05 Distinctions Real Property

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01 Fee on Limitation

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In New York, a fee simple determinable is referred to as a "fee on limitation."

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02 Fee on Condition with the Right of Reacquisition

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In New York, a fee simple subject to condition subsequent is referred to as "fee on condition" with the "right of reacquisition." The "right of reacquisition" is equivalent to the right of entry or power of termination. The "right of reacquisition" is descendible, devisable, and alienable.

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03 Additional Requirements for Ameliorative Waste

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In New York, there are additional requirements for ameliorative waste: (1) the proposed change may not violate any agreements regulating the conduct of the life tenant, (2) the life estate is not less than 5 years, and (3) the life tenant must give written notice of the proposed change to all future interest holders at least 30 days prior to the start of any work.

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04 Remainder Vested Subject to Complete Defeasance

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In New York, a vested remainder subject to total divestment is referred to as a "remainder vested subject to complete defeasance."

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05 Doctrine of Worthier Title (abolished)

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In New York, the Doctrine of Worthier Title has been abolished with respect to transfers taking effect after September 1, 1967.

Under common law, the doctrine of worthier title applies when the grantor, who is alive, attempts to create a future interest in his unknown future heirs. This doctrine encourages free transfer of land by effectively voiding the remainder in the grantor's heirs and creating a reversion in the grantor instead.

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Under common law, the doctrine of worthier title applies when the grantor, who is alive, attempts to create a future interest in his unknown future heirs. This doctrine encourages free transfer of land by effectively voiding the remainder in the grantor's heirs and creating a reversion in the grantor instead.

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06 Contingent Remainders and Executory Interests

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New York does not distinguish between contingent remainders and executory interests. A future interest that is subject to a condition precedent is simply referred to as a "remainder subject to a condition precedent."

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07 The Rule Against Perpetuities

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New York applies the Rule Against Perpetuities, with the addition of the following reform statutes.

Fertile Octogenarian Rule. In New York, the presumption of one's ability to have children is as follows: Males - 14 years of age and over. Females - 12 years of age, but not over 55 years of age. Evidence may be offered to establish whether a person is actually capable of having children to rebut these presumptions.

Adopted Children. In New York, the possibility that a person may have a child by adoption is disregarded.

Miracle Children. In New York, the validity or invalidity of a disposition is not affected by later events that contradict the presumption of being able to have children. If a child is actually born or adopted, the child is included in the gift and the disposition is still valid.

Unborn Widow(er). In New York, if an interest is void due to a reference to a widow or widower, it is presumed that the reference is to a life in being at the time the interest was created.

Administrative Contingency Problem. In New York, if the duration or vesting of an estate is contingent upon a specified event, there is a presumption that creator of the estate intended the contingency to occur within 21 years from the date the instrument went into effect. The presumption is that the creator intended to create a valid interest.

Wait and See Doctrine - NY rejects the Wait and See Doctrine. Under the Wait and See Doctrine applied in several jurisdictions, the validity of a future interest is determined on the facts as they exist at the end of the measuring life.

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08 Joint Tenancy

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In New York, a joint tenancy can be created even if the unities of time and title are not satisfied (but unities of possession and interest must be present!). By New York statute, a disposition of property to two or more people as executors, trustees, or guardians creates a joint tenancy even without express language in the conveyance of title.

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09 Right of Survivorship in Joint Tenancies

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In New York, the right of survivorship of the nonacting party will not be destroyed unless the conveyance is properly recorded in the county courthouse.

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10 Lien Theory of Mortgages (applies)

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New York follows the lien theory of mortgages.

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11 Tenancy by the Entirety

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By New York statute, any grant to a husband and wife results in a tenancy by the entirety unless the grantor expressly provides otherwise. If the couple is not legally married, a joint tenancy is created unless a tenancy in common is expressly created. In New York, the right of survivorship in a tenancy by the entirety can only end by mutual agreement, a conveyance signed by both parties, or divorce. Only a creditor of both parties can reach the property.

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12 Form of a Residential Lease

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In New York, all residential leases must be written clearly using words of common meaning. The sections of the lease are to be appropriately captioned and divided. Violations of this requirement will not render the lease as void, voidable or unenforceable as a result of a defense. However, failure to comply with this requirement will result in actual damages sustained and a $50 penalty.

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13 Excusing Failure to Give Timely Notice to Renew a Lease

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In New York, a tenant's failure to give timely notice to renew the lease will be excused if all of the following conditions are met: (1) the tenant was honestly mistaken, (2) the landlord is not prejudiced by the untimely notice, and (3) the loss of the lease would result in substantial forfeiture to the tenant.

