Having shared property with someone is common, especially between spouses. It is also common to have the same bank accounts and even the same debts. However, this is not a universal experience and there may be some instances where both you and your spouse would be better off only including one name on the official document instead of sharing. Understanding the significance of when and which documents you include your and your spouse’s names can give you a better understanding of how title deeds and mortgages work in New York. Working with a skilled New York residential real estate attorney can also provide you with valuable insight on how to make sure your property documents are in accordance with the law and ensure that your rights are protected. To schedule a consultation with one of our qualified attorneys, call Avenue Law Firm today at (212) 729-4090. Mortgage vs. DeedTo get a better understanding of how property ownership works in New York, it is important to first get a grasp of the differences between the mortgage and the deed. While both are legal documents concerned with real estate and can often be used interchangeably, they perform very different purposes. Knowing the difference between these two documents and what they represent can allow you to have better insight into how to protect your rights as well as to learn about the responsibilities and expectations required of you as a homeowner. Title DeedThe title of the property represents its actual ownership. The ownership of a piece of real estate is often represented by a deed. When a house is purchased, the deed to the property should be transferred to the new owner through a deed conveyance to represent the change in ownership. The change in ownership should also be filed with the county’s Register’s Office. If there is a dispute regarding the ownership of the property, the deed would be the first place to look for confirmation of who the true owner is. People who are not listed on the title deed may have a hard time proving ownership due to the fact that they are not listed on the title. Types of Multiple Property Ownership in New YorkA property can be owned by one or multiple people. It can also be held by a trust or a business. In New York, there are multiple ways in which a property can be owned by multiple parties. Tenancy in CommonIn a Tenancy in Common, each owner has a right to sell, transfer, or borrow against their own interest in the whole property. An example can be when a deceased person passes on a piece of real property to more than one beneficiary in their will. If the tenants in common agree, they may be able to divide up their interests in the property and exchange it for a monetary value through filing an action for a “partition”. The court will divide up the interests and can ensure that each tenant in common will receive the value of their interest in the property. Joint TenancyA Joint Tenancy may be somewhat like a Tenancy in Common, however, when an original party’s interest is sold, the ownership type becomes a Tenancy in Common. If one of the parties dies, however, their interest will automatically transfer to the other joint tenant. Joint Tenancy operates on a “right of survivorship”. New York has 4 requirements for a Joint Tenancy with Rights of Survivorship (JTWROS):
A regular JTWROS may be severed even without the consent of the other property owners. This can be done in two ways:
Tenancy by the EntiretyA Tenancy by the Entirety is a special kind of Joint Tenancy for married couples. Owners in Tenancy by the Entirety enjoy the benefits of a Joint Tenancy along with the Right of Survivorship. However, the owners cannot file a petition to partition the property or transfer the property without both owners’ – the spouses’ – consent. MortgageA mortgage loan represents a debt to the bank. As it is a secured debt, mortgages require an asset to act as leverage and assurance that the debt would be paid. In the event that the person who owes the mortgage cannot continue paying the bank, the bank can repossess the property. This ability to repossess the asset allows the lender – in this case, the bank – to minimize the risk of loss. When there are two names on a title deed, it means that there are joint owners of the property and each person owns an equal share of the property. The mortgage does not need to include both names to be valid. Even if the mortgage only lists one spouse, it does not affect the share of the ownership of the property. Differences in Name Inclusion on Property DocumentsSo why do differences exist and why can two names be on a deed but only one name is included on the mortgage? There can be a few reasons why this is the case depending on when the home was bought and how the purchase was financed. Having both spouses’ names on the mortgage may be beneficial but this may not be ideal in some situations. Interest Rates and Credit Score ImpactIn cases where a spouse has a poor credit history, interest rates may become higher if they are included in the mortgage. The couple may opt to only include the spouse with the better credit score on the mortgage to be able to save up money on interest payments in the long run. When foreclosure is imminent, the spouse whose name is on the mortgage would be the only one impacted. The other spouse would be able to apply for other financing options as their credit score would have not been affected by the foreclosure. Income RequirementsMost real estate loans have income requirements. If a spouse has an income that does not meet the requirements, perhaps because they have not had an income due to the marriage or do not have a consistent income, it may be wise to leave them out of the mortgage application. Marriage DynamicsIf the home is not intended to be bought for the use of both spouses, that is, one spouse is buying the house to be used after a pending divorce, it’s more prudent to include only one spouse’s name on the mortgage. If the house was acquired during the marriage, it may be considered marital property. The assistance of an experienced attorney may clarify things regarding how ownership would work in this scenario. Differences in the inclusion of each spouse’s name on the title deed can also vary but it’s important to remember that ownership of the property is based on the inclusion of your name on the title deed. Some reasons why name inclusion on the title deed can differ in New York include the following:
