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In nearly brand new decisions, WFCC Realty
Corp. v. Huang Hui Zhen, 59 Misc 3d 140 and
WFCC Realty Corp. v. Lin, 2018 N.Y. Slip Op.
51402(U), the Appellate Term, First Department
forced building owners to completely recon-
sider their methods for proving a rent-stabili-
zation-exempting substantial rehabilitation has
taken place in a building. Since 1995, landlords
seeking to establish such exempting construc-
tion took place in their buildings, relied on what-
ever forensic data was available to them—bills,
receipts, contracts, proofs of payment, and,
lacking these, Department of Buildings records
and forensic engineers expert estimations of the
ages of building systems. However, these WFCC
cases expand on concepts of Matter of Pavia v.
DHCR, 22 A.D.3d 393, 802 N.Y.S.2d 361 [2005]
to deny the use of these non-owner-maintained
records to establish the requisite proofs, effec-
tively making it impossible to prove an exemp-
tion to which the Owner would otherwise be
entitled.
“Substantial Rehabilitation” Defined
The laws that establish rent stabilization,
particularly the Emergency Tenant Protection
Act of 1974 set forth that buildings “substan-
tially rehabilitated as family units on or after
January 1, 1974” are not subject to rent stabi-
lization. (Emergency Tenant Protection Act
of 1974 “ETPA” §5(a)(5)) However, neither
the statute, nor its implementing regulation at
Rent Stabilization Code (“RSC”) §2520.11(e)
(3) define “substantial” or “rehabilitated” or the
phrase. For actual definition, one might wish to
look to a standard desktop dictionary, but...
The new rules of substantial rehabilitation to remove
units from rent regulation
Adam Leitman Bailey & Dov Treiman
MORTGAGE FINANCE
View online at alblawfirm.com/bestlawfirms-2019
Adam Leitman Bailey, P.C.
selected as a 2019 “best
law firm” in real estate—
one of only ten of its size
HONORS AND AWARDS
not yet received any reimbursement. If there is
no such advance to the workers (of whom some
may well be self-employed), then the risk of
nonpayment is fully shifted to those least likely
able to afford nonpayment, the actual manual
laborers.
A moment’s thought about the “pay-when-
paid” variation leads to the conclusion that if
the “when” is “never” then the payment never
occurs which means that under those circum-
stances, “pay-when-paid” boils down to “pay-if-
paid.” Thus, many courts and practitioners use
the phrases interchangeably (Welsbach Electric
Corp. v. Mastec North America, Inc., 7 N.Y.3d
624, 859 N.E.2d 498, 825 N.Y.S.2d 692 (2006),
footnote 2)...
Construction projects entail financial risk—
risks for the owners of the property, risks for
the banks financing them, risks for the general
contractor, subcontractors, even the construc-
tion workers. Naturally, all of these risk takers
seek to push off the risk to someone else. Many
of these push-offs the law allows; others are
legally intolerable. Where the risk imperils the
viability of the construction industry itself, one
highly favored by all who seek “progress,” legis-
latures select whom they will protect. Across the
United States, legislators have spent a century
considering the particular form of protection
known alternately as “pay if paid” and “pay
when paid.”
Pay-If-Paid Defined
The idea behind “Pay-If-Paid” is that a general
contractor will often wish to lower its financial
risk by entering into deals with its subcontrac-
tors under which the subcontractor is only paid
if, as, and when the general contractor receives
payment. Such a provision greatly reduces the
up-front expenditures of the general contrac-
tor and generally forces the subcontractor to
advance funds to its employees for which it has
Pay when paid, limits and limitations
Adam Leitman Bailey & Dov Treiman
Continue reading Pay When Paid on page 5.
REAL ESTATE LITIGATION
Seventy percent of Adam Leitman Bailey, P.C.
attorneys have been named to the New York
Metro area Super Lawyers and Rising Stars lists
for 2018, making the New York real estate firm
the only one of its size – under 30 attorneys – to
achieve such an impressive accomplishment.
Adam Leitman Bailey, P.C.
named to the 2018 super
lawyers & rising stars
lists—over two–thirds of
attorneys honored
HONORS AND AWARDS
View online at alblawfirm.com/super-lawyers-2018
Adam Leitman Bailey, P.C.
New York Real Estate ATTorneys
Winter 2018 Newsletter
Continue reading The New Rules on page 6.
TOP 100TOP 100
This past month, Adam Leitman Bailey, P.C.
spoke with a Vice President at [Fortune 500
company] who manages the subject television
studio that formerly complained it was unable
to do its job effectively as a result of the noise
interruptions during celebrity interviews. During
this call, she explained the problem had been
expunged, she no longer hears any noise or vibra-
tions and that the “mission is accomplished.”
[Fortune 500 company] came to Adam
Leitman Bailey, P.C. to solve a serious noise
nuisance: [Company’s] Fitness Studio gym,
located directly above the client’s live-action
performance studio, was creating severe noise
and sound vibrations that were greatly affecting
the ability of the client to conduct and record
interviews of its A-list celebrity guests.
The noise emanating from the gym, which
included the sudden and frequent dropping
of heavy weights, was so severe that the inter-
viewers and the guests were visibly startled
and distracted on stage during the recorded
interviews.
Equally troubling, and dangerous, the severe
vibrations caused by the dropping of the heavy
weights caused large portions of the ceiling
above the studio to crumble onto heads of
guests in the live audience. Despite the client’s
repeated complaints, the owner of the building
and the landlord ignored the client’s complaints
and failed to address the unbearable and danger-
ous conditions caused by the gym’s activities.
In a landmark decision for New York real estate
developers and owners, on August 2, 2018,
Judge Franc Perry issued the first decision in
New York history denying a temporary, limited
license sought by a developer pursuant to Real
Property Actions and Proceedings and Law
(“RPAPL”) Section 881.
“[T]he Court is in agreement with the respon-
dents in this matters. The Court is going to
dismiss the petition for a license as it has been
indicated that, although this may be solely about
money, there are other factors with regards to
the safety of the adjoining building that have
not been addressed in this proceeding.
As set forth below, this historic decision
dramatically impacts the rights of property
owners.
By way of background, a notable developer
(“Developer”) sought to construct a commer-
cial building in Chelsea.
From the onset of its project, the Developer
sought licensed access from the Board of
Managers (the “Board”) of the adjacent condo-
minium (the “Condominium”), and the individ-
ual owners of the units in the Condominium
that would be most impacted by the proposed
construction, in order to install protective
measures required by the New York City
Department of Buildings (the “DOB”).
Adam Leitman Bailey, P.C.
obtains landmark
decision denying
developer a license to
preserve safety of adjacent
condominium owners
REAL ESTATE LITIGATION
Read more at alblawfirm.com/cowboy-developer Read more at alblawfirm.com/tv-studio-noise
CONDOMINIUM AND COOPERATIVE
Stopping a gym’s noise
interruption at a
television studio
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.
2 WE GET RESULTS (212) 825-0365
Adam Leitman Bailey, P.C.
theory that the corporate entity acts as a shield
to protect individual owners from personal liabil-
ity. With this game changer, ALBPC was able to
obtain a substantial settlement offer from the
Defendants.
