NY Probate Process: Is Having a Will Enough?

We often see and hear that everyone needs to have a will, but what exactly is a will and what does it entail? A will or testament is a legal document that expresses a person’s wishes as to how they want their property to be distributed upon their death, and as to who will manage the property through its final distribution. 

A will by itself does not affect property ownership, and it still must go through probate. New York law does not require you to hire an attorney to start a probate proceeding, as some other states do. It is possible for your assigned executor to handle probate herself or himself; however, most probate matters are challenging and require the assistance of a Manhattan estate planning lawyer to save time and avoid aggravation.

Estate planning is highly subjective; each client and case is unique. At Sishodia PLLC, we recommend consulting with our knowledgeable estate planning attorneys to review your particular case and achieve your distinct estate planning goals. Contact us at (833) 616-4646 to take the first step toward peace of mind and a comprehensive estate plan tailored to your unique needs. Start estate planning today and secure your future.

What Happens When a Real Estate Property Goes Through Probate?

Probate is the legal process that takes place after someone passes away, regardless of whether they left a will. It involves settling debts, filing estate taxes, and distributing remaining assets. When real estate is part of the estate, the process can become more drawn out and costly, especially if the estate lacks liquidity.

The court appoints a personal representative to manage the estate, notify creditors, and handle necessary filings. If the estate’s debts exceed available funds, the court may require the sale of real property. For beneficiaries, this can mean inheriting far less than expected, or not inheriting the property at all.

Coop apartments in New York City complicate things further. A will can leave coop shares to a beneficiary, but transfer and occupancy still depend on the coop board’s approval. If the board denies the transfer, the shares must be sold, regardless of the deceased’s wishes.

Key considerations:

• Debts and taxes must be paid first – Creditors and tax authorities are prioritized in probate. Only what remains after these obligations are met can go to the heirs.
• Real property can be sold to cover obligations – If the estate lacks sufficient cash to pay debts, the court may order the home sold. Beneficiaries may only receive whatever is left after the sale and expenses.
• Probate in New York is not quick – It typically takes four to nine months or more. During this time, the estate cannot be fully distributed, and property cannot be easily transferred or sold without court approval.
• Disputes can delay everything – Creditors, disinherited relatives, or other interested parties may challenge the will or file claims, slowing down or complicating the estate settlement.
• Coop apartments add legal barriers – Inheriting a coop is not automatic. The board must approve the new owner, and failure to qualify means the shares must be sold, not transferred.

To reduce delays and preserve the value of your assets, proper estate planning is essential. The New York real estate attorneys at Sishodia PLLC can help you make informed decisions that protect your property and ease the burden on your loved ones.

Transferring Assets Outside of Probate

Some assets, like the proceeds from retirement accounts, proceeds of an insurance policy, a 401k and IRA, and other accounts with a named beneficiary, property, or shares on the stock certificate owned by parties as joint tenants with a right of survivorship are not subject to the probate process and they pass to the named beneficiary or surviving tenant.

If you and your domestic partner have rights of survivorship in your home, then the surviving partner keeps the home when the first partner dies. In the case of a legal marriage, if the title is held by spouses as tenants by the entirety or as “husband and wife”, in the case of the death of one spouse, there is an automatic transfer of ownership to the surviving spouse. For someone besides your spouse to inherit your home without it going through probate, the best choice may be to set up a living trust and transfer ownership of the home to it. The main advantages of putting your home into trust are avoiding probate, saving on estate taxes, and even protecting your home from certain creditors.

How to Avoid Probate in NY?

Avoiding probate in New York involves several straightforward strategies, each with specific factors to consider. Those interested in this process should explore legal methods such as living trusts, payable-on-death designations, and joint property ownership.

• Living Trusts: One effective method is creating a living trust, which involves transferring your assets to the trust during your lifetime. Upon your passing, a trustee will oversee the management and distribution of these assets to your beneficiaries as specified in the trust. This approach not only helps avoid probate but can also provide privacy and facilitate quicker distribution to your beneficiaries.
• Payable-on-Death Designations: Another option is to use payable-on-death (POD) designations, which can be applied to bank accounts, retirement accounts, and various financial instruments. Designating a beneficiary ensures that these assets transfer directly to them upon your passing, bypassing the probate process. It is a simple yet effective tool for providing immediate access to funds or assets, thereby reducing potential delays and complications.
• Joint Ownership: Joint ownership is a practical choice, particularly for real estate. Ownership shared between parties, such as with siblings or spouses, means that upon the death of one owner, the property automatically passes to the surviving owner(s) without the need for probate intervention. This method is particularly useful for seamlessly transferring property while avoiding legal hurdles.

Each strategy presents both benefits and limitations, with the best option depending on individual circumstances and goals. Evaluating your needs and consulting with an experienced New York estate planning attorney can assist you in making informed decisions.

New York Probate Process

The probate process involves several steps. The court must first receive the original will of the deceased along with a petition for probate. After receiving notice from the court, anyone with an interest in the will be notified. A guardian ad litem may be appointed by the court for minors or those with incapacity.

After the court has established that New York State is the valid jurisdiction and the will is in a valid form, it will issue the decree or court order granting probate. Letters testamentary will be sent to the executors named by the deceased.

Executors have the power to manage and take care of the estate. The executor is also responsible for identifying and making an inventory of all the assets of the deceased, paying taxes and debts, as well as distributing the property according to the will.

A relatively simple probate process may take only a few days. In some cases, however, probate can take longer. In cases when a relative or another person is incompetent or contests the will, this can be especially true.

