Top Real Estate Laws Affecting New Yorker’s in 2016
Real estate is an area that is subject to an increasingly complicated web of federal, state and local regulations. During 2015 a number of new and revised rules took effect in New York City and other parts of the state which may have a profound impact on the real estate market for years to come. Here is a look at just a few of the new laws that were enacted in 2015 and will impact this year.
Attorney General Encourages Broker Commission Rebates
In December 2014, the New York State legislature approved an amendment to the state’s Real Property Law which authorizes real estate brokers to “pass through or rebate” part of their commission to their client. As anyone who has bought or sold a house probably knows, the broker representing the seller typically receives a commission stated as a percentage of the final sales price. The broker representing the buyer then receives part of the seller’s commission. Many buyer-side brokers then offer a rebate to their client as a means of competing for business.
Although this practice was already commonplace in the New York real estate industry, there were some concerns about its legality under prior law, which prohibited a real estate broker from “sharing” his/her commission with a non-broker (which may be interpreted as including his own client). The legislature’s amendment removed this uncertainty. As New York Attorney General Eric T. Schneiderman noted in April of this year, “As of December’s legislative fix, there is no room for debate: commission rebating in New York State is legal.” Schneiderman further encouraged brokers to take advantage of the law and offer rebates to their customers.
NYC Imposes New Restrictions on Tenant Buyout Offers
In September, New York City Mayor Bill de Blasio signed into a law a new measure limiting the ability of landlords who operate rent-stabilized units to try and buy out established tenants. As Crain’s New York Business noted, “vacant rent-stabilized apartments often can be renovated, deregulated and re-rented at triple the price or more.” This provides landlords with incentives to buy out rent controlled tenants.
Under the City’s new rule, a landlord may not make repeated buyout offers within a six-month period. Mayor de Blasio said this “blackout” rule will “protect tenants from harassment and aggressive buyout schemes, and simultaneously help the City keep neighborhoods affordable.” But a lawyer who represents New York City landlords told Crain’s the blackout rule “prohibits what can be purely benign, non-threatening, non-intimidating—what should be protected free speech.” While this law may be challenged, for now, it remains in effect.
Estate Tax Reforms
New York State recently revised its estate tax laws. The estate tax is assessed against the total value of a person’s assets upon their death. Previously, the first $1 million in assets was exempt from tax. Under reforms which took effect earlier this year, this exemption amount will continue to progressively increase. As of December 2015, the exemption is $3.125 million, which will increase to just over $4.1 million next March. Also note the estate includes any gifts made by a person in the three years preceding death to be part of his or her estate.
Obviously, real estate is often the most valuable part of a person’s estate, and a single property can eat up most, if not all, of the state’s exemption. This makes it incumbent upon all property owners to seek competent legal advice to help minimize potential estate tax consequences.
If you need help from a New York real estate attorney on any of these issues, contact the offices of Menicucci Villa Cilmi today.
New York Real Estate Attorney. If you have legal questions regarding Real Estate, Mortgage or are in need of a Real Estate Lawyer in Staten Island, Brooklyn or New York contact the Law Firm of Menicucci, Villa, Cilmi PLLC for a no cost case evaluation. We are a Real Estate Law Firm with offices in Staten Island, Brooklyn and New York City.
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