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14 Terminating a Periodic Tenancy by Notice

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In New York, a periodic tenancy can be terminated by notice from the landlord to the tenant. In New York City, notice mus be given at least 30 days prior to the expiration of the term. Outside New York City, notice must be at least one month before the expiration of the period. Note that if a definite term has been specified, no notice is required outside of New York City.

(Under common law, a periodic tenancy is terminated by written notice. Notice must be given at least equal to the length of period unless otherwise agreed. A year-to-year periodic tenancy requires only 6 months notice)

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15 Terminating a Tenancy at Will

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To terminate a New York tenancy at will, the landlord must provide a written notice, of least 30 days, that is personally served on the tenant. If the tenant has not vacated according to the terms of the notice, the landlord may enter and maintain an action to recover possession without any further notice to the tenant.

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16 Special Rules for Holdover Tenants

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In New York, absent a contrary agreement, mere acceptance of rent by the landlord creates a month-to-month periodic tenancy that begins the day after the lease terminates. Absent a contrary agreement, a "new" tenant may bring action to evict a holdover tenant or avoid the lease and recover consideration already paid to the landlord. If a holdover tenant notifies the landlord of the intent to exit the premise and fails to deliver possession, the tenant must double the rent owed to the landlord, as long as he is in possession.

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17 Tenant's Rights If the Building Is Destroyed

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In New York, if there is no express written agreement to the contrary, a tenant without fault may quit and surrender possession of the leasehold if the building is destroyed; the tenant does not have a duty to pay additional rent if the premises are destroyed.

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18 Repairs

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By New York statute, the landlord of a building containing three or more apartments is required to keep the dwelling in good repair. However, the tenant may also be held liable if the state of disrepair was caused by the tenant's actions, negligence, or a third party under the tenant's control.

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19 Mitigating Damages

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In New York, the landlord is not required to mitigate damages if the tenant abandons the premises. However, there is some case law that may require mitigation of damages in the case of a residential lease.

(Under common law, if a tenant has unjustifiably abandoned the premises, the landlord has the option to let the property sit empty and continue to collect rent from the tenant. Most courts have taken the position that the landlord must make a reasonable effort to find a new tenant in an attempt to mitigate damages)

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20 Landlord's Duty to Deliver

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In New York, the landlord must put the tenant in actual physical possession of the premises at the beginning of the leasehold.

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21 Partial Actual Eviction

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In New York, partial actual eviction occurs when a tenant is physically excluded from a substantial portion of the premise.

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22 Constructive Eviction as an Affirmative Defense

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In New York, constructive eviction must be asserted as an affirmative defense against an action to dispossess by depositing the rent due in court.

(Constructive eviction occurs when the landlord acts (or fails to act) in accordance with the landlord's legal duties that makes the property uninhabitable. If constructive eviction occurs, the tenant must vacate the property within a reasonable time; otherwise, he has waived his right to vacate. If constructive eviction occurs and the tenant has vacated the property, the tenant can terminate the lease and sue for damages)

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23 Retaliatory Eviction

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In New York, retaliatory eviction applies to all residential buildings except buildings occupied by an owner with less than four units. Retaliation must be pleaded as an affirmative defense, but can subject the landlord to civil actions for damages or other relief. Restrictions that limit occupancy to the tenant and immediate families are prohibited.

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24 Assignment

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In New York, unless provided for in the lease, a residential tenant may not assign his lease without the written consent of the owner. The landlord is entitled to withhold consent without cause; if the landlord withholds consent, the tenant's only remedy is to seek release from the lease. If the landlord REASONABLY withholds consent, the tenant cannot assign or seek release from the lease.

A commercial tenant may assign his interest freely in the absence of a prohibition in the lease.

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25 Sublease

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In New York, a residential tenant in a building with four or more units has the right to sublease with the landlord's written consent. Consent cannot be unreasonably withheld. If consent is unreasonably withheld, it will be deemed as consent. The landlord's failure to respond to the tenant's notice will also be deemed as consent.

A commercial tenant may sublease his interest freely in the absence of prohibition in the lease.

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26 Easement by Prescription

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By New York statute, the land must be used for a period of 10 years to obtain an easement by prescription.

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27 Creation of a Covenant; Touch and Concern

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In New York, the common law "touch and concern" requirement has been expanded to include contributions toward a common fund for the neighborhood. This fund allows the contributing property owners to receive an easement to use common public areas.

(Under common law, the promise must specifically touch and concern the land as landowners, but not as general members of the community)

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28 Revocability of a License

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In New York, a license is always revocable.

(Under common law, a license is a mere privilege to enter another's land for a delineated purpose. A license is freely revocable, unless estopped.)

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29 Unconstitutional Taking by the Government

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In New York, before a landowner can bring suit, there must be an actual appropriation, taking by title, or government occupation or management. The landowner has a burden to establish beyond a reasonable doubt that he will not obtain a reasonable return under any use.