Good estate planning can help you avoid having your family members go through probate to distribute your assets. Many estate planning tools allow you to remove assets from probate so that they do not go through this process.

A trust is a common method to avoid probate in New York. The trustee will manage the trust property on behalf of your beneficiaries. The property becomes part of your probate estate once it is placed in trust.

What Assets Does a Will Not Cover in New York?

In New York, not all of your assets will pass through your will. Certain types of property bypass the probate process entirely because they are legally structured to transfer directly to a beneficiary. These assets are not governed by the terms of your will, regardless of what it says.

Accounts and policies with designated beneficiaries are a primary example. Life insurance proceeds, 401(k)s, IRAs, and other retirement accounts typically require you to name a beneficiary when you open the account. Upon your death, these assets go directly to the named individuals and are not subject to the instructions in your will. The same rule applies to payable-on-death (POD) or transfer-on-death (TOD) bank accounts, as well as jointly owned property with rights of survivorship. For instance, a joint bank account will pass automatically to the surviving co-owner, not through probate.

Additionally, the law limits how long you can control your assets after death. Under the “rule against perpetuities,” you cannot leave property or funds to a person who is not yet born and may not be for generations. This rule prevents someone from imposing long-term restrictions on property ownership and use far into the future.

Because these exceptions can cause confusion or conflict during estate administration, it’s important to align your estate plan, including your will, trusts, and beneficiary designations, to reflect your intentions clearly.

How Long Do You Have to File a Probate After Death?

There is no specific deadline set by the law for filing probate after a person’s death. However, it is highly recommended to commence the probate process promptly, as it may require several months to a year to reach completion. Below is a general outline of the probate timeline in New York:

Here is a general timeline for probate in New York:

• Three months: The submission of a copy of the death certificate, will, and probate petition to the New York Surrogate’s Court will be carried out by either the executor or a probate attorney. Subsequently, the court will issue letters of administration, granting the executor the authority to act on behalf of the estate. The executor will then compile an inventory of the assets and inform the deceased person’s creditors of their passing. Additionally, the estate’s property will be appraised, sold to settle debts, or distributed to the beneficiaries.
• Six months: By the end of the sixth month, it is the responsibility of the executor to ensure the payment of creditors, address any potential disputes, and complete the necessary filing of Federal Income Tax return forms 1040 and 1041.
• Nine months: Ideally, in a smooth case, the court should distribute the estate’s assets to the beneficiaries, discharge the personal representative (executor), and close the estate. However, various challenges such as will contests, litigation from creditors, or a larger estate may prolong the process. Additionally, it is important to be aware that the New York state estate tax must be paid within a nine-month period following the death of the individual.

Please keep in mind that these timeframes are approximate and can vary depending on the complexity of the estate and any legal challenges that may arise during the probate process. It is essential to seek guidance with an experienced New York City estate planning lawyer to guide you through the specific requirements and processes in your situation. Contact Sishodia PLLC today to schedule a consultation.

General Timeline for Probate in New York	Actions
Three months	Submit a copy of the death certificate, will, and probate petition to the New York Surrogate’s Court. Court issues letters of administration. Executor compiles inventory of assets. Inform creditors of the deceased. Appraise, sell, or distribute estate’s property.
Six months	Ensure payment of creditors. Address potential disputes. Complete filing of Federal Income Tax return forms 1040 and 1041.
Nine months	Ideally, distribute estate’s assets to beneficiaries. Discharge the personal representative (executor). Close the estate.

Contact Sishodia PLLC About Your Estate Planning

While having a will is a crucial part of preparing your estate, it does not bypass the probate process in New York. A will provides direction for how your assets should be distributed, but the estate must still go through probate court for validation and administration. Without careful planning, this can result in delays, legal fees, and complications, especially if your estate includes property like a home or coop apartment. Beneficiaries may encounter unexpected obstacles, and in some cases, assets may have to be sold to cover debts or taxes before anything is passed down.

To truly protect your legacy and minimize the burdens your loved ones may face, comprehensive estate planning goes beyond a simple will. Tools like trusts, advance directives, and strategic asset titling can reduce or even eliminate the need for probate. A knowledgeable New York estate planning attorney can guide you through the best options based on your personal and financial circumstances. Contact Sishodia PLLC today at (833) 616-4646 to discuss how you can preserve your assets and bring peace of mind to your family.

from Sishodia PLLC https://sishodia.com/ny-probate-process-is-having-a-will-enough/

How to Sell and Buy a House Simultaneously in 2025

Selling your home while purchasing another can seem daunting, yet it’s more common than you might think. In fact, recent statistics show that over 60% of Americans selling their homes are also in the market to buy. There are plenty of reasons why you could be considering selling your house and buying a new one at the same time in 2025, such as relocating for work or seeking more space to accommodate a growing family.

If you find yourself in this situation in New York City, having knowledgeable legal guidance can make a substantial difference. At Sishodia PLLC, our team of New York City real estate attorneys can help you handle both transactions smoothly and avoid common pitfalls that can complicate the process. We can clarify essential details such as closing costs and tax implications, which are pivotal in making informed decisions when selling and buying property simultaneously. Contact us today at (833) 616-4646 to schedule a consultation.

Closing Cost Statement

The process of buying an apartment in NYC does not end when you finally secure a closing date. There are still some matters that need to be addressed, such as conducting the last walk-through of your condo or co-op apartment and the closing statement. You may not be familiar with a closing statement if this is your first home purchase.

The closing statement summarises the sale transaction and needs to be kept for your records. The closing statement is prepared by your real estate attorney in spreadsheet format and will include the closing costs for your home purchase. This is an important document because it will contain the precise figure for your closing costs. You won’t know the exact amount of your final costs until your attorney has completed the closing statement.

