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Adam Leitman Bailey, P.C. Spring 2018 Newsletter

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The latest news and insights from the team at Adam Leitman Bailey, P.C. - must-read case highlights, articles, and recent press mentions key to expanding your knowledge of real estate law. In this issue, learn about the newest real estate laws in NYC, the authority given to condo and coop boards to impose and enforce fines, how ALBPC used photographic evidence to prove substantial rehabilitation in a rent regulation case, and more...

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Adam Leitman Bailey, P.C. Spring 2018 Newsletter

  1. 1. ADAM LEITMAN BAILEY, P.C. new yor k r eal estate attor neys www.alblawfirm.com PAGE 1212-825-0365 The Newest New York City Real Estate Laws that Property Owners and Occupants Must Know in 2018 NEWSLETTER SPRING 2018 by Adam Leitman Bailey and Dov Treiman 2017 was an astounding year in New York City real estate. Especially on Au- gust 9, 2017, but to become effective at scattered times over the ensuing year, the City Council enacted numerous pro- visions falling into three distinct areas: general property owner/landlord and shareholder/unit owner/tenant relations, harassment centered provisions, and pro- visions to slow down or discourage con- struction and sales of properties and laws affecting cooperatives and condomini- ums and foreclosure procedures. This article shall examine these laws and their applicability to property owners and occupants and the vendors that service them. THE AUGUST 9 LEGISLATION Incredibly on one single day on August 9, 2017, the New York City Council passed the following legislation, all of which the Mayor signed into law including laws concerning smoking, harassment of tenants, applications for construction and final inspections of permitted work, vacate orders, a task force on construc- tion work in occupied multiple dwellings, distressed buildings subject to foreclo- sure by action in rem, building violations, oversight of construction contractors who have engaged in work without a required permit increasing fines for working without a permit and stop work orders, a safe construction bill of rights, a denial of certain building permits where outstanding charges are owed to the city, and- creation of an office of the tenant advocate within the department of buildings. GENERAL PROPERTY OWNER/LANDLORD AND SHAREHOLDER/ UNIT OWNER/TENANT RELATIONS Bedbugs Effective as of November 6, 2017 is Local Law 69, amending NYC Adminis- trative Code §27-2018.1 and adding §27-2018.2, dealing with bedbugs. Unlike so many laws that affect buildings large enough to be subject to rent regulation— generally speaking, six residential units or more, this one applies to buildings that are three or more units, thus adding significantly to the regulatory burden of outer boroughs where these smaller buildings are more present. The law requires owners to provide tenants with their leases and lease renewals reports of histories of bedbugs in the building, along with posting such reports “prominently” in the building. This adds to the lobby postings already present in both pre-2017 laws and the 2017 enactments. Additionally, the law calls for electronically filing with the City an annual report with the same, thus requiring owners of buildings large and small to own and use computers. While this appears a relatively benign imposition, one must remember that many of these smallest affected buildings are the property of elderly non-comput- er-literate people who are not in any real sense commercial landlords. It has been the experience of these authors that many landlords in the group just described often find themselves painfully out of compliance with laws meant more for larger more commercial operations. The law does not directly set forth penalties for noncompliance. It does require that the electronic filing shall be publicly available and at least implies that anyone doing electronic research will find all previous reports. Therefore, anyone pur- chasing a multiple dwelling should, during the due diligence period, be research- ing these postings. Larger owners have reported their probably justified fear... LANDLORD-TENANT / ADMINISTRATIVE Continue reading at alblawfirm.com/new-laws-2018 This article will review the authority given to boards of condominiums and cooperative corporations to impose and enforce fines respectively on condo unit owners and cooperative shareholder-tenants who violate building house rules. Boards of condominiums and cooperative corporations have almost unlimited powers over their buildings’ operations and the manner in which condominium unit owners and cooperative shareholders may utilize the apartments and com- mon spaces in their buildings. Unless the conduct amounts to egregious discrim- ination between unit owners or shareholders similarly situated, self-dealing, or other bad faith or outright unlawful action, the business judgment rule precludes judicial second-guessing of board decision-making.1 Nevertheless, boards must