Judge Dismisses Eviction Case Against Firebug Tenant

I don’t usually write about landlord-tenant issues, but today’s Law Journal mentions a case that is worth writing about.

A landlord brought a holdover proceeding against a tenant who was arrested and charged with the crime of reckless endangerment. NYPD observed the tenant, acting alone, setting fire to clothing piled in the apartment’s bathtub. The tenant lit the fire and let it burn, with the nearby gas oven and stove both turned on.

The housing court judge, in her infinite wisdom, dismissed the landlord’s case. Why? Because the landlord picked the wrong legal theory to support eviction. The landlord claimed that the tenant, by creating a situation that could have caused an explosion or burned down the building, created a nuisance.

The judge said that recklessly setting your apartment on fire is not a nuisance because in order to prove a nuisance, you must prove a series of bad or inappropriate acts. One incident, no matter how stupid or dangerous on the tenant’s part, does not a nuisance prove.

According to this judge, the landlord screwed up by claiming nuisance when he should have claimed that the tenant breached a substantial obligation of the lease by committing an affirmative act of waste.

In New York civil practice, there is a general rule holding that when you file a legal complaint, the facts are the most important thing, rather than the “legal theory” you apply to those facts. For example, if you file a complaint claiming that the defendant deliberately made false statements to you about something important, and if you are specific about the what, when, who and where of the matter, then most courts will say that your complaint makes out a claim of fraud – even if you don’t identify your claim as one for fraud.

Not so for this Manhattan housing court judge, who apparently is willing to let tenants get away with setting fires in their apartments with gas ovens and stoves burning away because of an arguable technical defect in pleading.

Apartment owners and residents beware, and make sure your fire and tenant’s insurance is paid up.

NYC Amnesty for Environmental Control Board Judgments

The NYC Council passed legislation earlier this year requiring the NYC Dept of Finance (DOF) to give property owners amnesty as to outstanding judgments entered in the Environmental Control Board (ECB). If the requirements are met, the property owner is free from default penalties and interest. Here are the requirements:

• The ECB judgment was filed prior to 6/12/2016.
• The owner resolves the judgment between 9/12/2016 and 12/12/2016.
• All judgments listed on the Department of Finance's website for the property are resolved, including monetary fines and all work required to clear the violations that resulted in a judgment.

For more information see the NYC DOF's amnesty page

Property Theft is Alive and Well

It's easy to understand how to steal a car or a diamond ring. But a house? That's a little harder to wrap one's head around. Yet every day we see or hear reports of con artists attempting to steal people’s homes and properties. This is a particularly bad problem in Brooklyn because real estate prices make the crime very attractive. Most of the victims are elderly, or out-of-town members of a deceased owner’s family.

Today's New York Law Journal reports that one Carl Smith of Brooklyn has just been sentenced to prison time for stealing multiple properties. Let's look at what he did, and how you can protect yourself from scams like this.

According to Brooklyn District Attorney Ken Thompson, “This defendant shamefully stole houses and other property from their rightful owners by using forged documents, engaging in deceit and committing outright fraud. He did so solely to exploit the lucrative real estate market in Brooklyn,”

Smith, 50 years old, stole a Fort Greene Brownstone at 139 Vanderbilt Avenue, between Myrtle and Park Avenues by forging, back-dating and filing a fraudulent deed. He looked up the prior owner and found her death record. All of that is public information. Smith did the same thing with two Bedford-Stuyvesant properties at 45 Lewis Avenue and 64 Hart Street. He actually sold one of the properties twice, to two different buyers.

All this happened in 2011 and 2013, but Smith had done this before. In 2003 he used the same techniques to steal another Bed-Stuy property at 543 Lexington Avenue. He couldn't evict the tenants, though, and he was never prosecuted.

Smith finally got caught because he couldn't produce clear title histories when he attempted to close on the fraudulent sales. To make matters worse, he pretended to be an attorney for the owners.

Smith was convicted of grand larceny, criminal possession of forged instruments and unlawful practice of law. The judge sentenced him nine to eighteen years in prison.

So how can you protect yourself from scams like this? Sign up for New York City's free Recorded Document Notification Program. Once you sign up, you will get an email any time someone files a deed or other document against your property. If the filing is genuine, you don't have to do anything more. But if the filing is fraudulent, you can take action before any damage is done.

You can access the Document Notification Program on our firm's website, www.LevyNau.com. Click on the Links tab and scroll down to the Safeguard Your Property Title button.

As always, come in, call of click for help or more information. We’re here for you.