Adding, Removing, and Transferring Property InterestNew York allows for a distinction between property owned before and during a marriage. When one spouse has property acquired before the marriage, ownership does not automatically become mutual upon marriage. Even after a divorce, only property that is considered marital property and mutually owned would be divided and distributed between spouses. However, there are ways in which a spouse can transfer some ownership interest in their solely owned property to their spouse during the marriage. Adding your spouse to the title deed can be done to give them a share in the ownership of the property. This can be done through a quitclaim deed which gives your spouse property interest. Quitclaim deeds can also be useful in the following cases:
A quitclaim deed only serves as proof that a person “quits” any claim they have on a property. Filing a quitclaim deed does not mean that the person who is given the original owner’s property interest would have sole ownership. It only means that they would be acquiring any existing interest or ownership share the original owner has on the property. For property co-owned by two or more persons, each person can only quit their claim on the percentage of ownership they have and it will not affect their co-owners’ share. This also applies to any taxes on property transferred such as capital gains tax. Discussing who will be responsible for paying these taxes is important to avoid any complications. It is important to note that quitclaim deeds are only useful for specific purposes. When buying a property, it is strongly recommended to undergo the proper conveyance procedures and ensure that the purchase agreement includes everyone intended to be the property owner. Mortgage After DivorceA quitclaim deed also does not affect any liability on mortgages on the property. In the case of couples divorcing, if both spouses have their names on the deed and the mortgage, even if one spouse has quit their ownership claim on the property, they may still be responsible for the mortgage. A separation agreement may be helpful in ironing out any issues regarding who will be responsible for the mortgage. If one spouse gets the marital home after the divorce, they can refinance it and get a mortgage that is under their own name. This can help the spouse who did not get the home in the divorce to be able to move on with their life without the financial obligation. If the couple is unable to come into a consensus regarding who will pay the mortgage and continue to have both their names on it even after the divorce, it can present a serious problem. If one spouse is not able to fulfill their obligation, it may be up to the other spouse to complete payments on the loan even if they are not living on the property. If the property ends up in foreclosure due to nonpayment of the debt, both spouses can suffer damages to their credit scores. Regardless of whose names are included on the deed, it is important to continue paying the mortgage to avoid the loss of the property through foreclosure. Removing a Spouse From a MortgageMortgages are an agreement between the borrower/s and the lender. It can be difficult to remove a spouse’s name on a mortgage without the lender agreeing, especially when it can mean that the lender is being deprived of one means to collect on the debt. Removing a spouse on a mortgage can only be done with the lender’s consent or through refinancing the home. Adding a spouse to a mortgage can also only be done through refinancing. This can be considerably complicated due to the fact that the spouse would need to be approved. If Your Name Is in the Mortgage but Not the DeedIf your name is not included in the title deed of the home but is included in the mortgage, this can mean that you do not have an ownership stake in the property while also being obligated to make payments to the mortgage. In this scenario, you have all the liability of having a mortgage named after you while none of the benefits of having an ownership stake in the property. Having only one name on the deed can also present an issue in terms of inheritance. If the spouse whose name on the deed passes away, it can present a succession issue on who will be able to get the property. In most cases, when both spouses are co-owners of the property as in a Joint Tenancy by the Entirety, a spouse automatically gets ownership of the property upon the other spouse’s death. When there is only one name on the deed and the person dies, the property’s ownership will transfer depending on who the rightful beneficiary is as included in the person’s will or according to New York’s intestacy laws. This can mean that the deceased person’s spouse may not inherit the home. For a mortgage, when the spouse on the mortgage dies, paying the outstanding debt will be done through their estate. The deceased person’s estate would have to continue