THE REAL ESTATE MARKETS
Almost every day we get questions about the state of the real estate market in the New York City and surrounding areas. The following is what we have learned based upon reviewing correspondence, talking to real estate brokers, mortgage brokers, other attorneys, sellers and buyers who are active in the market at this time:
The market is clearly not the same market it was two years ago or even one year ago. There is more inventory on the market, partially because sellers are not willing to reduce their prices and it is taking longer to sell existing units, also because there are many new developments with brand new apartments, mostly condominiums, that are coming on to the market. Interest rates have risen, which has made it more difficult for purchasers to pay the same kind of prices they did two years ago or even one year ago.
Notwithstanding the foregoing, there has not been a “collapse” of the real estate market, nor any significant panic in the industry. Prices have remained either constant or have been slightly raised or reduced, and sellers appear to be confident that their properties have maintained their value and appear willing to wait until a buyer comes along willing to pay the price they want. This could be because:
A) They refinanced two or three years ago at very low rates and their carrying costs are loss and/or
B) The rental market has remained strong, and they may have their units rented with rents that cover or nearly cover their carrying costs.
A common word of advice from cautious real estate professionals to prospective purchasers has been to wait six months to a year and see if the prices will fall. However my suggestion is that if you find your dream home and you are able to handle the purchase price and the carrying costs, then you should proceed to purchase.
LIMITED LIABILITY COMPANY RULES
There have been some changes in limited liability company rules. Recent legislation has amended the publication requirements for domestic limited liability companies. These changes became effective June 1, 2006. The new rules require that notice of formation of an entity be published once a week for four successive weeks in a newspaper of the county in which the office is intended to be located. The new statute provides that if an entity formed on or after June 1, 2006 does not, within 120 days of the date of its formation, meet the publication requirements and file the certificate of affidavits of publication with the Department of State, the authority of the entity to carry on, conduct and transact any business in New York is suspended until there is substantial compliance.
We are aware that many businesses are very lax in meeting this requirement due to the cost of publication. However, we must warn all clients and potential clients that there could be serious consequences in the event they fail to meet publication requirements. If you are an LLC that is not yet published, we recommend that you do so at once. If you need assistance with meeting such requirements of course we will be happy to assist you.
TITLE INSURANCE — IT IS NECESSARY
Title insurance protects you against claims that arise from defects in your Real Estate title. Someone may, for example, claim to hold an easement giving them right of access to your property. Even if the claims prove false, you’ll be required to defend your rights in court – and pay legal fees that fight entails. Further, until matters are resolved you may be prohibited from using the property as you intend.
Title insurers review public records and examine documents such as judgments, liens, tax records, street assessments and similar potential trouble spots in advance of each sale. Their goal is to identify anything that could affect your title to the real property, and then take whatever action is required to clear any records and make it possible for the transaction to go through.
Title Insurance covers the legal fees associated with any defense against claims that might arise from title defects, as well as any losses you may experience as a result of such claims. Unlike property liability insurance that requires monthly premiums, you buy title insurance with a lump sum payment when the sale closes.
No lender will allow a closing to go through without title insurance. If you have questions about title insurance please call us.
We would like to introduce Erin M. Milovich, Esq. She joined us in April, 2006 as an Associate. We welcome her to our firm!