bring a case that involves a bicycle and a motor vehicle, the plaintiff must prove that the damages meet the serious injury threshold according to New York Insurance Law § 5102(d), which include the following:

1. Death

2. Dismemberment

3. A significant disfigurement

4. A fracture

5. The loss of a fetus

6. Permanent loss of use of a body organ, member, function or system

7. Permanent consequential limitation of use of a body organ or member

8. Significant limitation of use of a body function or system

9. A “medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person’s usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury or impairment.”

Most of the above injuries are straightforward. The last four are more complicated because there is more room for interpretation. Many cases have attempted to clarify and define each of these categories.

It's important to note that injuries must be verified by way of objective, diagnostic testing. Courts have consistently determined that an injury will not be considered “serious” if there are no objective medical tests confirming your pain or limitations.

Specifically, the last category is what’s known as the 90/180 Rule. Basically, plaintiffs can file a lawsuit if they can show medical evidence that they were unable to perform daily activities such as getting out of bed, going to the bathroom unassisted, walking, etc., for at least three out of the first six months following an accident.

Unfortunately, curtailment of recreational activities such as going to the gym, playing golf, etc., does not constitute an inability to perform activities of daily living.

If you believe your injuries are “serious,” you can expect an argument to the contrary from the insurance company. Also, a conclusory statement from your physician will be insufficient to prove your case, especially if your injury falls within one of the last four categories listed above.

Rather, there must be credible evidence that shows the accident caused your serious injury, the methods by which the medical provider arrived at their conclusion, as well as details of their findings. Things get thornier if there have been gaps in your treatment. Additionally, a pre-existing condition can further complicate your claim. Medical evidence must clearly establish that the injury you are suffering from is indeed the result of the accident for which you are suing.

Proving a serious injury case is often challenging, in addition to dealing with an insurer that is disputing your claim. Obtaining legal representation will protect you and will help ensure you do not accept an underestimated settlement offer.

Boundary Line Agreements and Affidavits

Fences are often intended to mark property lines.  If people see a fence they may rightfully assume it marks a property line.  If asked, lawyers will tell a property owner to place fences so the outside edge is on the boundary line or an inch or two inside the boundary.  Lawyers will often recommend they hire a land surveyor to place stake on the property line so the fence is located properly.

However, owners usually don’t have these discussions with a lawyer first. And most homeowners will forego hiring a surveyor before a fence is put up because it’s seen as an unnecessary expense.

As a result, fences are placed where the owner and/or their fencing company think the property line is located.  If either is wrong, the fence may be located as much as several feet from the actual boundary line.  And the fence may be well inside the owner’s true boundary or it may be on the neighbor’s land.

Should the owner want to sell the property, the owner’s attorney may have to obtain a new survey.  If the fence has not been placed on the actual property line, the new survey will show the buyer’s lawyer there is a fence that ain’t where it’s supposed to be.  It’s likely the buyer’s lawyer will require a boundary line agreement with the neighbor to establish that the correct boundary is as shown on the survey.

A boundary line agreement is usually a one or two page document signed by two owners of adjacent parcels of property whereby the owners agree on the precise location of an otherwise unclear common boundary. Once signed and notarized, the agreement is recorded with the county clerk and it “runs with the land,” meaning once it’s in place, it doesn’t need to be done again when one parcel is transferred to a new owner.

However, such agreements take time and effort.  If the neighbor is willing to sign, great.  If the neighbor refuses, it’s likely the closing will be delayed.

Misplaced fences can cause unnecessary issues and may result in extra expense and delays in closing.  If you are constructing a fence, consider engaging a surveyor to place stakes in your boundary line so the fence can be placed properly.

What's An Independent Medical Examination?

We recently wrote about no-fault insurance: insurance coverage that pays for medical treatment and other out-of-pocket losses up to coverage limits, regardless of who caused the accident, hence the name “no-fault.”

When you receive medical and health treatments via no-fault insurance, New York law allows the insurance carriers to request an “independent medical examination” which is commonly referred to as an “IME.” The purpose of an IME is to determine if the treatment you’re receiving is still medically necessary. If the doctor determines that you are no longer in need of the specific treatment you’ve been receiving since the accident, the insurance carrier will terminate your no-fault benefits.

