Real Estate Law



When purchasing a home, co-op apartment, condominium, commercial building or parcel of land, there are many important questions that need to be answered. While people are often enthusiastic about their new purchase, it can be a very stressful process.

To protect your investment and avoid the pitfalls that can be associated with purchasing property, there is no substitute for having a real estate attorney who understands the issues and can advise you properly. If you are planning on purchasing property, contact the law offices of EUGENE F, LEVY.

Call our office at (718) 261-7900.

At the law offices of EUGENE F. LEVY, we represent buyers and sellers of residential and commercial real estate in the New York metropolitan area including the five Boroughs, Nassau and Suffolk Counties. We have helped clients close on homes, co-op apartments, condominiums, townhouses, undeveloped land parcels, and commercial property of all types. Our services include:
  • Sales and purchase agreements
  • Commercial leases
  • Mortgage refinances
  • Real estate closings
An overview of real estate law and general terms is provided below:
Real Estate Law
Real estate law involves a person's rights relating to the ownership and possession of land, buildings or structures on land (including those materials beneath the land's surface, such as minerals and oil, and the area above the land's surface). Real estate is sometimes referred to as real property in order to distinguish it from personal property, which is moveable property. A common stumbling block for many consumers entering the real estate market is the number of unfamiliar terms used to describe the various possessory and ownership interests a person can have in a piece of real estate. The following discusses some of the basic concepts in real estate ownership, including buying a home co-op apartment, condominium or commercial property.
Real Estate Ownership
There are a variety of ways in which a person can own commercial or residential real estate. The most common form of ownership is fee simple absolute. Fee simple absolute means the owner has the right to sell the property, use the property as security for loans (i.e., encumber the property), improve the land or buildings, possess the property and pass the property on to his or her beneficiaries as part of their estate. A fee simple absolute is the most complete form of ownership. Property can also be owned jointly by two or more persons. A tenancy in common, for example, is a form of Joint ownership whereby all of the owners have a distinct and undivided interest in the property. Each owner is free to possess, sell or encumber the property. Should one of the owners die, his or her interest will be transferred according to his or her will or according to the state's intestacy laws if there is no will.

A joint tenancy is also a form of joint ownership. However, when a joint tenant dies, his or her interest in the property is transferred to the remaining joint tenants, not to his or her beneficiaries. This transfer of ownership to the remaining owners is known as a right of survivorship.

Additionally, property can be owned by a husband and wife as an estate by the entireties. This is similar to a joint tenancy. However, if the marriage is dissolved, the former husband and wife become tenants in common.
An encumbrance is an obligation that attaches to a piece of real property and is held by a party who is not the owner of the property. An encumbrance is not an ownership interest in real property, and the property may be bought and sold even though there are encumbrances attached to the property. A person who buys property with an encumbrance is bound by the encumbrance.

One of the more common forms of an encumbrance is an; easement. An easement is the right to use another person's land for a particular purpose. There are many forms of easements. Public utility companies frequently have utility easements that permit them to run gas, water or electrical lines through property. The owner of property on a waterfront might sell to the owner of an adjacent lot without access an easement to cross over to the water. A person who owns property that is landlocked may receive an easement from an adjacent landowner to have access in and out of the property. This is known as a right of way. Another type of encumbrance is a lien, which is a charge against property that provides security for a debt or obligation of the property owner. The lien holder does not own the property. The owner of property may voluntarily agree to a lien, perhaps by taking out a mortgage. Sometimes mortgages provide the holder of the mortgage with additional rights if the property is sold or encumbered further. A lien will be imposed for nonpayment of taxes. Another common lien is a construction lien. A construction lien may arise when someone furnishes labor or materials to improve a piece of property and is not paid. By giving proper written notice and filling and serving a claim of lien with the clerk of the court within the required time, the construction lien or (the person holding the lien) may force the payment of the lien. Deed restrictions, also known as covenants, conditions or restrictions, encumber an owner's freedom to use the land. They may be imposed on a buyer when properly is sold and are included a the deed to the property. Property developers seeking to retain a certain community atmosphere often use deed restrictions. Restrictions may limit the color of a house, the size and shape of a house, and require general upkeep of the property. There are other restrictions on the use of property as well, such as zoning ordinances and building codes.