The closing statement should contain all necessary information to determine where the money is going, as well as other details such as:

• The names of both the seller and buyer
• The closing date
• The address of the property
• The location for the closing

Closings can be delayed by up to a day or two. This is why it is important for the closing statement to specify a date.

The Closing Process

The closing of a real estate transaction usually takes between 60-90 days from the date the contract was signed. In NYC, things move more slowly, so expect closing to take place closer to 90 days. The buyer will need to send the attorney the down payment after the contract is signed. The buyer can lose their down payment if the buyer walks away from the contract prior to closing, unless there is a valid reason, such as a mortgage contingency. In New York, the average down payment is 10%. This money goes into an escrow account.

The buyer’s attorney must complete several tasks before closing. First, they must order a title check to see if the seller has any outstanding issues. Unsatisfied liens are the most frequent title problems. It is crucial to resolve title problems and ensure that your purchase is legal. 

The buyer’s attorney will also then work closely with the client to fill out any documents required by the lender. The attorney can also help their client calculate how much they owe any lenders or title companies, as well as any third-party entities that are involved in the transaction, such as co-op boards.

On closing day, the real estate attorney will ensure all documents that you sign, such as deeds, tax returns, and mortgage documents, are in order. At that point, the buyer will need to make a payment.

In NYC,  there are additional regulations and customs involved in real estate transactions, which can make closings very complicated. An experienced real estate attorney may be able to help you understand the many aspects of the process. This is why it is so crucial to find attorneys knowledgeable in real estate transactions. At Sishodia PLLC, attorney Natalia Sishodia and our team of experienced real estate lawyers can guide you through every step of the process.

Closing Costs Paid By the Seller in New York

If you are the seller, you will be paying closing costs that can run more than 8% of the sales price. This is because the seller is responsible for paying the real estate commission for the sale. The real estate commission makes up the largest percentage of your closing costs as the seller, with commissions typically ranging from 5 to 6 percent of the sales price. This commission is then typically split between the two agents.

In addition, the seller is responsible for any city and state transfer fees. The NYC transfer fee is 1% of the sales price for properties $500,000 or less or 1.425% for properties over $500,000. State transfer fees are an additional .40% or .65% for any properties selling in excess of $3 million.

In those cases when the seller is a foreign national, there is an additional 15% tax withholding known as FIRPTA. To add to the complexity, out-of-state residents also have to take into consideration a mandatory income tax payment at closing equal to 10.9% of the gain.

A knowledgeable real estate attorney experienced in handling sales involving both foreign sellers and out-of-state residents’ sales can guide you on the issues such as withholding (FIRPTA), exemptions, and your options when it comes to withholding certificates.

In addition to New York state-specific taxes, the seller is responsible for their pro-rata share of real estate taxes for the current year and any attorney fees.

Disadvantages Of Seller Paying Closing Costs

When a seller decides to shoulder the responsibility of covering closing costs, they are essentially taking on the financial responsibility associated with transferring property ownership. These costs encompass various expenses, including appraisals, title searches, and legal fees. Sellers choosing to pay closing costs frequently employ this strategy as a beneficial negotiation tactic, potentially speeding up the home sale process and even securing a more favorable offer. However, there are drawbacks associated with sellers covering these expenses.

• Increased Listing Price: When the seller agrees to cover the buyer’s closing expenses, they may choose to raise the home’s listing price to cover this additional financial obligation. As a result, this adjustment can lead to an increased overall cost for the buyer, even though the seller is taking care of the closing costs.
• Reduced Room for Negotiation: When the seller commits to shoulder the burden of covering the closing costs, it can restrict the scope of negotiations opportunities available to both the buyer and seller. This limitation arises because the seller has already made a concession by taking on the closing costs, which might reduce their willingness to negotiate on other aspects of the sale.
• Limited Scope for Upgrades or Repairs: If the seller takes on the responsibility of covering closing costs, they might have less flexibility to offer other concessions, like home upgrades or necessary repairs. This limitation can restrict the buyer’s capacity to negotiate for extra benefits or improvements.
• Complicated Documentation: The process of incorporating the seller’s payment of closing costs into the purchase agreement can be intricate, necessitating additional paperwork and documentation. This intricacy can prolong the time and effort needed to finalize the sale.
• Potential Appraisal Challenges: The involvement of the seller in covering the closing costs can pose potential appraisal difficulties. This is because the appraiser must take into account the higher listing price, potentially resulting in an adjustment to the assessed value of the home. Such adjustments could complicate matters if the appraised value ends up being less than the initially agreed-upon sale price.

When it comes to the disadvantages of a seller paying closing costs in real estate transactions, navigating the complex landscape of New York City’s property market can be particularly challenging. However, in such circumstances, a skilled New York City real estate lawyer can be your invaluable guide, helping you make informed decisions and avoid potential pitfalls seamlessly. Contact Sishodia PLLC today to schedule a consultation.

Tips and Considerations	Details
Break Down Your Goals in the Beginning	Start by clearly defining your goals and writing them down to stay organized and focused throughout the process.
Prepare Your Current Home First	Preparing your current home for sale involves decluttering, depersonalizing, and making necessary repairs, which can take several weeks or months.
Consider Contingency Clauses	Explore contingency clauses when making an offer on a new home, allowing you to back out if you can’t sell your old home without major consequences.
Avoid (or Cope With) These Common Pitfalls While You Move	Be prepared for challenges like needing temporary housing if your new home isn’t ready after selling the old one. Communicate your needs with your real estate team.