Call, visit or click for more information:

Levy & Nau P.C. / attorneys at law

844-LEVY-LAW or 718-622-8149

854 Fulton Street, Brooklyn NY 11238

www.LevyNau.com

Property Rights vs. the Right Thing to Do

A disturbing decision was just issued by the Appellate Division of New York’s Supreme Court. In an effort to return an already-evicted tenant to his apartment, the court held, in effect, that the landlord was required to lend the tenant money at zero interest.

The case, Lafayette Boynton Housing Corp. v. Pickett, involved a disabled man subsisting on social security. He had lived in his Bronx apartment for some 30 years. In 2011 the landlord started eviction proceedings for non-payment of rent. At that time the tenant owed $5,200 in arrears.

Over the next two years the tenant and his legal aid attorney he convinced a housing court judge to stay the warrant of eviction seven different times, based on promises to pay the arrears. By the time the tenant paid any arrears, however, he owed even more, because he was not paying his current rent each month. So the arrears kept climbing higher, and the promises to pay kept coming.

Finally, in 2013 the housing court refused to give the tenant any more chances, and the eviction went forward. A full month after the tenant was out of the apartment, he got additional public assistance and grant money and paid the judgment amount to the landlord. The full amount at that time, including the landlord’s legal fees, was $14,000.

Based on that payment, the housing court ordered the landlord to take the tenant back and to reinstate him into his old apartment. The Appellate Division upheld the lower court, noting that the tenant had made a good faith attempt to cure the arrears, and that it wasn’t the tenant’s fault that couldn’t pay up on time. It is not clear from the decision whose fault the judges thought it was.

Justice David Saxe, in a written dissenting opinion, said that the court’s majority decision “forces landlords to serve as de facto no-interest lenders to low-income tenants.” Justice Saxe also suggested that the housing court’s decision to give the tenant relief even after the warrant of eviction was executed went beyond the authority given by the applicable law (Section 749(3) of the Real Property Actions and Proceedings Law, which only allows relief from eviction “for good cause shown” before the warrant of eviction is executed.)

Maybe this decision was inevitable. Anyone and everyone would want to help an elderly disabled person living on social security. But there is great danger in letting emotion go too far in applying the law. The law is supposed to be objective and impartial. Emotion is never objective or impartial. Do we want a society where rules are applied evenly and predictably? Or do we want a society where rules depend on how our judges, executives and police feel when they get up in the morning? All I can do is ask the question.

Getting Ahead with Reverse Mortgages

Reverse mortgages, like any other tool, can be very useful if you know how to use them. There are big differences from regular mortgages, and you need to know those differences to make the right choices.

Let’s start with what is the same. A reverse mortgage is still a mortgage. A mortgage is what gives your lender the right to take your property in foreclosure if you don’t pay back a loan in accordance with your promissory note. The promissory note creates the debt. The mortgage connects the debt to your property. That part is the same with a reverse mortgage. You sign a promissory note, which creates a debt. Then you sign a mortgage, which ties the debt to your property.

Next we’ll look at the differences that make reverse mortgages such a powerful financial tool.

Your credit score doesn’t matter. It doesn’t matter how good or bad your credit score is. The primary factor is your age.  The youngest person on the deed to your house must be at least 62 years old. If that’s true, you are eligible. The only other tests for eligibility are whether or not you are delinquent on any kind of Federal government debt (income tax, for example) and whether or not you can afford to pay your real estate taxes and other home-related expenses.

Most property types qualify. If you live in a one to four family house, your property qualifies. Most condominiums and certain “manufactured” homes will qualify too, but co-op apartments and mixed-use buildings will not. Those restrictions come from the Federal government (HUD and FHA), not from the banks.

No payments during your lifetime. Now here is the fun part: you don’t have to pay the money back as long as you live in your house. Typically the money is paid back by your estate after your passing.

Flexibility. Reverse mortgages are very flexible. You can use the money for anything whatsoever. (You do have to pay off any existing mortgage as part of your closing, however). You can take the money in an up-front sump sum, or in the form of monthly payments from the bank to you. You can even take a reverse mortgage as a line of credit, just like a conventional home-equity line of credit (HELOC). Unlike a HELOC, however, any money you take does not have to be paid back until you are no longer in the home.

Most people want to know up front how much of their home equity they can tap through a reverse mortgage. The answer depends on your age (the higher the age, the higher the percentage of home value you can get), on the value of your property, and on what current interest rates are doing. The government has set a maximum reverse mortgage amount of $625,000 as of this writing. There are many reverse mortgage calculators online that will tell you how much you can qualify for. You plug in your age, home value and address, and the amount will be calculated for you. One that I like can be found at www.bitly.com/MorCalc.

 Despite all the advantages for senior homeowners, reverse mortgages are not the right financial tool for all situations. For that reason, the government requires you to speak to a HUD-certified counselor before you proceed. As always, get independent legal advice before signing any papers that affect your money or your property.