ALBPC then discovered e-mails between
the client’s board president and the Sponsors’
contractors showing that we timely put the
Sponsor on notice of the defects within the
applicable statute of limitations period. Using
this information, the firm was also successful
in defending against the Sponsors’ motion to
dismiss, having successfully argued that the
Sponsor was on notice of the defective condi-
tion. Ultimately, we were able to bring in all of
the culpable parties as Defendants to the case,
which further increased the settlement pot.
During the court ordered settlement confer-
ence, ALBPC provided a comprehensive posi-
tional statement demonstrating
to the court all of the expert
reports that our office had
commissioned, detailing the
damages and the estimated...
Our client, a Board of Managers of an Upper
West Side condominium, came to Adam
Leitman Bailey, P.C. for help with the damages
caused by building defects in their newly built
condominium.
Adam Leitman Bailey, P.C. commenced a
Supreme Court litigation against the Sponsor
Developer entities and the individual prin-
cipals of the entities to recover damages for
the building defects, which resulted from the
grossly negligent construction by the Sponsor
Developer entities. The biggest issue was a leaky
roof that caused water to infiltrate the building.
In discovery, Adam Leitman Bailey, P.C. found
that the roofing subcontractor was not licensed
or properly insured, which was a big key to
getting a favorable settlement for the client.
ALBPC also made new case law in this matter
by successfully arguing that the individual prin-
cipals of the sponsor bear personal liability by
virtue of their certifying in the Offering Plan that
the condominium was built in conformance with
the plans. Prior to this case, the First Department
(New York County), in these cases, had held
that the principals do not bear personal liability
simply by signing the Offering Plan, under the
Gamechanging settlement creates new case law, wins
attorney fees & allows client to make building repairs
Adam Leitman Bailey, P.C. secured an import-
ant ruling clarifying several aspects of New
York City’s Reserve Fund Law, which requires
the sponsors that convert rental buildings to
condominiums or co-operatives to establish a
reserve fund for the building of 3% of the “total
price” of the offering, subject to a limited credit
for certain specified types of building capital
replacement work.
In a decision concerning the subject condo-
minium in Manhattan, in which Adam Leitman
Bailey, P.C. represented the Condominium
Board, the presiding justice of the New York
County Supreme Court Commercial Division
issued a ruling of first impression about whether
certain classes of work that were performed by
the condominium sponsor qualified as credits to
the reserve fund.
Because the statute requires qualifying work
to be a capital replacement, not a mere repair,
the judge disallowed credits for installing a single
layer of roofing membrane to an existing roof
and for repair of spalled concrete and recoating
of building terraces. She also held that because
the statute prohibited credits for work to cure
violations of record, where elevator work cures
violations, it does not qualify for a credit without
proof of what, if any, work did not involve curing
the violations.
The sponsor’s claimed capital replacement
work also involved the replacement of a substan-
tial number of sliding glass doors. The judge
found that such replacements would not qualify
as replacement of windows, as the sponsor had
argued, but nonetheless the credits for replace-
ment of the doors qualified as a major structural
Adam Leitman Bailey, P.C. obtains decision clarifying under New York
condominium/co-op reserve fund law
CONDOMINIUM & COOPERATIVE
Read more at alblawfirm.com/
reserve-fund-law-decision
The FinCEN Geographic Targeting Order has
been extended once again, now until May
15, 2019. With the extension came some new
changes to the Order.
New counties have been added to the Order.
The list now includes residential real property
located in Tarrant and Dallas Counties, State
of Texas; Cook County, State of Illinois; Clark
County, State of Nevada; Suffolk and Middlesex
Counties, State of Massachusetts; and King
County, State of Washington. The following,
which were all listed on the previous Orders,
still remain: New York, Kings, Bronx, Queens
& Richmond Counties, State of New York;
Bexar County, State of Texas; Honolulu County,
State of Hawaii; San Diego, Los Angeles, San
Francisco, San Mateo and Santa Clara, Sate of
California; and Miami-Dade, Broward and Palm
Beach Counties, State of Florida.
Other changes include the
removal of purchases through a
Trust and the removal of certain
confidentiality provisions...
FinCEN geographic
targeting order renewal
Rosemary Liuzzo Mohamed
MORTGAGE FINANCE
Read more at alblawfirm.com/
fees-and-repairs
CONDOMINIUM & COOPERATIVE
Read more at alblawfirm.com/
fincen-gto-new-changes
replacement.
In addition her decisions on the reserve fund
credits, the judge followed the prior Appellate
Division ruling in the case to find that where the
sponsor’s discounted price offer to tenant-of-
ferees (i.e. insider price) had expired before
the “effective date” of the sponsor’s offering a
pre-effective date offer an “insider” tenant at the
higher price to non-tenant offerees...
3WE GET RESULTSWWW.ALBLAWFIRM.COM
New York Real Estate Attorneys
In NYCTL 1998-2 Trust v. Alanis Realty LLC, et
al., Adam Leitman Bailey, P.C. successfully
defeated Defendant Alanis Realty LLC’s motion
to vacate the Judgment of Foreclosure and Sale
that was previously entered in this tax lien fore-
closure proceeding, under which Judgment
ALB, P.C.’s client took title to the premises as the
high bidder at the foreclose sale.
The defendant prior owner brought a motion
to vacate a Judgment of Foreclosure and Sale
and to unravel the sale arguing that it was never
properly served with process in the action. It is
well established law in the State of New York,
however, that jurisdiction is obtained by service
of process on the Secretary of State irrespective
of whether the process ever actually reached
the business entity, which was the case here.
Adam Leitman Bailey, P.C. was retained to
protect the interests of the current owner of
the premises. Adam Leitman Bailey, P.C cross-
moved to intervene in the action as a neces-
sary party and, simultaneously, opposed the
motion to vacate the Judgment of Foreclosure
and Sale. So as not to rely only on the argu-
ment that service upon the Secretary of State
conferred jurisdiction, ALB, P.C. also strategized
and argued that: (1) vacating the buyer’s good
faith purchase for value would be improper and
severely prejudicial, and (ii) Alanis Realty LLC’s
failure to tender the judgment amount bars
relief, regardless.
Less than two weeks after oral argument
before the Honorable Ben R. Barbato, J.S.C. in
Bronx Supreme Court, the Court denied Alanis
Realty LLC’s motion to vacate the Judgment
of Foreclosure and Sale in its entirety, thereby
protecting the interests of the current owner and
enabling it to utilize the premises as it pleases.
Jackie Halpern Weinstein, Esq. and William J.
Geller, Esq. at Adam Leitman Bailey, P.C. strate-
gized, drafted, argued, and secured this win for
the client.
Adam Leitman Bailey, P.C. defeats prior owner’s
motion to vacate judgment of foreclosure and sale
Adam Leitman Bailey, P.C.
You’re in a co-op building, and you have a
resident called a rent-regulated tenant (this
covers the older rent-controlled apartments and
the relatively more recent rent-stabilized units).
The rent-regulated tenant moved in many years
ago, before your building became a coopera-
tive, when it was a rental. In fact, if you look at
the history of cooperatives, many former rent-
als are now co-ops. When your rent-regulated
tenants leave, then those apartments become
free-market and part of the co-op.
What happens if you have a rent-regulated
tenant who is also a hoarder? I’m talking about
those people who live in apartments cluttered
high with newspapers – and visited by vermin
and bugs. Is this a health hazard? Absolutely.
