http://nysbar.com/blogs/RPLS/ Sponsored by the Real Property Law Section of the New York State Bar Association NYSBA Blogging Policy en Copyright 2013 Thu, 04 Apr 2013 14:25:49 -0500 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss http://orpts.tax.ny.gov/cfapps/MuniPro/swis/index.cfm 3. "Conveyance pursuant to divorce or separation" has been added as a "Condition of conveyance" in Schedule A of revised FormTP-584. 4. Revised Schedule D ("Certificate of Exemption from the payment of estimated personal income tax") directs the person completing the form to check the second box under "Exemptions for nonresident transferor(s)/seller(s)" in Schedule D if the property is being conveyed by a referee in a foreclosure. It also states that, in such a case, a signature must be entered at the end of the "Exemptions" section in Schedule D. 5. Revised TP-584-I, "Instructions for Schedule A", "Name and Address Box", includes the following statement: "If the conveyance is pursuant to a mortgage foreclosure or any other action governed by the Real Property Actions and Proceedings Law, the defaulting mortgagor or debtor is the grantor." Revised Forms TP-584 and TP-584-I have been posted to the First American-New York web site at: http://www.firstamny.com/doc/866.pdf and http://www.firstamny.com/doc/865.pdf ]]> http://nysbar.com/blogs/RPLS/2013/04/form_tp-584_revised_effective_.html http://nysbar.com/blogs/RPLS/2013/04/form_tp-584_revised_effective_.html Title and Transfer TP-584 Transfer Tax Thu, 04 Apr 2013 14:25:49 -0500 Vacant land in the Town of Chester, in Warren County, was taken by the Town for failure to pay real estate taxes and then sold at auction in 1999. Plaintiffs, the owners of the property, who lived in New Jersey, asserted that the attempts to afford them notice of the foreclosure were constitutionally inadequate, and sought a declaration that they still owned the property. The Supreme Court, Warren County, granted the County's motion for summary judgment; the Appellate Division, Third Department, affirmed, as did the Court of Appeals. The Plaintiffs moved from South Orange, New Jersey, to which tax bills were sent, to Milburn, New Jersey; their direction to the post office to forward mail to their new address expired and mailed notices were returned as undeliverable. The Plaintiffs contended that the tax collector was required to either find some means of making personal service, to address a notice to occupant at their former address, or to search New Jersey public records for their new address. The Court of Appeals held that such actions were not constitutionally required and that the Plaintiffs were not deprived of their property without due process of law. Mac Naughton v. Warren County, decided December 11, 2012, is reported at 2012 WL 6115650. http://nysbar.com/blogs/RPLS/2013/03/tax_sales_-_notice.html http://nysbar.com/blogs/RPLS/2013/03/tax_sales_-_notice.html Title and Transfer Notices Tax Sales Tue, 12 Mar 2013 17:02:39 -0500 A Bankruptcy Trustee sought to avoid a mortgage filed pre-petition which had been improperly indexed due to an error on the recording cover page, claiming, under the Trustee's "strong arm" powers, that the Trustee was a bona fide purchaser without knowledge of the mortgage as of the date on which the bankruptcy was commenced. The Trustee also asserted that the correction to the recording made post-petition was an impermissible post-petition transfer of an asset of the bankruptcy estate. The Bankruptcy Court Judge denied the Trustee's motion and granted the mortgagee's motion to dismiss the adversary proceeding. Since a second mortgage, later executed to the same lender as the misindexed mortgage but properly indexed, referenced an "Existing Indebtedness" and its principal balance, the Bankruptcy Court held that the Trustee could not be deemed a bona fide purchaser without notice of the first mortgage. The District Court, Eastern District of New York, affirmed, stating that "the absence of prior proper recording did not entitle the Trustee as putative purchaser to close his eyes as to what the Second Mortgage revealed." Further, according to the District Court,"[w]hether or not the post-petition correction...was an improper conveyance of a property interest held by the debtors' estate is immaterial...the voiding of the correction does not supply a ground to extinguish the Trustee's constructive notice of the underlying encumbrance, itself." O'Connell, as Trustee v. JPMorgan Chase Bank, National Association, decided December 11, 2012, is reported at 2012 WL 6151972. http://nysbar.com/blogs/RPLS/2013/03/recording_act_-_notice.html http://nysbar.com/blogs/RPLS/2013/03/recording_act_-_notice.html Title and Transfer Notice Recording Act Tue, 12 Mar 2013 16:57:37 -0500 http://www.tax.ny.gov/research/property/assess/rp5217/index.htm. This form may be printed on legal size paper (8 ½ X 14) and utilize a computer as the venue for completion. A completed RP-5217 PDF form is not acceptable when typed or handwritten." "The standard four part RP-5217 may still be used when recording Deed conveyances and may be handwritten or typed. Fees for both