act within the boundaries of the authority provided to them by statute and/or by their buildings’ governing documents and by-laws. For condominiums, board authority to fine unit owners and residents is grounded in the Condominium Act2 and in each condominium’s declaration and by-laws. For a cooperative, the authority is determined by the provisions included in its certificate of incorporation, the proprietary lease, and by-laws. Condominiums Section 339-j of the Condominium Act grants boards express authority to im- pose monetary fines on “each unit owner” who does not “comply strictly” with the “bylaws, rules, regulations, resolutions and decisions adopted pursuant thereto.”3 Failure to comply with any of the same shall be ground for an action to recover sums due, for damages or injunctive relief or both maintainable by the board of managers on behalf of the unit owners or, in a proper case, by an aggrieved unit owner. Thus where a unit owner violates a condominium’s by-law or other duly adopted rule or regulation, the board has statutory authority to fine or main- tain an action against the offending unit owner. The inquiry for the court then focuses on (a) whether the board was authorized to adopt the specific rule or regulation at issue, or (b) whether the fine imposed on the unit owner is reasonable application of these principles is illustrated in the following cases. In Minkin v. Board of Directors of the Cortlandt Ridge Homeowners Ass’n,4 a group of owners of single-family homes within the community brought an ac- tion to recover damages from their board for breach of fiduciary duty and for a judgment declaring that the defendant board was not authorized to provide for landscaping services to be performed on their properties. The action arose when the board retained a landscaping company to perform landscaping services for all of the single-family homes in the community. The homeowners were charged for the landscaping services. The homeowners refused to pay the charges and claimed that the board lacked authority to charge them for the services. The board then assessed fees and fines against the homeowners after they made their own changes to the landscaping in the front of their properties, on the grounds that the home- owners failed to obtain board approval for the changes. The homeowners argued that the board exceeded its authority in imposing all the fines levied against them. In determining whether the fines and fees were properly assessed, the Second Department first noted that the declaration of covenants, which governed the board’s authority, expressly authorized the board (a) to provide landscaping ser- vices for the front portions of the properties of single-family homes within the subject community, and (b) to charge the homeowners for said services. The court reasoned that, since the board was authorized to provide landscaping services to be performed on the front portions of the properties, the homeowners were there- fore required to pay fines and fees assessed against them for not paying the land- scaping charges. The court held that the board’s actions respecting those charges were protected from judicial review pursuant to the business judgment rule. Nevertheless, the court also found that the board did not demonstrate its... Continue reading at alblawfirm.com/when-boards-fine When Can Condo and Co-op Boards Fine the Owners and Residents? by Adam Leitman Bailey and John M. Desiderio CONDOMINIUM-COOPERATIVE
  2. 2. On December 6, 2016, Mayor de Blasio, the Department of Finance and Housing Preservation and Devel- opment issued suspension notices to owners of more than 3,000 multiple dwellings that failed to comply with 421a tax benefit requirements. The notices gave owners one year, until January 5, 2018, to correct their mis- takes and omissions or suffer suspen- sion of tax benefits – or worse, pay back the tax benefits previously reaped. Our client, the owner of one of the targeted buildings located in the Bronx, came to us weeks after receiving the threatening notice, worried the City would require it to pay back ten years’ in abated taxes amounting to approximately $800,000. The owner hired a third party agent to handle the 421a application back in 2004 but that agent never secured a 421a Final Cer- tificate of Eligibility. Meanwhile, the City applied the tax abatement to the property’s annual tax bills for ten years. Adam Leitman Bailey P.C. investigated and iden- tified where exactly the agent made mistakes in the application process by failing to submit various construction and rental documents to the City. We corrected the errors then brought the building into compliance with the registration requirements under the rent stabilization law. Then by immediately es- tablishing relationships with the right City employ- ees in the 421a unit, we ensured the benefits were... ADAM LEITMAN BAILEY, P.C. new yor k r eal estate attor neys www.alblawfirm.com INFO@ALBLAWFIRM.COMPAGE 2 practice areas Adam Leitman Bailey, P.C. Works Hard to Correct Previous Agent's Errors, Helps Business Keep Hundreds of Thousands in Tax Benefits In 