IMEs are perfunctory examinations, at best. Perhaps more importantly, the doctor who performs your IME is paid by the insurance carrier so, in our experience, the results of IMEs usually end up concluding that the patient is no longer in need of treatment and, therefore, the insurance company terminates the no-fault benefits.

Regardless, when you receive notice that an IME has been scheduled, it is very important that you attend appointment. If you need to reschedule, that’s fine, but don’t blow off the appointment. Failing to show up could result in termination of your no-fault benefits.

And even if you attend and later find out your no fault benefits have been terminated, you still have options to continue your treatment if necessary. First, you can arbitrate the decision. Second, you can use your private health insurance. Finally, many doctors will be willing to treat you risk free. They will then try and get the medical bills paid by having you sign an assignment of benefits giving them permission to arbitrate the bills with the insurance carrier directly and ,should they lose, you will not be responsible for the unpaid bills.

Dealing with the process and protocol of personal injury lawsuits, no-fault benefits, entitlements, etc., can feel like completely foreign territory. If you have questions, please don’t hesitate to contact our office so we can help you determine the best path forward after an accident.

ABC's of Depositions

A deposition is basically a chance for the defendant’s attorneys to ask you questions about the accident, the injuries you suffered as a result, your medical history, your treatments, etc. With some exceptions, they can ask A LOT of different questions and, the worse the accident and injuries, the more questions they’re going to have.

What makes it a deposition rather than a Q&A session is that the answers plaintiffs provide are sworn statements that are recorded by a reporter who sits in the corner and writes down everything that’s said.

Chances are you’ve never been deposed before now, so it can seem a bit scary. The idea of sitting in a little conference room for a few hours being questioned by a lawyer in a suit is no one’s idea of a good time. I don’t think I’ve ever heard anyone say, “You know what I really enjoy? A good deposition.” Even lawyers.

So what’s the best thing to do before a deposition? Prepare. Then prepare some more.

Here are 8 tips to keep in mind.

1. The deposition is probably the most important part of your case because deposition testimony is what both sides are going to heavily rely on when it comes to deciding whether to settle the case or go to trial.

2. That said, preparation is crucial. This involves practicing the questions you are most likely going to have to answer. Preparation will also allow you to rehearse answering only the question that is asked and nothing more. The goal is to avoid volunteering information unnecessarily. And, like preparing for a big presentation (if you do that kind of thing for your day job), practice will also help settle your nerves.

3. See point 2 above and read it again because it’s really important. If a question calls for a “yes” or “no” answer, then say “yes” or “no.” And that’s it. And if you don’t know, say, “I don’t know.” Do NOT guess.

4. If you feel yourself getting nervous or upset, try smiling. It sounds overly simple, but you’d be surprised how much your attitude and emotions will follow the smile on your face. It will help keep your cool if you feel yourself getting a bit hot under the collar.

5. Do. Not. Lie. If you do, there’s a very good chance the other attorney is going to find out about it and not only will lying decrease your chances of settling the case, but it will also color the rest of your truthful answers which, in turn, will cast doubt on your credibility and, as a result, can adversely impact the size of a settlement or verdict. See how one little lie can roll downhill and affect your case?

6. Do not have any writing with you that you might refer to or look at during your deposition. That will allow the other attorney to demand to see the entire thing and question you about it line by line.

7. Always check in with our office the day before your deposition is scheduled. Depositions get rescheduled all the time and, if it happens to you, try to avoid assuming it’s a deliberate delay tactic. Defense attorneys usually carry dozens of cases at the same time. Schedules conflict. Things come up. It happens regularly.

8. Cases often settle after successful depositions, so take some comfort in the fact that the truth will prevail and, if you have properly prepared, you are likely on the way to winning your case.

While there is a fair amount more behind depositions and preparing for one, the above is a good overview of what to do and what not to do when there’s an attorney sitting across a table asking questions (and possibly with a smirk or frown on his face). If you want to talk more about depositions, please don’t hesitate to get in touch with our office.

The Basics of Real Estate Appraisals

Mortgage lenders usually require a home appraisal to put a value on the property. Professional appraisers inspect the home and compare it to recent sales of similar property nearby. The appraiser will judge how much the differences between those properties and the home you want to buy are worth. Ultimately, appraisers come up with a fair market value for the property.