types of RP-5217 remain the same." The ORPS website indicates that RP-5217 PDF is being accepted for transfers of real property in twelve upstate counties. ]]> http://nysbar.com/blogs/RPLS/2013/03/orange_county_-_form_rp-5127_p.html http://nysbar.com/blogs/RPLS/2013/03/orange_county_-_form_rp-5127_p.html Title and Transfer Orange County RP-5217 RP-5217 PDF Tue, 12 Mar 2013 16:52:34 -0500 Affirming a ruling of the Supreme Court, Kings County, the Appellate Division, Second Department, held that a deed conveying all or substantially all of the assets of a entity formed under New York's Not-For-Profit Corporation Law ("NPCL"), executed without Supreme Court approval as required under NPCL Sections 510 ("Disposition of all or substantially all assets") and 511 ("Petition for leave of court"), and a mortgage made by the grantee of such deed, were void. Real Property Law Section 266 ("Rights of purchaser or incumbrancer for valuable consideration protected") applies only when the challenged conveyance is voidable. Further, the conveyance may not be ratified by the Supreme Court under Religious Corporation Law Section 12(9) ("Sale, mortgage and lease of real property of religious corporation") since the transferor is not a religious corporation. Solar Line, Universal Great Brotherhood, Inc. v. Prado, decided November 21, 2012, is reported at 100 A.D. 3d 862 and 2012 WL 5870703. http://nysbar.com/blogs/RPLS/2013/03/not-for-profit_corporations_1.html http://nysbar.com/blogs/RPLS/2013/03/not-for-profit_corporations_1.html Title and Transfer All or Substantially All Not-for-Profit Ratification Tue, 12 Mar 2013 16:50:31 -0500 The promissory note for a ten year loan made in 2003, secured by a mortgage, permitted the borrower to prepay before maturity, provided there was not a continuing Event of Default and the maturity date had not been accelerated. The note required the payment of a yield maintenance amount, which was to be calculated during the first six years of the loan as of "the actual date of default under the loan." Voluntary payment of the loan did not constitute an Event of Default. On refinancing with another lender in 2005, notwithstanding that there had not been a default, the loan servicer demanded that the borrower pay yield maintenance. The borrower paid under protest and commenced a breach of contract Action seeking a refund of the yield maintenance amount paid. The Supreme Court, New York County, granted the Defendant-lender's motion to dismiss, holding that it would be "absurd and illogical" to conclude that a yield maintenance amount was not owed absent a default. The Appellate Division, First Department, reversed and granted the Plaintiff-borrower's motion for summary judgment, stating, at 922 N.Y.S. 2d at 568, that "it is not a court's function to imply a term to save a defendant from the consequences of an agreement that it drafted..." The Court of Appeals affirmed. "Application of the Note's literal language relative to voluntary prepayment and the yield maintenance amount does not result in either absurdity or an unenforceable agreement...The Note, as written, is enforceable according to its terms." Jade Realty LLC v. Citigroup Commercial Mortgage Trust 2005-EMG, decided November 19, 2012, is reported at 2012 WL 5833613. http://nysbar.com/blogs/RPLS/2013/03/mortgages_-_yield_maintenance.html http://nysbar.com/blogs/RPLS/2013/03/mortgages_-_yield_maintenance.html Title and Transfer Mortgages Yield Maintenance Tue, 12 Mar 2013 16:48:34 -0500 prescribed by the Village Clerk, of the name of and contact information for the plaintiff, the name of the defendant, the address and tax lot identification of the property, the date on which and the court in which the action was commenced, and "such other information as the department may require by rule." The Clerk is also to be notified if the action is discontinued, a judgment has been issued, or the property is sold in foreclosure. "The failure to notify shall not be deemed to affect in any way any pending legal proceeding related to such residential real property." Notice is not required for foreclosures commenced prior to September 30, 2010 or brought by a governmental entity. The Local Law is posted at http://ecode360.com/16263636.]]> http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosure_-_notice_.html http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosure_-_notice_.html Title and Transfer Mortgage Foreclosures Notice Village of Hempstead Tue, 12 Mar 2013 16:45:44 -0500 A foreclosing mortgagee sought a declaration of the relative priorities of the mortgages on the property. The Plaintiff's mortgage was subordinate to a mortgage (the "Senior Mortgage") held by assignment by Empire State Bank, N.A. ("Empire"), which Senior Mortgage was consolidated with another, subordinate mortgage made to Empire. The Plaintiff asserted that since Empire accepted a deed in lieu of foreclosure, Empire's its entire consolidated mortgage was extinguished by merger. The Supreme Court, Rockland County, granted the Plaintiff's motion for summary judgment but the Appellate Division, Second Department, awarded summary judgment