When you’re buying a condo or co-op in New York City, an important part of your due diligence is to look at a building’s financial health. Your starting point will be the building’s financial statement—of course it’s not the most fascinating read, so you may be relieved to know that the responsibility for making sense of it will fall largely on your attorney once you’ve put in an offer.
Slowly but surely, Bitcoin (BTC-USD) is being used to purchase everyday items like coffee and cars — and now, real estate is also joining the party.
A law requiring free internet for every apartment in New York City? If some city officials have their way, it will be a reality sooner rather than later. Council member Ben Kallos proposed a new bill on Thursday that would require landlords who own buildings with ten or more units to provide tenants with internet or “its functional equivalent,” as the proposal stated. “Such dwellings would be subject to additional technical requirements,” the bill reads, “including the installation of Ethernet ports and wiring to facilitate internet access. Violations would be punished under the Housing Maintenance Code.”
Recent Uniform Rule amendments are intended to bring Commercial Division Rules more broadly into general civil practice before the courts of New York State. While creating efficiencies, these also include potential traps for the unwary, such as new motion and discovery requirements. The Chief Administrative Judge December 29, 2000 Administrative Order implementing these changes, recognizes the Commercial Division as an “efficient, sophisticated, up-to-date court, dealing with challenging commercial cases, and has had as its primary goal the cost-effective, predictable and fair adjudication of complex commercial cases”. In this posting, we provide certain highlights of these Uniform Rule amendments.
As you read this article on a big, medium, or small-sized screen, you probably don’t need to be reminded that the pandemic has allowed many people to live more of their lives digitally. These days, you can do everything from socializing and shopping to learning and working online. So, it makes sense that online homebuying has also surged in popularity.
So, now Tesla (NASDAQ: TSLA) accepts payment in bitcoin. Now we know for sure the cryptocurrency is cool. But is it practical in more mundane transactions?
Renters’ insurance is a type of insurance policy that protects a renter in the event that something happens at their home, like a fire, flood, or theft. While homeowner insurance policies are designed to protect the property owners from the cost of those losses, renters and their possessions are almost never included. This means if you’re renting, be it a room or a whole house, you’re going to want to have a renters’ insurance policy of your own to cover your belongings in the event the unimaginable happens to your home.
You would think a balcony makes living in a New York City apartment a little bit nicer, right? After all, you get a little bit of private outdoor space, plus you can keep the door open for fresh air—and good ventilation is more important than ever in the Covid era.
On November 3, 2020, Gov. Andrew Cuomo issued Executive Order No. 202.72, which extends the expiration date of numerous previous Executive Orders to December 3, 2020. Importantly, Executive Order 202.55 was among those extended, meaning sponsors and developers may continue to benefit from the tolling of various offering plan-related and other regulatory requirements for the time being.
When you’re buying a condo or co-op in New York City, an important part of your due diligence is to look at a building’s financial health. Your starting point will be the building’s financial statement—of course it’s not the most fascinating read, so you may be relieved to know that the responsibility for making sense of it will fall largely on your attorney once you’ve put in an offer.
Still, you can take a look at financial statement any point in the process and understanding what you’re seeing can help inform how much you bid and might also give you an indication of whether a lender will be comfortable with your purchase.
Recent changes to borrowing guidelines by Fannie Mae mean banks are increasingly less likely to lend if the building you want to buy in has low reserve funds to pay for structural repairs, among other risky scenarios.
What you’re looking for in the financial statement includes consistency year over year, a healthy reserve fund, and whether or not there is any major work planned. What you find will tell you whether or not you might get hit with a large assessment in the near future. For additional reassurance you might also want to get your accountant or financial planner to look at the numbers.
What is the ratio of assets to liabilities?
A building’s financial statement typically opens with a list of assets, followed by a list of liabilities. You want to focus on current assets and current liabilities, says Michael Esposito, a certified public accountant with Wilkin Guttenplan, who has years of experience working with condos and co-ops in New York.
Often the building value of a co-op that was converted many years ago will be calculated in the low millions—this can be misleading because it is based on historical cost and depreciation that bears no resemblance to current market value.
Comparing current assets versus current liabilities gives you a better sense of the building’s cash flow—so that would be cash, receivables, and prepaid expenses versus accounts payable, any real estate tax abatements due, and accrued wages.
“You should have at least a 1:1 ratio, meaning you have enough current assets to meet your current liabilities,” Esposito says. This is typically called the working capital ratio.
“Anything better is great, but I would accept 1:1,” says Steven Wagner, an attorney and partner at Wagner, Berkow & Brandt (and a Brick Underground sponsor).
Is there a reserve fund?
A reserve fund is a co-op or condo’s rainy day fund—it’s the money the building has in the bank if a structural issue is uncovered, such as the roof starts leaking. It’s typically itemized on a financial statement as “other assets” and the industry standard is to have three months of carrying costs in reserve or a quarter of the annual operating costs.
While reserve funds have always been important in signifying a well-run building, the collapse of the Surfside condo tower in Miami has sharpened lenders’ focus on the aging infrastructure of buildings and the importance of having money available to address any issues that arise. A recent rule change by Fannie Mae prevents buyers from purchasing in buildings with reserve funds under 10 percent of the operating budget or where repairs have been deferred or unsafe conditions have been identified.
Previously condos were allowed to show lenders a reserve study for a building but now that’s not going to be enough to satisfy the requirements for conforming loans. As a result buildings may start increasing their maintenance or common charges in order to meet the new minimum reserve fund level.
