Commercial Real Estate Blog by Madison

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Residential Real Estate

Boundary Trees, Where to Draw the Line….

By Terence Guerriere, Esq., Executive Vice President, Madison Commercial Real Estate Services

In a world where party walls, air rights and subway easements can sometimes make life in real estate somewhat complicated, I took a moment to breath in some fresh spring air and contemplate the beauty of the world around me. I started to focus on a magnificent oak tree, its large spreading branches and its wide trunk, and let my mind wander… to the law of boundary trees, of course!

It can be an innocent act; even a noble one. A tree is planted. Or, a wayward seed floats to the surface from a branch above, lands and takes root. Regardless, with either of these simple acts, a contentious lawsuit can also take root. It likely will take years, sometimes generations, to come to fruition (pun intended). However, one person’s bucolic shade and privacy can become another’s annoyance and nuisance!

So who has ownership of and responsibility for boundary trees, trees that grow on or near the boundary line between adjacent properties? Who has the legal right and responsibility for the removal or care of such trees? Continue reading

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Inadvertent Mortgage Fraud: A Day Late Means Many Dollars Short

By: Eliezer Shaffren, Esq., Senior Commercial Counsel, Madison Title Agency

There are situations that arise in real estate transactions that can result in inadvertent mortgage fraud. That’s right. Unintentional and without malice, but mortgage fraud just the same. Case in point.

Mr. Jones arrived at the sale of his property fully prepared. At the closing, all title exceptions had been cleared, and payoff letters have been obtained for the remaining open mortgages. The first mortgage, a purchase money mortgage, had a payoff of $500,000, which would be paid off at closing. The second mortgage, a home equity line of credit (HELOC), had a maximum allowable draw of $50,000. Mr. Jones had only drawn $10,000 of the HELOC. He obtained a payoff letter, confirming this amount was also to be paid at closing.

The closing proceeded smoothly and Mr. Jones left the room, confident that all of his bills had been paid and debts satisfied. Newly flush with cash from the sale, Mr. Jones invited a group of friends to his favorite restaurant to celebrate. That’s where things went wrong. Continue reading

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Real Estate Fraud – “Stealing” a Home

By: Debra Smith, Associate General Counsel, Madison Title Agency

An increasingly common type of real estate fraud occurs when someone impersonates the true owner of real property and does one of two things- sells the home or obtains a mortgage on it.

Typically, the wrongdoer first identifies a low risk transaction. The wrongdoer may look for a home nearing foreclosure for unpaid taxes. This is very easy information to obtain because so much data is accessible on the Internet now. The wrongdoer will then visit the property and confirm it is vacant. The ideal target has no mortgages (or only a very small mortgage) encumbering it.

The wrongdoer will obtain fake identification in the true owner’s name. He may then sell the property to a bona fide purchaser. He collects the net sale proceeds and moves on to the next victim. In criminal proceedings against Maria Leyna Albertina in Brooklyn a decade ago, it was alleged that she had identified and purportedly “sold” 32 such properties.

There are many variations on this scheme. Continue reading

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The Pervasiveness of Mortgage Fraud – Forged Documents

By Debra Smith, Associate General Counsel, Madison Title Agency

Mortgage fraud is pervasive. This is the first of a series of blogs describing different types of mortgage fraud and the flags that can help anyone involved in the real estate and financial sector identify them.

One fraud seen with increasing frequency is forged mortgage satisfactions. A major example of this type of fraud occurred in 2005 in Greenwich, Connecticut. A respected real estate developer owned a number of commercial properties. It turns out that to generate more cash flow, he was routinely forging mortgage satisfactions of mortgages encumbering properties he owned. Continue reading

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Parking Arrangements in Reverse Exchanges – Part 3

By Lee David Medinets, Esq., Chief Counsel, MCRES, Madison Exchange a/k/a Madison 1031, and affiliates

In my last post, we looked at how a safe harbor reverse exchange works under Rev. Proc. 2000-37. Either the relinquished property or the replacement property is “parked” with an “exchange accommodation titleholder” or “EAT”. We also discussed the restrictions on a safe harbor reverse exchange that must be included in a “qualified exchange accommodation agreement” (a “QEAA”) in order to have the benefit of the safe harbor. In this post we will examine the difference between parking a replacement property versus parking a relinquished property.

There are usually some significant advantages to parking the replacement property instead of the relinquished property. Here are five advantages. Continue reading

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Implementation delayed for the TILA/RESPA Integrated Disclosure (TRID) Rule

By: Eli Young, Director of Title Operations, Madison Title Agency

Just as we were entering the final countdown to implement the new TILA/RESPA Integrated Disclosure (TRID) rule, the real estate industry has been granted a brief reprieve.

The August 15, 2015 effective date for the new rules has been postponed until October 2015. The delay is due to an administrative error that was made in the rules disclosure and review process. Under the Congressional Review Act, Congress and the Government Accountability Office must receive any new rule at least 60 days prior to the rule taking effect. However, the CFPB failed to submit its notice until after the 60-day deadline had passed and was forced to delay the effective date of the TRID rule as a result. Continue reading

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Developing Across the River: NYC’s Expanding Markets

By: Mark Faham, Regional Business Director, Madison Commercial Real Estate Services

Riding the subway each day to work and to closings is always an interesting experience. I recently noticed a fascinating fact which I had overlooked all these years: the strong correlation between subway ride distance and residential development in NYC. In recent years, there has been a huge amount of development right outside Manhattan, only about 15 minutes from ‘the city’ by subway. As the shortage of housing and escalating prices for housing skyrocket in Manhattan, NYC developers are creating housing in neighboring boroughs near subway transportation. Continue reading

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Tax Abatements and Exemptions Available to New York City and New York State Residential Property Owners

By: Pat Anarumo, Vice President of Sales, Madison Commercial Real Estate Services

Living in NYC or its surrounding suburbs comes at a price. Real estate and school taxes often take a big bite out of property owner’s budgets; however, all is not lost. The city and state offer various tax exemptions and abatements to residential property owners. There are many different benefits that can be taken advantage of, but for purposes of this discussion I will focus on three of them.
Continue reading

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