2017, in matters relating to two different clients, and separate con- dominiums offered to the public by two different sponsors, the attorneys at Adam Leitman Bailey, P.C. showed how reading the fine print in a con- dominium offering plan can assist in helping a purchaser terminate a con- tract to purchase units that were not yet constructed when the contract was signed — and not incur any pen- alty for doing so. In each case, the client came to Adam Leitman Bailey, P.C. well after having signed agreements to purchase two units from the sponsor of a condo- minium before the new building was constructed. Each client wished to get out of the contracts entered into for the units the client had agreed to purchase. However, as is typical is such cases, the purchase agreement for each unit under contract expressly barred the purchaser from reneging on the deal un- less the sponsor failed to construct the building and the units in a manner “comparable to the currently prevailing local standards and substantially in accor- dance with the Plans and Specifications” filed with the Building Department and other appropriate gov- ernmental authorities. In the absence of evidence of any materially defec- tive construction, a client who nevertheless wishes to get out of his or her contract normally has little recourse and will either be forced to close on the un- wanted unit or attempt to negotiate the return of at least part of the six to seven figure deposit that was paid to the sponsor’s escrow agent upon execution of the contract... Adam Leitman Bailey, P.C. Obtains Condo Deposit Refunds Totaling Over $10M Adam Leitman Bailey, P.C. is a full service real estate and business law firm. For more information about the firm or for a complete copy of any of the decisions and articles mentioned, please contact Adam Leitman Bailey at 212-825-0365 or email him at info@alblawfirm.com. APPEALS COMMERCIAL LEASING SERVICES CONDOMINIUM & COOPERATIVE REPRESENTATION FORECLOSURE LITIGATION HOMEOWNER ASSOCIATIONS CONDOMINIUM/ BOARD OF DIRECTORS CONSTRUCTION DEFECTS INSURANCE DEFENSE LITIGATION LANDLORD REPRESENTATION MORTGAGE FINANCE PRACTICE PURCHASE & SALE OF HOMES SHAREHOLDER REPRESENTATION REAL ESTATE ADMINISTRATIVE PROCEEDINGS PURCHASE & SALE OF MULTI-FAMILY DWELLINGS / BUILDINGS REAL ESTATE LITIGATION TENANT REPRESENTATION TITLE INSURANCE CLAIMS BANKRUPTCY & CREDITOR’S RIGHTS DUE DILIGENCE AND TRANSACTIONAL RISK ASSESSMENT OF MULTI-FAMILY DWELLINGS BUYOUTS & SALE OF APARTMENT LEASE Read more at alblawfirm.com/saves-800k-tax-abatementRead more at alblawfirm.com/condo-deposit-refunds CONDOMINIUM-COOPERATIVE DUE DILIGENCE / ADMINISTRATIVE TOP 100TOP 100
  3. 3. ADAM LEITMAN BAILEY, P.C. we get r esults www.alblawfirm.com PAGE 3212-825-0365 Adam Leitman Bailey, P.C. Wins $1.2M Judgment on Behalf of Small Brokerage Firm, Wins on Appeal, Gets Judgment Paid in Full within Months Adam Leitman Bailey, P.C. Wins Summary Judgment for Lender's Assignee in Lost Note Proceeding REAL ESTATE LITIGATION FORECLOSURE LITIGATION Abraham Lincoln once said, “Cap- ital is only the fruit of labor, and nev- er could have existed if labor has not first existed. Labor is the superior of capital, and deserves much the high- er consideration.” In this case, Adam Leitman Bailey, P.C. successfully fought on behalf of a small business that performed all of the labor in pro- curing the purchase of a large com- mercial building at a prime location in Manhattan, while some very wealthy and powerful defendants attempted to deny our client the commis- sion that they duly earned. Adam Leitman Bailey, P.C. was retained by a bou- tique commercial real estate brokerage firm that was defrauded of its duly earned commission through an elaborate scheme by several defendants. In 2009, a prospective buyer (called the “first buyer” in this study) used our client’s brokerage services and re- ceived confidential information concerning a large commercial building in Midtown Manhattan. The first buyer was and is a major hotelier who specializes in a particular type of hotel, and needed a suitable building to develop. An offer was submitted by our client on behalf of the first buyer, which was reject- ed, and it appeared that the prospective buyer was no longer interested. Later in 2009, a second potential buyer entered into a confidentiality agreement with our client and was shown the property. This contract required the second buyer to pay our client $750,000 upon the purchase of the property. Unbeknownst to our client, the second buyer conspired with his girlfriend to create an entirely new company in her name (not a party to the contract for the $750,000... A lender moved for a summary judgment and an order of reference. “Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the produc- tion of the mortgage, the unpaid note [‘note’], and evidence of default.” The court explained that “[n]otwithstand- ing failure to produce the original … note[], the [holder] could still recover pursuant to UCC 3-804, which deals with lost, de- stroyed or stolen instruments and requires the request- ing party to prove ownership of the note[], the