To the untrained eye, details about the reserve fund might not be obvious in a financial statement. Sometimes it is rolled into the working capital fund. Attorney Shaun Pappas, partner at Starr Associates, says depending on the statement, you might not see anything. That’s when your attorney will need to take a look and figure out what the balance is.
“The buildings are really not generating income so the balance should be what the condo holds year to year, which sometimes gets increased by the fact that there’s additional contributions over the years or monies held over from one year to the next,” Pappas says.
Are operating costs consistent year over year?
Ideally, you’ll see financials for the two most recent years. (If not, which could happen depending on when in the calendar year you’re buying, you can request a projected budget.)
How specifically expenses are itemized in this section of the statement will vary (some documents get into the nitty gritty in the notes section), but you’ll see line items for things like administrative expenses, operating expenses, and repairs and maintenance.
The main thing you’re looking for is consistency year over year. Obviously budgets increase and costs can increase but Wagner says the numbers from one year to the next should be fairly similar, within 2 percent. “It’s a hallmark of good management and reflects planning,” he says.
Pappas says boards spend a lot of time negotiating their service contracts and their insurance costs to keep finances consistent. As a prospective buyer, that’s what you want to see in the financial statement.
If there’s a significant increase in operating costs between one year and the next you’ll want to determine why, Pappas says. “Maybe there was a big capital improvement that was done, maybe there was an assessment made.”
What are the maintenance and repairs itemized?
Under the cash flow analysis, you’ll find details of the money being spent on capital repairs. This will typically identify the capital projects that are being worked on as well as repairs and upgrades carried out in the recent past.
Tara Brown King is an agent with Corcoran and says one of the biggest expenses for a co-op or condo is complying with Local Law 11, which deals with the facade. Finding out about repairs—including Local Law 11—is important.
“You need to know if you’ll be paying for that through an assessment or was it just done a year ago, in which case—hallelujah!—that’s a nice bonus for you as an incoming buyer,” she says.
If you see commitments, you’ll want to see how they will be funded. “Is the building going to refinance and increase the debt on the building?” Esposito asks.
A financial statement is a look at the past but it will also account for everything through to the date the statement is issued. “If they enter into a contract or a commitment for capital work by that date, like say an elevator, we have to disclose it,” he says.
How to interpret losses
It’s not uncommon for a building’s financial statement to identify losses. This isn’t necessarily a red flag but is one reason you’ll want your attorney or accountant to take a look at the books.
For example, the building may be characterizing an expense as a loss for tax purposes. The biggest thing, Esposito says, is seeing whether the maintenance is efficient.
“If you look at the financial statement and you are generating large losses, that means your maintenance is not enough. The next year expenses go up but the maintenance is already short—you are going to see huge increases in maintenance,” he says.
What do the notes tell you?
The notes are what Brown King calls a “gold mine” of information. The notes will explain some of the numbers you’re trying to make sense of and also add some color about the building. For starters, the notes tell you the year the co op or condo was founded. If it’s young, you’ll want to figure out if the board is used to running a building. Has the building settled and construction quirks been worked out?
The notes can also tell you if the building is involved in any litigation. This might not necessarily be a deal breaker, but you’ll want to know what it’s about and the amounts involved. For example Brown King asks, “Has someone slipped and fallen and is suing the building? If so, is there proper insurance for that?”
Other information in the notes might relate to commercial space owned by a co-op. Brown King says if retail space is owned by a co-op, it means the shareholders are getting the income from the lease.
“If that lease is Chase and they just renewed at market rate that’s probably having a very positive impact to the financial health of the building so you might have less carrying costs as an owner,” she says.
Other times you might have someone who is not paying rent and you’ll want to know that.
An audited financial statement is the highest level of service and would give you the highest comfort level. Esposito says most bylaws require audited financial statements, however, he works with an eight-unit co-op in Brooklyn that didn’t have a mortgage for years, and didn’t necessarily see the need for an audited statement.
On the other hand, he also works with a four-unit condo where the owners have known each other for years and ask for an audited financial statement every year.
https://www.brickunderground.com/buy/how-to-read-co-op-or-condo-financial-statement
Slowly but surely, Bitcoin (BTC-USD) is being used to purchase everyday items like coffee and cars — and now, real estate is also joining the party.
The first commercial property in New York is being put on the market for digital coin. Magnum Real Estate Group is selling three retail condos complete with a fully rented-out retail bottom floor in Manhattan’s upper East side for $29 million — but will only accept Bitcoin.
Located at 385 First Avenue in a new construction luxury residential building in Gramercy Park, the condos cover 9,000 square feet, and the bottom floor is fully leased by ProHealth, Mighty Pita and M&T Bank.
“There’s a demand for real estate and there’s nothing being offered to the holders of crypto,” Ben Shaoul, managing partner of Magnum Real Estate Group, told Yahoo Finance.
“Our idea is to offer something that’s unique and try to pair the holders of crypto with those who want to sell real estate,” he added.
This isn’t the first crypto transaction for Shaoul. He did three residential deals in 2018, including the sale of an Upper East Side retail condo for $15.3 million in Bitcoin. And Shaoul expects real estate transactions using crypto to grow.
“I see the runway for transactions with crypto increasing exponentially,” said Shaoul.
