In New York, filing a quitclaim deed (or quit claim) is one of the fastest ways to transfer property ownership. A quitclaim deed is a type of deed that allows a grantor to transfer any interests they may have in the ownership of a property to a grantee without the need for a title search or title insurance. While this may be an efficient way for a property to change hands and indeed a useful tool in some cases, a quitclaim deed provides the least security in the hierarchy of real estate deeds in New York.
To learn more about quitclaim deeds and whether they are the right choice for your real estate transaction, it is important to consult with an experienced New York City real estate attorney. At Avenue Law Firm, we provide quality legal counsel in matters of real property law to New Yorkers. We may be able to help you with understanding the legal processes involved with a quitclaim deed and in drafting your documents. Call us today at (212) 729-4090 to schedule a complimentary consultation with one of our skilled New York quitclaim deed attorneys.
Quitclaim Deeds in New York Defined
Quitclaim deeds are legal documents that transfer the grantor/’s ownership interest in a real estate property to a grantee. As referred to, the grantor “quits” any “claim” they have on a property. It can also be used in cases where there are issues with the original title of a property.
However, a grantor quitting their claim on a property does not mean that the grantee will have sole ownership. Filing a quitclaim deed only means that the grantor is relinquishing ownership of their share of the property. If the property is owned by two or more people and one person quitclaims their share to another person, they can only quitclaim and transfer the share they own.
A quitclaim deed gives no warranties or guarantees to the grantee. A quitclaim deed also does not require a title search or insurance nor does it provide actual proof that the grantor has a relationship with the property. Quitclaim deeds only serve as proof that the grantor is transferring any sort of relationship they have on the property to the grantee.
In comparison to other deeds, a quitclaim deed provides the least security and should not be used in real estate transactions with valuable payment. When a property changes hands through a quitclaim deed, no consideration is given as to whether there are any liens or encumbrances. After a quitclaim deed is recorded, it may be difficult to hold a grantor liable for any issues with the ownership. This makes it important to only agree to a quitclaim deed if you trust that the grantor has ownership of the property.
While a quitclaim deed may not be advisable to use in actual real estate transactions, it may still be useful in the following situations:
It is also important to note that a quitclaim deed does not change or affect the liability on any mortgages on the property. If you are a grantor filing a quitclaim deed, you may want to make sure that your name would be excluded from any liability on mortgages related to the property that you quitclaimed.
This also applies to any taxes owed on the property. If the transfer is being conducted as part of a gift, a gift tax might be owed. Taxes such as capital gains tax might also be owed on the property. The matter of who should pay taxes should be a part of the discussion before a quitclaim deed is filed. To ensure that you won’t have any tax liabilities on the property you will be receiving as a grantee, consider getting the help of an experienced New York real estate attorney.
At Avenue Law Firm, our team of New York real estate attorneys is dedicated to providing quality legal counsel when it comes to real estate transactions. We may be able to help you by doing due diligence on your property and determining any legal issues you may face. Contact us today at (212) 729-4090 to schedule a free consultation.
How do you file a quitclaim deed form in New York?
As with any real estate transaction, the filing of a quitclaim deed requires several steps. It is important to make sure that the steps are strictly followed to avoid wasting time and money.
For a quitclaim deed in NY to be valid, it needs to be in writing. The document would also need to include the following details:
Real Property Law § 258 of the New York state legislation dictates how quitclaim deeds should be written.
The grantor must sign the deed and have it acknowledged before a notary. The deed must be stamped and signed by the notary as a confirmation of the grantor’s authentic signature. Once the grantee receives the document, acknowledgment of the acceptance in writing may also be necessary.
Depending on the county, the additional details of the deed may need to be verified such as the description of your property. To ensure that the information on your quitclaim deed is accurate and would be legally binding, you may also ask a qualified New York real estate attorney to fill it out for you.
To ensure that the quitclaim deed is effective against other people seeking to get ownership of the property, it must be filed per the rules of the County Clerk or City Registrar of the locale where the property is located.
