Are You Moving to New York?

If you are moving to New York, one of the first things you probably need to do is find a new place to live.  In New York, as of course in all other states, you can either rent an apartment or house or purchase one.  If you purchase, you should know that you can buy a house, a house in a homeowners’ association, a condominium (real property that also has multi-family or cluster housing characteristics) or a cooperative apartment (a proprietary lease and shares in the cooperative corporation.)   Whatever the type of housing, most residential real estate in New York is purchased with the assistance of a real estate broker.  Fortunately, in New York, and particularly in New York City and on Long Island, there are many real estate brokers with whom to work. But, once the property is located and the basic terms are negotiated, the legal process of acquiring title to the real property can be distinctly different from the process in your current state.
              
In many states, including California and Florida, the real estate sales process is very different from the process in New York.  In these and other states, the process is controlled to a much greater extent by the Real Estate Broker and the Closing Agent. The contract phase of the process is much more of a standardized exercise and contract forms provided by the Realtor are “filled out” by the parties and signed.  The Closing is also a pro-forma process. The deed and purchase price are deposited with an escrow agent together with executed mortgages and mortgage notes where a mortgage loan is involved.  The escrow agent could be an independent attorney, title insurance company or other closing agent.  On the date of closing, papers and funds are then directed as appropriate.  In states where the closing is by law or custom to take place in this manner, attorneys for the parties of often discouraged.

In New York, attorneys for both parties are much more involved in the sales process.  Attorneys represent the parties during the negotiation of the terms of the purchase and conditions of the sale.  Issues such as the condition of title to the property acceptable easements, covenants and restrictions, and terms of tenancies are all subject to negotiation.  There are many “printed forms” of real estate contracts, but none is considered the standard or required form.  Many law firms have there own contracts and the terms and conditions can significantly depart from any “printed form.”  

The closing of title is, likewise, quite different in New York from that in many other states.  While a closing in escrow is possible and is sometimes used, the usual closing of title is hosted by either the attorney for the Seller or the attorney for the lending institution.  All parties attend in person and documents are executed at that time.  The purchase price is paid by the Purchaser and disbursed to the Seller or to satisfy the Seller’s mortgage and other obligations. From contract to closing, small and large problems frequently arise and need to be resolved if the sale is to proceed.  (This is only an incomplete description of the sales process.  A more detailed article will be posted soon.)  Of course, if you currently live in a state where real estate sales procedures are more like those in New York, you already understand how important it is to have a competent attorney involved in the transaction to protect your interests.  Bottom line: A wise purchaser of real estate in New York should not enter into a real estate contract without his own legal representation.

As with real estate law, estate laws vary widely between states.  You should know from the start that we are not talking about the validity of a will you have already executed in your current state.  Generally, if the will is valid in you current state, it will be honored as valid in New York.  Given that, however, New York law may significantly affect the amount of property passing to your family, since New York has and will continue to have an estate tax that may continue to impose a tax liability on your estate.  The greatest danger from differing state laws, however, is the differences in the intestacy laws from state to state.  These differences between states must be reviewed to make sure that, at a minimum, you understand how your estate would be distributed if you were to die without a will as a resident of New York.  Of course, it would be our recommendation in almost all circumstances that you execute a will.  (See our article, “Why Do I Need a Will?”)

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Last modified: December 27, 2007

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