LawCURRENTS™, a quarterly newsletter

LawCURRENTS is a free and entertaining quarterly newsletter written by Richard Klass.


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man in a tug-of-war, illustrating article by Richard Klass about a law firm’s charging lien

When Lawyers Engage in a Tug-of-War

Fall 2017

He was an associate at a law firm that handled cases involving workplace discrimination, including cases based upon age, disability, gender, race, religion and sexual orientation discrimination. The associate decided it was time for him to transition from the law firm to another firm in which he would become a partner. Some of the law firm’s clients whose cases were handled by the associate elected to transfer representation from the former firm to the associate’s new law firm…. (more)

 

Woman applying lipstick. Illustrating article by Richard Klass, Esq. entitled Ready, Willing and Able

Ready, Willing and Able

Summer 2017

I’m ready, willing and able / And honey, now it’s up to you
So lay your cards on the table / And tell me what you plan to do. – Doris Day

The owner of a 4-family house was ready to make a quick sale for $1.5 million. The buyer agreed to enter into a contract of sale for the house in “as is” condition in an all-cash deal to close seven days after signing the contract. Right before the closing, however, a dispute arose between the parties regarding the actual closing date. The seller attempted many times to close title, including sending several “time of the essence” notices to set a firm closing date. Each time, the buyer’s attorney responded that it could not close on the date but proposed an alternate closing date…. (more)

 

All in the Family: Inherited Real Estate the Subject of Siblings’ Lawsuits

Spring 2017

Their mother owned several valuable properties. While she was alive, the mother did some estate planning to minimize potential estate taxes. As part of her estate plan, she transferred the properties into limited partnerships….After meetings and conversations among the siblings about their mother’s estate and the son/manager’s sale of the properties, a couple of the sisters accused the son/manager and his brother of committing fraudulent acts. Specifically, they accused the brothers of selling the properties at below-market prices to entities owned by the brothers…. (more)

 

Funny man with fists raised illustrating article by Richard Klass about attorney charging liens and an associate of a law firm moving to a new firm with a client or clients.

“Lawyers are men whom we hire to protect us from lawyers.”

Winter 2017

The associate of a law firm found another opportunity and decided to leave his current firm for another. The associate contacted existing clients of his current law firm to ask if they wanted him to continue as their attorney and follow him to the new firm. A bunch of clients agreed to transfer their cases to the new law firm… (more)

 

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Statute of Limitations Dooms Sister-in-Law’s 33 Year Old Mortgage

Fall 2016

Way back in 1982, a wife and her husband purchased a home in Brooklyn. The wife’s mother-in-law — her husband’s mother — provided $20,000 to help the couple make the purchase. At the time the money was provided, the mother-in-law had not firmly decided whether she considered the $20,000 a gift or a loan…. (more)

 

Caveat emptor / Caution Buyer Beware: illustrating article about New York Loft Law, Caveat Emptor, special facts doctrine and Transfer of Development Rights

$16 million dispute: Developer should’ve taken “Loft Law 101”

Summer 2016

He was the owner of two buildings on one lot in Greenpoint, Brooklyn. Greenpoint is an area well known for its warehouses and lofts, and is now a very desirable neighborhood for residential development. It is also well known that many tenants in commercial lofts in and around Greenpoint reside in them instead of just using them as artist studios or business spaces. One building housed the owner’s gym business and the other was a three story loft building. Along with the property itself, the Transfer of Development Rights (TDRs) were very valuable to developers, as they would allow greater development of another property. The owner negotiated the sale of the whole property for $16 million…. (more)

 

Underwater explosion next to the USS Arkansas illustrating article by Richard Klass about restrictive covenants in employment agreements.

Blown out of the water!
Employment Agreement held too Restrictive.