A quitclaim deed does not expire. However, if a deed is filed twice from the same grantor, the deed of the person who recorded it first will take precedence. As such, it is important to make sure to file a quitclaim deed as soon as possible.
In addition to the quitclaim deed, you must also fill out two additional forms. The location of your property will determine which forms you need to file.
If the property is located in NYC:
Quitclaim deeds on properties located in New York City may be filed online using the Automated City Register Information System (ACRIS)
If the property is located outside of NYC:
It is important to note that the RP-5217-PDF cannot be a handwritten or a typewriter-entry document. The downloadable PDF versions allow the direct editing of the documents through the use of a computer or a mobile device.
The fees involved in filing a quitclaim deed depend on the type of real estate being transferred. Filing a deed for a farm or residential property typically costs $125 and $250 for other types of property. There may be additional fees involved when filing your forms. It is best to consult an experienced New York real estate attorney to get an estimate of how much the process of filing a quitclaim deed may cost.
Should I use a quitclaim deed for my real estate transaction?
Whether you should use a quitclaim deed to transfer ownership of property depends on your specific case. Quitclaim deeds are still a quick and effective way to transfer property when you are sure that the person acting as the grantor and executing the exchange has the right to give you the property. Regardless, it is a wise decision to immediately file a quitclaim deed as soon as possible to make sure that your document takes precedence over any deed the grantor might initiate over the same property.
It is also a good idea to consult a skilled New York real estate attorney to prepare your quitclaim deed and accompanying documents and to make sure that it is filed with the right offices. At Avenue Law Firm, we have assisted and facilitated the transfer of ownership for properties in and out of New York City. Our team of experienced New York real estate attorneys may be able to help you in making sure that your rights are protected and your best interests are kept in mind during the transaction. Contact us at (212) 729-4090 or fill out our online form to schedule a free consultation.
How are property taxes determined in New York City?
Although taxes are not the most interesting subject, nor are they likely to bring much happiness to anyone having to pay them, they are a necessary part of government. New York City residents know all too well how expensive property tax bills can be. About 45% of all NY City tax dollars collected each year come from real estate taxes. So how does the government go about calculating residential property tax bills? And is there any way to have property taxes lowered? For more information, speak with an experienced NYC real estate lawyer.
Properties in New York City are split into four classes. Class 1 includes one to three unit residential properties. Class 2 includes residential properties with more than 3 units, including cooperatives and condominiums. And Class 3 includes utility company equipment and special franchise property. Finally, Class 4 includes all other real property, such as office buildings, factories, stores, hotels, and lofts.
In this post I’ll concentrate on Class 1 properties. The first step the government takes in calculating Class 1 residential property tax bills is determining the market value of your residence. Government determines the market value by using statistical analysis that incorporates data such as recent selling prices of similar properties in your neighborhood. Similar properties are classified as those that are close in size, style, and age to your property.
The second step is determining a property’s assessed value. A property’s assessed value is a percentage of its market value. The good news is that the state law limits the increase of assessed value of a Class 1 property in New York City. For a Class 1 property, the assessed value cannot rise more than 6% in one year or 20% over five years, no matter how quickly the market value of your home increases. This is true unless you make a physical change to the property, such as an addition or renovation. Because of the caps, it is possible that the assessed value of your property continues to increase even if your market value decreases. This is because it can take years for assessed value to “catch up” to the market value.
Assessed value can change for many reasons, including but not limited to (1) your property’s market value changing; (2) making physical changes to your home, such as additions or renovations. These physical changes are not subject to the annual or five year caps on increases to your assessed value for that year; (3) You lost a tax exemption or abatement, or its value was reduced; (4) your assessed value is catching up to prior changes in market value.