Closing Costs Paid By the Buyer in New York

Buyers should expect to pay closing costs ranging from 2 to 5% of the purchase price of the property, depending on their mortgage terms and property type variables. These will include

• Lender’s fees, including any costs associated with the mortgage financing for the property, such as prepaid interest, appraisal fees, survey costs, and tax escrow
• Their pro-rata share of property taxes for the current year
• Transfer taxes if the purchase is a new build
• Mortgage recording tax
• Attorney’s fees
• Condo or co-op building application and attorney fees
• Title insurance premiums
• Mansion tax on any properties with a purchase price of $1 million or more

Depending on the type of mortgage and the market, closing costs can be negotiated between a buyer and seller, although in a very hot real estate market, the seller doesn’t usually have much incentive to do this.

Can I Afford to Buy a New Home Before Selling My Old One?

Buying a new home in New York before selling your current one can be difficult, especially when finances are tight or timing is uncertain. Many homeowners consider this step when they’ve found the right property and don’t want to risk losing it, even though their current home hasn’t yet been sold. The pressure of balancing two properties at once can create significant stress, so it’s important to consider what this process may involve.

• Financial Requirements: Lenders typically look closely at a borrower’s financial profile in these situations. Having sufficient income, manageable debt, and enough savings to handle two mortgage payments can make a difference in getting approved.
• Short-Term Loan Options: Some homeowners turn to bridge loans to help cover the cost of a down payment on the new property. These loans are temporary and come with higher costs, but they may provide short-term relief during a transition. Others may consider using a home equity line of credit if they qualify and have enough built-up equity in their current home.
• Market Conditions: Market activity in New York influences how quickly a home sells. If demand is high and comparable homes are moving fast, it may feel more comfortable to buy first. But when the market is slower or less predictable, carrying two properties at once can become financially draining.
• Carrying Costs: The added burden of two sets of property taxes, insurance, and utilities can take a toll. For many, managing these responsibilities without a clear end date can feel like a heavy burden.
• Support and Planning: A real estate agent and financial professional can offer guidance based on your specific situation. With their support, it becomes easier to weigh your options and move forward with greater clarity and confidence.

Buying before selling in New York is possible, but it’s not a decision to make lightly. With the right support and careful planning, you can reduce the stress that comes with juggling two homes and avoid financial missteps that may affect your long-term goals.

Getting the Guidance of a New York City Real Estate Lawyer

When you are purchasing a piece of real estate in New York City, it is always advisable to have the advice of an NYC real estate attorney to ensure that everything is in order and you are not paying for anything that is not your responsibility. An experienced real estate attorney will work with you from contract to closing to protect your legal rights and prepare you for all your contractual and financial obligations and closing costs.

At Sishodia PLLC, our skilled team of New York City real estate lawyers is with you each step of the way to help your transaction go smoothly and avoid surprises. Whether you are a buyer or seller, we can help. Call us at (833) 616-4646 or contact us through our online contact form to schedule a free consultation.

from Sishodia PLLC https://sishodia.com/how-to-sell-and-buy-a-house-simultaneously-in-2022/

Questions To Ask Before Buying a Co-op in New York

When handling a co-op transaction in New York, it’s important to recognize that you’re not simply purchasing an apartment but rather becoming a corporate shareholder in a residential building. Consequently, buying a co-op involves a distinct set of considerations compared to acquiring a single-family home or condo. Each co-op may have its own unique peculiarities that should be understood before engaging in the process.

In order to facilitate a smooth experience, it is recommended to enlist the services of a skilled New York co-op real estate attorney. At Sishodia PLLC, our experienced Manhattan co-op real estate lawyers can help address your questions and concerns, providing the necessary insights to make well-informed decisions that you won’t later regret. Our team can also assist in managing any challenging matters associated with purchasing a co-op in New York, such as preparing for a co-op board interview and understanding potential questions for co-op board interview. Contact us today at (833) 616-4646 to schedule a consultation.

What to Ask When Buying a Co-op

For potential buyers, especially in the competitive New York market, understanding the nuances of each co-op’s rules, regulations, financial health, and expectations is crucial. Below are critical questions you should ask before committing to buy a co-op in New York.

What Are the Board’s Financial Requirements?

When you are considering a co-op arrangement, you will appear before a board of directors who will have the authority to approve or deny you depending on their criteria and by-laws. A co-op board of directors can be as financially demanding as a mortgage lender.

Consequently, they may require an applicant to fill out a REBNY financial statement to prove their financial capability and may impose other financial requirements. Many co-ops will have strict debt-to-income requirements and want to see applicants with a minimum of a couple of years of mortgage and maintenance payments available to ensure financial liquidity.

What Does Coop Due Diligence Include?

When you are purchasing a coop unit in New York City, it is important to do thorough due diligence. Due diligence includes a review of the Offering Plan, house rules, Building By-Laws, the last two years of building financials, and building board minutes. A knowledgeable and experienced real estate attorney can guide you through due diligence findings and advise on the risks involved, empowering you to make an educated decision as a purchaser. This includes assessing the building’s compliance with recent New York City local laws, such as facade inspections (Local Law 11), lead paint regulations (Local Law 31), and upcoming deadlines for natural gas detector installations (Local Law 157), as these can lead to future assessments.

What Are Co-op Stock Certificates?

For a potential buyer, asking for the co-op stock certificate is a fundamental first step. Purchasing a cooperative apartment means you are buying shares in the corporation that owns the building, not the physical unit itself. The stock certificate is the official document that proves your ownership of these shares. This paper is the tangible evidence of your stake in the cooperative corporation and the primary document to verify at the outset of any negotiation.