Spring 2016

She was hired as a salesperson for a company that sold water purification systems. The company also installed and maintained those systems (known as “reverse osmosis” or “RO” systems). The company had a policy that all salespeople had to sign its Independent Business Owner contract, which laid out the retention terms including the salesperson’s right to sales commissions and restrictive covenants (or promises) in favor of the company…. (more)

 

Gray-haired woman holding frying pan illustrating article by Richard Klass about a commercial tenant. © Vbaleha / Dreamstime.com

“I tell the landlady I got a job, I’m gonna pay the rent.
She said, ‘yeah?’ I said, ‘oh yeah.’”

— George Thorogood, “One Bourbon, One Scotch, One Beer”

Winter 2016

The landlady rented the storefront space to an interior decorating firm. This commercial tenant signed a lease to rent the store and an individual provided a personal guarantee of the lease…. (more)

 

Portrait of William Shakespeare by William Page, 1873, illustrating article about Notice of Pendency by Richard Klass.

“What’s in a Name?” asked Shakespeare.
“$300,000” we replied.

Fall 2015

The child got injured as a result of a trip and fall accident in a building in Brooklyn. His mother hired a law firm to pursue his personal injury claim. The law firm recovered judgment in favor of the child against the building’s owner; however, it was having trouble collecting on the Judgment because the owner seemingly did not have premises liability coverage on the building…. (more)

 

Young woman with a shocked expression in a rent stabilized apartment in New York.

The Rent Is Too Damn High

Summer 2015

The tenant lived in an apartment building in Brooklyn, New York for several years. She dutifully paid her rent to her landlord. After several years, she discovered that the rental amount she was paying exceeded the legally-allowed amount for her rent-stabilized apartment according to New York State law…. (more)

 

© Thomas Wolf, www.foto-tw.de. CC BY-SA 3.0 de. Cropped detail from original photo.

A Man’s House is (Not Always) His Castle

Spring 2015

A New York City college bought an old garage on a residential street with the intention of eventually tearing it down and using the vacant lot in the development of a 17-story building. The owner of the adjacent apartment building was more than glad to have the college demolish the garage, which had become an eyesore. In order to demolish the garage, however,… (more)

 

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A Day Late and a Dollar Short

Winter 2015

A comprehensive medical practice was opening up in an office building and needed extensive renovations in the space. The medical practice hired a construction company to handle the build-out of the office at a cost of over $250,000. The construction contract specified that the contractor would achieve “substantial completion” of the project within 3 months after work began in April 2012. Unfortunately… (more)

 

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Pay the Worker on the Day He (or She) Works

Fall 2014

This guiding principle is so important that it is laid out in several passages throughout the Bible. It is incumbent upon an employer to pay the wages of its employees on a timely basis. If the employer does not pay its employees, New York State law provides employees with significant remedies, including an entitlement to monetary penalties against the employer over and above the unpaid wages and the recovery of attorney’s fees…. (more)

 

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Lawyer Misses the Bus (a $300,000 tale of woe)

Summer 2014

The cabbie’s nightmare began with courtesy and continued with insult and injury. It began as just another busy day in the life of a New York livery cab driver: picking up and dropping off passengers. On this particular day, the cabbie had pulled to the curb just past a bus stop in Manhattan to let out a passenger. He then stepped out of the car to open the passenger’s door. Perhaps he thought a little extra courtesy might result in a bigger tip but, no matter the reason, in this case, it cost him dearly…. (more)

 

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“Wild Card” (Or How Mad Max Got to Keep His Camaro!)

Spring 2014

It was a really nice car – a 1999 Chevy Camaro with only 51,000 miles. Maybe it wasn’t the most expensive car (like a Chevy Corvette) but Mad Max loved driving it on weekends. Mr. Max also had another vehicle (a truck) that he needed for work during the week. Unfortunately, Max’s business wasn’t doing well and he was forced to file for personal bankruptcy due to his mounting debts. As part of filing for Chapter 7 bankruptcy, Max had to submit to the Bankruptcy Court his Petition…. (more)

 

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Lenders “Livin’ la Vida Loca” till HETPA Ended The Fiesta