The third step is applying exemptions that are on file. Exemptions reduce your assessed value before your taxes are calculated. The City of New York offers exemptions to seniors, veterans, clergy members, people with disabilities, and other homeowners. If you are granted an exemption, the amount of the exemption is subtracted from the assessed value of your home. This reduces your taxable value.
One common exemption in NYC is School Tax Relief (STAR), which is available to owners of houses, co-ops, and condos with less than $500k annual adjusted gross income. Typically this exemption earns you tax savings of approximately $300 per year.
By subtracting any exemptions from the assessed value of your property, you will get your taxable value. This leads to step 4, the final step the government takes to calculate Class 1 residential property tax bills, which is applying the city’s tax rate for Class 1 properties to taxable value, and then subtracting any applicable abatements. The city’s tax rate percentage for Class 1 properties is set annually by the city council based partially on state law requirements.
However, you can still get a discount on your final tax bill if you qualify for certain tax abatements. Abatements reduce your taxes after they’ve already been calculated. This means that once the tax rate percentage is applied to the taxable value of your property, abatements can further reduce the bottom line. Standard abatements provided by the government include:
Every January the Department of Finance will send a Notice of Property Value (NOPV) to homeowners explaining the determination of their property’s market and assessed values, and listing applicable exemptions. If you feel that the assessed value on your property is too high, you have the right to appeal to the New York City Tax Commission. To have the Tax Commission lower your assessment, you must prove that your property’s value is less than its effective market value (assessed value before exemptions divided by 6%).
Property taxes in New York City can be painful, both to your bank account and to understand. Although taxes are certain, if we arm ourselves with knowledge we can make them a little less painful.
Written by Petro Avenue, Esq
Real Estate Attorney NYC
One of the most popular topics that come up during my conversations with first-time home buyers looking for an apartment in New York is Co-op vs. Condo. Unlike everywhere else in the US co-ops constitute the majority of apartments in NYC. Around 70% of all residential buildings are co-ops, while condos constitute the majority of apartments built in the past 20 years. Aside from the age of the apartment building, there are many crucial differences between coops and condos and the choice usually depends on the client’s situation and personal inclinations. For more information, speak with a reputable New York City real estate attorney.
DIFFERENCES IN OWNERSHIP BETWEEN A CO-OP & A CONDO
1. Ownership – Purchasing a condo is similar to purchasing a house. At the closing you will receive a deed to your new apartment as well as share of the interest in the building’s common areas. If you purchase a co-op, you technically do not own your apartment from a legal standpoint. Rather, the entire building is owned by a single corporation. At the closing you are purchasing shares in this corporation as opposed to the actual apartment. In most cases, the larger and more expensive the apartment you are purchasing, the more shares you will receive. At the closing, simultaneous with the purchase of shares, corporation will sign a lease with you that gives you the right to occupy the apartment you have just bought.
CONDO VS CO-OP PRICES IN NEW YORK
2. Costs to Purchase – In NYC, the purchase prices of co-ops are usually much less expensive than condos, and you can receive more bang for your buck, so to speak, when it comes to square footage. Purchasing a condo can also mean higher closing costs, since you will be required to purchase a title insurance and pay a mortgage tax if you choose to finance your new home; neither of which are required when purchasing a co-op.
Speaking of mortgages, condos may offer more flexible options if you do not have a large amount of cash for a down payment. Some co-op boards require a higher down payment than condo buildings, in addition to a year or two worth of mortgage and maintenance charges left over in your checking or saving account after the down payment. This is called a liquid assets requirement and the exact amount varies from building to building. Although by purchasing a co-op you’ll save on the title insurance and mortgage tax some co-op buildings have a flip tax. Flip tax is not an actual tax. It is a transfer fee charged by the co-op to the buyer or seller and can be as much as 3% or more of the entire purchase price.
HOW MUCH WILL IT COST ME TO OWN MY APARTMENT?