“The fact that bitcoin is at record highs helps, but I also think investors have done very well owning bitcoin and now they’re looking for cash flow in assets and [real estate] gives someone the ability to buy a long-term real property with cash flow so they can take some chips off the table or transact and sell the asset in a few years as it’s appreciated in value to another buyer of crypto,” he added.
Shaun Pappas, Partner at real estate law firm Starr Associates LLP, likens acquiring real estate using crypto to backward diversification with dividends.
“Commercial sales with crypto were the logical next move as this section of the market matures,” Pappas explained. “Commercial real estate in NYC, especially in this location, will be there forever. The owner will always have access to tenants.”
Yet real estate transactions dealing in crypto aren’t all that new. Bill Zielke, CMO of BitPay — a cryptocurrency payment processor that’s processing the real estate transaction for Magnum — says that the payment processor has been handling crypto real estate transactions the past few years for international buyers, and more recently ski homes in the Western U.S. and properties in New York.
How it works
Transacting in bitcoin has some efficiencies and advantages. It means the process settles the next business day, instead of the typical 30 to 90 days, and the buyer sends their cryptocurrency from a digital wallet to Bitpay’s wallet.
Magnum Real Estate doesn’t have to touch the crypto. The one day settlement is processed through the U.S. automated clearing house for electronic funds network, which handles financial transactions for consumers, businesses and governments, and Magnum receives U.S. dollars.
Then, BitPay takes the cryptocurrency, Magnum is paid in dollars, and the buyer’s sale is complete and settled in a day. The transaction could be done 24/7 from anywhere in the world — and because it’s bitcoin and done on the blockchain no banks or traditional pay wires are involved and it’s secure.
If the transaction is financed, BitPay settles the crypto portion of the transaction and the portion that’s financed would be handled by the real estate company through normal financial lending channels.
As the price of bitcoin and other cryptocurrencies have run to record highs, investors are looking to cash out and buy something with that crypto whether it’s real estate, cars, electronics or jewelry.
“There’s a correlation with our volumes and the price,” Zielke said. “As the price goes up people tend to spend…I fully expect that trend will continue. More people are buying and holding crypto than ever before. So as that increases so will the spending.”
Luxury purchases using crypto are growing. BitPay, which has relationships with global yacht broker Denison and luxury car dealers, including Ferrari and Lamborghini, is seeing strong growth. About 32% of BitPay’s October processed volume was from purchases of luxury goods including jewelry, gold, yachts and real estate.
In the third quarter, BitPay saw similar amounts with about 30% of volume (dollar amount of sales) from the luxury goods category. The cryptocurrency of choice was bitcoin, which made up 60% of the volume.
With roughly 500,000 New Yorkers still without internet access, momentum is gaining for action
A law requiring free internet for every apartment in New York City? If some city officials have their way, it will be a reality sooner rather than later. Council member Ben Kallos proposed a new bill on Thursday that would require landlords who own buildings with ten or more units to provide tenants with internet or “its functional equivalent,” as the proposal stated. “Such dwellings would be subject to additional technical requirements,” the bill reads, “including the installation of Ethernet ports and wiring to facilitate internet access. Violations would be punished under the Housing Maintenance Code.”
The news site Patch reported that Kallos wanted the bill passed to help underprivileged New Yorkers—there are around 500,000 of them who don’t have internet access. Living without it means that applying for food benefits, working remotely, and even reserving COVID-19 vaccine appointments is a challenge, to say the least.
Internet, Kallos believes, needs to be a utility in the same way that electricity, heat, hot water, and phone service are. Landlords who can’t afford to provide it can apply for aid, although he says that they’re looking at an investment that starts as low as $14.95 a month to buy internet in bulk.
The digital gap among New Yorkers and the need for internet became glaring during the pandemic. With remote work and schooling as a way of life and Zoom as a mainstay, New Yorkers who had to live without it faced roadblock after roadblock: Students couldn’t keep up with school, and employees couldn’t do their jobs. Kallos’s proposal is the first of its kind, according to Shaun Pappas, a real estate lawyer at Starr Associates in New York.
However, this isn’t the first time that the city has tried to help New Yorkers get access to internet. In January 2020—just a few months before the pandemic Mayor Bill de Blasio and chief technology officer John Paul Farmer announced the Internet Master Plan, which aims to provide all New Yorkers with easy, affordable, and fast internet service. In May, the administration announced that the plan had achieved a milestone by bringing internet connection to 13 low-income developments, three of which will receive free WiFi on public grounds.
Shaun Pappas believes that this new proposal is likely to get passed. “The city thinks that internet is an essential service for everyone, and it’s in their interest to serve underprivileged residents and give them whatever they need to live their basic lives,” he said. “Internet is definitely part of that.” Pappas thinks that the free internet landlords offer will be tiered. “They’ll probably provide a basic plan, but you’ll have to pay to upgrade to a higher speed,” he says.
If the bill doesn’t get passed, Tara King-Brown, a real estate broker with the Corcoran Group, says that the landlords who do offer it for free will have a competitive edge. “They will attract more buyers and renters and can build its cost into the monthly rental or maintenance fees,” she says. “Internet today goes beyond being an amenity. It’s the great equalizer that every New Yorker needs and deserves.”
https://www.architecturaldigest.com/story/free-internet-coming-every-new-york-city-home
Recent Uniform Rule amendments are intended to bring Commercial Division Rules more broadly into general civil practice before the courts of New York State. While creating efficiencies, these also include potential traps for the unwary, such as new motion and discovery requirements. The Chief Administrative Judge December 29, 2000 Administrative Order implementing these changes, recognizes the Commercial Division as an “efficient, sophisticated, up-to-date court, dealing with challenging commercial cases, and has had as its primary goal the cost-effective, predictable and fair adjudication of complex commercial cases”. In this posting, we provide certain highlights of these Uniform Rule amendments.