Winter 2014

In 2006, New York State enacted the Home Equity Theft Prevention Act(“HETPA”) for the purpose of affording greater protection to homeowners who face foreclosure proceedings against their homes. HETPA was instrumental in addressing increasingly rampant swindling where con men, proposing to “help” homeowners out of foreclosure, instead, stole homes and home equity from homeowners through deed/equity thefts and other mortgage foreclosure “rescue” scams…. (more)

 

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Stone Cold

Fall 2013

The business idea was a good one: one partner, we’ll call him “Salesman,” was experienced in the stone business. He would bring his knowledge and talents. The other partner, we’ll call him “Moneybags,” would bring his cash. Together, they would launch a business to import and distribute stone material from China…. (more)

 

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The Producer

Summer 2013

Mel Brooks’ movie and musical The Producers may have been a fictional story of fraudsters selling more shares in the production of their Broadway show “Springtime for Hitler” than actually existed, but such fraudsters exist in real life, overselling available interests not only in Broadway productions, but in every type of investment, including real estate…. (more)

 

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Surprise!

Spring 2013

On a recent day, “Jack” (not his real name) went to an ATM to withdraw money from his bank account. To his surprise, he could not. Upon contacting the bank’s customer service department, he discovered that his bank account was restrained and could not be accessed. The bank’s representative informed him that there was a judgment against the joint accountholder—a friend, we’ll call him “Stan”—and this was the reason for the restraint on the account…. (more)

 

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“Then I’ll huff and I’ll puff, and I’ll blow your house in!”

Winter 2013

Those famous words were said by the Wolf in the fairy tale Three Little PigsSometimes, municipalities have to say those same words to homeowners whose buildings become so damaged that they have become “unsafe.”… (more)

 

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Saved from the Auction Block

Fall 2012

A Kings County homeowner was unable to pay his mortgage. He had been in and out of bankruptcy and his Midwood-area house had been in foreclosure since 2007. A Judgment of Foreclosure and Sale had been entered in 2010. Now, the foreclosure auction was scheduled for September 13th. In laymen’s parlance, the auction sale date is the “drop dead” date for the homeowner to keep his house and, in the final days before the auction, the homeowner needed Richard A. Klass,Your Court Street Lawyer, to save the house from the auction block…. (more)

 

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Not so fast. Lawyer Can’t Be Displaced by Client without Court Order

Summer 2012

The client was injured and hired a lawyer to prosecute his personal injury claim against various entities for negligence. The lawyer agreed to handle the personal injury claim for a one-third contingent legal fee. “Contingent fee” refers to an arrangement with an attorney for payment of a percentage of an amount recovered for the client through settlement or resolution of the claim; a one-third contingency is fairly standard in personal injury matters…. (more)

 

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An Extra $1,500,000 for the Aged

Spring 2012

More than fifty years ago, a charitable woman executed her Last Will and Testament, bequeathing all of her assets to two Catholic charities in the event that her siblings did not survive her. The two Catholic charities named in the Will were the Columbus Hospital and St. Joseph Rest Home for the Aged, each to get 50% of her estate. Both of these institutions were founded or operated by Italian American Catholic Orders.In March 2008, the woman passed away, leaving more than $3,000,000 worth of assets in her estate. Since her siblings predeceased her, the Will left everything to the two Catholic charities…. (more)

 

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Home! Sweet Home!

Winter 2012

The homeowner had a bunch of problems. Not only was he saddled with over $30,000 in credit card debt spread across several credit card accounts, he had also just received the Summons and Complaint, filed by his mortgage lender, seeking to foreclose on the mortgage recorded against his home. He was delinquent on his mortgage and owed many months’ worth of mortgage arrears. This homeowner is one of the tens of thousands of homeowners across the State (and more across the country) who have fallen into foreclosure with little help or support…. (more)

 

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Feeling a Million Bucks Better!