This certificate is critically important because it is directly tied to the proprietary lease. The proprietary lease is the agreement that grants you the right to live in your specific apartment. The stock certificate and the proprietary lease are intrinsically linked; one cannot be transferred without the other. This connection forms the basis of your residence. When it comes time to sell, the transaction involves transferring the stock certificate and assigning the proprietary lease to the new buyer.

The quantity of shares assigned to a unit, often based on its size and location, is detailed on the certificate. This number is significant because it determines the proportion of the building’s monthly maintenance fees you are obligated to pay. The certificate therefore defines your specific ongoing financial commitments to the cooperative.

How Often Does the Board Reject Applicants?

Although it makes sense that a board will want to exercise care in who it approves, some boards are oppressive in the rules department. If there are indications that resales struggle in the building, you should consider that a red flag.

What Are Potential Reasons for a Co-op Board Rejection?

Practice shows that co-op boards do not usually give a reason when rejecting purchasers. However, there are several reasons known to knowledgeable real estate attorneys and experienced real estate brokers. Among them are: purchaser financial issues, liquidity, high debt-to-income ratio, bad credit, job history, Pied-a-Terre, guarantor issues, or a low purchase price.

How Often Do the Maintenance Fees Go Up?

As a shareholder, you will be paying a maintenance fee to help pay your proportionate share of the upkeep of the building. In recent years, due to inflation, rising insurance premiums, and the costs associated with complying with new city regulations like Local Law 97 (requiring energy efficiency upgrades), many buildings have seen maintenance fees increase by 3-7% annually. The board of directors should be financially savvy enough to ensure that the cost of maintenance is reasonable and has not continued to skyrocket, and that the building has an adequate reserve fund to handle unexpected costs without consistently resorting to large assessments.

What Kind of Sales Restrictions Does the Co-op Have?

As a buyer, you should always consider the future of any real estate transaction. Many co-ops are highly restrictive and rule-oriented. How easy will it be to sell the unit if and when you decide to move on? The more sales restrictions that a co-op has regarding how you can market it and who can buy a unit, the fewer options you will have if you want to sell it down the road.

Is There a Flip Tax?

Is there a flip tax that you may be subject to? While not all co-ops charge a flip tax, some charge various percentages of the purchase price, a percentage of the gain, or a per-share amount. And, if you are not subject to one as a buyer, you should know if you will be subject to one as a seller should you decide to sell the unit at a future time.

What Is The Sublet Policy?

Most co-ops have some form of sublet restrictions. While some can be very flexible, others can be extremely restrictive. Some may also charge a sublet fee, either monthly or annually. You will want this information in case you ever are in a position where you may have to let the unit out temporarily.

What Is the Pet Policy?

If you have a pet, you should have your attorney check on the building’s pet policy during the due diligence to find out if the building allows pets, or has restrictions on quantities and sizes.

What Is The Co-op Alteration Policy?

If you are purchasing your co-op with an idea to renovate or combine the units after closing or at a later date in the future, you should be prepared to meet with your building’s board members and building managers to negotiate the terms of the renovation and even the plans. You may need to have an architect or engineer involved. Most of the coops will not allow shareholders to install a washer and dryer in the unit or a jacuzzi bath. Some coops will not allow a combination of two units.

Each of these questions can reveal crucial details about the financial and legal obligations associated with a particular co-op, helping you make a well-informed decision. Another consideration is to consult with a skilled Manhattan co-op real estate lawyer to acquire professional advice and help protect your interests throughout the buying process.

Risk	Description	Potential Impact
Incompetent Co-op Board	Board mismanagement and poor communication	Reduced property value and poor quality of life
Poor Building Management	Financial mismanagement or unethical contracts	Higher costs, delayed repairs, legal or financial complications
Restrictive Subletting Policies	Strict rules limiting rental options	Reduced investment flexibility and rental income potential
Difficult Neighbors	Tense relationships or conflicts within the community	Stressful living environment, possible disputes
Special Assessments	Additional fees due to budget shortfalls or emergencies	Unexpected financial strain

Risks of Buying a Co-op

When considering purchasing a co-op in New York, it’s important to be aware of several potential risks that could impact your living situation and finances. One significant concern is the possibility of dealing with an incompetent co-op board. Unlike individual ownership in a condo, co-op residents share collective ownership and rely heavily on the board to manage the building effectively, address concerns, and communicate key decisions. A board that fails in these responsibilities can affect daily life and the overall value of your investment.

Another risk involves poor building management, which can lead to financial mismanagement or even unethical activities. Shady dealings with contractors and overpriced contracts are issues that can arise, compromising the integrity of building operations and potentially leading to unexpected costs for repairs and maintenance.

Strict rules and regulations in co-ops, especially around subletting, can also pose challenges. These regulations might restrict your ability to rent out your apartment, which can be a significant drawback if you plan to leverage the rental market without selling your property. This aspect is crucial to consider if flexibility in property use is important to you.

Additionally, the community aspect of a co-op, while often seen as a benefit, can turn into a risk if you end up with difficult neighbors. Living in close quarters with others means that personality clashes or disagreements can have a direct impact on your living environment.

Finally, be prepared for potential financial surprises such as special assessments. If the building’s reserve funds are insufficient during emergencies, you might face additional charges that can strain your budget.

Engaging a knowledgeable co-op real estate lawyer can help weigh the potential benefits and drawbacks, manage the purchasing process effectively, and find a co-op that suits one’s needs and future goals. Contact Sishodia PLLC today to speak with an experienced Manhattan co-op real estate lawyer.

Is Coop Maintenance Tax Deductible?