to Empire, holding that the Senior Mortgage had priority over the Plaintiff's mortgage. According to the Appellate Division, "the plaintiff submitted no evidence of Empire's intent to merge its mortgage and ownership interests when it accepted the deed in lieu of foreclosure. Moreover, a merger would injure Empire by subordinating its prior assigned mortgage to the plaintiff's subsequent mortgage, and the plaintiff would not be unjustly enriched if a merger is not recognized, given that it accepted its mortgage interest with the knowledge that the previously assigned mortgage was superior." Congregation Beth Medrosh of Monsey, Inc. v. Rolling Acres Chestnut Ridge, LLC, decided December 12, 2012, is reported at 2012 WL 6176651. http://nysbar.com/blogs/RPLS/2013/03/deeds-in-lieu_of_foreclosure.html http://nysbar.com/blogs/RPLS/2013/03/deeds-in-lieu_of_foreclosure.html Deeds in Lieu of Foreclosure Merger Tue, 12 Mar 2013 16:41:17 -0500 http://www.courts.state.ny.us/reporter/pdfs/2012/2012_32758.pdf. ]]> http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosures_-_help_f.html http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosures_-_help_f.html Title and Transfer Help for Homeowners Mortgage Foreclosures Notice RPAPL Section 1303 Tue, 12 Mar 2013 11:52:53 -0500 Under Real Property Actions and Proceedings Law Section 1307 ("Duty to maintain foreclosed property"), effective April 14, 2010, a foreclosing mortgagee which has obtained a judgment of foreclosure on residential real property that is or becomes vacant, or occupied by a tenant but abandoned by the mortgagor, "shall maintain such property until such time as ownership has been transferred...and the deed for such property has been recorded..." The Plaintiff in an Action to foreclose a mortgage on property in Albany sought an Order vacating the judgment of foreclosure entered September 22, 2010. It asserted that it was "'unfair' to require it to continue to maintain the property" since there were no bids at auction, the property was vacant since the commencement of the Action, was subject to numerous tax liens, and the mortgagee had to make repairs required by the municipality. The Supreme Court, Albany County, denied the motion to vacate the judgment. According to the Court, "This statute was in effect for approximately five months when [the] judgment [of foreclosure] was entered...Only one public auction has been held and two years have transpired without any further effort to transfer the property. Moreover, plaintiff has documented only limited maintenance repairs, apparently expending $431.30 during this period. On balance, plaintiff's duty to maintain the property in furtherance of the statutory objective of preserving the State's neighborhoods, outweighs the maintenance burden imposed." Trustco Bank v. Franklin, decided November 15, 2012 and reported as 2012 NY Slip Op 32758, is posted at 2012 WL 5681315. http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosures_-_proper.html http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosures_-_proper.html Title and Transfer Maintenance Mortgage Foreclosures RPAPL Section 1307 Tue, 12 Mar 2013 11:47:43 -0500 The Supreme Court, Kings County, dismissed a complaint to foreclose a mortgage since the Plaintiff purportedly assigned the mortgage and note during the pendency of the Action. The Appellate Division, Second Department, reversed the ruling of the lower court. According to the Appellate Division, "an original mortgagee can continue an action even though it assigned its interest in the mortgage and note to another entity during the pendency of an action, unless the court directs a substitution of parties pursuant to CPLR 1018" ["Substitution on transfer of interest"]. Under Section 1018, "[u]pon any transfer of interest, the action may be continued by or against the original parties unless the court directs the person to whom the interest is transferred to be substituted or joined in the action." Indymac Bank F.S.B. v. Thompson, decided October 3, 2012, is reported at 952 N.Y.S. 2d 86. http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosures_-_subsit.html http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosures_-_subsit.html Title and Transfer Mortgage Foreclosures Substitution of Plaintiff Tue, 12 Mar 2013 11:45:36 -0500 The Supreme Court, Kings County, dismissed for lack of standing a foreclosure action because the Plaintiff did not disclose in either the summons or the complaint that it brought the Action as the agent or servicing agent of the true holder of the Note. The complaint stated that the Plaintiff was the "sole, true and lawful holder of the bond/note and mortgage securing [the] same." Saxon Mortgage Services v. Jackman, decided December 20, 2012, is reported at 2012 WL 6758044. http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosures_-_standi_1.html http://nysbar.com/blogs/RPLS/2013/03/mortgage_foreclosures_-_standi_1.html Title and Transfer Mortgage Foreclosures Note Standing Tue, 12 Mar 2013 11:41:44 -0500 Closing was contingent on the contract vendees obtaining subdivision approval. In order to obtain subdivision