Fall 2011

Bad economic times over the past few years have seen the foreclosure of tens of thousands of properties across New York State (as well as around the country). One corporate landlord had two commercial rental buildings located in Brooklyn. Spread across those two buildings was a ‘blanket’ mortgage of $1.1 million (the term ‘blanket mortgage’ refers to one mortgage recorded against two or more properties). The buildings fell into foreclosure as a result of the landlord’s inability to pay the mortgage loan and the general economic downturn in the area. The corporation that owned the buildings and the individual owner who signed a personal guaranty of the mortgage loan were sued in the mortgage foreclosure proceeding…. (more)

 

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Surplus Moneys: The Extra Bit Left Over!

Summer 2011

In the typical mortgage foreclosure proceeding, the mortgage lender (or “mortgagee”) brings an action against the homeowner to foreclose on its mortgage against the real estate, generally because the homeowner (or “mortgagor”) failed to make payments on the loan. The mortgage is the legal document recorded by the mortgagee against the mortgagor property to provide the collateral for the making of the loan. In case of default in payment, the mortgagee has the right to sell the collateral to satisfy the remaining balance due on the loan (most foreclosure proceedings are judicial sales, where a court has authorized the sale, as opposed to ‘non-judicial’ sales in limited circumstances). Sometimes, in a foreclosure action, the plaintiff is not the holder of a mortgage but rather has another type of lien against the real estate, such as a tax lien for unpaid real estate taxes, mechanic’s lien (for building supplies or labor performed), or judgment lien…. (more)

 

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“Busting” the Trust!

Spring 2011

A Trust was created by a woman in her Last Will and Testament (testamentary trust), leaving her children and their issue (children) as the sole beneficiaries of the trust. The Children’s Trust was formed as a “mixed” discretionary trust; meaning that the trustees maintain the discretion to pay moneys to the beneficiaries of the trust but the trust itself is a spendthrift trust, whereby the beneficiaries cannot invade the trust or, in other words, take out money themselves. A “discretionary” trust is typically set up to give the trustees the authority to pay money (either principal or interest) as they see fit, considering the lifestyle and resources of the beneficiary. A “spendthrift” trust prohibits the beneficiary, creditors of the beneficiary, or any other person from taking money out of the trust…. (more)

 

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The Wrong Side of the Tracks Costs Law Firm $800,000

Winter 2011

The Long Island Railroad (LIRR) leased one of its old rail yards in Queens to a recycling company. One of the recycling company’s employees was working the late shift on a rainy evening in 2003. That rainy night, he was assigned the task of welding on a portion of the metal fence surrounding the yard with an acetylene torch. He got up on a ladder, climbed up several rungs, and started to weld. At that point, the injured worker got a shock from the welding equipment. The ladder then shifted in the mud and he fell to the ground, suffering severe injuries. Since that incident, he was unable to work, having become disabled, and having had several surgeries to his back and knee…. (more)

 

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Knocking Out Defenses Means They Don’t Get Up!

Fall 2010

The Executor of the estate of a man who owned a mixed-use building in Brooklyn sold it to someone for $700,000. As part of the sale, the Executor agreed to take back two mortgages on the property from the buyer in favor of the decedent’s wife, the beneficiary of the estate.The buyer (and now building’s owner) defaulted on the mortgages by failing to make payments on them to the beneficiary/lender. At that point, the mortgagee turned to Richard A. Klass, Your Court Street Lawyer, for legal assistance to commence foreclosure proceedings on the two mortgages against the buyer…. (more)

 

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The $1.2 Million Shopping Disaster

Summer 2010

At her local supermarket, a shopper bought her groceries and started to walk out the front door of the market with her cart. As she walked out, the entire door at the exit came unhinged from the frame and slammed down on her. The door managed to slice off the rear portion of her leg, taking out part of her calf. The result was a painful ordeal, requiring extensive medical treatment.The shopper decided to retain Richard A. Klass, “Your Court Street Lawyer,” to pursue her claim for personal injuries based upon the negligence of the supermarket. An action was brought in the Supreme Court, Kings County against the supermarket, alleging negligence for the fallen door…. (more)

 

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The (Property) Bonds of Matrimony That Can’t Be Broken

