MORE RE: UNLICENSED HOME CONTRACTORS

A blog post I started on May 28, 2010 had received numerous comments on this issue:

Friday, May 28, 2010 - UNLICENSED HOME CONTRACTORS

To add to that discussion, here is a story of the recent arrest of Nassau home improvment contractors for operating without a license and it appears the target of these arrests were contractors working on Superstorm Sandy victims:

ABC LOCAL - Nassau contractors busted for working unlicensed

NEWSDAY - Nassau: 61 unlicensed contractors nabbed in Sandy sting

NEW YORK DIVORCE - MAINTAINING THE MARITAL RESIDENCE

This article was passed along to me. Of course, there are so many other issues to consider in whether or not to remain in the marital home, especially in these days of home values versus debt carrying costs, etc., as well as the child custody issue.

For myself, the best message one can take from this story is that many times a client will say "my friend was able to get this" or "I was told this would happen", etc. The fact is, in my view, each divorce is different, there is no cookie cutter approach and one person's experience does not mean that will be another person's experience.

Here is the article:

FORBES - Should You Move Out Of The Marital Home? Learn From Divorce Attorneys, Not The Tabloids

MORE NEW ISSUES IN FORECLOSURE

There are many stories on this:

Bank of America Lied to Homeowners and Rewarded Foreclosures, Former Employees Say

This action is pending in US District Court Massachusetts but the plaintiffs are seeking class certification and New York is one of the states that would be covered in the proposed class.

Here is a link to Plaintiff's memorandum of law for class certification which describes in more detail the nature of the action:

IN RE BANK OF AMERICA HOME AFFORDABLE MODIFICATION PROGRAM (HAMP) CONTRACT LITIGATION CLASS CERTIFICATION MEMORANDUM OF LAW

NEW ISSUES IN FORECLOSURES

As predicted, with so many homes "underwater" and so many homes selling at auction for less than the amount due, banks will soon address the deficiency judgments.

This was discussed recently by The Washington Post:

WASHINGTON POST - Lenders seek court actions against homeowners years after foreclosure

Note the potential liability for exposure in NY - 26 years after judgment sale, the homeowner is still open to litigation on the amount due.

SANDY/FORECLOSURE CLINIC TOMORROW

I am on vacation but the Nassau County Bar Association is not.... Superstorm "Sandy" Consultations & Foreclosure Free Legal Consultation Clinics at Nassau County Bar Association on June 25 from 3 to 6 p.m. Call 516-747-4070.  

MORTGAGE FORCLOSURE - NATIONAL MORTGAGE SETTLEMENT

As many have read, a federal report released Wednesday shows that five banks and lenders that are part of a multistate settlement over fraudulent foreclosure practices are in compliance with parts of the settlement, but that some banks are lagging in providing efficient relief to borrowers.

There is a website on the National Mortgage Settlement that was developed and is hosted and maintained by the Attorneys General on the Executive Committee that negotiated the settlement. The link is here:

National Mortgage Settlement

MORTGAGE FORECLOSURE - WHAT HAPPENS TO AUCTION SALE SURPLUS

This post obviously does not apply to homes which are underwater but to homes that have equity but still subject to foreclosure.

Once the bank has obtained a Judgment of Foreclosure and Sale, it can then sell the real estate. The mortgage foreclosure proceeding culminates with the public auction of the bank’s real estate to the highest bidder. At that point, the property is sold to the bidder, who pays the sale price to a court-appointed referee.  If the amount paid by the successful bidder at the auction sale exceeds the amount due to the mortgagee according to the Judgment of Foreclosure and Sale, then there is created a special fund of the left-over purchase price called the “Surplus Moneys.” For example, if the mortgagee is due $200,000 and the property sold for $300,000, the remaining sale price of $100,000 is the surplus. According to Article 13 of New York’s Real Property Actions and Proceedings Law (RPAPL), there is a procedure for the former homeowner (and other junior lienors, such as second mortgagees, judgment creditors or other lienholders) to petition the court for the release of the surplus moneys.

This from last week just came to my attention:

NY POST - Sen. Sampson’s embezzlement indictment spurs reform in foreclosure suits

REVERSE MORTGAGES

Yesterday I attended a CLE on reverse mortgages sponsored by Tradition Title Agency.