circum- stances of the loss and [the note’s] terms.” When a defendant challenges the plaintiff’s stand- ing, the plaintiff must present “evidence that it was the holder or assignee of the subject mortgage and under- lying note at the time the action was commenced…. Either a written assignment of the underlying note or the physical delivery of the note prior to the com- mencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident.” The plaintiff had made “a prima facie showing of its entitlement to judgment as a matter of law by produc- ing a copy of the mortgage, evidence of the lost note and its terms, and a note & mortgage purchase agree- ment that sets forth the date of defendant’s default. With respect to the lost note, plaintiff submitted an allonge to prove ownership, a recital in the mortgage that details the terms of the note including the total amount owed and the term of the loan, and lost note affidavits to account for the note’s loss.” The court found that the plaintiff met the require- ments of UCC §3-804 and had “sufficiently defeated any triable issues with respect to the note’s existence, terms, and whereabouts.” The plaintiff had also “estab- lished its standing by the allonge, which endorsed the note to plaintiff.” The defendant argued that the mortgage was “void ab initio because the original mortgagees acted as trust- ees for the property owner, who did not authorize the property’s transfer to defendant.” The court rejected such argument, citing the defendant’s “conduct in ac- cepting the benefit under the note and mortgage and in making seventeen payments on the loan such that he waived any right he may have had to repudiate it.” The defendant had also asserted that his covenant to pay was “subject to a condition precedent,” i.e., compliance with a mortgage rider. The court found that “the terms of the …rider concern payment of the full loan balance upon certain conditions, and is irrel- evant to the present case.” The court also rejected the defendant’s arguments with respect to consideration and fraud. The court granted the plaintiff’s motion for summary judgment and for an order of reference... Read online at alblawfirm.com/foreclosure-motion-templates Read more at alblawfirm.com/foreclosure-promissory-note FORECLOSURE LITIGATION Adam Leitman Bailey, P.C. Assists with Drafting Foreclosure Motion Templates for State of New York Jackie Halpern Weinstein, Esq. assisted in drafting the Foreclosure Motion Templates promulgated by Administrative Order 356/17 of the Chief Administrative Judge of the Courts, effective January 1, 2018, for use in residential mortgage foreclosure proceedings in Supreme Court in cases where a homeowner defen- dant has defaulted. The templates are an applauded result, in part, of great efforts by the members of the New York City Bar Mortgage Foreclosure Task Force to improve the foreclosure process in the state of New York. Avail- able on the New York State Unified Court System... by Scott E. Mollen Original Promissory Note Lost-Lender Satisfied UCC 3-804 and Entitled to Judgment Read more at alblawfirm.com/1m-brokerage-litigation Adam Leitman Bailey, P.C. Closes $10M Townhouse Read more at alblawfirm.com/10M-townhouse-closing PURCHASE & SALE The Transactional Department at Adam Leitman Bailey, P.C. recent- ly represented the purchaser of a ten million dollar townhouse on the Upper East Side of Manhattan. The property, which was previously owned by a well-known graphic artist, was in high demand, given its prime location in one of Manhat- tan’s most exclusive and desirable neighborhoods. Attorneys at ALBPC faced significant headwinds throughout the transaction but were ultimately able to carefully navigate the deal to a successful conclu- sion. Despite the hurdles, ALPBC was also able to find significant savings in closing costs on behalf of the purchaser by taking advantage of a purchase Consolidation, Extension, and Modification (a/k/a “CEMA”), which is a well-known process among experienced real estate professionals that allows...
  4. 4. ADAM LEITMAN BAILEY, P.C. we get r esults www.alblawfirm.com INFO@ALBLAWFIRM.COMPAGE 4 Adam Leitman Bailey, P.C. Defeats Forgery/Fraud Defenses, Wins Appeal for Note Holder in Highly Contested Foreclosure Proceeding Adam Leitman Bailey, P.C. Saves Pit Bull from Eviction Despite Attack on Neighbor's Dog REAL ESTATE LITIGATION Read more at alblawfirm.com/albpc-defeats-forgery-fraud Continue reading at alblawfirm.com/pitbull-eviction In Wilmington Savings Fund Soci- ety, FSB, DBA Christiana Trust, not individually but as trustee for Ventures Trust 2013-I-H-R v. Kirk Gibson, Brett Jones, et al., after a non-jury trial, by Order entered on March 27, 2015, the Court: (i) granted Plaintiff “Judgment as a Matter of Law on all causes of action alleged in the Verified Amended Complaint”; (ii) dismissed “Defendant Jones’ counterclaims and affirmative defenses assert- ed in his Verified Amended Answer… as a matter of law”; and (iii) directed Plaintiff to “file a request for an order of reference under a separate order.” Defendant Jones, who lives at the premises, but who