Maintenance consists of the HOA fees to coop and a portion of Real Estate Tax. Have your real estate attorney confirm the % of the maintenance that is allocated to taxes, as this is a portion that you’ll be able to deduct on your income tax return together with any building assessment. The special assessment is tax-deductible if it is for maintenance and repairs.

What Is a Condop?

You may come across coops with relaxed rules that do not have a Coop Board approval process and instead have a waiver of the right of first refusal similar to condo requirements.

What to Expect at the Coop Board Interview

Just like a job interview, a coop board interview requires preparation. Your Coop board may ask you to appear with all the occupants of the premises, even if they are not a part of the purchase application. If you have a pet, your board will likely want to see your pet at the interview with you. While remote interviews via platforms like Zoom became the standard in the early 2020s and remain common for their convenience, some boards have returned to in-person meetings. Regardless of the format, be ready for a wide range of questions. It is not uncommon for boards to delve into personal matters, financial details, or your rationale for certain life decisions to assess your suitability as a future neighbor.

Can a Co-op Board Evict a Shareholder?

A landmark court case has opened the door for the removal of disruptive shareholders from co-ops. This groundbreaking ruling empowers co-op boards to address abusive neighbors, setting them apart from condos that face limitations in dealing with problematic residents. Many co-op proprietary leases contain provisions that enable eviction in response to objectionable behavior, either through a board or shareholder vote.

To initiate the eviction process, it is essential to confirm the existence of a relevant clause in the proprietary lease, typically found in paragraph 31(f) of standard-form leases. Prior to proceeding with eviction, it is generally necessary to give the shareholder an opportunity to rectify their behavior. This involves issuing a written notice that clearly outlines the violations and requests correction.

In such civil cases, there is no obligation to inform the shareholder of their rights. The primary focus should be on addressing the objectionable behavior and seeking a resolution. To strengthen the eviction case, it is crucial to gather evidence and organize the facts. This includes creating a written timeline of the infractions, retaining copies of notices sent to the shareholder, and obtaining statements from witnesses who have observed the objectionable behavior.

Well-documented evidence, as demonstrated in the Pullman case, can support the board’s decision. Conducting a meeting in accordance with the co-op’s procedures is vital. It is necessary to adhere to the by-laws governing board and shareholder meetings, including providing proper notice. The meeting notice should explicitly state its purpose, specifically mentioning that it will address and vote on a resolution to terminate the proprietary lease of the tenant-shareholder, authorize actions to recover the apartment, and cancel the share certificate.

During the meeting, the accused shareholder should be given an opportunity to present their case. It is important to document these opportunities, either through recordings or accurate note-taking. If required, witnesses who can substantiate the charges should also be present. Following the meeting, a resolution should be drafted, outlining the board’s decision and the grounds supported by testimony and evidence.

Acquiring Experienced Legal Assistance at Sishodia PLLC

Buying a unit in a co-op is quite different from buying other real estate, underscoring the importance of experienced legal assistance to make informed decisions. At Sishodia PLLC, our team of Manhattan co-op real estate lawyers has extensive experience with co-ops and handling their often challenging issues. We can help you maneuver a co-op transaction that fits your needs and lifestyle. Contact us today at (833) 616-4646 or schedule a consultation through our online contact form.

from Sishodia PLLC https://sishodia.com/questions-to-ask-before-buying-a-co-op-in-new-york/

What Is the Mansion Tax in New York City?

Today, if you are purchasing a home, condo, or co-op in New York City, the mansion tax may be one of the most significant closing costs you will pay.

While the mansion tax may seem like a misnomer in a city where a $1 million dwelling doesn’t always feel like a “mansion,” it wasn’t when the lawmakers imposed this tax three decades ago. When the mansion tax was first proposed by Mario Cuomo back in 1989, the intent was to buffer the state’s budget. One of the ways of doing that was to impose a tax on wealthier individuals who were more able to afford it. Since then, the real estate market has changed dramatically in New York, and the $1 million price point may not be for a mansion at all, but a relatively small apartment. Be sure to discuss the mansion tax with your New York City real estate lawyer before you make an offer.

At Sishodia PLLC, our experienced lawyers are well-versed in the nuances of New York real estate law. We can provide you with legal guidance on addressing the challenges of the mansion tax and can help you avoid the NYC transfer tax. Our team understands the evolving nature of the market and the implications of this tax on various property types. For personalized guidance, contact us at (833) 616-4646 to schedule a consultation.

What is the Mansion Tax in New York City?

The New York mansion tax starts at 1% for properties sold at $1 million or more. The rate increases progressively up to 3.9% for properties over $25 million. This tax applies to residential real estate purchases and is typically paid by the buyer at closing.

When You Aren’t Buying a Mansion, But You’re Paying a Mansion Tax

In 1989, $1 million could indeed buy a mansion, but now, as one of the most expensive areas in the country to buy real estate, you can easily pay this much for a small apartment in some areas of the city. But this tax is still in effect and still called the mansion tax, regardless of how opulent the piece of real estate you’re buying.

Initially, the mansion tax was a 1% tax paid at closing on any purchase of real estate over $1 million. Since then, it has been amended to a sliding scale tax based on several tiers of real estate prices.

How Much is the Mansion Tax Now?

IIf you are purchasing real estate for $1 million or more in New York, you will be subject to paying the mansion tax for that property. In 2019, state lawmakers agreed to a new schedule for the tax which is based on the purchase price of the property.

