Condominium conversions are now in style. Virtually every newly constructed residential building intended for sale is a condominium. The firm represents sponsors and tenant groups in construction related litigation and proceedings before the Attorney General. Through his management corporation, Bren Management Corp., Martin Kera has acquired extensive hands-on experience supervising construction and repairs of buildings and dealing with contractors, architects and engineers. He also has extensive experience in the management of condominiums and the purchase and sale of apartments.
(Insert link to recent court decisions-attach the Woodpoint decision-Judge Demarest)
A cooperative corporation is a common vehicle for residential ownership in New York City. When you purchase a cooperative apartment, you are not purchasing real estate. You are purchasing stock in a corporation that owns real estate, typically an apartment building. In addition to acquiring the stock, you enter into a proprietary lease that enables you to live in a particular apartment. Since you don’t own real estate, the loan that you take to purchase a cooperative apartment is technically not a mortgage. It is a personal property loan.
Cooperative conversions are rarely seen in New York in the 21st century. Most of the new conversions are condominium conversions. There are many brokers and attorneys who advocate converting a cooperative into a condominium. There are pros and cons to each. Co-ops require Board of Directors approval to transfer ownership. A proposed applicant can be rejected and the Board does not have to give a reason. The only exception is in cases where the rejection was based upon discrimination. This enables the Board of Directors to control who is living in the building. Co-op Boards often limit subletting and require owner occupancy. Condominiums are freely transferable subject to a right of first refusal to purchase the unit given to the Board of Managers. The right of first refusal is rarely exercised. Brokers contend that this makes condominiums more valuable than co-ops, which is why brokers recommend a conversion to condominium ownership. Many condominium units tend to be purchased by investors who rent out the apartments. Consequently, a condominium tends to become a rental building with few owner occupants. A cooperative corporation can place a mortgage on the building. This is a good way to raise money to pay for necessary repairs. A condominium does not have this flexibility. New York law does allow a condominium to place a mortgage on all of the units but the banks require a signature authorizing the mortgage and guaranteeing it from each unit owner. You rarely see a mortgage on a whole condominium.
Kera & Graubard has represented sponsors of cooperatives and condominiums, tenant association upon conversion to cooperative ownership, sellers and buyers of units. We also handle litigation by and against co-ops and condominiums. Martin Kera also owns a management company, Bren Management Corp., which manages co-op and condominium buildings and apartments and townhouses. When representing the seller, we make sure that everything is in order with the seller’s documents so that the sale can close smoothly. We prepare the contract and arrange for payoff of the seller’s loan. When representing the purchaser, we review the contract, read the minutes of Board of Directors’ meetings and speak to the managing agent. We work with the bank attorney to prepare for a smooth closing. After the closing we promptly send a closing statement by e-mail and by mail.
The firm represents a prominent environmental testing and air monitoring corporation. It can guide a client through Phase I and Phase II environmental testing.
The firm represents developers in acquisition of the land, closing a construction or acquisition loan, preparation and negotiation of construction contracts, preparation of a condominium offering plan and processing through the Attorney General’s office, sales of newly constructed units, processing of applications for J-51 tax benefits and RPTL 421-a tax benefits through the NYC Department of Housing Preservation and Development.
The firm represents represents lenders and borrowers inc onnections with mortgage placement and refinance.
The firm represents lenders and borrowers in connection with foreclosure of mortgages and defense of foreclosure actions.
Landlord - Tenant:
The firm has extensive experience in Housing Court, both residential and commercial. A recent decision after trial in ECA Realty v Jo-Ness Enterprises, Inc. is instructive for commercial landlords who are renting to a tenant. Most leases have a clause requiring the tenant to construct the store or restaurant in accordance with all laws and Building Codes of the municipality. Most landlords are content to leave it up to the tenant to comply and do not do their own independent investigation to determine whether the proposed construction will be acceptable to the building department. That is a mistake. A landlord should conduct its own investigation to determine whether the tenant’s proposed construction and use will be allowed under the current building code before the lease is signed and the tenant is given possession. The investigation should include asking the tenant to show how it is going to build what it wants to build under the current building code. In other words, make sure the tenant does some due diligence on its own before it signs the lease. If the landlord doesn’t do this, the landlord winds up with a tenant who cannot open for business, a tenant with an inability to pay the rent and a substantial expense for legal fees for an eviction proceeding. In connection with this, it is very important to include a clause in the lease stating that it is an event of default if the tenant fails to open for business within a stated period of time.