A reverse mortgage is actually called a Home Equity Conversion Mortgage (HECM). It is a FHA program and, in my opinion, may not be completely explained in the commercials I see on television. Some basic information about them, the costs, eligibility, etc. can be found at these links which I found to be helpful:

HUD - Frequently Asked Questions about HUD's Reverse Mortgages

WIKI - Reverse mortgages in the United States

Another interesting fact I learned is that not all banks are offering reverse mortgages.

NEW YORK HOME SALES - SELLER'S CONCESSION

There was a discussion recently regarding language for the use of a "Seller's Concession" - which is a method utilized to assist Buyers by a financing of the Closing costs.

There are ethical questions on this practice which has been addressed by the NYSBA as basically what these concessions are is a“grossing up” the sales price of a residential property in an amount matched by a “seller’s concession”. The ethical opinions require full disclosure to all parties.

I personally do not agree with this process. If housing is unaffordable, then do not buy it. I recently found a blog post which had additional concerns too:

NY State Bar Ethics Opinion Doesn’t Go Far Enough by Robert J. Smith

NEW YORK DIVORCE - CELL PHONE EVIDENCE AND COHABITATION

When you are on various Internet groups, you get links to some very interesting articles and I pass this one along:

Cohabitation, the Termination of Alimony and Cell Phones

I liked it for two reasons:

1. It addresses cell phone evidence which, like email, Facebook and similar items, can become important items of evidence in various aspects of matrimonial law (although it does not address the cost in legal fees, etc. in obtaining these records).

2. It discusses the issue of cohabitation, which raises issues not only in maintenance but may also in custody matters.

But what is "cohabitation"?  Graev v Graev, 11 NY3d 262 [2008]) gives a warning to parties to make it explicitly clear what the terms of the agreement are with respect to the definition of cohabitation.

PROPER ACKNOWLEDGMENTS BY NOTARY PUBLICS IN PRE-NUP AGREEMENTS

Real Property Law § 309-a codified model language to be used in a certificate of acknowledgment involving a signer who was not acting on behalf of a corporation and indicated that an acknowledgment should read as follows (or "conform substantially" with the following): "On the [insert date] before me, the undersigned, personally appeared [insert name of signer], personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument"

The danger of not following this language in prenupital agreements (which require proper certificate pf acknowledgments) is revealed in the May 30, 2013 decision in GALETTA v. GALETTA, 2013 NY Slip Op 3871 - NY: Court of Appeals 2013

In that case, there was a prenupital agreement and in the certificate of acknowledgment relating to the husband's signature, the "to me known and known to me" phrase was inexplicably omitted, leaving only the following statement: "On the 8 [sic] day of July, 1997, before me came Gary Galetta described in and who executed the foregoing instrument and duly acknowledged to me that he executed the same."  The court found that the parties' prenuptial agreement was invalid.

NEW YORK DIVORCE - PROPOSED CHANGES TO MAINTENANCE

There has been a lot of "buzz" about a new bill introduced to revise New York's rules regarding maintenance (alimony) and here's a discussion of it from the Wall Street Journal:

WSJ - Legislator Seeks to Fix New York State's Divorce Laws - Bill Would Overhaul Alimony Law, Set New Awards Formulas

CHILD CUSTODY & SUPPORT

I recently read of the decision in Rubin v Della Salla. 2013 NY Slip Op 02681, decided on April 18, 2013, Appellate Division, First Department which is described in part in the following article from Thomson Reuters:

Millionaire parent doesn't have to pay child support: appeals court

In this case, a father who has custody of his child the majority of the year was not obligated to make support payments to the child's mother, despite the vast disparity in their incomes: the father was a millionaire and the mother was unemployed.