A fire hazard? Absolutely. Is that dangerous for
your residents? Absolutely.
This is a serious problem, and most hoarders
need serious help. The board of directors is meet-
ing, and all of a sudden the subject “rent-regulat-
ed hoarder” comes up under your new business
section. Everyone wants to speak. Everyone has
gotten calls about this rent-regulated tenant/
hoarder.
You have someone you can turn to for help.
Remember: there is a non-resident owner of
this unit. He or she is not the “landlord” of that
rent-regulated apartment. To get the tenant out,
the owner has to be notified of everything. That
owner also has to be sued.
But that owner is probably going to be very
happy to be sued. That owner has a unit where
he or she is not getting the full rent, and the best
thing that could happen is if the board evicts the
tenant. They’ve been waiting 40 years to have
the tenant leave (through eviction or death), so
they can get the apartment back and sell it on
the market.
In these situations, the board should have
that owner hande the eviction. If you have an
aggressive owner, let him or her do the job, and
the board doesn’t have to spend money. If the
owner is not being aggressive, then the board
has to do the job. Either way, everybody should
work together for the common good.
Legal game changers for boards – rent stabilization law
Originally published by Habitat
FORCLOSURE LITIGATION
CONDOMINIUM &COOPERATIVE
4 WE GET RESULTS (212) 825-0365
Our mortgage servicing client commenced
a second foreclosure action in 2017 after
its first 2008 action failed. When the Borrowers
claimed that the mortgage had been accel-
erated by the 2008 action and could not be
enforced under the 6-year statute of limitations,
the servicer turned to Adam Leitman Bailey, P.C.
to save the mortgage loan.
Borrowers made a pre-answer motion to
dismiss under the statute of limitations. ALBPC
opposed Borrowers’ motion on a number of
grounds including that by the terms of the mort-
gage, Borrowers had the ability to reinstate the
loan up until a judgment was entered. Therefore,
since there was no prior judgment, the loan had
never actually been accelerated and the statute
of limitations had not expired.
The Court agreed and denied
Borrowers’ motion to dismiss.
The Court completely adopted
ALBPC’s argument that there
could not have been...
Adam Leitman Bailey, P.C.
saves mortgage from
statute of limitations
MORTGAGE FINANCE
Read more at alblawfirm.com/
acceleration-argument
Read more at alblawfirm.com/prior-owners-motion
Read more at alblawfirm.com/habitat-rent-
stabilization-law/
the value, or the agreed price, of such labor…”
The law of these liens, first enacted in New
York in 1830,[1] has evolved through the years
to increase the protections accorded to these
“mechanics.”
Lien Law §34, a later development, makes
contracts to waive the ability to assert the lien
unenforceable, stating, “Notwithstanding the
provisions of any other law, any contract, agree-
ment or understanding whereby the right to file
or enforce any lien created under article two is
waived,[2] shall be void as against public policy
and wholly unenforceable.” It was based on this
provision, as amended through the decades,
that the Court of Appeals in West-Fair Elec.
Contractors v. Aetna Cas. & Sur. Co., 87 N.Y.2d
148 (1995) ruled,
We hold that a pay-when-paid provision which
forces the subcontractor to assume the risk that
the owner will fail to pay the general contractor
is void and unenforceable as contrary to public
policy set forth in the Lien Law §34. By contrast,
a pay-when-paid provision which merely fixes a
time for payment does not indefinitely suspend
a subcontractor’s right to payment upon the fail-
ure of an owner to pay the general contractor,
and does not violate public policy...
New York Real Estate Attorneys
Illegality of Pay-If-Paid
Like many jurisdictions across the United
States, New York outlaws Pay-If-Paid clauses,
but, in New York’s case, only indirectly.
Generally speaking, prohibitions on contrac-
tual clauses in New York reside in Article 5 of
the General Obligations Law. However, the
cases questioning the enforceability of Pay-If-
Paid clauses do not point to any provision of
the General Obligations Law, but rather to the
Lien Law, even though in nearly none of those
cases has anyone filed a lien. Rather, the cases
construe the right to collect on the debt and
whether the debt has actually arisen, which thus
would hypothetically impact the right to file a lien.
The core concept in these cases is the
so-called “mechanic’s lien,” taking its name from
an obsolete meaning of the word “mechanic”,
being “one who is employed in a manual occu-
pation; a handicraftsman.” (Oxford English
Dictionary, Oxford University Press, 1971.)
These are governed by Article 2 of New York’s
Lien Law. Specifically, Lien Law §3 states, “A
contractor, subcontractor, laborer, material-
man… who performs labor or furnishes materials
for the improvement of real property with the
consent or at the request of the owner thereof…
shall have a lien for the principal and interest, of
Pay when paid
Continued from front page
Read more at alblawfirm.com/pay-when-paid
Acontract had been signed. Adam Leitman
Bailey, P.C. received a call when, after
finding “mouse droppings” during a visit to the
apartment, the buyers would not close. Because
our client was a celebrity, we immediately cut off
all contact with the real estate brokers to avoid
any unwanted publicity and, within an hour,
hired an exterminator to head to the multi-mil-
lion dollar Fifth Avenue premises. Not only did
the exterminator not find any sign of rodents,
but there was not even a mouse dropping to be
seen; the exterminator issued a report that the
apartment was rodent-free. This report was sent
to the buyers’ attorney immediately and within
days the closing was back on.
A month later, the closing was off again. We
received a call from the buyers’ counsel who
asked for his client’s deposit back. We told him
our client was ready to litigate to the end of time
before he would give back any money (which
was true). After he spoke with his client, the clos-
ing was back on again.
Now we were worried about the buyer throw-
ing the board interview by acting undesirable,
but the interview went fine. Adam Leitman
Bailey, P.C. called a time of the essence closing
and had a stenographer and videographer at the
closing. The apartment closed
and we were off to our next case.
Making sure the closing happens
PURCHASE & SALE OF HOMES
Adam Leitman Bailey, P.C. (“ALBPC”) was
retained by a leading title insurance carri-
er to defend a homeowner in Westchester
County who had contracted with a developer to
purchase a parcel of property and a home to be
constructed on it. Also a party to the contract
was a contractor, who was hired by the develop-
er to construct the new home and its appurte-
nance. One boundary line of the homeowner’s
property adjoins two neighboring properties.
The contractor hired a surveyor to survey the
boundary lines of the property to ensure proper
placement of a driveway, stone wall and plumb-
ing connections that were to be built by the
contractor.
After construction was complete, the home-
owner was notified by a county agency that
the surveyed boundary line was inaccurate. It
turned out that a portion of the stone wall, drive-
way and underground utilities encroached on
two neighboring properties. The surveyor did
a second survey confirming that the first survey
was inaccurate leading to the encroachment.
The neighbors sued the homeowner for
injunctive relief to remove the encroaching
structures, and compensatory damages for
trespass.
ALBPC attorneys immediately sprang into
action, poring over old deeds and proper-
ty records to prepare a detailed answer to
the complaint setting forth fifteen affirmative
defenses as well as counterclaims for adverse...