Lenders often require an appraisal because they want to be certain that the home is worth its purchase price, and can be sold to cover losses if you default on your mortgage.

In New York, the cost of as appraisal is usually paid by buyers. The benefit of an appraisal is that they can stop you from paying too much for a property. If that happens, a buyer has an opportunity to try and renegotiate the purchase price. That alone can help make the appraisal fee worthwhile.

When you buy a home with your own cash, you’re not obliged to have an appraisal.

Typically, a home appraisal report includes:

·      Explanation of the valuation

·      A brief overview of the local market trends

·      Summary of the home’s characteristics

It’s important to note that home appraisers are not home inspectors.  Don’t rely on their expertise to uncover structural problems.

Appraisers typically value your property in several ways: the most-common “comparables” valuation, or “comps,” for short, as detailed above, finds a value by comparing the subject property to other nearby sales. The “replacement cost” is what it would take to replace the home on that lot.

Sellers and agents may attend an appraiser’s inspection. However, they should only answer questions and provide information. Don’t try to unfairly influence or intimidate an appraiser. And keep in mind an appraiser is not allowed to divulge anything confidential at that point.

You may, however, ask to check the appraiser’s credentials and satisfy yourself that she has the requisite local knowledge to reach a fair valuation. That’s important, because some appraisers jump at any opportunity to grab a job, even if he or she does not know the area.

No Fault Law Overview

New York law requires drivers to maintain certain minimum levels of auto insurance on any vehicle registered and operated in the state. New York is a "no-fault" state, which means if you’re involved in an accident with an automobile in the state, you may be entitled to no-fault benefits.

Under no-fault, after a car accident, no-fault coverage pays for medical treatment and other out-of-pocket losses incurred up to coverage limits, regardless of who caused the accident - hence the name “no-fault.”

These losses include necessary expenses such as medically-related expenses, other expenses, lost wages, etc.

• Ambulance costs

• Necessary x-rays, surgical interventions, and nursing care

• Dental costs

• Prescription drugs

• Psychiatric treatment.

• Physical and occupational therapy

• Any necessary rehabilitation

• Any professional health services needed within one year of the accident if the services are required because of injuries incurred in the accident.

No-fault also includes up to $25 a day for other expenses, such as transportation costs to travel to therapy or other medical appointments. This also includes household help if medically necessary.

In addition, no-fault benefit pays 80% of lost wages up to $2,000 per month.

However, note that not everyone is entitled to no-fault benefits, including:

• Motorcycle riders & passengers

• Owners driving their own (or their spouse’s) uninsured vehicle

• Residents of states other than New York.

Navigating claims after an accident can seem complicated, so don’t hesitate to contact The Donaldson Law Firm – we can help.

What Is A Certificate Of Occupancy?

A contract of sale for residential property usually obligates the seller to provide a, “Certificate of Occupancy or other required certificate of compliance, or evidence that none was required, covering the building(s) and all of the other improvements located on the property authorizing their use as a one family dwelling at the date of Closing.”

Sounds complicated but a certificate of occupancy, or “c/o” as they’re commonly referred to, is simply a document issued by a local building department that certifies a building's compliance with local building codes indicating it’s suitable for occupancy.

What’s The Difference Between A Certificate Of Occupancy And Certificate Of Compliance?

The term certificate of occupancy is also used interchangeably with “certificates of compliance.” While a certificate of occupancy is often identified as a document in relation to the house in its entirety, a certificate of compliance is used in reference to documents a local building department will issue for projects which the local authority requires for specific additions and renovations such as kitchen renovations, fences, swimming pools, etc.

What Is The Process To Obtain Either Certificate?

Keep in mind that certificates of occupancy or compliance are the end result of a project. The process overall looks like this:

Step 1: Permit application.

Step 2: Town issues permit.

Step 4: Project completed.

Step 4: Project inspected by local building inspector.

Step 5: Town issues certificate of occupancy or compliance.

What Projects Require Permits?

Generally, a homeowner is obligated to apply for a permit for projects that involve the structure of the building, plumbing, HVAC lines, or survey lines (hence the need for a permit for a fence). For example, in Somers, New York (we’re using Somers as an example because our office is located in Somers), click here and have a look at the Town’s requirements for permits associated with pools, spas, and hot tubs.