The interesting part of the case for me was how the court determined who had primary physical custody - based on number of overnights:

"Courts have uniformly followed Bast, finding that where parents have unequal residential time with a child, the party with the greater amount of time is the custodial parent for CSSA purposes (see Smith v Smith, 97 AD3d 923 [3d Dept 2012]; Matter of VanBuren v Burnett, 58 AD3d 900 [3d Dept 2009]; Rossiter v Rossiter, 56 AD3d 1011 [3d Dept 2008]; Jennifer H.S. v Damien P.C., 50 AD3d 588 [1st Dept 2008], lv denied 12 NY3d 710 [2009]; Matter of Ambrose v Felice, 45 AD3d 581 [2d Dept 2007]; Matter of Minter-Litchmore v Litchmore, 24 AD3d 932 [3d Dept 2005]; Gainey v Gainey, 303 AD2d 628 [2d Dept 2003]; Sluck v Sluck, 266 AD2d 764 [3d Dept 1999]; Borowicz v Mancini, 256 AD2d 713 [3d Dept 1998]).

Here, given the schedule set by the court's custody decision, there is no question that the father has physical custody of the child for a majority of the time and should be considered the custodial parent for child support purposes. Based on the custody order, for the July 2012 to June 2013 time period, the child will spend 206 overnights with the father compared to 159 with the mother. Thus, the child will be with the father for a majority of the time (56%), and with the [*6]mother a minority of the time (44%). The extra 47 days the child spends with the father translates into nearly 30% more than the mother's time. Put another way, the child is with the father approximately 130% of the time he is with the mother. The great disparity in overnights here — 56% to 44% — stands in marked contrast to the cases cited by the mother where the parents have equal, or essentially equal, custodial time (see e.g. Barr v Cannata, 57 AD3d 813 [2d Dept 2008]; Carlino v Carlino, 277 AD2d 897 [4th Dept 2000]; Baraby v Baraby, 250 AD2d at 201).

The court below ignored its own custody schedule when it stated that the parents here share "very nearly equal" physical custody of the child. In an attempt to equalize the custodial time, the court focused on how much "waking, non-school time" the child spends with each parent. In other words, the court suggested that a custodial parent could be identified by calculating the number of waking hours he or she spends with the child. The mother makes a similar argument on appeal, contending that she should be considered the custodial parent because she "sees" the child on a majority of days during the year. For example, she counts a Thursday overnight as two days simply because she saw the child after school on Thursday and again on Friday morning.

This approach was soundly rejected in Somerville v Somerville (5 AD3d 878 [3d Dept 2004]). In that case, the child spent the majority of custodial time each week with his mother, and the father was ordered to pay child support. The father appealed, claiming that he should be considered the custodial parent because he had physical custody of the child during most of her "waking hours." The father argued that more weight should be given to daytime than to nighttime hours because a child needs less parental care during the time the child is sleeping. The court denied the father's objections to the child support order, finding his argument "patently absurd and . . . entitled to no serious consideration" (5 AD3d at 880; see also Joleene D.R. v Robert J.W., 15 Misc 3d 1148A, 2007 NY Slip Op 51201[U] (Fam Ct Oswego Cty 2007] [rejecting claim that the court should give less weight to sleeping time]). We reach the same result here and reject the counting of waking hours as a method of determining who is the custodial parent. Although the Court in Bast did not elaborate on what constitutes a "majority of time," we believe that the number of overnights, not the number of waking hours, is the most practical and workable approach. In Smith v Smith (97 AD3d 923), a case directly on point, the Third Department endorsed the use of overnights. In that case, during the school year, the children were with their father 18 out of every 28 nights, and with their mother the remaining 10 nights. For the summer, school recesses and holidays, the parents shared equal parenting time. Despite the fact that the father had the children for the majority of time, the trial court nevertheless designated him the noncustodial parent by virtue of his greater income, and directed him to pay child support. The Third Department reversed that determination, finding that the trial court's order violated Bast v Rossoff. The court held that "[i]nasmuch as shared' custody is not synonymous with equal' custody and [the father] clearly has physical custody for a majority of the time during the greater part of the year, Supreme Court incorrectly determined that [the father] was the noncustodial parent for child support purposes . . . and erred in directing [the father] to pay child support to [the mother]" (97 AD3d at 924). [*7]

