Real Estate & Property: Frequently Asked Questions

New York is one of the few states where attorney representation is customary and strongly recommended for both buyers and sellers. The attorney reviews the contract, negotiates terms, conducts due diligence, resolves title issues, and manages the closing. Fees typically range from $2,000 to $4,000 for residential transactions.

Buyers typically pay 2-5% of the purchase price. Major costs include: mortgage recording tax (1.8% for loans under $500,000, 1.925% for loans $500,000+), title insurance (0.4-0.6%), attorney fees, bank fees, and lender charges. Sellers pay the real estate broker commission (typically 5-6%) and NYC/NYS transfer taxes.

Source: N.Y. Tax Law § 253 (mortgage recording tax); N.Y. Tax Law § 1402 (transfer tax)

A title search examines public records to verify the seller's ownership, uncover liens, mortgages, easements, judgments, or other encumbrances. Title defects can delay or kill a transaction. Title insurance protects you against undiscovered defects. Never skip the title search, even in a private sale between people you trust.

1% of the total purchase price for residential properties selling for $1,000,000 or more. An additional progressive surcharge applies to properties in NYC selling for $2,000,000+ (ranging from 0.25% to 2.9% depending on price). The mansion tax is paid by the buyer at closing.

Source: N.Y. Tax Law § 1402-a

In a condo, you own your unit outright and receive a deed. In a co-op, you own shares in a corporation that owns the building, plus a proprietary lease for your unit. Co-ops have stricter approval processes, financial requirements, and restrictions on subletting. Financing a co-op can be more difficult.

Co-op boards can reject buyers without stating a reason (except for legally protected classes). Most co-ops require 20-25% down payment, 1-2 years of post-closing liquidity, and a debt-to-income ratio under 25-28%. The board application process takes 4-8 weeks. Maintenance fees include your share of the building's property taxes and mortgage.

The seller's attorney drafts the contract. The buyer's attorney reviews and negotiates. Upon signing, the buyer deposits 10% into the seller's attorney's escrow account. The contract period (typically 60-90 days) allows for inspections, financing, and due diligence. The contract is binding once both parties sign.

The seller typically keeps the 10% deposit as liquidated damages if the buyer defaults without a contractual basis (e.g., mortgage contingency, inspection contingency). The contract should clearly define default remedies. In some cases, the seller can sue for specific performance or additional damages beyond the deposit.

If your property is assessed above fair market value, you can challenge the assessment annually. File a complaint with the Board of Assessment Review by Grievance Day (typically the third Tuesday in May for most municipalities). If denied, appeal to the Small Claims Assessment Review (SCAR) within 30 days. A successful grievance reduces your tax bill prospectively.

Source: N.Y. RPTL §§ 524, 730

A 1031 exchange allows you to defer capital gains tax by reinvesting the proceeds from an investment property sale into a like-kind replacement property. You have 45 days to identify replacement properties and 180 days to close. A qualified intermediary must hold the funds; you cannot touch the proceeds directly.

Source: IRC § 1031

Tenants have the right to a habitable apartment, proper heat and hot water, protection from illegal lockouts, security deposit protections (returned within 14 days of move-out), and limits on security deposits (no more than one month's rent). Rent-stabilized tenants have additional protections including limits on annual rent increases.

Source: N.Y. Real Prop. Law § 235-b; Housing Stability and Tenant Protection Act of 2019

Rent-stabilized apartments (roughly 1 million units in NYC) have regulated rent increases set annually by the Rent Guidelines Board. Tenants have a right to a renewal lease, succession rights, and protection from most evictions. Buildings with 6+ units built before 1974 receiving J-51 or 421-a tax benefits are commonly stabilized.

Source: N.Y.C. Admin. Code § 26-504; Rent Stabilization Code

Serve proper written notice (14-day notice for nonpayment, 30/60/90-day notice for holdover depending on tenancy length). If the tenant does not vacate, file a petition in Housing Court. The court process typically takes 2-6 months. Self-help evictions (changing locks, removing belongings) are illegal and can result in damages against the landlord.

Source: N.Y. Real Prop. Acts. & Proc. Law Art. 7; RPAPL § 711

A lien search reveals any outstanding claims against a property, including tax liens, mortgage liens, mechanic's liens, and judgment liens. All liens must be satisfied before or at closing for the buyer to receive clear title. Your attorney should order a lien search as part of standard due diligence.

Title insurance protects the buyer and lender against losses from title defects, unknown liens, fraud, or errors in public records. Lenders require a policy. Owner's title insurance is optional but strongly recommended. It is a one-time premium paid at closing. Claims, though infrequent, can save you hundreds of thousands.

The School Tax Relief (STAR) program reduces school property taxes for eligible homeowners. Basic STAR is available to homeowners with income under $500,000 (savings up to approximately $350). Enhanced STAR is for homeowners 65+ with income under $98,700 (savings up to approximately $800). New applicants receive a credit check, not an exemption.

Source: N.Y. RPTL § 425