By his or herself, the average homeowner will be unfamiliar with how to satisfy all of the permit requirements. Rather, the contractors retained to undertake the project will know what to do in order to obtain a permit that will allow work to begin.

Once the project is completed, either the contractor or homeowner contacts the Town’s building department to schedule an inspection, the purpose of which is to ensure the work was performed according to the Town’s building code. If successful, the Town will issue either a certificate of occupancy or certificate of compliance.

What Are The Consequences If I Don’t Apply For A Permit For A Project That Requires One?

So what’s the big whoop? Can’t a homeowner just hire a guy to install a hot tub? It’s not like the Town drives around looking for unauthorized outdoor hot tubs, right?

That’s true – the Town does not have the resources to police all home projects. However, a lack of a permit and/or certificate of compliance will become an issue if you ever want to sell your home. After a seller and buyer are in contract, the buyer will order what’s called a title report. The title company will search local records to identify all of the permits and certificates associated with the property. And if there’s a big pool in the backyard or a new central air conditioning system but the title report doesn’t identify certificates for the work, guess what happens?

Either the seller has to go about applying for a permit retroactively (which, by the way, are more expensive compared to the cost of permits applied for at the start of a new project), which slows down the entire transaction, or the seller reduces the sale price to compensate the buyer because the buyer will eventually have to deal with what the seller never did.

What If There’s No Certificate Of Occupancy In The Town’s File For My House?

When a house is built prior to when the local town enacted their building codes, a certificate of occupancy for the property will not exist. Rather, the town will issue what’s called a letter in lieu of a certificate of occupancy or just “a letter in lieu of,” for short.

If you have any questions about certificates of occupancy or certificates of compliance, please give us a ring at 914.359.5455 or 646.492.5600. Or just email us at contact@nypractice.com.

Property Tax Apportionments

For most people, buying and selling a home is something that only occurs a few times during their lives, so there are parts of the transaction that are unfamiliar and may seem confusing or complicated.

For example, title reports include information that identifies whether the seller is current on property taxes. In New York, homeowners pay property taxes to the local town and are usually split between (1) a general tax and (2) a school tax.

The general tax is usually paid in one installment and the tax period mirrors the calendar year: January through December.

The school tax period usually runs July 1 through June 30 and is paid in two installments.

Because it is impossible for a closing to occur on the start or end date for both tax periods, either the seller is going to get a credit from the buyer for taxes already paid, or vice versa.

Here’s a basic example.

Jane is selling 31 Rose Drive. Her annual general tax is $1,200, which is $100 per month.

On April 1, Jane writes a check to the town for $1,200 to pay the general tax.

In May, Jane puts the house up for sale. In July, she accepts an offer from Jill. On September 1, Jane and Jill meet with their attorneys to close.

Because Jill is considered the owner of the home as of the day of the closing, Jill is responsible for the general tax from September 1 through December 31.

However, Jane already paid the general tax for the year. Just because the property is transferred from one person to another, the town isn’t owed the same tax again for September through December. And because towns are not in the habit of issuing refunds to sellers, Jill owes Jane $400 which is $100 per month for September through December, so the attorneys add $400 to the amount that Jill owes Jane at the closing.

The opposite occurs when the closing takes place before the tax is paid. For example, if Jane and Jill close on March 1, the situation reverses: Jill receives a $200 credit from Jane for the general tax not yet paid for January and February, thereby reducing the amount Jane is owed by $200. Subsequently, Jill will be responsible to pay the entire $1,200 tax due April 1.

Here’s an easy way to calculate who gets what when it comes to property tax apportionments leading up to closing.

If the closing occurs after tax is paid, seller receives a credit.

If the closing occurs before the tax is paid, buyer receives a credit. 

Either will be calculated by dividing the annual tax amount by 365 (or 366 days during a leap year) and then multiplying the daily tax rate by the number of days between the start of the tax period to the day before the closing.

Again, it’s not so much that apportioning taxes is complicated. Rather, it’s something that most sellers and buyers only have to do a few times during their lives, so it’s unfamiliar. Then again, it’s also part of the reason why the majority of people hire attorneys to help guide them through the real property process – to make sure they’re receiving that to which they’re legally entitled.