There are sound policy reasons why calculating the waking hours spent with each parent should not be the method used to determine who is the custodial parent. Allowing a parent to receive child support based on the number of daytime hours spent with the child bears no logical relation to the purpose behind child support awards, i.e., to assist a custodial parent in providing the child with shelter, food and clothing (see e.g. Higgins v Higgins, 50 AD3d 852 [2d Dept 2008] [food, clothing and shelter costs are inherent to the basic child support obligation]). Furthermore, because a child's activities are subject to constant change, the number of hours spent with each parent becomes a moving target. Outside of school hours, a child may participate in after-school activities, spend time with a child care giver, be enrolled in tutoring, or attend summer camp. During those times, the child may not be with either parent. The child's activities may vary day to day and will change as the child ages, unnecessarily creating the need to recalculate the parties' parenting time and possibly modify the custodial parent designation. Moreover, the use of this type of counting approach could also lead parents to keep their children out of camp or other activities simply to manipulate their time spent with the child so as to ensure that they are designated the "custodial parent" (see Bast v Rossoff, 91 NY2d at 732 [rejecting proportional offset formula because it has undesirable potential of encouraging parents to keep a stopwatch on visitation]). An hour-by-hour analysis of custodial time is just not workable and would run afoul of the "greater uniformity [and] predictability" the CSSA was designed to promote (Cassano, 85 NY2d at 652).

The dissent misconstrues the reality of the motion court's custody schedule, stating that the child does not spend significantly more time with the father. In fact, as noted above, the father has 56% of time with the child compared to 44% for the mother — an almost 30% difference. Thus, the child spends significantly more time with the father, making the father the custodial parent for child support purposes. The dissent's reliance upon Redder v Redder (17 AD3d 10 [3d Dept 2005]) is misplaced. In Redder, the parties had substantially the same amount of custodial time with the children, which is not the case here.^[FN2]

In justifying its departure from the CSSA, the motion court placed undue emphasis on an isolated phrase in Bast v Rossoff. As noted above, Bast explained that "[i]n most instances," the custodial parent can be determined by identifying which parent has physical custody for a majority of time (91 NY2d at 728). The motion court interpreted the phrase "[i]n most instances" as allowing it, in a proper case, to designate a parent who had the minority of time with the child as the custodial parent for child support purposes. There is no support in the case law for this reading of Bast. The more reasonable interpretation is that the Court recognized that [*8]there may be situations where it cannot be determined who has the child the majority of time, such as equal custody cases, or where the child is not residing with either parent for a majority of time because the child is away at college or at a boarding school.

In finding that the father could be considered the noncustodial parent, the motion court improperly focused on the parties' financial circumstances rather than their custodial status. In doing so, the court endorsed an approach where the determination of the custodial parent is based not on whom the child spends the majority of the time with, but instead on which parent has the lesser monetary means. No matter how well-intentioned the court may have been, neither the CSSA, nor Bast v Rossoff, allows for economic disparity to govern the determination of who is the custodial parent where the custodial time is not equal.^[FN3] "

AFFORDABLE HOUSING - WITH RENTALS

Yesterday, at Landlord/Tenant court, it became clear to me that tenants and homeowners face the same issue - what is affordable housing?

The National Low Income Housing Coalition has a calculator to determine your own personal Housing Wage, the wage you would need to earn in order to pay no more than 30% of your income on the rent- the accepted standard of affordability.

NLIHC - Housing Wage Calculator

Example, Tenant has combined family income of $48,000 a year and rents a home at $2,000 a month. According to the calculator, Tenant should have a combined family income of $80,000 a year. Whether it is health, job loss, increased expenses, whatever reason, Tenant is behind in rent for 4 months ($8,000) and a non-payment proceeding is commenced. How can Tenant continue to pay $2,000 a month rent and pay off the $8,000 balance on a combined family income of $4,000 a month?

LANDLORD/TENANT COURT NASSAU COUNTY

Today I will be in Nassau County Landlord and Tenant Court as part of the Landlord/Tenant Project's Attorney of the Day Program, which assists thousands of men, women and children in court to prevent homelessness. To take advantage of this program, and assuming you meet income eligibility standards, when you appear on the return date of your summary proceeding, wait for the calendar call, and then when your name is called, advise the clerk you are requesting a lawyer. The clerk will send you to a room, where information will be taken regarding your income, etc., and if you are eligible, an attorney will represent you.