ALBPCnegotiates settlement
ending neighbor dispute
TITLE INSURANCEREAL ESTATE LITIGATION
5WE GET RESULTSWWW.ALBLAWFIRM.COM
Read more at
alblawfirm.com/
neighbor-
dispute
Read more at alblawfirm.com/
making-sure-closing-happens
For actual definition, one might wish to look
to a standard desktop dictionary, but, in fact,
the phrase “substantially rehabilitated” defies
the dictionary and is a term of art described by a
series of events that must have taken place and
under these decisions, memorialized by a partic-
ular set of documents.
Substandard or Deteriorated
The first of those events is that a building must,
through no fault of the current owner, came to
be “in a substandard or seriously deteriorated
condition.” RSC §2520.11(e)(3); see also DHCR
Operational Bulletin 95-2 (“OB95-2”), specifi-
cally OB95-2(I)(B). A presumption of substan-
dard or seriously deteriorated condition applies
“[w]here the rehabilitation was commenced in
a building that was at least 80% vacant of resi-
dential tenants.” [OB95-2(I)(B); see also RSC
§2520.11(e)(3)]. However, that 80% only uses
the presumption to satisfy the deterioration
requirement. There is no amount of vacancy
required as a threshold to substantial rehabilita-
tion itself.
In order to qualify for DHCR approved
substantial rehabilitation, it is imperative that
“[a]ll building systems comply with all applicable
building codes and requirements, and the owner
has submitted copies of the building’s certificate
of occupancy before and after the rehabilita-
tion.” [OB95-2(I)(D); see also RSC §2520.11(e)
(5)]. Proof regarding certificates of occupancy
is unnecessary in buildings exempt from certif-
icate of occupancy requirements.
The new rules of substantial rehabilitation
Continued from front page
Adam Leitman Bailey, P.C.
Adam Leitman Bailey, P.C. prevailed for its
clients in noise nuisance litigation, compel-
ling the plaintiffs to withdraw their case with prej-
udice, and without the clients being required to
pay even a dime.
Adam Leitman Bailey, P.C. represented the
owners of a full-floor, combined unit in a condo-
minium building located on Manhattan’s Upper
East Side. The plaintiffs, owners of the unit one
floor below, filed suit in Supreme Court, New
York County, alleging that the clients were
responsible for making unreasonable and intol-
erably loud noises starting as early as 6:30 or
7:00 a.m. on weekend mornings. According
to the plaintiffs’ complaint, such noises includ-
ed the sounds of jumping up and down, yelling
and screaming, playing of sports (like soccer,
hockey, or wrestling), banging, thumping,
running, heavy footsteps and commotion. The
plaintiffs retained an acoustical expert, who took
measurements allegedly showing that the levels
of noise measured in the plaintiffs’ apartment
and coming from the clients’ apartment to be
more than 400 percent louder than the ambient
noise in plaintiffs’ apartment. Plaintiffs alleged
that such levels of noise constituted violations
of the New York City Noise Code. Plaintiffs
sought injunctive relief to halt the alleged noise
nuisance, damages based on the alleged dimi-
nution in value of the plaintiffs’ apartment, and
punitive damages. Plaintiffs also sued the condo-
minium board for allegedly failing to enforce its
own rules.
Adam Leitman Bailey, P.C. successfully defends noise
nuisance litigation, compels plaintiffs to withdraw
MORTGAGE FINANCE
CONDOMINIUM & COOPERATIVE
6 WE GET RESULTS (212) 825-0365
Read more at alblawfirm.com/
substantial-rehab-new-rules
New York law does allow a condominium
board to sue a developer for construction
defects. However, the right of the board to sue
the developer is limited to construction defects
that affect the common elements of the condo-
minium building only. The law does allow the
board to sue on behalf of construction defects
that affect individual units, but only if the defect
involved is common to two or more units in the
building.
Q&A: can condo boards
sue developers for
defects?
Originally published by Super Lawyers
CONDOMINIUM & COOPERATIVE
Read more at alblawfirm.com/
developers-construction-defects
Adam Leitman Bailey, P.C., was retained by
a developer that had entered into a 2011
joint venture with another developer under
which they agreed to work together on govern-
ment-supported housing redevelopment proj-
ects. In 2017, the parties agreed that they could
independently work on new redevelopment
projects, but before the agreement reflecting
this was signed, ALBPC’s client started prepara-
tory work on a new project. The other developer
tried to kill this new project by bringing a suit
claiming that the new project should have been
in the joint venture, distributing the suit to the
public officials that would have to approve the
new project, and issuing intrusive subpoenas...
PRACTICE AREA
Read more at alblawfirm.com/
dissolving-venture
Read more at alblawfirm.com/noise-nuisance
Adam Leitman Bailey, P.C.
assists joint partner in
dissolving venture
New York Real Estate Attorneys
7WE GET RESULTSWWW.ALBLAWFIRM.COM
from building requirements to a duty to protect
against a potential attack as well as the proper
insurances to order including newer national
insurances and the necessary requirements for
replacement cash policies, private flood insur-
ance, preparing for the attack and other critical
issues ever practitioner must know to protect its
clients.
Presenting with experts from three states
suffering from natural and unnatural disas-
ters, Adam Leitman Bailey lectured to a full audi-
ence at the American College of Real Estate
Lawyers’ Fall Annual Meeting in New Orleans on
preventing casualties when catastrophic events
and natural disasters occur. The talk, “Surviving
the Apocalypse: Tales from Lawyers on the Front
Lines of Catastrophic Losses,” looked at real
experiences from lawyers who worked closely
with clients faced with the aftermaths of such
events. The panelists discussed best practices
and lessons learned, practical tips about prepa-
rations and documents, and valuable advice on
insurance coverage and claims.
Mr. Bailey discussed how New York has
progressed building to withstand the next casu-
alty as well as discussing the state of the law
Adam Leitman Bailey speaks on natural disaster
prevention at acrel annual conference
SPEAKING ENGAGEMENTS
Adam Leitman Bailey, P.C. hosted the clos-
ing lecture for the Syracuse University Law
School NYCEx program. During this lecture, Mr.
Bailey delved into his experiences in building
his firm while answering any questions that the
students had about his journey and what it took
to establish his law firm. As a Syracuse Law alum
himself, Mr. Bailey was both proud to host this
lecture and share his years of knowledge and
experience with the students, as well as humbled
to explain to them how he began years ago and
the growth he and the firm have achieved since.
Adam Leitman Bailey
hosts syracuse university
law school nycex closing
lecture
SPEAKING ENGAGEMENTS
Adam Leitman Bailey lectured on
“UnderstandingandTerminatingEasements”
to an enthusiastic group of claims attorneys
representing 26 states. Mr. Bailey covered differ-
ent types of easements and their application to
title insurance policy and title claims, analyzing
deeds to provide key “real-life” examples. He
then lectured on the various methods of termi-
nating easements. Mr. Bailey provided the audi-
ence with case
studies in order to
show them how to
use different types
of easements and...
SPEAKING ENGAGEMENTS
More on this at alblawfirm.com/homebookproject
New Milford intern
describes home project
COMMUNITY
Upholding the firm’s values and core beliefs
in supporting education for students of all
backgrounds, especially those who come from
underprivileged and under-resourced areas,
Adam Leitman Bailey, P.C. employees and
interns are dedicated to assisting our mission by
taking part of every step of the book publishing
process – from design to production to arriv-
al at the New York Port to mailing each book,
one-by-one, to various schools, libraries, and
non-profit organizations throughout the New
York City area and across the country.