What Is An Easement

Almost every piece of residential real property serviced by a utility includes an easement held by the company or municipality that first installed access to the utility. So upon reviewing a title report, the question invariably arises: What is an easement?

I’ll quickly do the lawyer thing and provide the legal definition of an easement, which is “an interest in land owned by another person, consisting in the right to use or control the land, or an area above or below it, for a specific limited purpose.”

Maybe a better way to explain the definition is by example. Let’s say you’re buying a house in the Lower Hudson region. You’re in contract and The Donaldson Law Firm just emailed you a copy of the title report. You’re looking through the exceptions listed in Schedule B and read the following:

Easement in: Liber 227 cp 165.

If this is your first time buying a house, you might think, “What in the world does that mean? What’s ‘liber?’”

Very good questions but, further along in the title report, you come across what look like copies of really old legal documents. One of them has “L227 cp 165” handwritten across the top of the page and below that it reads:

RIGHT OF WAY: New York State Electric & Gas Corporation. The undersigned, hereinafter called GRANTOR, being the owner of or having an interest in land situate in the Town of XYZ, County of Dutchess, State of New York . . . hereby grants and releases unto the New York State Electric & Gas Corporation . . . the right, privilege and authority to construct, maintain, and remove a pole line with the necessary wires . . . used for the transmission and/or distribution of electric current upon said property.”

So what is an easement? If the home has electricity provided by a power company, then that power company executed an easement on the property with the permission of whomever owned the property at that time and that easement allows it to install and maintain the power lines that provide electricity to the home. And that is the sole purpose for which the power company can access your property.

That’s one type of easement of which there are many, including right of way easements (where two properties share the same driveway), light-and-air easements, etc.

Again, though, almost all homes that are serviced by a utility or sewer system will have at least one, if not several, easements recorded against the property, most of which likely happened decades ago in the first half of the twentieth century as towns were building their infrastructures.

When To Contact A New York Real Estate Attorney

Buying a home in New York may seem like a simple process and, overall, it is quite simple. However, there’s a certain level of complexity to be found in that simplicity, meaning the number of details associated with what is typically such a large transaction is what creates some level of complexity in the simplicity.

In general, here’s what the home buying process looks like:

Step 1: A seller puts a property on the market.

Step 2: Buyers view the property.

Step 3: A buyer makes an offer to purchase. 

Step 4: Upon reaching an agreed-upon price, the buyer usually has the home inspected.

Step 5: Afterward, the seller or seller’s attorney issues a contract of sale to the buyer or buyer’s attorney.

Step 6: Upon agreeing to the negotiated language in the contract of sale, the buyer signs the contract and delivers the down payment to the seller’s attorney to be held in escrow.

Step 7: Once the check clears, the seller signs the contract and delivers a fully executed copy to the buyer.

Step 8: The buyer then orders a title report. Read more about title reports in our recent blog post here. If securing a mortgage, the buyer provides a copy of the contract to his or her lender in the hopes of obtaining a loan.

Step 9: Once the lender approves the title report, the parties are “clear to close.” At this point, the closing date is confirmed.

Step 10: At closing, the buyer brings money to the table and the seller signs over a new deed to the property which the title company then records with the county clerk’s office. Seller hands keys to buyer and buyer is now the proud new owner of the property.

Real estate attorneys usually get involved right around Step 5, so there are three primary parts of the transaction that a real estate attorney helps manage.

CONTRACT

The contract is a document that sets out, in writing, the rights and obligations of both the buyer and seller. It identifies the property being sold, the purchase price, the amount of the down payment, the balance due at closing, approximately when the closing will occur, and that the seller promises to deliver to the buyer a certificate of occupancy for the property. (Certificates of occupancy and compliance will be a whole other blog post.)

While most of the contents of a contract of sale may look like obscure legal language to the layperson, it is the result of decades upon decades of real property transactions and litigation, and is designed to be as comprehensive as possible for the purpose of controlling circumstances most likely to arise in a typical real property transaction. 

TITLE REPORT

In a real estate transaction, buyers often request title reports. We recently wrote about title reports and you can check that out here. These are necessary because it allows the buyer and her attorney to ensure that the seller has the right to sell the property, whether the seller has to satisfy any existing mortgages associated with the property, that there are no liens on the property, that previous owners obtained permits and certificates of compliance for any home improvements, etc.