3. Monthly Expenses – Both condos and co-ops have monthly charges (respectively referred to as common charges and maintenance fees) which you will be required to pay toward the operation and maintenance of the building’s common areas. These monthly charges vary and things like the size of the building, number of amenities, etc. will affect the amount that you will end up paying. Both condos and co-ops can also charge assessment fees for building renovation projects, such as the installation of a new elevator. The main difference between a condo’s common charges and a co-op’s maintenance fees is that the maintenance fees include charges for a percentage of the building’s property tax, calculated according to the number of shares you own. If you own a condo, you are responsible for paying your unit’s property taxes directly to the government, which will likely cause your overall monthly costs to be greater than they would be for a similarly sized co-op.
DO CONDOS HAVE BETTER AMENITIES THAN CO-OPS?
4. Location and Amenities – Many of the newer developments in NYC are condos rather than co-ops. These buildings usually include many luxury amenities such as fitness centers, spas, pools, concierge services, etc., and have an overall newer, trendier feel. However, most of the classic, “Old New York” pre-war buildings are co-ops. These buildings often have larger apartments with more ornate décor such as crown moldings, fireplaces, etc. Of course, this is all a matter of personal preference. Location may also play a factor as well. For example, many of the buildings in the Battery Park and in the Financial District are condos, while many of the buildings located around Central Park, on the Upper East Side, and in Gramercy Park are co-ops.
CAN THE CO-OP BOARD PREVENT ME FROM BUYING OR SELLING MY APARTMENT?
5. The Board Approval Process – While both condos and co-ops elect a board of directors to make important decisions regarding the maintenance and upkeep of the building, the co-op board wields MUCH greater power. In extreme cases, the co-op board can even evict a shareholder that it deems disruptive. When buying a co-op, you must go before the board and submit to a potentially arduous approval process. The board will go over your finances and credit, and review your debt-to-income ratio, which they usually expect to be between 25% and 30%. The process involves a great deal of paperwork, which may often require the assistance of an attorney to prepare. The board can reject you for any reason (except for reasons of race, religion, disability, etc. which are protected by law.) However, the board does not have to specify the reason why they reject your application. There is always the risk that you will spend significant time and energy going through the approval process, only to be rejected.
Looking to sublet your apartment? Co-op boards usually have much stricter subletting policies, making condos a better choice for those looking to purchase an investment property. Although when purchasing a condo (unless it’s a new construction) you will have to fill out the board application as well, the condo board does not have the right to reject a buyer regardless of the buyer’s financials, credit, etc. Condo board’s have what’s called the right of first refusal pursuant to which the board’s sole remedy is to purchase the apartment from the seller upon the same terms as are being offered to the purchaser. The chances of the board actually exercising their right of first refusal are slim to none.
SO WHAT’S BETTER CO-OP OR CONDO?
Overall, the decision between a condo and a co-op is a personal one. Both have their pluses and minuses. Condos often cost more but allow a greater degree of freedom and flexibility than co-ops, and an easier approval process. With co-ops you can save on closing costs, afford more square footage and have lesser monthly fees, but you may lose the flexibility that is offered by condos.
PLANNING TO BUY AN APARTMENT? CONTACT US FOR A FREE CONSULTATION WITH AN EXPERIENCED NYC REAL ESTATE ATTORNEY
Disclosure: This is a blog by NYC real estate attorney. The materials contained here have been prepared for general informational purposes only and shall not be used as a substitute for consultation with a lawyer or interpreted as legal advice.
If you are a new business owner who is taking the important step of leasing your first commercial space, you should be aware that commercial leases are subject to some unique considerations that would not necessarily apply to residential leases, such as an apartment lease. In many jurisdictions, commercial tenants are not guaranteed the same rights as residential tenants. In the commercial leasing environment, both tenant and landlord are persons or entities engaged in business pursuits; as such, a commercial lease is generally viewed as an equal bargaining transaction between the two business interests. For example, in New York, the respective rights and duties of the landlord and tenant are almost entirely defined by the terms of the lease itself, with very little statutory or regulatory protection for the parties. In plainer terms, the courts will not be sympathetic to issues arising out of your failure to thoroughly read and understand the terms of your commercial lease. For this reason, it is crucial to have a NYC real estate attorney experienced with commercial leasing review your lease prior to you signing it.