Counsel Appearances: Current Rule 202.1 is amended to provide that appearing counsel must be familiar with their case and fully prepared and authorized to discuss and resolve issues regarding the appearance. Failure to comply may be treated as a default for purposes of Rule 202.27 and/or may be treated as a failure to appear for purposes of Rule 130.2.1. While counsel should always be prepared for court appearances, attorneys should take heed of potential consequences of non-compliance.
Adherence to discovery schedule: New Rule 202.20-e requires parties to strictly comply with discovery obligations by dates set in case scheduling orders. Non-compliance may result in sanctions under CPLR § 3126. This rule strengthens court scheduling orders, straightforward discovery deadlines, relief for adversary noncompliance.
Interrogatories: New Rule 202.20 limits interrogatories to 25, including subparts, unless the court orders otherwise.
Depositions: Under new Rule 202.20-b, depositions are limited to seven hours per deponent, which limit the court may adjust for good cause shown. Rule 202.20-d creates additional requirements for corporate entity depositions. These changes further align more general New York civil practice with the New York Commercial Division and Federal Rules of Civil Procedure.
Disclosure disputes: New Rule 202.20-f, provides that to the “maximum extent possible”, discovery disputes should be resolved through informal procedures, such as conferences, rather than motion practice, Absent exigent circumstances, counsel must consult in good faith either by “in-person or telephonic conference” in an effort to resolve disclosure disputes before contacting the Court. In the event a discovery dispute cannot be resolved other than through motion practice, the discovery motion shall be supported by an affidavit or affirmation from counsel attesting o (i) the date(s), time(s), persons participating, and duration of the conference(s) or (ii) if the moving party was unable to conduct a conference due to the unreasonable failure or refusal of an adverse party to participate, then the moving party shall, in an affidavit or affirmation, detail the efforts made to obtain such a conference and set forth the responses received. Unreasonable failure or refusal to participate in a conference requested by another party may (i) relieve the requesting party of the obligation to comply with this paragraph and (ii) be result in sanctions pursuant to Part 130. Prior practice of limiting pre-motion communications to writing are no longer sufficient.
Motion Procedure: Under Rule 202.8, the exact relief sought shall be specified in the (i) notice of motion or order to show cause, and (ii) concluding section of the memorandum of law. Counsel must submit as part of the motion papers, copies of all pleadings and other documents required by the CPLR “and as necessary for an informed decision on the motion (especially on motions pursuant to CPLR 3211 and 3212).” Tabs should be used for exhibits to hard or working copies of motion papers. Copies must be legible. If an exhibit is voluminous and only discrete portions are relevant to the motion, counsel shall attach excerpts and submit the full exhibit separately. Foreign language documents must be translated as required by CPLR 2101(b). When reliance is placed on a decision or other authority not readily available to the court, a copy of the case or of pertinent portions of the authority shall be submitted with the motion papers, “When appropriate,” proposed orders should be submitted with motions, for example motions to be relieved, pro hac vice admissions, and open commissions. No proposed order should be submitted with a dispositive motion. Unless the court orders otherwise, no motion may be adjourned on consent more than three times or for a cumulative total of more than 60 days.
Motion Paper Word Limits and Certification: Under new Rule 202.8-b, moving affidavits, affirmations, briefs, and memoranda of law shall be limited to 7,000 words. Reply affidavits, affirmations, and memoranda are limited to 4,200 words and shall not contain any arguments that do not respond or relate to those made in the memoranda in chief. Every brief, memorandum, affirmation, and affidavit shall include on a page attached to the end of the applicable document, a certification by the counsel setting forth the number of words in the document and certifying that the document complies with the word count limit. Of course, counsel should also be cognizant of Judges’ part rules in this regard as well. Electronically-submitted memoranda of law, affidavits and affirmations exceeding 4500 words, shall include bookmarks providing a listing of the document’s contents and facilitating easy navigation by the reader.
Statements of Material Facts: Under new Rule 202.8-g, summary judgment motions shall include a separate, short and concise statement, in numbered paragraphs, of the material facts as to which the moving party contends there is no genuine issue to be tried. The opposing party shall submit a correspondingly numbered paragraph responding to each numbered paragraph in the moving party’s statement, if necessary, additional paragraphs containing a separate short and concise statement of the material facts as to which it is contended that there exists a genuine issue to be tried. Each numbered paragraph of the movant’s statement of material facts will be deemed admitted unless specifically controverted by a correspondingly numbered paragraph in the statement required to be served by the opposing party. Each statement of material fact, including each statement controverting any statement of material fact, must be followed by citation to evidence submitted therewith.
Print Type, Margins and Bookmark: Rule 202.5(a) requires print no smaller than 12-point, 8½ x 11-inch paper bearing margins no smaller than one inch, and footnote print size no smaller than 10 points. Electronically-submitted memoranda of law, affidavits and affirmations exceeding 4500 words, shall include bookmarks providing a listing of the document’s contents and facilitating easy navigation by the reader within the document.