Spring 2010

Two sisters and their respective husbands decided to purchase a two-family house in The Bronx in 1995. At the closing, they took title to the property, reflected on the Deed, as follows: “Gilberto Hernandez and Consolacion Hernandez, his wife …. And Erlinda Que and Elpidio Rodriguez, her husband.” Erlinda executed her Last Will and Testament, in which she devised her “half share and interest in the real property” to her sister, Consolacion, and her husband, Elpidio, in equal shares. In December 2000, Erlinda passed away, survived by her husband, Elpidio.For a long time after Erlinda’s death, Elpidio and his deceased wife’s sister continued to maintain the house. At some point, he remarried and wanted to sell it and move. And, when they all couldn’t agree on how to accomplish this, a lawsuit was initiated called a “Partition and Sale” action. In this type of lawsuit, the parties ask a judge to order the property sold at auction…. (more)

 

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$73k Buys $200,000 House Thanks to Debtor’s “Hat Trick” Screw-up

Winter 2010

The foreclosure auction of the defendant’s Staten Island house came up on a Wednesday at 9:30AM. The courtroom was packed with people ready to bid on the house. The Referee announced the sale of the house, took bids, and struck down the sale at $73,000 to the successful bidder.Moments later, the Referee informed the successful bidder that one of the two owners of the house had filed bankruptcy at 9:26AM; therefore, the foreclosure sale was invalid and the bidder should take back his bid deposit. At that moment, the successful bidder called Richard A. Klass, Your Court Street Lawyer about whether the sale was indeed invalid….” (more)

 

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Making Sure the Guarantor is a “Good Guy”

Fall 2009

In 1997, a landlord rented a commercial space to a tire company pursuant to a commercial lease agreement. The tenant defaulted in the payment of rent, owing the landlord the claimed arrearage sum of $157,000. To collect the rent arrears, the landlord came to Richard A. Klass, Your Court Street Lawyer to recover…. (more)

 

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Who Are You and Why Are You Suing Me?! The Debt Buyer Phenomenon

Summer 2009

He got the Summons and Complaint from a process server in 2007. The name of the plaintiff suing the defendant was “New Century Financial.” He had never heard of the plaintiff and did not know why it was suing him. The Complaint claimed that the defendant had a Providian credit card account and owed money on the account. He remembered having an account with Providian a long time ago and also remembered making his last payment to Providian in the Fall of 2000…. (more)

 

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Don’t Give Me a Black Russian!

Spring 2009

In 2006, the executor of the estate of a woman who owned a cooperative apartment in Brooklyn attempted to sell the apartment. She first made a contract with a black woman who had two children to sell the apartment for $160,000. The contract of sale provided (as almost all do in cooperative apartment sales) that the buyer had to apply to the coop board for approval of the sale. She applied to the coop board for approval; then, dissention came about between the resident board members and the sponsor-management company. Despite supposedly being “approved” by the residents on the board, the management company claimed that the board was not legally constituted; accordingly, no closing of title would be scheduled…. (more)

 

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Court Upholds 25-Year Lease at Fixed $800 Rent

Winter 2009

In Borough Park, there lived an elderly couple in a house (the Kimmels). Their neighbor (Twersky) was interested in renting the first floor apartment for her son and his family. At the time that she rented the apartment, it was in poor shape and in very poor condition; indeed, the entire house needed extensive renovations. In 1995, Twersky and the Kimmels entered into a lease agreement…. (more)

 

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Amendment to Bankruptcy Petition Worth Millions!

Fall 2008

A brother tried to help his sister, and it almost cost him millions of dollars. Based upon the brother’s good credit, his sister bought a house in Queens in his name. At some point, she was unable to keep up with the mortgage payments and the house fell into foreclosure… (more)

 

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When Do Two Feet Matter? When $16,728,000 Rides on It!