Without a title report, a buyer runs the risk of taking ownership of a piece of property that, legally, could cause major headaches post-closing.

CLOSING

The closing is where the buyer, seller, lender, attorneys, realtors, and closing agent come together and seal the deal.

Many, many documents are signed by both buyer and seller but what is most important is that (a) the seller signs a piece of paper called a deed that transfers ownership from the seller to the buyer, (b) the buyer brings certified checks to the closing, one of which usually goes to the seller, another of which usually goes to any lenders or banks to satisfy the seller’s existing mortgage or home equity lines of credit, and (c) if the buyer is obtaining a loan, he or she will have about two tons of documents to sign in order to secure the loan.

As mentioned, there are many more details that arise during the course of a real estate transaction, and this is why most sellers and buyers hire attorneys – to help them navigate the process. Of course, a lot of people can read a contract and the contents of a title report. However, the value that attorneys bring to the transaction involve protecting our respective clients in terms of mitigating the risks of what is not just possible, but what is likely to occur in a real property transaction based on prior experiences.

If you’re getting ready to sell or in the market to buy, give us a ring. We love helping our clients with their real estate needs.

What Is A Title Report

In downstate New York, it’s common practice for a buyer’s attorney to order what’s called a title report once the contract of sale has been finalized. And first time home buyers almost always ask (rightfully so), “What’s a title report?”

At its most basic, a title report is a pdf document that is anywhere from 20 to 40 pages long and includes some of the following information:

• A legal description of the property that identifies the county in which the property is located, the tax map designation (section, block and lot numbers), the boundary lines that set the property apart from adjacent properties, roads, streams, etc.;

• Whether there are any existing mortgages or other liens recorded against the property; 

• Town and school tax search results which show whether the taxes have been paid or remain due;

• Certificates of occupancy (“c/o”) and certificates of compliance (“c/c”); and,

• The existence of utility easements (which give utilities the legal right to run power and gas lines on the property).

There’s usually more than that, but those are the basics cover some of the more important aspects of title associated with residential properties.

When looking at a title report for the first time, a buyer may feel a bit lost, and that’s to be expected. There is a ton of legal language stuffed into a title report but its contents will be extremely important in helping your attorney identify any risks associated with taking ownership of the home.

For example and, perhaps most importantly, the title report identifies whether the person selling the home actually owns it. That may sound a bit crazy but most buyers take it for granted that the seller who signed the contract has the legal right to sell it. While it’s uncommon for circumstances to arise where a seller has zero ownership interest in the property, it’s not uncommon to see incidents where the person selling the home failed to disclose that other individuals have an interest in the property whose consent was needed for the sale to occur.

It’s also important that a title report identify whether there are any existing mortgages recorded against the property. Why? Because those mortgages and other liens need to be satisfied before ownership transfers to the buyer. If they aren’t paid off at the time of closing, guess who could get stuck holding the bill for the loan? Right – the person who just bought the property.

A title report also identifies certificates of occupancy and/or certificates of compliance which the local town has issued. These are important because they show whether the home and any improvements were built according to local codes. For example, let’s say the seller had a pool installed five years ago but the title report does not show a certificate of compliance, to prove it was built to code. There’s nothing stopping a buyer from going forward with the sale without the c/c (so long as the lender also approves) BUT when the time comes and the buyer wants to subsequently sell the property, the same issue is going to come up again, so better to deal with the issue now rather than later.

Finally, a title report will include tax search results. Like a mortgage, it’s important to identify the annual town and school taxes associated with a particular piece of property (compared to relying on information on real estate web sites that are usually provided by the brokers who, in turn, rely on sellers for the info) because the whomever owns the property is responsible for paying the taxes. Therefore, if a tax search is not performed, a buyer runs the risk of taking ownership of a home that can have upwards of tens of thousands of dollars of tax arrears associated with it.

So let’s go back to the question: what is a title report? To be specific, it is the written analysis of the status of title to real property, including a property description, names of titleholders and how the title is held, tax rate, encumbrances, and any real property taxes due.

It’s also important to mention that, if a buyer is obtaining a loan to buy the property, there isn’t a lender in the world who is going to fork over several hundred thousand dollars without first reviewing a title report. In legal language, that’s what attorneys refer to as the lender protecting its interest.

Give us a ring if you have more questions.