Real Estate Law in New York
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Are you thinking of buying or selling a property in New York? If so, you might have some questions about the legal aspects of the process. Real estate law is a complicated and ever-changing field that covers many topics, such as contracts, deeds, titles, taxes, mortgages, foreclosures, and more. In this blog post, I will give you a brief overview of some of the most important topics related to real estate law in New York and provide you with some helpful resources to learn more.
How to Make a Legal Contract for Buying or Selling a Property
One of the first steps in any real estate transaction is to sign a contract between the buyer and the seller. This contract outlines the terms and conditions of the sale, such as the price, closing date, contingencies, and warranties. In New York, there are two types of contracts: standard form contracts and attorney-prepared contracts.
Standard Form Contracts
Standard form contracts are usually used by real estate agents and brokers and contain pre-printed clauses that can be modified by the parties. These contracts are designed to be simple and easy to understand, but they may not cover all the specific details and issues that may arise in your transaction.
Attorney-Prepared Contracts
Attorney-prepared contracts are customized by lawyers to suit the specific needs and interests of the clients. These contracts are more flexible and comprehensive, but they may also be more expensive and time-consuming to prepare.
Disclosures
Another important aspect of real estate contracts is disclosure. Disclosure means providing information about the property’s condition, history, and defects to the other party. In New York, sellers are required by law to complete a Property Condition Disclosure Statement (PCDS) and give it to the buyer before signing the contract. The PCDS contains 48 questions about various aspects of the property, such as structural problems, environmental hazards, zoning violations, and legal issues. If the seller fails to provide the PCDS or provides false or incomplete information, the buyer can sue for damages or cancel the contract.
How to Transfer Ownership of a Property
A deed is a legal document that transfers ownership of a property from one party to another. In New York, there are three main types of deeds: warranty deed, quitclaim deed, and bargain and sale deed.
Warranty Deed
A warranty deed provides the highest level of protection to the buyer, as it guarantees that the seller has a clear title to the property and will defend it against any claims. A warranty deed also implies that the seller has paid all taxes and liens on the property and that there are no restrictions or easements that could affect the use or enjoyment of the property.
Quitclaim Deed
A quitclaim deed provides the lowest level of protection to the buyer, as it only transfers whatever interest the seller has in the property without any warranties or guarantees. A quitclaim deed does not imply that the seller has a valid title to the property or that there are no liens or encumbrances on it. A quitclaim deed is usually used when there is no money involved in the transaction or when there is a family or personal relationship between the parties.
Bargain and Sale Deed
A bargain and sale deed is somewhere in between, as it implies that the seller has a valid title to the property but does not make any warranties or guarantees. A bargain and sale deed is usually used when there is some money involved in the transaction but not enough to warrant a warranty deed.
Title Search and Title Insurance
A title is a legal term that refers to the rights and interests that a person has in a property. A title search is a process of examining public records to verify that the seller has a clear title to the property and that there are no liens, encumbrances, or defects that could affect the transfer of ownership. A title insurance is a policy that protects the buyer from any losses or damages that may arise from title defects or claims after closing. In New York, title insurance is usually required by lenders and recommended by attorneys.
How Much Does It Cost to Buy or Sell a Property in New York
Buying or selling a property in New York involves paying various taxes and fees that are collectively known as closing costs. Closing costs can vary depending on
the type, location, and value of the property, as well as the terms of the contract and the financing options. Some of the common closing costs include:
- Transfer taxes: These are taxes imposed by the state and local governments on the transfer of ownership of a property. In New York State, the transfer tax rate is 0.4% of the sale price for both buyers and sellers. In New York City, there is an additional transfer tax that ranges from 1% to 2.625% of the sale price depending on the value and type of property.
- Mortgage recording tax: This is a tax imposed by the state and local governments on mortgages secured by real property. In New York State, the mortgage recording tax rate is 0.5% of the loan amount for both buyers and sellers. In New York City, there is an additional mortgage recording tax that ranges from 0.8% to 1.925% of the loan amount depending on the value and type of property.
- Recording fees: These are fees charged by county clerks for recording deeds, mortgages, and other documents related to real estate transactions. Recording fees vary by county but typically range from $50 to $250 per document.
- Attorney fees: These are fees charged by lawyers for representing clients in real estate transactions. Attorney fees vary depending on the complexity and scope of services provided but typically range from $1,000 to $3,000 per transaction.
- Title insurance fees: These are fees charged by title insurance companies for conducting title searches and issuing title insurance policies. Title insurance fees vary depending on the value and type of property but typically range from 0.5% to 1% of the sale price.
Conclusion
Real estate law in New York is a vast and intricate subject that requires professional guidance and assistance. Whether you are buying or selling a property in New York, you should consult with an experienced and reputable real estate attorney who can help you navigate the legal process and protect your rights and interests. If you have any questions or need any advice, feel free to contact me anytime. I am always happy to help.
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