Summer 2008

In 2006, a developer entered into a contract to purchase a large industrial warehouse in Greenpoint, Brooklyn, in order to convert the property into residential housing. The Contract of Sale provided for a purchase price of $16,728,000…. (more)

 

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How the “Continuous Representation” Doctrine Helps Injured Clients

Spring 2008

In legal matters, there is an attorney-client relationship from the moment that the attorney is consulted by the client until the matter concludes. If, during the term of this relationship, the attorney was negligent or commits malpractice in the matter, the client may have a claim against the attorney for legal malpractice. Sometimes, the malpractice is committed at the early stages of litigation and not at the conclusion; for instance, an action may have started in Year 1, malpractice was committed in Year 2, and the action concludes in Year 6. The question then becomes whether or not the client may pursue a claim against the attorney for the malpractice committed in Year 2, when the statute of limitations period may have already passed…. (more)

 

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Notice to Admit: The Power of a Piece of Paper

Winter 2008

In the Civil Practice Law and Rules (CPLR) – the “Game Book” of civil practice in New York State courts, there is a little-used device called the “Notice to Admit.” While not as often utilized by attorneys as it ought to be, it can pack a powerful punch to the other side in litigation…. (more)

 

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New Way to Award Attorney’s Fees

Fall 2007

The “American Rule” governs most cases in United States’ courts, where each party to the litigation bears its own costs and attorney’s fees (as opposed to the “English Rule,” according to which the loser of the litigation is chargeable with the winner’s attorney’s fees). There are three exceptions to the “American Rule,” which are when there is:
(a) an agreement between the parties pertaining to attorney’s fees;
(b) a statute which awards reasonable attorney’s fees to the “prevailing party;” or (c) a court rule provides for attorney’s fees…. (more)

 

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Getting it Done: The Importance of Entering Timely Defaults

Summer 2007

In 2004, a guy went out for a night of drinkin’ on the town. On the way home, he stopped in to one last bar to drink. At the bar, in a very drunk condition, he hit on a woman. After leaving the bar to go home, he saw standing by a nearby building a woman who he thought was the same one as the one in the bar. When the guy saw the woman on the street, thinking it was the one he saw in the bar, he grabbed and touched her. Unfortunately, it turned out that she was not the same woman — and she pressed charges of assault…. (more)

 

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Force ‘Em to Sell! The Right to Specific Performance

Spring 2007

In the typical real estate transaction, the seller is interested in selling the property, the buyer is interested in buying it, and the Contract of Sale is merely used to memorialize the deal and as the basis for the buyer to obtain a mortgage commitment from a mortgage lender. The closing takes place; everyone leaves happy!… (more)

 

What Is a “Traverse” Hearing and Why Is It Important

Winter 2005

Recently, I had the opportunity to successfully represent a client at a traverse hearing in the Civil Court. This article will illustrate the purpose and effect of such a hearing…. (more)

 

Bringing an Action for Specific Performance of a Real Estate Contract of Sale

Spring 2004

Typically, the sale of real estate involves the signing of a contract of sale between the owner of the real estate and the prospective buyer for a certain dollar amount. Each side is eager to close the transaction — the seller wants the money from the closing to purchase another property and the buyer wants to move into the house…. (more)

 

The Significance of “ECF” (Electronic Case Filing) in Courts

Winter 2003

The above headline seems a strange topic for this newsletter. It does not address a particular area of law, or seem to relate to most people other than lawyers. However, this is not so, and is an important development of which the general public should be aware…. (more)

 

The Importance of Saving Proof of Payment

Fall 2003

In 1994, tax payments were made to the NYC Department of Finance for several parcels of real property by a client. In 2001, unbeknownst to the client, the Department of Finance unilaterally reversed the payments made, added interest, created tax liens, and bundled up the liens for public auction sale…. (more)

 

The Sale of New York City Tax Liens at Auction

Spring 2003

Almost every parcel of real property within New York City is assessed taxes on an annual bases. When these real estate taxes are not paid, tax liens are created by law which “attach” to the property. The tax lien, similar to other liens, serves as notice to the public that the City has a claim against the property. Traditionally, New York City was enabled by statute to bring “in rem” proceedings to foreclose on the lien and, thus, become the owner of the property…. (more)