While properties costing $1 million are still taxed at 1%, the tax gradually increases, maxing out at 3.9% for properties purchased for $25 million or more. The tax structure is as follows for this year:

• Purchases of $1 million to $1,999,999 – 1%
• Purchases of $2 million to $2,999,999 – 1.25%
• Purchases of $3 million to $4,999,999 – 1.5%
• Purchases of $5 million to $9,999,999 – 2.25%
• Purchases of $10 million to $14,999,999 – 3.25%
• Purchases of $15 million to $19,999,999 – 3.5%
• Purchases of $20 million to $24,999,999 – 3.75%
• Purchases of $25 million and over – 3.9%

There has been much debate around the mansion tax and its future. The graduated tax rates were the first major changes that have happened in the decades since its inception.

Who Pays The Mansion Tax In New York State?

In New York State, the buyer pays the mansion tax when purchasing residential property priced at $1 million or more. The tax starts at 1% and increases on a sliding scale up to 3.9% for properties priced over $25 million. This tax must be paid at closing unless the seller agrees to cover it.

If the buyer is unable to fulfill the payment or meet the requirements for an exemption, the responsibility for this tax then transfers to the seller. The amount is calculated as a percentage of the property’s purchase price. For example, if a home is priced at $1,200,000, the mansion tax would be 1%, resulting in a total tax of $12,000. Although a 1% tax might seem relatively small, especially when compared to the overall property cost, it constitutes a substantial portion of your total cash investment, particularly if you are financing the acquisition.

This tax is applicable when purchasing any property that is or could be utilized, wholly or partially, as a personal residence. This description covers a range of residential real estate, such as single-family, duplex, or triplex houses, individual condos, and cooperative apartment units.

Whether you’re a buyer, seller, or investor, understanding who is responsible for paying the mansion tax and how it applies to your transaction is crucial. At Sishodia PLLC, our New York City real estate lawyers can provide you with comprehensive legal guidance tailored to your unique situation. We can help you address the details of the mansion tax and provide you with the assistance needed to make well-informed decisions. Contact us today to schedule a consultation and secure your real estate endeavors with knowledgeable legal support.

How Can Buyers Legally Minimize the Mansion Tax?

Buyers can legally minimize the impact of New York’s mansion tax by using a few strategic approaches. One method is negotiating the purchase price. If a property is listed slightly above the mansion tax threshold, both parties may agree to reduce the sale price to fall just below the taxable amount. This may lead to savings that benefit both the buyer and the seller.

Another legal strategy is to separate certain non-real estate items from the transaction. For instance, if the home includes high-end furnishings or appliances, the parties may agree to transfer those items through a separate bill of sale. By reducing the recorded property price, this method may lower the tax owed. However, this must be done carefully, using accurate valuations and clear documentation, to comply with tax rules and avoid future issues.

A third option involves purchasing the property through a limited liability company (LLC). Some buyers choose this structure to take advantage of how the transaction is treated under certain tax codes. Depending on the jurisdiction and the deal’s structure, this may lead to reduced tax obligations. Still, this approach requires careful planning and should follow applicable real estate and tax regulations.

Each of these options comes with conditions and limitations. Buyers should review the legal and financial aspects with a skilled real estate attorney before moving forward. Taking the right steps early in the transaction can help reduce unexpected costs while staying within the law.

Question	Answer
Who pays the mansion tax in New York State?	The purchaser of the property is responsible for paying the mansion tax.
When does the responsibility transfer?	If the buyer can’t pay or qualify for an exemption, the seller becomes responsible for the tax.
When is the mansion tax paid?	The mansion tax is typically settled during the property sale’s closing stages.
What is the threshold for the tax?	The mansion tax applies to residential properties in New York valued at over $1 million.
How is the tax amount calculated?	The tax amount is calculated as a percentage of the property’s purchase price.
What types of properties does it apply to?	The tax applies to properties that can be used as personal residences, including condos, houses, and apartments.

You Must Consider the Mansion Tax As Part of Your Closing Costs

For anyone trying to estimate closing costs for a real estate purchase in New York City, the mansion tax will need to be calculated and considered. This is regardless of what type of residential property you are purchasing, whether it is a single-family home, a condo, or a co-op.

If you have further questions about the mansion tax or any other closing costs that you will have to pay, an NYC real estate attorney can assist you in understanding your obligations. At Sishodia PLLC, we are a team of highly experienced New York City real estate lawyers who are here to guide any real estate transaction you may have, from a one-bedroom co-op to a commercial real estate investment.

Call us at (833) 616-4646 or contact us through our online contact form to schedule a consultation.

from Sishodia PLLC https://sishodia.com/what-is-the-mansion-tax-in-new-york-city/

How to Buy an Investment Property in New York City

Investing in real estate has become a hot topic, and for those who can, investment properties are often one of the most stable and lucrative long-term investments today. The primary goals of an investment property are its income-producing potential as well as future capital return. While much media has focused on renovating and “flipping” real estate, the most stable investments are those kept over a period of time, offering passive income with a high degree of appreciation potential.

However, buying investment property in New York can be challenging, and investors should be knowledgeable of what it entails and the potential pitfalls that they may encounter. One way of doing this is to seek out the advice and guidance of a New York City real estate attorney and real estate agent who is well-versed and experienced in investment property purchases. At Sishodia PLLC, our attorneys can assist you throughout the entire process, from conducting due diligence and negotiating contracts to handling any legal issues that may arise. Contact us today at (833) 616-4646 to schedule a consultation and let us help you secure passive income through real estate in New York.

Is Buying Property in NYC a Good Investment?

As one of the most consistent investment locations in the United States for appreciation, New York City is one of the best places to own investment property for generating rental income. Given its history of recovering and flourishing after economic downturns, investing in New York City real estate is often considered a robust choice. 