Buying a Home

Buying a home can be one of the most rewarding experiences a person can have and one of the most complicated and stressful. Every home purchase involves a number of potentially complicated legal issues, confusing terminology and a great deal of paperwork. Retaining a residential real estate attorney to assist in the process is often a necessity. Not only can an attorney explain the significance of various decisions a buyer will have to make, but the attorney can point out potential problems that a buyer may not otherwise see.
Residential Real Estate Agents
Most people interested in buying a home work with a residential real estate agent. Residential real estate agents help to bring buyers and sellers together, assist in the purchase process, and typically are paid a commission by the seller based on the purchase price of the home. In the past, real estate agents represented only the interests of the seller. Today, however, real estate agents have more flexibility in terms of whose interests they represent. A real estate agent can represent a seller or a buyer. Whomever an agent represents, he or she has a duty to disclose that relationship to the-buyer and seller. If a buyer hires an agent, that agent will often split the commission with the seller's agent.
Though a seller and a seller's agent are obligated to make full disclosure of a house's material defects, it often pays to have a professional evaluate a home's structural and mechanical condition. There is an exception provided in the law where a Seller can give a $500.00 (Five Hundred Dollar) credit to the Buyer and not have to provide a Full Disclosure Statement. A professional may uncover problems overlooked by an untrained eye: rotting floors, termites, rusty plumbing and defective electrical systems. A professional may also be able to give a buyer a more accurate estimate of repair costs. Buyers may also want a real estate appraiser to research property appreciation rates, neighborhood population trends, average neighborhood income and employment base, or find out if there are any plans to build an unwelcome facility nearby, like a nuclear reactor or garbage dump. The more research a buyer conducts, the more likely he or she will be satisfied with the purchase.
Contract of Sale
A contract of sale is a written document submitted by the seller to the buyer detailing the seller's terms for the purchase of real estate. The terms of the contract can be enormously complicated and cover issues such as price, down payment, mortgage arrangement, what items will be left with the property, zoning restrictions, title, deed, taxes, remedies in the event of default, conditional requirements for purchase and other important details. Commercial or multi-family property has additional issues of tenants rent, building violations, etc. The buyer may accept the seller's proposed contract of sale, reject it or issue a counter offer. Usually, a seller will\ limit the period-of time in which a buyer can accept the terms of the contract. If that period passes without a buyer's acceptance, the seller is under no obligation to sell the real estate. However, if the buyer accepts the seller's contract terms within the time allotted, the buyer and seller are legally committed to the terms of the agreement. Therefore, it is extremely important that both the buyer and seller understand the terms of the contract before signing it. Any contingencies (e.g., need to obtain financing) should be provided for in the purchase agreement.

Title and Title Insurance

A title is a right to partial or whole ownership of a piece of real estate. Typically, a contract of sale will include a provision conditioning the sale of the property on the seller providing a marketable title. A marketable title is a title generally free from encumbrances and title defects that may lead to litigation. An example of a title defect might be a gap in the history of the property's ownership. In such a case, after the buyer has purchased the property, someone could conceivably show up and claim to be the rightful owner. To protect their own interests, a buyer should purchase and obtain title insurance as part of the purchase process. If an unknown title defect does surface after purchase, the buyer may recover damages under the policy. A title insurance policy sometimes includes a provision requiring the title insurance company to defend the title in litigation should anyone challenge the title. Title insurance can also be purchased for the holder of the property mortgage.
A deed is a written instrument that transfers title to property from one person to another. There are a number of different types of deeds. The most common is the Bargain and Sale with Covenants against Grantor's Acts deed which requires the seller to promise that he or she is the legal owner of the property and that there are no outstanding liens, mortgages, or other encumbrances against it as of the date of closing. While a Bargain and Sale Deed with Covenants against Grantor's Acts gives the buyer protection from the claims of others and the seller's acts it is no substitute for title insurance. A seller can disappear, move out of the jurisdiction, die or declare bankruptcy.