REVISED STATEMENT OF CLIENT'S RIGHTS

Part 1210.1 of the Official Compilation of Codes Rules, and Regulations of the State of New York, containing the the Statement of Clients Rights that must be posted in every law office, was amended effective April 15, 2013. Part 1210.1 now provides:

 

1. You are entitled to be treated with courtesy and consideration at all times by your lawyer and the other lawyers and nonlawyer personnel in your lawyer’s office.

2. You are entitled to have your attorney handle your legal matter competently and diligently, in accordance with the highest standards of the profession. If you are not satisfied with how your matter is being handled, you have the right to discharge your attorney and terminate the attorney-client relationship at any time. (Court approval may be required in some matters, and your attorney may have a claim against you for the value of services rendered to you up to the point of discharge.)

3. You are entitled to your lawyer's independent professional judgment and undivided loyalty uncompromised by conflicts of interest.

4. You are entitled to be charged reasonable fees and expenses and to have your lawyer explain before or within a reasonable time after commencement of the representation how the fees and expenses will be computed and the manner and frequency of billing. You are entitled to request and receive a written itemized bill from your attorney at reasonable intervals. You may refuse to enter into any arrangement for fees and expenses that you find unsatisfactory. In the event of a fee dispute, you may have the right to seek arbitration; your attorney will provide you with the necessary information regarding arbitration in the event of a fee dispute, or upon your request.

5. You are entitled to have your questions and concerns addressed promptly and to receive a prompt rely to your letters, telephone calls, emails, faxes, and other communications.

6. You are entitled to be kept reasonably informed as to the status of your matter and are entitled to have your attorney promptly comply with your reasonable requests for information, including your requests for copies of papers relevant to the matter. You are entitled to sufficient information to allow you to participate meaningfully in the development of your matter and make informed decisions regarding the representation.

 

7. You are entitled to have your legitimate objectives respected by your attorney. In particular, the decision of whether to settle your matter is yours and not your lawyer’s.(Court approval of a settlement is required in some matters.)

8. You have the right to privacy in your communications with your lawyer and to have your confidential information preserved by your lawyer to the extent required by law.

9. You are entitled to have your attorney conduct himself or herself ethically in accordance with the New York Rules of Professional Conduct.

10. You may not be refused representation on the basis of race, creed, color, religion, sex, sexual orientation, age, national origin or disability.

　

MORE ON FORECLOSURE

An interesting blog post from Hallmark Abstract Service I received the other day - it explains the difference in the foreclosure process in other states:

The Foreclosure Process: What a difference a state makes!

And for homeowners, the difference also means this: In almost every nonjudicial foreclosure state, the lender can­not recover a deficiency without bringing a separate lawsuit and getting a money judgment. This usually means that the lender won’t pursue the deficiency because of the expense. In a judicial foreclosure, on the other hand, most states allow the lender to seek a deficiency judg­ment as part of the underlying foreclosure lawsuit (a few states require a separate lawsuit).

NEW YORK MORTGAGE FORECLOSURE - THE SHADOW DOCKET

If you recall the May 31 blog on the press announcement by the New York State Attorney General's office on proposed legislation regarding the "shadow docket", yesterday, another press release was announced:

A.G. Schneiderman Sues HSBC For Holding Hundreds Of Struggling Homeowners In Legal Limbo

As the press release notes:

"Suit Alleges That By Failing To Follow New York Law, HSBC Has Trapped Hundreds Of New Yorkers Facing Foreclosure In The “Shadow Docket”

Schneiderman: The Law Is Clear And I Will Prosecute Any Lender That Denies New York Homeowners Their Legally Mandated Right To Negotiate Alternatives To Foreclosure"

WHAT IS AFFORDABLE HOUSING

From the HUD website:

"The generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more then 50 percent of their annual incomes for housing, and a family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States. The lack of affordable housing is a significant hardship for low-income households preventing them from meeting their other basic needs, such as nutrition and healthcare, or saving for their future and that of their families."

I bring this up due to my work yesterday as a volunteer lawyer for the Nassau County Bar Association Mortgage Foreclosure Clinic.

LITIGATION AND SUPERSTORM SANDY

A suggested reading from today's Newsday:

NEWSDAY OPINION: Sandy victims' next insult: backlog in civil court system