(A taking occurs if the zoning ordinance deprives the owner of the entire economic use of the land. If zoning results in the loss of nearly all of the economic value of the property, courts will apply a balancing test, factoring in the social goals of the regulation, the diminution in value, and the owner's reasonable expectations for the use of the property)

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30 Risk of Loss

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New York has adopted the Uniform Vendor and Purchaser Risk Act. Under this Act, the risk of loss between the time of the contract and the time of the closing is placed on the seller, unless the buyer has legal title or possession of the property at the time of the loss.

(Under the majority view, the doctrine of equitable conversion places the risk of loss on the buyer if the property is destroyed after the contract is signed, but before closing)

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31 Risk of Loss; Insurance Proceeds

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In New York, the seller may keep insurance proceeds in addition to the right to recover the full purchase price. An insurance policy is considered to be a contract between the seller and insurer. A buyer can obtain the insurance proceeds if the buyer paid for the insurance premium.

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32 Marketability; Easements

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In New York, visible and invisible easements are considered encroachments that give the purchaser a right to object to the title. Lawful structures such as public highways are excluded.

(The seller provides an implied warranty that the title is marketable. A title is unmarketable if:

(1) there are encumbrances
(2) there are gaps or defects in the chain of title (including title acquired by adverse possession)
(3) the property is in violation of zoning ordinances)

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33 Remedies for Unmarketable Title

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In New York, in the event that there is an unmarketable title that is not the fault of the seller, the buyer may recover only the money paid toward purchase, expenses incurred for title examination, and nominal damages.

(the buyer must notify the seller if he discovers that the title is not marketable and then given the seller a reasonable time to cure (the closing date can be extended to give the seller reasonable time). If the seller does not cure, remedies include:

(1) damages
(2) rescission of the contract
(3) specific performance)

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34 Statutory Special Warranty Deed

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In New York, a statutory special warranty deed is referred to as a bargain and sale deed.

(A statutory special warranty deed is provided by a state statute. It contains 2 promises:

(1) the grantor has not conveyed the estate to anyone else
(2) the property is free from encumbrances made by the grantor)

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35 Race-Notice Statute

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New York s a race-notice jurisdiction. In a race-notice jurisdiction, a subsequent bona fide purchaser is protected only if he records before the prior grantee. If the buyer is a bona fide purchaser and is the first to record, he wins.

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36 Adverse Possession

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By New York statute, the property must be in continuous, open and notorious, and actual possession for 10 years to establish the possessor's title to the land. If a tenant in common is in exclusive possession and has not ousted his co-tenant, he can claim title by adverse possession after 20 years.

In New York, if a person claims possession without a reasonable belief that he is entitled to the property, he is a mere trespasser.

In New York, the existence of de minimis nonstructural encroachments is deemed permissive and non-adverse.

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37 Mortgages; Lien Theory

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New York follows the lien theory of mortgages. Under the lien theory, the morgagee is the holder of a security interest and the mortgagor is the owner of the land until foreclosure. Therefore, the morgagee may not possess the property until foreclosure.

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38 Redemption

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New York only recognizes an equitable right of redemption prior to sale. There is no statutory right of redemption after the sale.

(In equitable redemption, the mortgagor has the right to redeem the property any time PRIOR to foreclosure (cannot be waived). Statutory redemption allows the mortgagor to redeem after foreclosure for a fixed period of time - the amount to be paid is the foreclosure sale price, not the amount of the original debt)

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39 Methods of Foreclosure

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In New York, there are three methods of foreclosure:

1. Foreclosure by an action in equity and sale. The property is sold and the proceeds are divided among the interested parties.

2. Strict foreclosure. An action in equity that compels the parties who have a right to redemption to exercise such right by making the appropriate payment to satisfy the mortgage debt. If the payment is not made within a reasonable time, the right of redemption is barred.

3. Foreclosure by advertisement. This option gives the mortgagee the right to extinguish the equity of redemption by selling the land without a judicial proceeding or court decree. A power of sale must exist in the mortgage.

(Under common law, there are 2 types of foreclosures by sale:

(1) a judicial sale
(2) a power of sale)

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40 Deficiency

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In New York, if there is a deficiency and the mortgagor has been personally served in the foreclosure action, the mortgagee can request a deficiency judgment from the court. If no demand is made for deficiency within 90 days of the sale, the proceeds from the sale will be deemed to satisfy the full mortgage debt.

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Breach of Duty to Pay Rent

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In NY, self-help is flatly outlawed and entitles the tenant to damages.

(Under common law, if a tenant breaches his duty and is in possession of the premises, the landlord may evict properly through a court action or continue the relationship and affirmatively sue for rent due. The landlord must not engage in "self-help" (i.e., changing locks, forcibly removing the tenant or tenant's possessions), which is punishable civilly and criminally)