Motion Oral Argument: Rule 202.8-f provides that each court or court part shall adopt a procedure governing requests for oral argument, provided that, in the absence of such an adopted procedure, any party may request oral argument of a motion by letter accompanying the motion papers. Notice of the date selected by the court shall be given, if practicable, at least 14 days before the scheduled oral argument. At that time, counsel shall be prepared to argue the motion, discuss resolution of the issue(s) presented and/or schedule a trial or hearing. Oral arguments may be conducted by the court by electronic means.
As you read this article on a big, medium, or small-sized screen, you probably don’t need to be reminded that the pandemic has allowed many people to live more of their lives digitally. These days, you can do everything from socializing and shopping to learning and working online. So, it makes sense that online homebuying has also surged in popularity.
If you’re thinking of buying or selling your home online, there are a number of differences from the traditional, signing-a-stack-of-papers process. Here are some of the factors you should take into consideration before plunging into the world of digital real estate.
Those looking to sell their homes can simply enter information about their property online, and newer services like Opendoor, Zillow Offers, Offerpad, and RedfinNow will make an initial cash offer on the property. These services are generally referred to as iBuying.
“Zillow makes a cash offer based on a home’s Zestimate, making selling a home a faster, safer, and easier process that is done completely online,” explains Zillow’s home trends expert, Amanda Pendleton. “Homeowners have the certainty of a fair market value cash offer from Zillow, and they can set their closing date, eliminating the need for open houses, showings, and repairs.”
If the seller accepts the offer, the company handles the process from there, taking over the process of marketing and eventually selling the home. How the iBuyer makes money on the sale depends on each company’s business model. Opendoor, for example, works on a fee-based model, in which they typically charge the seller five percent of the purchase price. Zillow also charges a fee, which averages just under six percent. In general, iBuying is a model that favors sellers who’d like to offload their properties quickly.
In addition to selling your home completely online, it’s also possible to buy a home without ever physically stepping foot in it. According to a recent Zillow survey, 39 percent of millennials said they would be comfortable buying a home online, and 59 percent said they would be at least somewhat comfortable making an offer on a home after touring it virtually but not seeing it in person.
Thanks to advances in technology, a virtual tour can show you many of the same aspects as an in-person-showing, and buying a home this way can be a great option when time and distance are factors — especially during the pandemic. In an effort to limit travel, a cross-country move made after a virtual-only tour can be more practical than it sounds
on the surface.
However, if you do consider buying a home online, Pendleton cautions that there are some intangible factors that you might miss when you don’t actually see the home in person.
“The sounds, the smells, the light in a home — it’s often those factors that give a buyer an emotional connection to a home and make them realize it’s ‘the one,’” she says. “That’s where they’ll need to rely on the experience of a trusted local real estate agent, which can clue them in about aspects like if there’s a lot of street noise, if there are families in the neighborhood, or if there’s great afternoon light that hits the backyard. Most agents now offer live video tours to help remote buyers better understand those externalities.”
That being said, buying a home online can give you a competitive edge when it comes to snatching up a hot property.
“Buying a home via a digital walkthrough or online photos can happen very quickly and can provide an advantage to a buyer who is ready to act fast,” says Shaun Pappas, a partner at New York City-based Starr Associates LLP.
Especially in a tight market, being OK with skipping an in-person showing gives a buyer a leg up.
“In a sellers’ market with tight inventory, as we have seen the last year in the Hamptons, buyers had to jump and make offers without making time to visit the house,” says Yorgos Tsibiridis, a Compass broker in New York.
And when it comes to selling a home online, convenience is the main advantage. You won’t have to deal with sprucing up your place for open houses, watching strangers traipse through your living room, or reviewing multiple offers and buyer letters. Still, the decision to buy or sell virtually ultimately depends on who’s sitting in front of the screen.
https://www.apartmenttherapy.com/buy-sell-homes-online-36895554
By: Marc Rapport
So, now Tesla (NASDAQ: TSLA) accepts payment in bitcoin. Now we know for sure the cryptocurrency is cool. But is it practical in more mundane transactions?
What got us thinking about this was a Reddit thread that begins, “If a tenant is offering to pay rent in bitcoin, would you accept it?”
The very first respondent gets to the heart of the matter: “I wouldn’t know how to.”
Neither would I. I also would be concerned about the volatility of the currency. I mean, I know the dollar changes in value against other currencies every day, all day long, but not like bitcoin, which on March 11, for example, was trading at more than $57,000 per each computer-mined “coin.”
So, unless your property rents in exact increments of $57,000, or whatever bitcoin is worth at that moment, how do you get a part of it? Do you cut it up like a pirate with a handful of pieces of eight?
Arrgh, with so much to know and cryptocurrency slowly but surely gaining broader use, we figured we’d asked someone who knows a lot about this stuff for a little insight.
In this case, it’s Shaun Pappas, a New York City real estate attorney who works with developers, lenders, and investors in the acquisition, sale, and financing of complex commercial, mixed-use, and luxury residential properties. His firm, Starr Associates, is currently working on more than 175 new construction and rental conversion buildings across 80 development firms around the Big Apple.
We asked him four questions:
What’s involved in accepting cryptocurrency for rent? Is it just bitcoin? Are there others?
Thus far, bitcoin has been traditionally the most often accepted cryptocurrency. Generally, the entity or individual accepting payments is receiving the funds in dollars through an exchange company, and there are several exchange companies that will convert bitcoin into dollars.
How do you convert those payments into cash? Will my bank or credit union accept them?