The diversity of property types and neighborhoods in NYC allows investors to find options that align with their investment strategies and financial objectives. The city offers a broad array of properties to choose from, such as residential units, commercial spaces, or mixed-use buildings. In most cases, all an investor needs to have in their portfolio can be a couple of New York City apartments to see an appreciable cap rate. 

As a huge financial and business hub, Manhattan and the surrounding areas may not offer the best investment deals. The market in Manhattan is consistently high-priced and in great demand, and sellers are not nearly as motivated to work with a buyer as they may be in other areas because they simply don’t need to be. Moreover, it’s important to acknowledge that the NYC real estate market is subject to fluctuations. Economic trends, policy changes, and global events can all impact property values and market stability. This volatility means that potential investors should approach the market with caution and informed judgment.

While buying property in NYC can be a good investment, it requires careful planning, a clear understanding of the market, and readiness to manage potential risks. Your goals—whether you’re aiming for long-term capital growth, seeking rental income, or looking at short-term gains—will dictate the best strategies for your investment, making it a worthwhile decision.

Before making any important investment purchases, conducting extensive research and assessing your financial readiness to handle the ups and downs of real estate investment is crucial. It’s advisable to consult with a New York City real estate attorney who understands the local market dynamics and can provide valuable insights and guidance tailored to your specific situation.

Steps to Buying an Investment Property	Description
1. Determine investment goals	Define your investment objectives and desired financial outcomes.
2. Set a budget	Establish a budget based on your financial capacity and investment strategy.
3. Research the market	Conduct thorough market research to identify favorable investment areas and property types.
4. Find a real estate agent and attorney	Seek professional guidance from a knowledgeable real estate agent and attorney specialized in investment properties in New York City.

Up and Coming Neighborhoods and Boroughs

But there are many up-and-coming areas around the city that can be potentially suitable long-term investments for individuals, providing they are willing to make some repairs and renovations and have a little bit of patience. Looking at areas just outside of already well-established neighborhoods may still offer more reasonable pricing while piggybacking on their surrounding neighborhood’s popularity.

While the main goal for real estate investment is to buy low and sell high, there are some boroughs and neighborhoods that have greater long-term potential for the future. This results in less risk and downside volatility should that happen in the future and equates to a more optimal potential return on investment.

New York City REITs

Investors, both local and global, can participate in New York City’s real estate market through real estate investment trusts (REITs). Investors can take advantage of REITs to participate in the investment of commercial or residential properties, along with mortgage loans. What sets New York City REITs apart is their exclusive focus on prestigious commercial or retail buildings which are prime and in-demand pieces of real estate.

In essence, REITs provide investors with the ability to access a diversified portfolio of properties that are traded similarly to stocks. This arrangement ensures a consistent stream of dividend income since REITs are mandated to distribute 90% of their taxable income to shareholders annually in the form of dividends. Additionally, investing in REITs offers diversification opportunities. However, it’s important to note that REITs can be affected by risks associated with rising interest rates.

Prior to making any investment decisions, it is recommended to seek guidance from a New York City real estate attorney. At Sishodia PLLC, our attorneys have extensive knowledge and experience in the real estate industry. By consulting with us, you can make well-informed investment decisions. Take the initial step towards maximizing your real estate investments by scheduling a consultation with Sishodia PLLC today.

Using an LLC to Avoid Common Pitfalls When Investing in Real Estate in NYC

Investing in New York City real estate offers significant profit potential but is not without its legal and financial challenges. Establishing a Limited Liability Company (LLC) provides a strategic way to minimize these risks and protect your investment. An LLC offers significant protection by separating personal assets from business liabilities, meaning personal property and finances are shielded in case of lawsuits or debts incurred by the property.

One significant benefit of using an LLC in NYC is the limitation of personal liability. Should legal action arise from incidents at the property, such as tenant disputes or accidents, the LLC structure means that only the assets within the LLC can be targeted, not the personal assets of the owner. This separation provides a secure barrier against personal financial risk.

Another benefit is the potential ease of property transfer and tax advantages. Real estate owned by an LLC can be transferred by changing membership interests in the LLC itself, rather than transferring the actual real estate, which may reduce the costs associated with title transfers and minimize exposure to transfer taxes. In New York, LLCs have the option to elect pass-through taxation. This approach allows profits to be taxed solely at the individual member level, eliminating the double taxation that corporations typically face.

Additionally, operating through an LLC can enhance credibility with lenders and tenants, which is particularly valuable in the competitive New York City market. Banks might be more willing to lend to an LLC, and tenants often view an LLC as a more formal and stable management structure.

For real estate investors in NYC, setting up an LLC is a prudent step to mitigate risks associated with direct ownership, streamline management, and optimize fiscal outcomes. It is advisable to consult with a legal professional familiar with New York real estate and business law to tailor the LLC to specific investment needs and goals. 

Taking a Long-Term Approach

Unless you are specifically looking at the property from a flipping perspective, you should expect to hold onto it for a significant period of time to capture the greatest amount of return and hedge against any real estate market volatility.

Purchasing a property that is within your budget, financially self-sustaining, and has a good future prospect for appreciating in value requires a great deal of research and knowledgeable market insight. A good investor will typically work with an experienced agent and real estate attorney who understands investment property in New York City.

If you are considering buying an investment property in New York City, you will want one with critical experience with investment property purchases. Contact the NYC real estate attorneys at Sishodia PLLC at (833) 616-4646 or schedule a consultation through our online contact form.

from Sishodia PLLC https://sishodia.com/how-to-buy-an-investment-property-in-new-york-city/