RENT PROVISION IN A COMMERCIAL LEASE
This is not as straightforward as a rent clause in a residential lease. In addition to monthly rent your landlord may ask you to pay real estate taxes and maintenance costs. Make sure you understand if operational costs such as electricity, trash removal, water, property taxes, etc. will be handled by you or by the landlord. Almost every office and retail lease provides for some form of escalation of the rent. Most of the time rent increases by a certain percentage each year. Sometimes rent escalations are tied to Consumer Price Index (CPI).
WHO IS RESPONSIBLE FOR IMPROVEMENTS, ALTERATIONS, AND REPAIRS?
In residential leases, the landlord is usually responsible for all repairs and maintenance of the property. However, commercial properties are commonly rented “as is”. Unless specifically stated in the commercial lease, the landlord does not have an obligation to maintain or repair your premises, or to maintain the common areas. It is paramount that you understand your obligations and have a financial plan for dealing with potential emergency maintenance that you may be held responsible for.
CAN I SUBLEASE MY COMMERCIAL SPACE?
Unforeseen circumstances can pop up for the best of us. If you no longer need the entire commercial space for yourself, will you be able to sublet all or a portion of it? The right to sublease is governed by your commercial lease. Make a note of whether or not subleasing is permitted. Even if it is, most commercial leases require you to get your landlord’s consent prior to subleasing the space. It is not uncommon for landlords in New York to charge tenants for such consent or to request a portion of the rent that you will receive from your tenant. Therefore, it is very important to carefully review the portion of your commercial lease agreement that deals with your rights to sublease the rented space and to discuss the process and all the fees with your landlord prior to signing the commercial lease.
DO I HAVE AN OPTION TO RENEW MY COMMERCIAL LEASE?
It’s always good to plan ahead. Let’s say that you signed a five-year commercial lease and your business is booming at the end of this term. Many businesses depend on their location and moving may result in your business loosing clients. Would you really want to be forced to pack up and move to a new location, possibly disturbing business and confusing your clients? A good commercial lease attorney will always advise you to negotiate an option to renew the lease.
BREACH OF CONTRACT
What will happen if one party doesn’t comply with the terms of the commercial lease? Is there a procedure or timeframe for written demands before litigation? What about mediation or arbitration? If it does come down to litigation, who is responsible for attorney’s fees, etc.? Make sure that the terms are clear and fair before signing.
WILL THIS COMMERCIAL LEASE WORK FOR ME?
You may have found a perfect space, but will the lease work for you? Many commercial leases have restrictions and it’s important to consult with a real estate attorney to make sure that you will be able to run your business without breaking any of those restrictions. Will you have 24/7 access to the space? Can you place a sign? Can you renovate the space? Will your use comply with the certificate of occupancy? Are there any noise restrictions? Typically, commercial leases contain provisions that state you can’t disturb or interfere with the business operations of other tenants. For most tenants this is not an issue. But for some, such as, pre-K, recording studios, and large health care facilities, such provisions can be deal breakers.
Signing a commercial lease is a big step and one that you may have to live with for years or even a decade. It is a good idea to consult with an experienced real estate attorney before signing anything. Your attorney will have your best interests in mind and will often be able to work with the landlord or the landlord’s attorney to come up with terms more favorable to you and your business. Contact a reputable real estate attorney from Avenue Law Firm today by calling (212) 729-4090.
Written by Petro Avenue, Esq
Avenue Law Firm is a team of experienced New York real estate attorneys and is with you each step of the way. Our highly skilled lawyers have dedicated our years of experience to making sure our clients receive the best legal assistance possible. If you need legal assistance with real estate law, personal injury law, and business law in New York, call us at (212) 729-4090.