Adam Leitman Bailey
speaks to fortune 500
company’s attorneys on
easements
Read online alblawfirm.com/homebookproject
New York Real Estate Attorneys
Adam Leitman Bailey, P.C.
One Battery Park Plaza
Eighteenth Floor
New York, New York 10004
Tel: (212) 825-0365
Email: info@alblawfirm.com
7WE GET RESULTSWWW.ALBLAWFIRM.COM
Read more at alblawfirm.com/
acrel-disaster-casualties
Read more at
alblawfirm.com/
easements-
lecture-2018
AdamLeitmanBailey,P.C.
OneBatteryParkPlaza,EighteenthFloor
NewYork,NY10004
Tel:212-825-0365
Email:info@alblawfirm.com
RETURNSERVICEREQUESTED
AdamLeitmanBailey,P.C.
newyorkrealestateattorneys

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Adam Leitman Bailey, P.C. Winter 2018 Newsletter

  • 1. WE GET RESULTS In nearly brand new decisions, WFCC Realty Corp. v. Huang Hui Zhen, 59 Misc 3d 140 and WFCC Realty Corp. v. Lin, 2018 N.Y. Slip Op. 51402(U), the Appellate Term, First Department forced building owners to completely recon- sider their methods for proving a rent-stabili- zation-exempting substantial rehabilitation has taken place in a building. Since 1995, landlords seeking to establish such exempting construc- tion took place in their buildings, relied on what- ever forensic data was available to them—bills, receipts, contracts, proofs of payment, and, lacking these, Department of Buildings records and forensic engineers expert estimations of the ages of building systems. However, these WFCC cases expand on concepts of Matter of Pavia v. DHCR, 22 A.D.3d 393, 802 N.Y.S.2d 361 [2005] to deny the use of these non-owner-maintained records to establish the requisite proofs, effec- tively making it impossible to prove an exemp- tion to which the Owner would otherwise be entitled. “Substantial Rehabilitation” Defined The laws that establish rent stabilization, particularly the Emergency Tenant Protection Act of 1974 set forth that buildings “substan- tially rehabilitated as family units on or after January 1, 1974” are not subject to rent stabi- lization. (Emergency Tenant Protection Act of 1974 “ETPA” §5(a)(5)) However, neither the statute, nor its implementing regulation at Rent Stabilization Code (“RSC”) §2520.11(e) (3) define “substantial” or “rehabilitated” or the phrase. For actual definition, one might wish to look to a standard desktop dictionary, but... The new rules of substantial rehabilitation to remove units from rent regulation Adam Leitman Bailey & Dov Treiman MORTGAGE FINANCE View online at alblawfirm.com/bestlawfirms-2019 Adam Leitman Bailey, P.C. selected as a 2019 “best law firm” in real estate— one of only ten of its size HONORS AND AWARDS not yet received any reimbursement. If there is no such advance to the workers (of whom some may well be self-employed), then the risk of nonpayment is fully shifted to those least likely able to afford nonpayment, the actual manual laborers. A moment’s thought about the “pay-when- paid” variation leads to the conclusion that if the “when” is “never” then the payment never occurs which means that under those circum- stances, “pay-when-paid” boils down to “pay-if- paid.” Thus, many courts and practitioners use the phrases interchangeably (Welsbach Electric Corp. v. Mastec North America, Inc., 7 N.Y.3d 624, 859 N.E.2d 498, 825 N.Y.S.2d 692 (2006), footnote 2)... Construction projects entail financial risk— risks for the owners of the property, risks for the banks financing them, risks for the general contractor, subcontractors, even the construc- tion workers. Naturally, all of these risk takers seek to push off the risk to someone else. Many of these push-offs the law allows; others are legally intolerable. Where the risk imperils the viability of the construction industry itself, one highly favored by all who seek “progress,” legis- latures select whom they will protect. Across the United States, legislators have spent a century considering the particular form of protection known alternately as “pay if paid” and “pay when paid.” Pay-If-Paid Defined The idea behind “Pay-If-Paid” is that a general contractor will often wish to lower its financial risk by entering into deals with its subcontrac- tors under which the subcontractor is only paid if, as, and when the general contractor receives payment. Such a provision greatly reduces the up-front expenditures of the general contrac- tor and generally forces the subcontractor to advance funds to its employees for which it has Pay when paid, limits and limitations Adam Leitman Bailey & Dov Treiman Continue reading Pay When Paid on page 5. REAL ESTATE LITIGATION Seventy percent of Adam Leitman Bailey, P.C. attorneys have been named to the New York Metro area Super Lawyers and Rising Stars lists for 2018, making the New York real estate firm the only one of its size – under 30 attorneys – to achieve such an impressive accomplishment. Adam Leitman Bailey, P.C. named to the 2018 super lawyers & rising stars lists—over two–thirds of attorneys honored HONORS AND AWARDS View online at alblawfirm.com/super-lawyers-2018 Adam Leitman Bailey, P.C. New York Real Estate ATTorneys Winter 2018 Newsletter Continue reading The New Rules on page 6.
  • 2. TOP 100TOP 100 This past month, Adam Leitman Bailey, P.C. spoke with a Vice President at [Fortune 500 company] who manages the subject television studio that formerly complained it was unable to do its job effectively as a result of the noise interruptions during celebrity interviews. During this call, she explained the problem had been expunged, she no longer hears any noise or vibra- tions and that the “mission is accomplished.” [Fortune 500 company] came to Adam Leitman Bailey, P.C. to solve a serious noise nuisance: [Company’s] Fitness Studio gym, located directly above the client’s live-action performance studio, was creating severe noise and sound vibrations that were greatly affecting the ability of the client to conduct and record interviews of its A-list celebrity guests. The noise emanating from the gym, which included the sudden and frequent dropping of heavy weights, was so severe that the inter- viewers and the guests were visibly startled and distracted on stage during the recorded interviews. Equally troubling, and dangerous, the severe vibrations caused by the dropping of the heavy weights caused large portions of the ceiling above the studio to crumble onto heads of guests in the live audience. Despite the client’s repeated complaints, the owner of the building and the landlord ignored the client’s complaints and failed to address the unbearable and danger- ous conditions caused by the gym’s activities. In a landmark decision for New York real estate developers and owners, on August 2, 2018, Judge Franc Perry issued the first decision in New York history denying a temporary, limited license sought by a developer pursuant to Real Property Actions and Proceedings and Law (“RPAPL”) Section 881. “[T]he Court is in agreement with the respon- dents in this matters. The Court is going to dismiss the petition for a license as it has been indicated that, although this may be solely about money, there are other factors with regards to the safety of the adjoining building that have not been addressed in this proceeding. As set forth below, this historic decision dramatically impacts the rights of property owners. By way of background, a notable developer (“Developer”) sought to construct a commer- cial building in Chelsea. From the onset of its project, the Developer sought licensed access from the Board of Managers (the “Board”) of the adjacent condo- minium (the “Condominium”), and the individ- ual owners of the units in the Condominium that would be most impacted by the proposed construction, in order to install protective measures required by the New York City Department of Buildings (the “DOB”). Adam Leitman Bailey, P.C. obtains landmark decision denying developer a license to preserve safety of adjacent condominium owners REAL ESTATE LITIGATION Read more at alblawfirm.com/cowboy-developer Read more at alblawfirm.com/tv-studio-noise CONDOMINIUM AND COOPERATIVE Stopping a gym’s noise interruption at a television studio 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. 2 WE GET RESULTS (212) 825-0365 Adam Leitman Bailey, P.C.