previously transferred the premises to a straw- man borrower in order to qualify for the loan, ap- pealed the order arguing that (1) the sale of the prem- ises to the borrower was a fraudulent transaction and (2) the note holder did not have standing to foreclose. Adam Leitman Bailey, P.C. successfully argued before the appellate panel that Plaintiff established its standing to commence the action as a mat- ter of law by demonstrating through submission of credible evidence that the Note and Mortgage were validly assigned to Plaintiff prior to com- mencement of the action and, further, that a party may continue an action in the name of the plaintiff, even after assignment of the mortgage, without for- mal substitution. Additionally, Adam Leitman Bailey, P.C. argued that Jones cannot execute a deed to the premises to the borrower and later argue fraud, as “a cause of action alleging that the plaintiff was induced to sign something different from what he or she thought was being signed only arises if the signer is illiterate, blind, or not a speaker of the language in which the document is written.” Persuaded by Adam Leitman Bailey, P.C.’s argu- ments, in a decision and order dated January 24, 2018, the Appellate Division, Second Department, affirmed the lower court’s order granting judgment... Adam Leitman Bailey, P.C. Wins Crain's Best Places to Work Award Four Times This Decade Adam Leitman Bailey, P.C. places third out of all the law firms in New York City in winning a Crain’s Best Places to Work award. The firm picked up its fourth Crain's award at the 2017 luncheon. Read online at alblawfirm.com/albpc-wins-crains and alblawfirm.com/crains-2017 TITLE INSURANCE The Making of Adam Leitman Bailey At the beginning of the new millennium, in an ele- vator at 26 Broadway, I met Adam Leitman Bailey. He explained that he bartered doing work for a landlord in exchange for office space. He had no employees and was single. He had more work than he could handle and asked me if I could help out with some of the overload. As such, I became the first member of the team. In 2000, he was not the pre-eminent states- man where each sentence out of his mouth sounded presidential. He spoke so fast that he ate his words trying to make a point, oftentimes due to having a photographic-type memory that can remember the smallest detail. And instead of the more circumspect attorney he would come to be, he would be happy to tell anyone his legal prowess. But despite these flaws, I realized that Adam had an amazing mastery of the law, cases, and could cite the law and its history like reciting the alphabet. He had a vision for the firm where he could foresee how a case would likely be resolved at its very commence- ment. To this day, I have seen only one case where he did not predict the strategy correctly, as well as the steps the adversary would take on the voyage. Adam is a master of the game of law and the great- est negotiator any of us at the firm have ever encoun- tered. Over the years, he has known when to press hard and the exact moment to step back without blowing the deal or negotiation. As a former com- petitive athlete, he understands that he should fight hard for the client on the court and be friends with opposing counsel when not speaking about the case. Adam has always loved lawyers and intellectual pursuits and we bonded over our love of Lincoln, Churchill, and Hamilton, and somehow found time to buy each other books about our heroes. But Adam was not reading about our heroes for fun, but rather learning from their lives to assist in making himself a better leader. As I watched Adam reach for stardom, despite his powerful, persuasive writing and his abili- ty to try cases, it took me a number of years to realize the rareness of his being, and to be sold on spending the rest of my career with him. I am often asked what makes Adam Leitman Bai- ley. Firstly, he is the most aggressive person I have ever met—but only in thought and actions. Many are surprised at how quiet or laid back he can be when they meet him for the first time, at least until he understands all of the facts. He is the hardest... Continue reading at alblawfirm.com/making-alb by John M. Desiderio A mix-breed pit bull ran out its door and took a bite at a small dog known for spending time making cancer sur- vivors feel better. Turned out the “bite” was only a scratch and no stitches – only an animal Band-Aid – were need- ed. Our client even offered to pay for the visit to the veterinarian. Also, this was the client’s dog’s first “bite.” Reviewing the minutes of meet- ings or board meeting summaries, the board of this building has always met with alleged offenders or fined the offending owner. However, less than a week after this dog bite, court papers were filed seeking immediate eviction of the dog. The condominium building had formidable evi- dence. Directly in the governing documents was a paragraph that forbade pit bulls from entering the building. Although the offending dog had been spending time helping one of its owners heal from a serious accident after being hit by a car while on a...