Although acceptance of bitcoin as a form of payment continues to evolve, at this point using an intermediary to convert the funds is the easiest method. The intermediary will accept the bitcoin payment and convert it to dollars for a percentage fee. The cash funds will then be transferred directly to the receiving landlord/owner’s bank.
Do you recommend converting it quickly into cash to avoid that price volatility?
The volatility of bitcoin raises the biggest question when accepting it as a form of payment. The renter/buyer can of course simply sell the bitcoin and convert to dollars on their own. However, in most transactions the third-party intermediary will make the exchange.
The receiving landlord/owner will prepare an invoice through the exchange, and the invoice is sent out over email to the renter/buyer. Typically, the person paying the notice in bitcoin will have 10 to 15 minutes to open the above and make the payment. The price is only locked for that amount of time to avoid volatility concerns. Once the payment is made through the intermediary, the cash exchange is sent to the receiving landlord/owner’s bank within 24 hours.
How widespread is that practice, and how much is it growing?
The practice is certainly becoming more widespread. In 2018 and 2019, we facilitated several apartment and commercial real estate sales in bitcoin on behalf of developers in New York City. Since that time, we have seen major companies shift toward accepting bitcoin payments, and we anticipate the real estate industry will follow.
The trend will continue to grow as the price of bitcoin increases and the ability to either purchase directly with bitcoin or exchange the currency becomes common practice. Many investors look at it as an opportunity to turn their bitcoin investment into a tangible asset in real property. Thus, we wanted to give our clients the opportunity to accept this as an additional type of payment.
The Millionacres bottom line
Because we’re here to help, and we’re all about real estate investing here at Millionacres, we commend for your edification this piece by our own Deidre Woollard: “Should You Invest in Real Estate with Bitcoin?” (Bitcoin was at a mere $23,000 or so when Deidre penned this piece way back in December 2020.)
And, as for actually working with the coin of the cyber realm, we also recommend that you check out this by Millionacres and Motley Fool writer Matt Frankel: “Best Cryptocurrency Exchanges and Apps for March 2021.”
Matt notes that there are brokerage firms that handle cryptocurrencies as an investment, but it’s not for everyone.
That can be said of accepting bitcoin for rent payments, too. Not into it? Hold out as long as you can, I guess, but at least be assured that there are places that will turn it into “real” money for a fee. It’s not so different from the interchange fee charged by credit card processors in that regard. And as more people use cryptocurrency, maybe there’ll be competition for the conversion business that’ll help keep the fees down.
Renters’ insurance is a type of insurance policy that protects a renter in the event that something happens at their home, like a fire, flood, or theft. While homeowner insurance policies are designed to protect the property owners from the cost of those losses, renters and their possessions are almost never included. This means if you’re renting, be it a room or a whole house, you’re going to want to have a renters’ insurance policy of your own to cover your belongings in the event the unimaginable happens to your home.
“Typically renters’ insurance is not very expensive, so the benefits outweigh the costs,” explains Shaun Pappas, partner at Starr Associates. “In case of an incident in the apartment, even if it is not necessarily the fault of the tenant, having renters’ insurance will be useful and will allow the tenant to seek reimbursement.”
Fortunately, because it insures the possessions within the home and not the actual building, a renters’ insurance policy only costs a fraction of what a homeowners insurance policy does. In other words, there’s practically no reason for you not to carry a policy for yourself. No more putting it off — here are five companies that you can get a quote from today.
Lemonade
Starting cost per month: $5
If you’re looking for a quick and easy way to get a quote, look not further than Lemonade. You can have one emailed to you after answering a few quick questions on their website (we clocked our estimate at 70 seconds). And according to their website, filing claims is supposed to be just as fast. Unlike other companies, Lemonade doesn’t have any brick-and-mortar locations, which is probably how they keep the costs so low.
Jetty
Starting cost per month: $10
If you have 60 seconds, you can get a quote from Jetty from your phone or computer 24 hours a day, 7 days a week. Unlike other insurance companies, Jetty partners directly with property management groups, which means you can only sign up for a Jetty renters’ policy if you’re renting from one of their affiliated properties. One of the perks of a Jetty policy is that they offer a program that allows renters to avoid making an upfront cash deposit by charging them either a one-time refundable fee or a low (but
non-refundable) monthly payment. The downside is that the site doesn’t make it easy to search out participating properties, so if that upfront deposit has been keeping you from moving, you likely won’t know if the building you’ve been considering is affiliated with Jetty until you’ve spoken with the leasing office.
E Premium Insurance
Starting cost per month: $11 to $22
Similar to Jetty, E Premium Insurance is a renters’ insurance company that is tied to the property management company. So, you won’t be able to take advantage of some of the benefits of E Premium Insurance (like their deposit assistance policy, which is also similar to Jetty’s) if you’re looking to move somewhere unaffiliated with the company.
However, if you haven’t decided on where you’re moving yet, you can check out the E Premium website to see what buildings are affiliated with the company. Their online tool allows you to search by zip code to find participating properties in your area.
GEICO
Starting cost per month: $12
Like other traditional insurance companies that offer multiple product lines, GEICO offers discounts to renters who bundle their rental and auto policies. Plus, they have a handy online tool that will actually help you calculate the value of your items and figure out how much insurance you need, unlike other companies that estimate values for you. This tool can be perfect for renters who have unusually expensive electronics, or unique collections that may require a little more information (like comic books or original artwork) when pricing out policies.