  • 3. theory that the corporate entity acts as a shield to protect individual owners from personal liabil- ity. With this game changer, ALBPC was able to obtain a substantial settlement offer from the Defendants. ALBPC then discovered e-mails between the client’s board president and the Sponsors’ contractors showing that we timely put the Sponsor on notice of the defects within the applicable statute of limitations period. Using this information, the firm was also successful in defending against the Sponsors’ motion to dismiss, having successfully argued that the Sponsor was on notice of the defective condi- tion. Ultimately, we were able to bring in all of the culpable parties as Defendants to the case, which further increased the settlement pot. During the court ordered settlement confer- ence, ALBPC provided a comprehensive posi- tional statement demonstrating to the court all of the expert reports that our office had commissioned, detailing the damages and the estimated... Our client, a Board of Managers of an Upper West Side condominium, came to Adam Leitman Bailey, P.C. for help with the damages caused by building defects in their newly built condominium. Adam Leitman Bailey, P.C. commenced a Supreme Court litigation against the Sponsor Developer entities and the individual prin- cipals of the entities to recover damages for the building defects, which resulted from the grossly negligent construction by the Sponsor Developer entities. The biggest issue was a leaky roof that caused water to infiltrate the building. In discovery, Adam Leitman Bailey, P.C. found that the roofing subcontractor was not licensed or properly insured, which was a big key to getting a favorable settlement for the client. ALBPC also made new case law in this matter by successfully arguing that the individual prin- cipals of the sponsor bear personal liability by virtue of their certifying in the Offering Plan that the condominium was built in conformance with the plans. Prior to this case, the First Department (New York County), in these cases, had held that the principals do not bear personal liability simply by signing the Offering Plan, under the Gamechanging settlement creates new case law, wins attorney fees & allows client to make building repairs Adam Leitman Bailey, P.C. secured an import- ant ruling clarifying several aspects of New York City’s Reserve Fund Law, which requires the sponsors that convert rental buildings to condominiums or co-operatives to establish a reserve fund for the building of 3% of the “total price” of the offering, subject to a limited credit for certain specified types of building capital replacement work. In a decision concerning the subject condo- minium in Manhattan, in which Adam Leitman Bailey, P.C. represented the Condominium Board, the presiding justice of the New York County Supreme Court Commercial Division issued a ruling of first impression about whether certain classes of work that were performed by the condominium sponsor qualified as credits to the reserve fund. Because the statute requires qualifying work to be a capital replacement, not a mere repair, the judge disallowed credits for installing a single layer of roofing membrane to an existing roof and for repair of spalled concrete and recoating of building terraces. She also held that because the statute prohibited credits for work to cure violations of record, where elevator work cures violations, it does not qualify for a credit without proof of what, if any, work did not involve curing the violations. The sponsor’s claimed capital replacement work also involved the replacement of a substan- tial number of sliding glass doors. The judge found that such replacements would not qualify as replacement of windows, as the sponsor had argued, but nonetheless the credits for replace- ment of the doors qualified as a major structural Adam Leitman Bailey, P.C. obtains decision clarifying under New York condominium/co-op reserve fund law CONDOMINIUM & COOPERATIVE Read more at alblawfirm.com/ reserve-fund-law-decision The FinCEN Geographic Targeting Order has been extended once again, now until May 15, 2019. With the extension came some new changes to the Order. New counties have been added to the Order. The list now includes residential real property located in Tarrant and Dallas Counties, State of Texas; Cook County, State of Illinois; Clark County, State of Nevada; Suffolk and Middlesex Counties, State of Massachusetts; and King County, State of Washington. The following, which were all listed on the previous Orders, still remain: New York, Kings, Bronx, Queens & Richmond Counties, State of New York; Bexar County, State of Texas; Honolulu County, State of Hawaii; San Diego, Los Angeles, San Francisco, San Mateo and Santa Clara, Sate of California; and Miami-Dade, Broward and Palm Beach Counties, State of Florida. Other changes include the removal of purchases through a Trust and the removal of certain confidentiality provisions... FinCEN geographic targeting order renewal Rosemary Liuzzo Mohamed MORTGAGE FINANCE Read more at alblawfirm.com/ fees-and-repairs CONDOMINIUM & COOPERATIVE Read more at alblawfirm.com/ fincen-gto-new-changes replacement. In addition her decisions on the reserve fund credits, the judge followed the prior Appellate Division ruling in the case to find that where the sponsor’s discounted price offer to tenant-of- ferees (i.e. insider price) had expired before the “effective date” of the sponsor’s offering a pre-effective date offer an “insider” tenant at the higher price to non-tenant offerees... 3WE GET RESULTSWWW.ALBLAWFIRM.COM New York Real Estate Attorneys
  • 4. In NYCTL 1998-2 Trust v. Alanis Realty LLC, et al., Adam Leitman Bailey, P.C. successfully defeated Defendant Alanis Realty LLC’s motion to vacate the Judgment of Foreclosure and Sale that was previously entered in this tax lien fore- closure proceeding, under which Judgment ALB, P.C.’s client took title to the premises as the high bidder at the foreclose sale. The defendant prior owner brought a motion to vacate a Judgment of Foreclosure and Sale and to unravel the sale arguing that it was never properly served with process in the action. It is well established law in the State of New York, however, that jurisdiction is obtained by service of process on the Secretary of State irrespective of whether the process ever actually reached the business entity, which was the case here. Adam Leitman Bailey, P.C. was retained to protect the interests of the current owner of the premises. Adam Leitman Bailey, P.C cross- moved to intervene in the action as a neces- sary party and, simultaneously, opposed the motion to vacate the Judgment of Foreclosure and Sale. So as not to rely only on the argu- ment that service upon the Secretary of State conferred jurisdiction, ALB, P.C. also strategized and argued that: (1) vacating the buyer’s good faith purchase for value would be improper and severely prejudicial, and (ii) Alanis Realty LLC’s failure to tender the judgment amount bars relief, regardless. Less than two weeks after oral argument before the Honorable Ben R. Barbato, J.S.C. in Bronx Supreme Court, the Court denied Alanis Realty LLC’s motion to vacate the Judgment of Foreclosure and Sale in its entirety, thereby protecting the interests of the current owner and enabling it to utilize the premises as it pleases. Jackie Halpern Weinstein, Esq. and William J. Geller, Esq. at Adam Leitman Bailey, P.C. strate- gized, drafted, argued, and secured this win for the client. Adam Leitman Bailey, P.C. defeats prior owner’s motion to vacate judgment of foreclosure and sale Adam Leitman Bailey, P.C. You’re in a co-op building, and you have a resident called a rent-regulated tenant (this covers the older rent-controlled apartments and the relatively more recent rent-stabilized units). The rent-regulated tenant moved in many years ago, before your building became a coopera- tive, when it was a rental. In fact, if you look at the history of cooperatives, many former rent- als are now co-ops. When your rent-regulated tenants leave, then those apartments become free-market and part of the co-op. What happens if you have a rent-regulated tenant who is also a hoarder? I’m talking about those people who live