  5. 5. Adam Leitman Bailey, P.C. Prevails in Non- Primary Residence Case for 100-year-old Woman ADAM LEITMAN BAILEY, P.C. we get r esults www.alblawfirm.com PAGE 5212-825-0365 The Tax Cuts and Jobs Act was signed into law at the end of 2017 and will have an impact on homeowners in the United States. The mortgage interest deduction on a mortgage taken to purchase a home prior to December 14, 2017 allows a borrower to de- duct interest on up to $1 million in mortgage debt, even if the purchaser refinances the mortgage to get a lower rate. Prior to 2018 the interest on a home equi- ty loan of up to $100,000.00 was deductible as well. Mortgages taken to purchase a home after Decem- ber 14, 2017 up until 2026 will instead allow a bor- rower to deduct the interest on up to $750,000.00 in mortgage debt. The interest deduction on home equity debt has been completely wiped out as of 2018 and will remain this way until 2026, unless new leg- islation is enacted beforehand. Although many of the homeowners in the Unit- ed States – those whose home are worth under $750,000.00 – will not be hurt by this new law, many homeowners in New York (as well as California, Flor- ida, New Jersey & Connecticut) will be affected. People who already own homes worth over a mil- lion dollars may not want to move and will continue enjoying the old interest deduction benefit. People considering buying a more expensive home may reconsider as well, thereby holding on to the less... Adam Leitman Bailey, P.C. Obtains Condo Buy-back from Sponsor CONDOMINIUM-COOPERATIVE MORTGAGE FINANCE How the New Tax Law Affects the Mortgage Interest Deduction Buckling under pressure, a finan- cial district residential condominium developer opted to buy-back a condo- minium unit rather than litigate with Adam Leitman Bailey, P.C. Our clients (“Unit Owners”) pur- chased a financial district condomini- um (“Unit”) advertised as graceful, so- phisticated, and refined. After moving in, they realized they got anything but grace. The developer refused to work with them to actually refine the Unit. The develop- er refused to acknowledge that it installed faulty and dangerous appliances. The developer told them to cover-up the dents and scratches in the Unit them- selves. Distraught and unable to enjoy the Unit, the Unit Owners turned to Adam Leitman Bailey, P.C. to get results. Our team immediately conducted a Unit-wide analysis of construction issues and studied all the le- gal documentation for the Unit. The team then be- gan a multi-front campaign to get results for the Unit Owners. Adam Leitman Bailey, P.C. made settlement demands, started a lawsuit, began administrative pro- ceedings, and promised to take all the issues to the press. The developer pushed back and refused to do anything. But after a few short months of sparring... It is difficult to dispose of an action on a pre-answer motion to dismiss a complaint but Adam Leitman Bailey, P.C. recently obtained this victory for its client in a case where an adjoining entity, a nursing home, claimed that it had an easement over the client's property to park its visitors' cars. The problem with the nursing home's claim, as detailed in Adam Leitman Bailey, P.C.'s papers, was that its complaint simul- taneously alleged that it had an easement either by implication or by prescription but failed to set forth sufficient facts to support either contention. Adam Leitman Bai- ley, P.C. also demon- strated that the nursing home had more than... Continue reading at alblawfirm.com/sponsor-buyback REAL ESTATE LITIGATION Continue reading at alblawfirm.com/rmbs-trust Continue reading at alblawfirm.com/new-tax-law The 100-year-old client was in and out of the hos- pital for a year, recovering from an injury caused by unsafe conditions in her apartment, when her land- lord attempted to evict her. The Adam Leitman Bailey, P.C. attorneys worked hard, fighting to not only get the landlord to drop the eviction, but to also agree to make the necessary repairs to her apartment. Read online at alblawfirm.com/100-year-tenant In a 48-page decision, Judge Vic- tor A. Bolden of the United States District Court for the District of Connecticut granted ALBPC’s Mo- tion to Dismiss a Plaintiff’s claim for, among other things, violations of the federal Fair Debt Collection Practices Act (“FDCPA”), the federal Fair Credit Reporting Act (“FCRA”), the Fifth and Fourteenth Amendments to the U.S. Constitution, and Connecticut state law, against a Residential Mortgage-Backed Securi- ty (“RMBS”) Trust and its Servicer (“Defendants”). Through the pendency of the Motion to Dis- miss, Plaintiff made several requests to the Court to amend the Complaint and to supplement its al- legations in briefs. Using the various requests to amend and the supplemental allegations in the briefing to enhance its argument, ALBPC was able to establish that Plaintiff’s failure to state a claim was not due to poor pleading, but because the facts that existed just did not support a plausible claim. The Court agreed and dismissed with preju- dice, denying Plaintiff an opportunity to re-plead. Concerning claims that the mortgage loan was not enforceable, ALBPC successfully argued that Plaintiff’s claims regarding the Trust’s standing to foreclose were irrelevant in a direct claim by the borrower. ALBPC focused the Court on the law of negotiable instruments under the Uniform Commer- cial Code and the Court broadly rejected Plaintiff’s claim that