paying the debt or risk the foreclosure of the home. The bank can also put a claim on other assets in the estate to ensure payment of the loan. To avoid this, the surviving spouse may enter a negotiation with the bank to refinance the mortgage under their own name. Getting Professional Assistance For Your Real Estate NeedsOverall, discussing the matter of property ownership and the mortgage with your spouse, especially when you are not sure whether or not both of your names are on the title deed of your home is best done sooner rather than later. Ensuring that your property documents are in order can help you have a sense of security and prevent costly mistakes down the line. Consult an experienced New York City real estate attorney to make sure your property documents reflect your real estate goals. An attorney can walk you through the potential complications and any issues you may encounter and provide the most applicable solutions. At Avenue Law Firm, our capable Manhattan attorneys have handled numerous real estate transactions in New York. Our attorneys provide tailored assistance that keeps our clients’ best interests in mind. Contact us today at (212) 729-4090 to schedule a consultation with one of our attorneys. Via https://www.avenuelawfirm.com/two-names-on-deed-one-on-mortgage-who-owns-the-house/
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As a renter, the prospect of being tied down to an apartment lease, especially if the contract is extended, can be a daunting, but calculated risk. A renter should go into a lease knowing the terms and abide by them throughout the duration of the contract. If a renter wanted to get out of the lease early, they would have to pay a termination fee, lose their security deposit, or risk being taken to small claims court. On the flip side, landlords who want to end an existing apartment lease early or want a renter to move out before the lease is over can make an offer to buy out the existing lease. While this may seem unbalanced, landlords are also bound to abide by the terms of a lease agreement. Just as landlords have rights, New York also has laws that protect the renter’s rights in the event that their landlord wants to end their lease agreement early. However, not everyone may be familiar with the inner workings of the law. Before you make any decisions, it is important to retain the services of a competent NYC real estate attorney. Working with a skilled real estate attorney can be beneficial in ensuring that your rights are protected in a buyout. Our experienced Manhattan residential real estate attorneys at Avenue Law Firm may be able to help you in ensuring that the terms of your buyout are favorable to you. Call us today to schedule a free consultation at (212) 729-4090. Understanding an Apartment Lease BuyoutWhile apartment lease buyouts are not uncommon in New York, they can still take an inexperienced renter by surprise. Apartment lease buyouts occur when a landlord offers to pay a renter a lump sum in exchange for the renter moving out and are usually done by landlords in the hopes of getting a higher-paying tenant. Apartment lease buyouts happen more frequently in rent-controlled or rent-stabilized apartments, usually for the following reasons:
New York laws prohibit landlords from increasing rent above a certain cap annually as long as the same tenant remains in the apartment. Tenants are also allowed by NYC rent regulations to renew their apartment leases in perpetuity, meaning that they cannot be evicted due to their leases expiring. As long as the tenant follows the terms of the lease and pays their rent on time, they can be allowed to renew their lease until they choose to move out. While this may not always be the case, apartment lease buyouts usually occur more in areas of the city that are seeing more development. Development in terms of more job opportunities or commercial spaces can often mean that rent prices increase but NY laws protecting tenants in rent-controlled or rent-stabilized apartments make it difficult for landlords to evict tenants or impose a higher rent. There are also scenarios wherein the City or a developer offers to buy a landlord’s property. If there are remaining tenants, a landlord cannot sell their property. A lease can only be broken if the tenant has not been following the terms or through mutual agreement. Through an apartment lease buyout, a landlord and tenant can work together to find terms that are mutually acceptable and end the lease agreement without issues. The NYC Rent Guidelines Board oversees lease agreements and ensures that statutes and guidelines are followed both by landlords and tenants. While tenants face eviction if they do not follow the agreements, landlords themselves are subject to high fines and penalties if they abuse the agreements. Both parties are expected to adhere to New York City landlord-tenant laws which govern lease agreements. Should You Accept or Negotiate?If you have been offered a lease buyout by your landlord, it’s important to remember that you are not obligated to accept. You are well within your right to reject an offer, even if the buyout offer is high. A landlord also cannot coerce or harass you to accept a lease buyout offer. It’s illegal for a landlord to threaten you or otherwise cancel essential services to your apartment because you don’t want to accept the offer. However, a buyout can also allow you to move into a new apartment or relocate somewhere else. You also do not have to accept a buyout outright and can even negotiate better terms if you think that the current terms are not favorable to you. How Much a Buyout Is WorthBefore you accept your buyout or