in apartments cluttered high with newspapers – and visited by vermin and bugs. Is this a health hazard? Absolutely. A fire hazard? Absolutely. Is that dangerous for your residents? Absolutely. This is a serious problem, and most hoarders need serious help. The board of directors is meet- ing, and all of a sudden the subject “rent-regulat- ed hoarder” comes up under your new business section. Everyone wants to speak. Everyone has gotten calls about this rent-regulated tenant/ hoarder. You have someone you can turn to for help. Remember: there is a non-resident owner of this unit. He or she is not the “landlord” of that rent-regulated apartment. To get the tenant out, the owner has to be notified of everything. That owner also has to be sued. But that owner is probably going to be very happy to be sued. That owner has a unit where he or she is not getting the full rent, and the best thing that could happen is if the board evicts the tenant. They’ve been waiting 40 years to have the tenant leave (through eviction or death), so they can get the apartment back and sell it on the market. In these situations, the board should have that owner hande the eviction. If you have an aggressive owner, let him or her do the job, and the board doesn’t have to spend money. If the owner is not being aggressive, then the board has to do the job. Either way, everybody should work together for the common good. Legal game changers for boards – rent stabilization law Originally published by Habitat FORCLOSURE LITIGATION CONDOMINIUM &COOPERATIVE 4 WE GET RESULTS (212) 825-0365 Our mortgage servicing client commenced a second foreclosure action in 2017 after its first 2008 action failed. When the Borrowers claimed that the mortgage had been accel- erated by the 2008 action and could not be enforced under the 6-year statute of limitations, the servicer turned to Adam Leitman Bailey, P.C. to save the mortgage loan. Borrowers made a pre-answer motion to dismiss under the statute of limitations. ALBPC opposed Borrowers’ motion on a number of grounds including that by the terms of the mort- gage, Borrowers had the ability to reinstate the loan up until a judgment was entered. Therefore, since there was no prior judgment, the loan had never actually been accelerated and the statute of limitations had not expired. The Court agreed and denied Borrowers’ motion to dismiss. The Court completely adopted ALBPC’s argument that there could not have been... Adam Leitman Bailey, P.C. saves mortgage from statute of limitations MORTGAGE FINANCE Read more at alblawfirm.com/ acceleration-argument Read more at alblawfirm.com/prior-owners-motion Read more at alblawfirm.com/habitat-rent- stabilization-law/
  • 5. the value, or the agreed price, of such labor…” The law of these liens, first enacted in New York in 1830,[1] has evolved through the years to increase the protections accorded to these “mechanics.” Lien Law §34, a later development, makes contracts to waive the ability to assert the lien unenforceable, stating, “Notwithstanding the provisions of any other law, any contract, agree- ment or understanding whereby the right to file or enforce any lien created under article two is waived,[2] shall be void as against public policy and wholly unenforceable.” It was based on this provision, as amended through the decades, that the Court of Appeals in West-Fair Elec. Contractors v. Aetna Cas. & Sur. Co., 87 N.Y.2d 148 (1995) ruled, We hold that a pay-when-paid provision which forces the subcontractor to assume the risk that the owner will fail to pay the general contractor is void and unenforceable as contrary to public policy set forth in the Lien Law §34. By contrast, a pay-when-paid provision which merely fixes a time for payment does not indefinitely suspend a subcontractor’s right to payment upon the fail- ure of an owner to pay the general contractor, and does not violate public policy... New York Real Estate Attorneys Illegality of Pay-If-Paid Like many jurisdictions across the United States, New York outlaws Pay-If-Paid clauses, but, in New York’s case, only indirectly. Generally speaking, prohibitions on contrac- tual clauses in New York reside in Article 5 of the General Obligations Law. However, the cases questioning the enforceability of Pay-If- Paid clauses do not point to any provision of the General Obligations Law, but rather to the Lien Law, even though in nearly none of those cases has anyone filed a lien. Rather, the cases construe the right to collect on the debt and whether the debt has actually arisen, which thus would hypothetically impact the right to file a lien. The core concept in these cases is the so-called “mechanic’s lien,” taking its name from an obsolete meaning of the word “mechanic”, being “one who is employed in a manual occu- pation; a handicraftsman.” (Oxford English Dictionary, Oxford University Press, 1971.) These are governed by Article 2 of New York’s Lien Law. Specifically, Lien Law §3 states, “A contractor, subcontractor, laborer, material- man… who performs labor or furnishes materials for the improvement of real property with the consent or at the request of the owner thereof… shall have a lien for the principal and interest, of Pay when paid Continued from front page Read more at alblawfirm.com/pay-when-paid Acontract had been signed. Adam Leitman Bailey, P.C. received a call when, after finding “mouse droppings” during a visit to the apartment, the buyers would not close. Because our client was a celebrity, we immediately cut off all contact with the real estate brokers to avoid any unwanted publicity and, within an hour, hired an exterminator to head to the multi-mil- lion dollar Fifth Avenue premises. Not only did the exterminator not find any sign of rodents, but there was not even a mouse dropping to be seen; the exterminator issued a report that the apartment was rodent-free. This report was sent to the buyers’ attorney immediately and within days the closing was back on. A month later, the closing was off again. We received a call from the buyers’ counsel who asked for his client’s deposit back. We told him our client was ready to litigate to the end of time before he would give back any money (which was true). After he spoke with his client, the clos- ing was back on again. Now we were worried about the buyer throw- ing the board interview by acting undesirable, but the interview went fine. Adam Leitman Bailey, P.C. called a time of the essence closing and had a stenographer and videographer at the closing. The apartment closed and we were off to our next case. Making sure the closing happens PURCHASE & SALE OF HOMES Adam Leitman Bailey, P.C. (“ALBPC”) was retained by a leading title insurance carri- er to defend a homeowner in Westchester County who had contracted with a developer to purchase a parcel of property and a home to be constructed on it. Also a party to the contract was a contractor, who was hired by the develop- er to construct the new home and its appurte- nance. One boundary line of the homeowner’s property adjoins two neighboring properties. The contractor hired a surveyor to survey the boundary lines of the property to ensure proper placement of a driveway, stone wall and plumb- ing connections that were to be built by the contractor. After construction was complete, the home- owner was notified by a county agency that the surveyed boundary line was inaccurate. It turned out that a portion of the stone wall, drive- way and underground utilities encroached on two neighboring properties. The surveyor did a second survey confirming that the first survey was inaccurate leading to the encroachment. The neighbors sued the homeowner for injunctive relief to remove the encroaching structures, and compensatory damages for trespass. ALBPC attorneys immediately sprang into action, poring over old deeds and proper- ty records to prepare a detailed answer to the complaint setting forth fifteen affirmative defenses as well as counterclaims for adverse... ALBPCnegotiates settlement ending neighbor dispute TITLE INSURANCEREAL ESTATE LITIGATION 5WE GET RESULTSWWW.ALBLAWFIRM.COM Read more at alblawfirm.com/ neighbor- dispute Read more at alblawfirm.com/ making-sure-closing-happens