approval, the contract vendees engaged certain companies to provide architectural and engineering services. The approvals were not obtained. The companies rendering those services were not paid in full; they filed mechanic's liens for amounts claimed to be owed to them. Plaintiff, the property owner, commenced a breach of contract action against the contract vendees and moved to have the mechanic's liens discharged. The Supreme Court, Greene County, granted the Plaintiff's motion to discharge the mechanic's liens. The Appellate Division, Third Department, affirmed. According to the Appellate Division, "[a] mechanic's lien on real property is not valid unless the property owner or the owner's agent requested or consented to the lienor's services, and such consent must be shown by some affirmative act, and not merely by the owner's acquiescence or awareness." In this case, "[d]efendants' claims to the effect that plaintiff knew of and consented to their professional services were wholly conclusory and unsupported by any documents or other evidence" and "defendants failed to establish the existence of issues of fact as to whether plaintiff took any affirmative act indicating his consent to defendants' work." Creech v. Rufa, decided December 6, 2012, is reported at 2012 WL 6050321. http://nysbar.com/blogs/RPLS/2013/03/mechanics_liens_-_engaged_by_c.html http://nysbar.com/blogs/RPLS/2013/03/mechanics_liens_-_engaged_by_c.html Title and Transfer Mechanics' LIens Contract Vendee Mon, 11 Mar 2013 13:06:20 -0500 The Appellate Division, Second Department, affirming a ruling of the Supreme Court, Nassau County, held that the execution of a mortgage by a joint tenant to a third party without the knowledge of the other joint tenant does not sever the joint tenancy. On the death of the joint tenant who executed the mortgage, the mortgage ceased to exist and the surviving joint tenant held the property free and clear of the mortgage. The mortgagee asserted that under Real Property Law Section 240-b ("Certain conveyances authorized"), the joint tenancy was severed by execution of the mortgage, which was "a written instrument that evidences the intent to sever the joint tenancy" under Section 240-b. The mortgagee also asserted that the mortgagee and the surviving joint tenant were therefore tenants in common. However, according to the Appellate Division, absent language in the mortgage or in another writing evidencing the mortgagor's intent to sever the joint tenancy, the Court could not "conclude that the mere act of delivering a mortgage...evinced [the mortgagor's] intent to sever the joint tenancy." Smith v. Bank of America, decided December 19, 2012, is reported at 2012 WL 6604683. http://nysbar.com/blogs/RPLS/2013/03/mortgage_by_a_joint_tenant.html http://nysbar.com/blogs/RPLS/2013/03/mortgage_by_a_joint_tenant.html Title and Transfer Joint Tenancy Joint Tenant Mortgage RPL Section 240-b Severance Mon, 11 Mar 2013 12:36:30 -0500 A 1968 deed conveyed land "along the edge of Perch Pond" to Anthony Furlano. The deed also stated that "(t)he Grantor further conveys any rights which he may have in and to the lands under the waters of Perch Pond which bound and abut unto the lands hereinabove conveyed." However, conveyances executed by Anthony and Marilyn Furlano in 1973 to the Defendants' predecessors in title recited only that the deeds conveyed land "along the waters (sic) edge of Perch Pond" and "along the edge of Perch Pond." The Plaintiffs claimed title to the land under water as the grantees under a 1993 deed which conveyed the Furlanos' remaining waterfront property and "all remaining lands of Grantors". The Plaintiffs asserted that the 1973 deeds did not convey the land under water and therefore the submerged land passed under the 1993 deed to the Plaintiffs' predecessors in title. The Court of Appeals, reversing an Order of the Appellate Division, Third Department, held that the Defendants had title to the underwater land. According to the Court, "(i)t has long been established New York law that a conveyance of land on a pond or stream includes the land under the pond or stream, to the center of the water, unless a contrary intention is made clear. We reaffirm that principle in this case, and hold that its application does not depend on minor variations in the language of the conveyance." Further, according to the Court, "(t)o make a plain and express reservation of rights to underwater land, a grantor must do more than use the word 'edge' or 'shore' in a deed. He or she must say that land under water is not conveyed, in those words or in words equally clear in meaning. In the absence of an explicit reservation, a grant of land on the shore of a pond or stream will be held to include the adjoining underwater land, except in unusual cases where the nature of the grant itself shows a contrary intention." Knapp v. Hughes, decided October 18, 2012, is reported at 2012 WL 4933274. http://nysbar.com/blogs/RPLS/2013/03/land_under_water.html http://nysbar.com/blogs/RPLS/2013/03/land_under_water.html Title and Transfer Deeds Descriptions Land Under Water Ponds Mon, 11 Mar 2013 12:34:22 -0500