Call, visit or click for more information:

Levy & Nau P.C. / attorneys at law

844-LEVY-LAW or 718-622-8150

854 Fulton Street, Brooklyn NY 11238

www.LevyNau.com

Deed Fraud

People want what you have. It doesn't matter if you have a lot or a little. People want to take what is yours. I see it every day I come to work. I see a lot of deed fraud. That's the phrase being used to describe what happens when, for example, someone forges your name on a deed to your house. They forge your name, forge a notary stamp, and just like that, they have a deed from you to them.

Sometimes it stops there. Sometimes it goes farther. Sometimes the thief takes out a mortgage, on your property that they have stolen without you knowing, and they disappear with the money. Sometimes the thief just re-sells your house to some unsuspecting mark who pays good money for a deed.

You don't get a dime, of course, because you have no idea that any of this is happening. Your first inkling that your house has been sold out from under you is when you get the eviction notice from the chump who thinks he owns your house. By then the thief is long gone, maybe to a nice beach in a country with no extradition treaty with the United States.

I've seen this happen all over Brooklyn. But it's not a local problem. An article in the Wall Street Journal this week focused on a case of deed fraud in Manhattan. A senior citizen in Harlem was the victim. The article mentioned that this is a national problem. It's happening in Chicago and Detroit, too. Read the article here.

There was always an undercurrent of deed fraud in the real estate business, but things have gotten easier for the thieves. Now that property records are online in New York City, and lots of other places, it's a snap to see past deeds, mortgages, and signatures of owners. You were always able to go to the city clerk's office and see all this, but now you can see it online. Property research is easier now for attorneys, brokers, owners, and even thieves.

Now that all your property records are online, authorities consider deed fraud to be in the same crime category as other forms of identity theft and cyber crime. In Manhattan the District Attorney's office is taking this threat seriously. In Brooklyn, not so much from what I see.

The New York City Sheriff's Department, part of the city's Department of Finance, takes it more seriously. The Sheriff's Department has set up a special unit to investigate deed fraud. Deed fraud bothers the city because it has an effect on taxes the city likes to collect.

That's human nature. Put your hand in someone's pocket and they tend to notice. The city government is like that. Mess with tax collections, and you get noticed. In my humble opinion, the city government is looking out for itself when it investigates deed fraud. They don't care about you, specifically.

If you want to protect yourself, you are on your own. You're flying solo through rough air. You better have a plan to make sure you don't crash and burn. In aviation we are taught to use all available resources to get us through situations we may face as pilots. The same attitude can help protect your house and your financial interests.

Here is one resource I have written about before. Sign up online for automatic email notices any time any document is recorded against your property. You've already paid for this service through your taxes. Go here. Enter every property you own. Register your contact information. The system works. Use it. Don't fly solo through real estate space.

Here's another resource for you: www.LevyNau.com. That's my law firm's website. Click, call or visit for more information, or if you suspect deed fraud.

Tax Liens Can Ruin Your Day

In aviation, sometimes you hear about events that can "ruin your day", like running out of fuel in mid-flight, or hitting a mountainside because you are flying in the clouds and you are below your assigned altitude. It's a euphemism for anything that can harm you or your airplane.

There are things in real estate that can ruin your day too, in the sense that they can harm you financially before you ever see them coming.

One such thing is a tax lien. If you have a mortgage and your monthly payment includes an escrow for taxes, you rarely have to worry about a tax lien. Even if you fail to pay your mortgage, your bank will make sure the property taxes are paid. That's because past due taxes get paid even ahead of a first mortgage, and your bank doesn't want anyone in line ahead of it to get paid out of your hide.

Some mortgages are set up in a way that requires you to pay real estate taxes on your own. This is also your responsibility if you have no mortgage. In New York City we pay our property taxes every three months. Elsewhere it might be once or twice a year.

If you don't pay your property taxes on time, they become a lien on your property. The same is true of water bills and some other charges. These liens are then sold to outside companies that specialize in collecting the money. The tax lien buyer adds more fees and interest to your debt, and before you know it, your tax bill is high enough to ruin your day.

You can’t tell if this has happened simply by looking up your tax account online. The city will show a zero balance, because the city got paid by the tax lien buyer.

The city government is supposed to send you multiple notices of its intention to sell your tax lien, to give you an opportunity to pay up. But it you don’t ever see these notices, you might not know your tax lien has been sold until you get served with tax lien foreclosure papers.

The Center for NYC Neighborhoods has a web-based tool to give you an idea of how widespread tax lien sales are in various neighborhoods. Check it out at http://cnycn.org/taxliensale/.

Don’t let tax liens or unpaid property taxes ruin your day. For more information, call us.