Rudder Property Group sat down with Shaun W. Pappas, Partner of Starr Associates LLP—one of New York’s pre-eminent law firms providing comprehensive legal representation for the real estate industry—to learn more about the process of converting an existing office building into commercial condominiums.
Clients and Colleagues,
A significant change to the “tenant-protection” landscape has been pending before the New York State legislature over the past months. As of yesterday, it seems the legislature has come to terms on new regulations, which are to be implemented “immediately” and which will serve to change some of the legal standards for converting occupied residential rental buildings in New York.
The Real Estate Finance Bureau has announced that it will begin posting offering plans and amendments to the offering plan database search webpage. The database will now include a “Documents” tab where the offering plan and/or amendments associated with a particular filing will be posted. The database can be accessed at https://ag.ny.gov/real-estate-
The REFB states that the “Documents” will be screened and redacted as necessary to protect private information. A complete comply of the REFB bulletin can be found here.
Make sure your brokerage and co-brokerage agreements are always in writing. It may sound simple, but the litigation team at Starr Associates LLP was compelled to defend this issue for a client in New York Supreme Court when a purported “co-broker/finder” claimed he was entitled to 1/2 our client’s brokerage commission based on an alleged oral agreement.
Although the evidence provided by plaintiff during discovery was paltry, the court permitted the case to proceed to a jury trial, based on the claim by plaintiff that a gratuity offered by our client as a “thank you” once the deal was consummated, as is common in the industry, was really an effort to pay the co-broker less than the ½ commission orally agreed-upon. Our client wholly denied that any oral agreement was ever discussed and alleged that the “thank you” payment was a simple gift. Plaintiff provided no proof of such oral agreement, other than his own testimony.
As many of you may have heard, the budget bill for New York’s 2020 fiscal year, which begins July 1, 2019, was signed into law and includes an increase to the New York State (NYS) transfer tax and so-called “mansion tax” on transfers of real property where the real property is located in any city within the state having a population of one million or more (i.e. all 5 boroughs). By way
of background, the current rate for the NYS transfer tax is $2 for every S500 (or fraction thereof) of consideration, subject to limited exceptions and exemptions and the current rate for the mansion tax” is 1% on transfers of residential real property where the consideration is in excess of $1 million.
Attached are the new applicable tax rates. It should be noted that, while the new tax will take effect on July 1, 2019, there is a safe harbor provision for transfers made pursuant to a binding agreement entered into on or before April 1, 2019 and that close after July 1, 2019.
In preparation for the new tax rates, our office will be preparing an amendment to all existing offering plans and will address the new tax rates in all pending contracts until such amendment is accepted for filing by the AG. Please give us a call with any questions and to discuss what may need to be done for your project.
On December 20, 2018, the New York State Department of Law (“DOL”) published a memorandum (“Memo”) setting forth guidelines to sponsors who wish to submit a condominium offering plan (“Plan”) and withhold certain units from the initial offer. The following summarizes the pertinent items from the DOL Memo, all of which will need to be clearly disclosed throughout the Plan, prior to withholding any units
According to a recent New York City local law, the owners of all Class A multiple dwellings, which includes all cooperative corporations and condominiums, are required to adopt a “smoking policy” by no later than August 28, 2018.
Starr Associates LLP highly recommends that any of our clients who may be subject to GDPR seek more information by consulting with privacy law counsel.
The Kadampa Meditation Center occupies the entire ground floor of a seven-story commercial co-op building in Manhattan’s Chelsea district. The nonprofit that bought the 7,500 square foot space in 2012 has been trying for the past two years to convince the co-op board to convert the building to a condominium association. Such a conversion would enable the nonprofit to take advantage of a tax exemption that is not available to nonprofit shareholders in a co-op.