Another type of deed is a quitclaim deed. A quitclaim deed relinquishes whatever interest the seller may have in a piece of property to the buyer. A quitclaim deed does not give the buyer the same protection as a Bargain and Sale deed. If the seller is the sole owner of the property, the quitclaim deed may be enough to transfer title, but there is no warranty the title is valid. The seller is conveying whatever interest he or she may have in the property.

It is important for new buyers of property to record their deeds at the public records office in the County in which the property is located. Recording a deed gives "notice to the world" that a particular piece of property has been sold and the name of the current owner.
Few people have enough money on hand to pay the full purchase price of a house. Consequently, most real estate is purchased with the aid of a mortgage loan from a financial institution such as a bank, credit union or mortgage company. A mortgage is a loan for which the buyer agrees to repay the principal amount, plus interest, over a period of years. The subject of the mortgage the house and property is the security for the loan. If the buyer fails to pay the mortgage, the financial institution has a right to foreclose on the property in order to satisfy the debt. The key to obtaining a favorable mortgage is to shop around for the best interest rates and terms. Among the terms to keep in mind are:
  • Prepayment penalties
  • Service charges
  • Insurance requirements
  • Lender's right to change interest rates during the term of the loan
  • What is the maximum repayment term?
If the terms of the purchase agreement have been met, inspections concluded, title questions settled and financing obtained, all of the parties involved in the sale of the house will meet to sign documents and transfer money. This meeting is known as the closing. Just before the closing, the buyer and seller may meet to inspect the property one more time to ensure that the house and property have not substantially changed since the buyer last saw them. A basic closing usually includes, among other things, the buyer showing the lender proof of title insurance and homeowners insurance. The buyer then signs the mortgage agreement and Note. The completed mortgage agreement provides cash toward the amount of the purchase price which is given to the seller. The seller then signs the deed that transfers ownership of the property over to the buyer. After any remaining cash adjustments are made, the purchase is concluded and the buyer should be the new property owner. The buyer should immediately have the deed and mortgage recorded at the local county records office.


A cooperative apartment and condominium residences are planned communities, either residential or business, in which a person has individual ownership of a unit and joint ownership of the common elements. The common elements are any portions of the condominium not included in the units such as sidewalks, hallways, swimming pools and tennis courts. An owner of a condominium, unit owns the area formed by the walls, floors and ceiling, and everything inside, including appliances, fixtures and cabinets. The owner pays property taxes based on the value of the unit and a pro rata portion the common areas. Condominiums are operated by condominium associations made up of unit owners. The association is a corporation and can enter into contracts, sue, be sued, and can make assessments against the units to pay common expenses. The condominium association also has the authority to impose many of its own operational rules concerning things such as pets, children, parking, unit maintenance, noise levels and unit resale or leasing. Therefore when considering the purchase of a condominium the more you research the rules and regulations the more content you will be with your purchase.
Cooperative Apartments
Cooperative housing is a legal entity, usually a corporation that owns real estate, consisting of one or more residential building. Cooperatives are a distinctive form of home ownership with differences from other residential arrangements such as single family ownership, condominiums and renting. The cooperative cooperation grants membership by way of issuing shares of stock to purchase in the cooperative corporation. The shareholders have the right to occupy a particular unit in the cooperative building through the issuance of a proprietary lease.

The major advantage of the housing cooperative is that the shareholders are in effect pooling their resources and lowering the cost per shareholder in all of the services and products associated with home ownership. The shareholders through their elected officers, screen and select who may live in the cooperative building, unlike any other form of home ownership. The corporations Articles of incorporation and Bylaws as well as the Proprietary Lease specify the cooperatives rules.

The cooperative procedure of screening potential purchasers allows them to get financial information sufficient to determine that the new purchaser can indeed pay the maintenance charges and any mortgage payments that they may have arranged through their bank. The cooperative form of ownership has the disadvantage of limiting the shareholders ability to rent their apartment to others and can also have limitations with regard to the duration of any rental period. This is in contrast to the condominium form of ownership where an apartment owner can normally lease their apartment to others without the approval of the condominium association.

Call the offices of Eugene F. Levy, Esq. If you are considering purchasing a home, cooperative, condominium, or commercial property. Call (718) 261-7900.