negotiate, it is important to know what price is reasonable for you to ask. New York buyouts have to be approved by city officials to ensure that landlords are not lowballing tenants but a landlord can also take the buyout off the negotiating table if they think that your asking price is too high. It may be difficult for an individual tenant to determine how much a lease buyout is actually worth. A good measurement would be to compare how much rent a tenant is currently paying with how much rent is currently worth in the vicinity. It may also be good to consider future developments and construction and how much these would affect rent. The market rate is not a fixed amount and is more reliant on how much tenants are willing to pay given an apartment’s amenities and its proximity to other necessary facilities. For a rent-stabilized apartment, apartment lease buyouts in general could range from $20,000 to $60,000. Determining your landlord’s intentions or what is pushing them to offer the lease buyout can be a negotiating chip. When offering a buyout agreement, landlords must disclose in writing the following information:
A landlord can do anything they can to convince you to sign the agreement as long as they abide by the law. As a tenant, it is important for you to know your rights. According to the NYC Protection Act, a landlord cannot subject a tenant to the following acts to force them to accept a buyout agreement:
Tenants who have been subjected to such acts may sue their landlord for harassment. Tenants can notify their landlord that they do not wish to be contacted, for up to 180 days, and the landlord must abide by the request or face legal consequences. In addition, tenants can also file a complaint with the City. Landlords proven to have engaged in such behavior may be subjected to various fines. A tenant can receive an amount ranging from $1,000 to $10,000 for a first offense and anywhere from $2,000 to $10,000 for any subsequent offenses. If your landlord is harassing you into accepting an apartment lease buyout agreement, getting the help of a skilled NYC residential real estate attorney can ensure that the terms are fair and that your rights are protected. Our Manhattan real estate attorneys at Avenue Law Firm are well-versed in the relevant laws involved, including the NYC Buyout and Tenant Protection Laws. We can also assist you in filing a complaint with the City and represent your rights in court if necessary. Tax Implications of an Apartment Lease BuyoutHaving favorable terms on your apartment lease buyout may seem like a windfall but getting a high tax liability on your buyout can decimate any financial benefits you can get. Being aware of the tax implications of accepting an apartment lease buyout can be just as important as getting good terms on your agreement. Even though apartment lease buyouts are offered as a lump sum, you may not actually be entitled to the whole amount. You need to be aware of the tax rates that would apply to the payout you get and structure your agreement in a way that reduces your tax liability. When a buyout is accepted as is, the funds are taxed as regular income and are subject to federal, state, and city tax rates. Finding a skilled Manhattan real estate attorney who can help negotiate and structure your agreement in a way that allows you to benefit from tax rates is beneficial. Effective Negotiation TipsWhen negotiating your apartment lease buyout, you must be aware of the current and future implications of accepting the agreement. The following factors can be useful to keep in mind during the negotiation:
Although it would be ideal to assume that your landlord would not be applying underhanded tactics in the negotiation, it is not usually the reality. To protect your rights and to have someone looking out for your best interests in the negotiation proceedings, seeking the help of a knowledgeable Manhattan real estate attorney is crucial. How a Skilled NYC Residential Real Estate Attorney Can HelpGetting a handle on all the moving parts of your agreement can become overwhelming. Determining the current market rate for your specific location may also be difficult. An experienced attorney can help you negotiate favorable terms of your agreement while also taking into account the tax consequences. An attorney can also use legal resources to find out whether there are lawsuits or actions influencing your landlord to offer a buyout agreement. If you reject your landlord’s offer and they resort to harassment to force you to move out of your apartment, an attorney can also file a complaint and a lawsuit, if needed. An attorney can also ensure that your landlord adheres to a request of 180 days of no contact. At Avenue Law Firm, our team of Manhattan residential real estate attorneys provides quality legal counsel in matters of rent negotiation to apartment lease buyout agreements. We may be able to help you get favorable terms and understand your rights whether you choose to accept or reject a buyout offer. Contact Avenue Law Firm today at (212) 729-4090 to schedule a free initial consultation and to learn more about our services. Via https://www.avenuelawfirm.com/what-to-do-in-an-apartment-lease-buyout/ |
About UsAvenue 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. FIND US ONLINE Bitly Box Diigo Dropbox Evernote Postach.io Histre Inoreader Instapaper Nimbus OneDrive Onenote Raindrop.io Todoist Toodledo Trello Tumblr Weebly Wordpress Blogger Google Drive Youtube Map Related Links About.me Behance.net Dribbble.com Taplink Gravatar.com Link.Bio Minds Justpaste.it Issuu.com Linkhub Solo.to Archives
May 2023
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