Nationwide
Starting cost per month: $20
If you’re someone who prefers sitting down with your insurance agent in person (or dropping off your payment directly in their office), you’ll love the traditional trappings of Nationwide. Also, because Nationwide offers so many different services — they carry auto, life, and more — you can save money by bundling their services (for example, using them for more than just your renters’ insurance needs).
https://www.apartmenttherapy.com/renters-insurance-companies-36893188
You would think a balcony makes living in a New York City apartment a little bit nicer, right? After all, you get a little bit of private outdoor space, plus you can keep the door open for fresh air—and good ventilation is more important than ever in the Covid era.
But not all balconies are alike and that’s something to keep in mind if you are apartment hunting. You might want a balcony to escape from constant Zoom calls in your apartment, but you may wind up dealing instead with pigeons, leaks, and other maintenance issues.
The first thing you should consider when looking at an apartment with a balcony is the overall condition of the building, says Rowena Dasgupta, a broker at Warburg Realty. “Safety is the first concern and you should ask how strong the balcony is and how much weight it can hold, especially if it’s an older building.”
You also need to be aware of the building’s bylaws and house rules, says Tara King-Brown, a broker at Corcoran. Most buildings have a separate section in the lease or house rules specifically for a balcony, like if you can smoke out there.
Liability is another thing to keep in mind, says Shaun Pappas, a partner at Starr Associates. If the wind blows your outdoor furniture off and it injures someone (it happened to this New Yorker last year), then you would be held liable. So you also have to be smart with what you store out there.
Keep reading for 10 things to consider when living in an apartment with a balcony, and how to make sure it’s the right outdoor space for you.
1. It might be noisy
Obviously, if your balcony faces a busy street, school, bar, or restaurant with outdoor dining, it is going to be noisy out there. What you may not realize is that a balcony—which usually has sliding glass doors, can mean more noise inside your apartment than a regular wall. So think about where the balcony is located and whether it’s noisy inside is going to be a problem.
2. It all depends on the weather (and wind)
Unless it’s a covered or an enclosed balcony, you probably won’t get much use out of it during the colder months. You also need to consider how high up you are. “The higher the floor, the colder it will be,” Dasgupta says. Wind is also an issue: If you’re on the 15th or 20th floor, you will probably use it a lot less.
If you’re renting and want to enclose it, check out your building’s rules, King Brown says. For buyers who want to permanently enclose it, you have to consider the zoning of the building. “You would be turning an exterior space into an interior space, and the square foot of the apartment might already meet the building’s floor-area-ratio,” she says.
3. What and where is it facing?
If you’re expecting some sun for you or your plants, you need to consider which way it’s facing. If it’s facing north, then you will get little sunlight, Dasgupta says. A south-facing balcony is optimal, but you can also get sunlight on an east- or west-facing balcony at certain times during the day. (Pro tip: You can pull out your iPhone and use its compass to figure this out ). King-Brown says you should also consider how far the balcony is from the adjacent building. If it faces south, but it’s close to the building next door, then you might not get optimal sunlight.
4. Upkeep is up to you
Maintaining your balcony is on you. In the fall, you’ll have to keep leaves off the balcony and in the winter, you have to remove any ice and snow. Your lease might even outline what upkeep is required of you.
Another messy issue: If your balcony is larger than those above you, any falling debris from above like cigarette butts might land on your balcony. (Although with a little detective work you can usually find out who the culprit is.)
5. Pigeons and pests
Pigeons are a part of NYC life and they’re really annoying to balcony owners, because of their habit of perching on a balcony and leaving droppings all over it. If it bothers you, you might choose to install spikes along the railing that will prevent pigeons from landing there. However, Dasgupta says she’s never experienced a building take care of this, so the solution would be up to you.
If you’re on a lower floor, or have a terrace on the ground floor, then you should also consider other pests like bugs and mice, especially since the pandemic has led to an increase in pests issues because most people are spending more time at home.
6. Know which grills you can use
It’s very tempting to have a barbecue or fire pit on your balcony, but New York City Fire Code forbids grills that use propane or charcoal, and fire pits are banned as well because of their open flame. But electric grills are allowed, and so are gas-fed grills, as long as they are professionally installed and inspected, but you should check your building’s rules before investing in one.
Another solution is to look for buildings where the developer has included a gas hook-up for a grill on the balcony, King-Brown says. The developers at 100 Barclay, a landmarked building in Tribeca, did this.
7. It’s not a storage unit
A balcony might seem like an ideal storage space, especially one that you can’t really enjoy because of noise or pigeons, but keeping lots of stuff out there it is likely prohibited by your building. Pappas says a good lease will outline that personal items shouldn’t be stored.
When it comes to seasonal outdoor furniture, you might be required to bring it inside, cover it, or make sure it’s properly secured. If you have to bring it inside, consider where you can keep the furniture. You should also aim to buy wind proof and sturdy furniture to prevent any mishaps. Even cushions and planters should be properly secured.
8. Beware the Juliet balcony
When you’re looking online for an apartment with a balcony, some apartments might turn out to have a Juliet balcony. These really don’t give you any outdoor space, Dasgupta says. They are essentially large windows that allow you open to let in fresh air, but have no space for standing or sitting outside.
9. Smoking, noise, and other building rules
Generally, if a building has a hard no smoking policy, then it would also apply to your balcony, Pappas says.
But, in some cases, a building will prohibit you from smoking in common areas, but will allow smoking on your private balcony. However, if the smoke starts to bother a neighbor then you might be asked to stop. And, if you’re subletting in a building that allows smoking, the owner of the unit might decide to prohibit you from smoking out there.