  • 6. For actual definition, one might wish to look to a standard desktop dictionary, but, in fact, the phrase “substantially rehabilitated” defies the dictionary and is a term of art described by a series of events that must have taken place and under these decisions, memorialized by a partic- ular set of documents. Substandard or Deteriorated The first of those events is that a building must, through no fault of the current owner, came to be “in a substandard or seriously deteriorated condition.” RSC §2520.11(e)(3); see also DHCR Operational Bulletin 95-2 (“OB95-2”), specifi- cally OB95-2(I)(B). A presumption of substan- dard or seriously deteriorated condition applies “[w]here the rehabilitation was commenced in a building that was at least 80% vacant of resi- dential tenants.” [OB95-2(I)(B); see also RSC §2520.11(e)(3)]. However, that 80% only uses the presumption to satisfy the deterioration requirement. There is no amount of vacancy required as a threshold to substantial rehabilita- tion itself. In order to qualify for DHCR approved substantial rehabilitation, it is imperative that “[a]ll building systems comply with all applicable building codes and requirements, and the owner has submitted copies of the building’s certificate of occupancy before and after the rehabilita- tion.” [OB95-2(I)(D); see also RSC §2520.11(e) (5)]. Proof regarding certificates of occupancy is unnecessary in buildings exempt from certif- icate of occupancy requirements. The new rules of substantial rehabilitation Continued from front page Adam Leitman Bailey, P.C. Adam Leitman Bailey, P.C. prevailed for its clients in noise nuisance litigation, compel- ling the plaintiffs to withdraw their case with prej- udice, and without the clients being required to pay even a dime. Adam Leitman Bailey, P.C. represented the owners of a full-floor, combined unit in a condo- minium building located on Manhattan’s Upper East Side. The plaintiffs, owners of the unit one floor below, filed suit in Supreme Court, New York County, alleging that the clients were responsible for making unreasonable and intol- erably loud noises starting as early as 6:30 or 7:00 a.m. on weekend mornings. According to the plaintiffs’ complaint, such noises includ- ed the sounds of jumping up and down, yelling and screaming, playing of sports (like soccer, hockey, or wrestling), banging, thumping, running, heavy footsteps and commotion. The plaintiffs retained an acoustical expert, who took measurements allegedly showing that the levels of noise measured in the plaintiffs’ apartment and coming from the clients’ apartment to be more than 400 percent louder than the ambient noise in plaintiffs’ apartment. Plaintiffs alleged that such levels of noise constituted violations of the New York City Noise Code. Plaintiffs sought injunctive relief to halt the alleged noise nuisance, damages based on the alleged dimi- nution in value of the plaintiffs’ apartment, and punitive damages. Plaintiffs also sued the condo- minium board for allegedly failing to enforce its own rules. Adam Leitman Bailey, P.C. successfully defends noise nuisance litigation, compels plaintiffs to withdraw MORTGAGE FINANCE CONDOMINIUM & COOPERATIVE 6 WE GET RESULTS (212) 825-0365 Read more at alblawfirm.com/ substantial-rehab-new-rules New York law does allow a condominium board to sue a developer for construction defects. However, the right of the board to sue the developer is limited to construction defects that affect the common elements of the condo- minium building only. The law does allow the board to sue on behalf of construction defects that affect individual units, but only if the defect involved is common to two or more units in the building. Q&A: can condo boards sue developers for defects? Originally published by Super Lawyers CONDOMINIUM & COOPERATIVE Read more at alblawfirm.com/ developers-construction-defects Adam Leitman Bailey, P.C., was retained by a developer that had entered into a 2011 joint venture with another developer under which they agreed to work together on govern- ment-supported housing redevelopment proj- ects. In 2017, the parties agreed that they could independently work on new redevelopment projects, but before the agreement reflecting this was signed, ALBPC’s client started prepara- tory work on a new project. The other developer tried to kill this new project by bringing a suit claiming that the new project should have been in the joint venture, distributing the suit to the public officials that would have to approve the new project, and issuing intrusive subpoenas... PRACTICE AREA Read more at alblawfirm.com/ dissolving-venture Read more at alblawfirm.com/noise-nuisance Adam Leitman Bailey, P.C. assists joint partner in dissolving venture
  • 7. New York Real Estate Attorneys 7WE GET RESULTSWWW.ALBLAWFIRM.COM from building requirements to a duty to protect against a potential attack as well as the proper insurances to order including newer national insurances and the necessary requirements for replacement cash policies, private flood insur- ance, preparing for the attack and other critical issues ever practitioner must know to protect its clients. Presenting with experts from three states suffering from natural and unnatural disas- ters, Adam Leitman Bailey lectured to a full audi- ence at the American College of Real Estate Lawyers’ Fall Annual Meeting in New Orleans on preventing casualties when catastrophic events and natural disasters occur. The talk, “Surviving the Apocalypse: Tales from Lawyers on the Front Lines of Catastrophic Losses,” looked at real experiences from lawyers who worked closely with clients faced with the aftermaths of such events. The panelists discussed best practices and lessons learned, practical tips about prepa- rations and documents, and valuable advice on insurance coverage and claims. Mr. Bailey discussed how New York has progressed building to withstand the next casu- alty as well as discussing the state of the law Adam Leitman Bailey speaks on natural disaster prevention at acrel annual conference SPEAKING ENGAGEMENTS Adam Leitman Bailey, P.C. hosted the clos- ing lecture for the Syracuse University Law School NYCEx program. During this lecture, Mr. Bailey delved into his experiences in building his firm while answering any questions that the students had about his journey and what it took to establish his law firm. As a Syracuse Law alum himself, Mr. Bailey was both proud to host this lecture and share his years of knowledge and experience with the students, as well as humbled to explain to them how he began years ago and the growth he and the firm have achieved since. Adam Leitman Bailey hosts syracuse university law school nycex closing lecture SPEAKING ENGAGEMENTS Adam Leitman Bailey lectured on “UnderstandingandTerminatingEasements” to an enthusiastic group of claims attorneys representing 26 states. Mr. Bailey covered differ- ent types of easements and their application to title insurance policy and title claims, analyzing deeds to provide key “real-life” examples. He then lectured on the various methods of termi- nating easements. Mr. Bailey provided the audi- ence with case studies in order to show them how to use different types of easements and... SPEAKING ENGAGEMENTS More on this at alblawfirm.com/homebookproject New Milford intern describes home project COMMUNITY Upholding the firm’s values and core beliefs in supporting education for students of all backgrounds, especially those who come from underprivileged and under-resourced areas, Adam Leitman Bailey, P.C. employees and interns are dedicated to assisting our mission by taking part of every step of the book publishing process – from design to production to arriv- al at the New York Port to mailing each book, one-by-one, to various schools, libraries, and non-profit organizations throughout the New York City area and across the country. Adam Leitman Bailey speaks to fortune 500 company’s attorneys on easements Read online alblawfirm.com/homebookproject New York Real Estate Attorneys Adam Leitman Bailey, P.C. One Battery Park Plaza Eighteenth Floor New York, New York 10004 Tel: (212) 825-0365 Email: info@alblawfirm.com 7WE GET RESULTSWWW.ALBLAWFIRM.COM Read more at alblawfirm.com/ acrel-disaster-casualties Read more at alblawfirm.com/ easements- lecture-2018