The firms represents sellers and buyers in connection with residential and commercial transactions. In representing the seller, we work with the client to resolve title issues raised by the purchaser’s title insurance company, or the lender. When representing the purchaser, we examine all the leases to make sure there are no problems, work with the lender and the title company to insure a smooth closing.
Notice of Pendency:
A notice of pendency, commonly known as a lis pendens, is notice to the world that an action affecting the title to real property has been filed except summary proceedings to evict a tenant. It is customarily filed when there is litigation affecting title to real property. It must be filed in a mortgage foreclosure action. An action to recover a downpayment on a cancelled real estate transaction is not an action affecting title to real property. An action to compel a sponsor to make repairs is not an action affecting title to real property.
Lien Law Trust:
Article 3-a of the Lien Law requires an owner or general contractor, who is a trustee under the law, to keep detailed accounts of what happened to the construction law funds and how they were paid out to contractors. Most owners and contractors do not understand this law and do not keep proper records and segregated accounts. It is a fertile area for construction litigation.
The firm represents contractors, sub-contractors and owners in connection with real estate related litigation.
The time to file a mechanic’s lien is eight months from the last day of work, except for single family residences, where the time limit is four months. A mechanic’s lien can help a sub-contractor or general contractor secure payment. It is not a self executing enforcement device. The lien can be bonded and a contractor or sub-contractor still has to prove that it is entitled to collect the money. Collection alternatives include commencing an action to foreclose the mechanic’s lien, which is similar to a mortgage foreclosure and just as slow. Sub-contractors often elect to sue on the debt. Many times the mechanic’s lien is more of a security device that is an important tool to assist in collection of the debt. In order to recover upon an action to foreclose a mechanic’s lien, it is necessary for a sub-contractor to show that there is a lien fund to which the lien can attach. If the owner has already paid the general contractor, but the general contractor has not paid the sub-contractor, there is nothing to which the lien can attach and it will be dismissed.
We assist general contractors in preparation and negotiation of contracts with owners and sub-contractors.
Assume that you are the owner of a house and a developer purchases the property next door. One day there is a lot of noise and they are excavating the property. You now have a full scale construction site next door with jackhammers and excavation equipment. The excavation for the foundation and footings of the new building goes below the level of your cellar. There is sand or dirt underneath your cellar. Since the support has been removed, the dirt or sand under your house slides out, your house tilts and you have cracks in your house and your doors are tilted. You may not be able to open your front door. In order to prevent this, the law requires that the developer do underpinning. This means that they have to pour concrete or take other measures to make sure that the dirt or sand does not slide out from under your house. This has become a very big problem with the recent construction boom. We are handling several cases of this nature. The New York City Department of Buildings (DOB) has enacted some rules and regulations, among them being the requirement of having a DOB inspection.
The firm handles all aspects of business transactions. We can help you buy the business, sell the business and fight over the business. We handle all forms of business-related litigation. We also assist businesses in the collection of money when it is more than a routine collection.
Wills, Trusts and Estates:
The firm can help you prepare your Will or Trust Agreement. We can also help you with estates. We can file and administer a probate proceeding when the decedent leaves a Will and file and administer an administration proceeding when the decedent does not leave a Will. We also handle ancillary proceedings. When the decedent resides outside of New York State, but owns property within New York State, it is necessary to obtain Ancillary Letters to transfer the property. Many real estate attorneys are not familiar with this process. We are.