When it comes to noise, you should follow the same rules that pertain to inside your apartment. If you violate any of your building’s policies on the balcony, you can expect the same recourse as if it were inside, which could mean fines or a termination of your lease, Pappas says.
10. Your building has a right to use it for facade work
Buyers need to check to see when the last time the building inspected their facade, King-Brown says. Local Law 11 mandates that all buildings six floors or higher must have their facade inspected every five years.
If the facade work hasn’t been recently inspected or worked on, then your building might have the right to access your balcony to work on the facade, and can even deem the outdoor space not usable for several months, King Brown says.
https://www.brickunderground.com/rent/10-things-to-consider-about-living-in-nyc-apartment-with-balcony-buyers-renters-noise-trash-weather-storage-furniture
On November 3, 2020, Gov. Andrew Cuomo issued Executive Order No. 202.72, which extends the expiration date of numerous previous Executive Orders to December 3, 2020. Importantly, Executive Order 202.55 was among those extended, meaning sponsors and developers may continue to benefit from the tolling of various offering plan-related and other regulatory requirements for the time being.
On a related note, the New York State Department of Law (“Attorney General”) amended their Memorandum Re: Temporary Submission and Review Policies and Procedures Due to COVID-19 State of Emergency (“AG Memo”) on September 18, 2020. While previously the AG Memo had tied the Attorney General’s COVID-19 “relief period” to the expiration of Executive Order No. 202, this has been amended such that the AG Memo’s temporary policies and procedures are now effective “until further notice” by the Attorney General. As of the date of this news blast, no such “further notice” has yet been given and therefore sponsors and developers may continue to operate under the AG Memo’s temporary policies and procedures (including without limitation digital submissions and alternative notarizations) for the time being.
Please feel free to contact us to discuss how Executive Order No. 202 and the temporary policies established by the Attorney General may affect your project.
Our team has had the pleasure of working with Starr Associates on our project at 150 Rivington Street. The entire Starr team was a tremendous asset to the success of our project. Through very challenging times, Starr Associates came through time and time again. It is an honor to work with everyone at Starr!
I have known Allan Starr for many years and worked with him on many projects. He has always exceeded my expectations. He not only knows the ins and outs of the law, but knows how to make the whole process easy and quick. I’ve found him to possess an incredibly astute legal mind, combined with a common sense approach that always accomplishes my goals. He’s not only a gentleman and a friend, but a brilliant lawyer.
It has been an absolute pleasure working with Allan Starr and Samantha Sheeber over the past twelve years. They are not only the utmost professionals, but also wonderful people who I have grown to love like family. I trust them with all of my new development projects and private clients, and we support each other in our business and personal lives. Starr Associates LLP has always been there for me and my clients and I would recommend them as highly as I recommend anyone.
Allan and I have worked together for decades; along the way, I have worked with Samantha Sheeber, Andrea Roschelle, John Rodriguez and Erica Starr and have always been pleased with their quick and accurate responses. They have worked with us on closings (with great and efficient results), restatements of stale plans, amendments and other assorted AG requirements, always on a timely and cost-effective basis.
“Working with Starr has been great on three condo projects in Manhattan to date. The accessibility and direct attention of the partners is unsurpassed. Allan and Sam have the interests of the owner at heart and make every effort to protect our interests in a responsible and defensible manner. Their practical approach and deep knowledge of the offering plan process and requirements of the AG office combine to make a highly effective and efficient package. At the associate level they have good support as well. The closing office has to be the best in NY – never a failed closing in 15 years. We are repeat customers and will be going forward.”
“Samantha Sheeber is a partner in making transactions successful. She’s resourceful, respected, smart, funny as hell, and is swift to constantly embarrass us (and clients) because she sees the end while we all muddle in the middle. She saves time. She is selfless and fast and conscientious. She’s loyal to the notion of selflessly getting stuff done. She cultivates great talent. And she makes the process fun, even when she is mad at us for asking the same impossible question 11 times hoping for a new result (a solution for which — by the way — she often discovers).”
“As an active developer in New York City, Magnum Real Estate Group is proud to have partnered with Starr Associates, LLP as our legal counsel in 5 significant projects valued at approximately $800 million. Over the last 5 years, Starr has provided us with exceptional advice on condominium Offering Plans and related transactions. Partner Samantha Sheeber, Esq. and her team have professionally guided us, and provided creative and effective solutions when needed.”
“I have had the fortunate opportunity, over the past 16 years, to work with Allan Starr and Samantha Sheeber who I consider to be experts in the field of real estate law. They, together with their team, have a deep understanding of Attorney General Offering Plan registrations and continually seek to identify creative solutions to complicated issues. Their level of integrity and commitment are unwavering no matter how large or small a project. I completely endorse Starr Associates LLP and look forward to our mutual continued success.”
“Starr Associates’ specialty in the creation and representation of condominiums is unmatched. Their knowledge, experience and professionalism in the office condominium sector is best-in-class. Starr Associates’ hard work and expertise has been critical to the success of our firm’s office condominium projects.”
“Starr Associates have been our condominium attorneys for many years. Their counsel goes well beyond just drafting the condominium documents, which of course they do extremely well. They also represent us and our brand with condominium unit purchasers, and with our lenders and partners on condominium related matters. We have always found Starr’s attorneys to be professional, responsive and cost-conscious.”