the assignment of mortgage was “inval- id,” rendering any attempts to enforce the mort- gage loan unlawful. The Court found no plausible claim that the Trust was not the holder of the note. Significantly, in wholesale rejecting Plaintiff’s various claims under the Fair Debt Collection Prac- tices Act, the Court adopted ALBPC’s argument based upon Derisme v. Hunt Leibert Jacobson, P.C., 880 F.Supp 311 (2012) that foreclosing a mortgage is not debt collection within the meaning of the Fair Debt Collection Practices Act. Not all of the... TENANT REPRESENTATION Adam Leitman Bailey, P.C. Successfully Defends Residential Mortgage-Backed Security Trust and Its Servicer LANDLORD-TENANT Continue reading at alblawfirm.com/contradictory-easement Adam Leitman Bailey, P.C. Obtains Disposal of Claim to an Easement on Contradictory Grounds on Pre-answer Motion to Dismiss
  6. 6. ADAM LEITMAN BAILEY, P.C. we get r esults www.alblawfirm.com INFO@ALBLAWFIRM.COMPAGE 6 Adam Leitman Bailey, P.C. Defeats Motion to Vacate Default Judgment at Trial Court Level and on Appeal, Protecting Client's Valid Foreclosure In Emigrant Bank v. Luigi Rosabianca, et. al, the parents of an infamous and now disbarred real estate lawyer, Luigi Rosabianca, (the “Parents”) defaulted in a civil action to foreclose on their residence, by failing to submit an Answer responding to a Com- plaint brought by our lender client. They were shown to have both constructive and actual notice of this pending litigation. Adam Leitman Bailey, P.C. moved for a default judgment. The Parents brought a motion to vacate their de- fault, claiming that their son, Luigi Rosabianca, was engaging in a money laundering scheme and that he duped them into believing that he would defend their interests in the foreclosure action as their counsel. They claimed that they never consented to their son mortgaging their home through the powers of attor- ney used by him at the closing and that they were never made aware that he would use them for that purpose. Luigi Rosabianca was convicted on a plea of guilty to Grand Larceny in 2016 and was sentenced to pris- on for an apparently unrelated fraud scheme whereby he stole approximately $4.5M. Adam Leitman Bailey, P.C.’s opposition to the Par- ents' motion was based on a strict legal analysis of whether they exited a reasonable excuse for their de- fault in addition to a meritorious defense. Despite the extremely sympathetic situation por- trayed by the Parents, Adam Leitman Bailey, P.C. correctly convinced the Court to deny the Parents’ motion to serve a late Answer and to grant a default judgment against them. Plaintiffs appealed from the trial Court decision to the Appellate Division, First Department. Adam Leitman Bailey, P.C. attorneys responded by point- ing out once again that the Parents did not meet the evidentiary threshold of a reasonable excuse and mer- itorious defense. Sympathetic as it may have sounded, their story was not enough. The Appellate Division held that the Parents had sufficient notice and time to respond but had failed to do so and that their defense based on impropriety in the powers of attorney was belied by their express signed, notarized grant of full powers to their son. The Appellate Division held in a point by point analysis that the Parents had not met their bur- den, with one judge dissenting. The Parents have applied for leave to appeal to the Court of Appeals and Adam Leitman Bailey, P.C. has opposed. We await a decision. Adam Leitman Bailey, P.C. was represented by Colin Kaufman and David Smith at the trial court level and by Jeffrey Metz on the appeal. Read more at alblawfirm.com/defeats-motion-vacate Adam Leitman Bailey, P.C. Prevails Using Pictures Proving a Substantial Rehabilitation Avoiding Rent Regulation When joint owners of real property are unable to get along with each oth- er, they are armed with a very power- ful legal remedy, that of the partition. Any joint tenants or tenants-in-com- mon who no longer desire to hold property in common with their fellow co-tenants, may maintain, as a matter of right, an action to divide the property, and to ultimately force its immediate sale at a public auction where the property is unable to be physically divided without substantial prejudice. The partition’s omnipotence comes from its ex- tremely low burden of proof, which in many cas- es, is merely perfunctory. All that needs to be demonstrated to prevail in a partition case and to subsequently force a sale, is that the plaintiff co- tenant jointly owns the property, and that physi- cally divvying it up is impractical or by doing so, it will result in greatly reducing its market value. Given the unique and special nature of real prop- erty, dividing it often proves to be unfeasible, which typically results in courts compelling a sale, whether it be the shares appurtenant to a cooperative apart- ment, a residential brownstone, a large mixed-use... FORECLOSURE LITIGATION A client came to Adam Leitman Bailey, P.C. looking to evict a trouble- some tenant whose lease had expired in a building that had been gut ren- ovated. Under the law, such buildings are free from rent regulation if certain criteria are met—that the building is in dilapidated condition and that the landlord replaced at least 75% of the building systems, including, at the very least, all walls, floors, and ceilings. However, proving those criteria entails providing a good number of mind numbing dry facts to a court that can want to ignore them. Devising an innova- tive technique of embedding photographic evidence directly into the written argument, Adam Leitman Bailey, P.C. highlighted the dispute in a way that en- abled the pictures to say many thousands of words. These pictures, presented directly inside the argu- ment discussing them, first showed the dilapidated condition of the building, including rusted out steel I-beams, and rotted floor joists, connected to noth- ing in particular. The pictures went on to depict that the building had been stripped down to bare brick shell with nothing but scaffolding inside. With that picture initially catching the court’s attention, it took very few words to convince the court that there was Continue reading at alblawfirm.com/substantial-rehabilitation LANDLORD-TENANT Continue reading at alblawfirm.com/landlord-hire-lawyer REAL ESTATE LITIGATION TIC for Tat: Court Moves Goal Posts in Co-tenancy Rules by Massimo F. D'Angelo new wiring, new plumbing, new floors, walls, ceil- ings and roof because the court had already seen the building when it had none of those systems in place. Not content with the implication that bare walls meant everything inside the new walls was brand new, the pictures went on to depict the new build- ing systems, including the plumbing, wiring, heating systems, and hot water systems. The pictures even showed the basement slab had been removed, leaving nothing but a lay- er of gravel before a new thicker slab was poured over it. With these images so firmly implanted in the court’s mind, little explanation was re- quired. Finally, the pictures concluded by showing shiny white brand new apartments, with gleam- ing new appliances. All in all, the court was given some 300 pages of vibrant data making the reha- bilitation obvious beyond a shadow of a doubt. Usually, courts will bend over backwards to deny a motionforsummaryjudgment,strainingtofindsome kind of issue of fact. But with these pictures in place, there was only one fact: that the building was created completely anew, with nothing from the original ar- chitecture other than empty windowless brick walls. This left the tenant with nothing to argue except his invalid interpretation of the whether the building permits actually permitted all the work that had...
  7. 7. ADAM LEITMAN BAILEY, P.C. we get r esults www.alblawfirm.com PAGE 7212-825-0365 Adam Leitman Bailey, P.C. One Battery Park Plaza Eighteenth Floor New York, New York 10004 Tel: 212-825-0365 Email: info@alblawfirm.com Adam Leitman Bailey, P.C. Lectures to Brokers on How to Close Deals MEDIA | COMMUNITY | EVENTS Read more at alblawfirm.com/free-closings Adam Leitman Bailey, P.C. Provides Free Closings for Employees, Educating in Real Estate and Helping Employees Achieve Their Real Estate Ambitions Read more at alblawfirm.com/town-residential Read online at alblawfirm.com/read-america-2018 and alblawfirm.com/class-reading-thanks Television show, "First Time Flippers," featured not only the home that she purchased, but also the construction that she performed with her family on one of the properties. From working at a real estate law firm, learning the secrets of the trade, reading Adam Leitman Bailey’s book, Finding The Uncommon Deal, and always asking questions, these employees have been able to find their uncommon deal. As a bonus, the firm covers closing costs for its employees and provides discounts on title insur- ance, mortgage, and interest rates ro help all em- ployees achieve their real estate ambitions. When joining the team at Adam Leitman Bailey, P.C. it is inevitable that one acquires the highest lev- el of knowledge in real estate. The firm vigorously implements training, education, and a deep under- standing of real estate throughout the day-to-day tasks of all employees. Amazingly, at a firm of fewer than 50 employ- ees, in 2017 Adam Leitman Bailey, P.C. performed 10 closings for employees both buying and selling homes. In addition, one of our employees credits Adam Leitman Bailey for teaching her how to buy a home at the best price and helping in her search to uncov- er her dream home. Three years later, she is now the owner of three homes, two of which she rents out. Adam Leitman Bailey Speaks to Parents on Buying a First Home, Landlord-Tenant Issues Adam Leitman Bailey Is Honored to Visit New Jersey School for Read Across America Day, Receives Thanks and Book from Students Spending over an hour with parents, none of whom were born in America, at a Queens high school PTA workshop, Adam Leitman Bailey discussed the key ingredients to finding a dream home, how to save to buy a home, and citizenship issues regarding the purchase. Read online at alblawfirm.com/queens-pta Below: Adam Leitman Bailey received a thoughtful thank you note from the first and second grade class he visited on Read Across America Day in 2017, complete with a copy of their own homemade book inspired by Adam's reading of his own forthcoming children's book, Home. Adam Leitman Bailey and Andrew Jorges lectured on "Common Ways Deals Die and How Brokers Can Bring Them Back to Life" for an audience of brokers at Town Residential. by Nina Luppino
  8. 8. ADAM LEITMAN BAILEY, P.C. One Battery Park Plaza, Eighteenth Floor New York, NY 10004 Tel: 212-825-0365 Email: info@alblawfirm.com RETURN SERVICE REQUESTED ADAM LEITMAN BAILEY, P.C. new yor k r eal estate attor neys

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