Persons looking to purchase property in New York City should be aware that there is a 1% “mansion” tax for all properties being purchased at a price of one million dollars or more. This is in addition to the already applicable 1.425% transfer tax.
Ordinarily, the seller is responsible for the transfer tax and the purchaser is responsible for the mansion tax. Unfortunately with the price of real estate ever rising upwards, a “mansion” cannot usually be acquired with only a million dollars. In Manhattan, a buyer is lucky to get a two bedroom apartment for a million dollars.
We have been in the process of updating our website and although we have not completed the updates, there have been many improvements. You may view our updated website at www.daklawyer.com.
IMPORANT GOVERNMENT WEBSITES
Here is a brief directory of important government websites that you might find useful:
Department of Housing and Community Renewal:
Department of Finance:
Department of Buildings:
Department of Housing Preservation and Development:
Department of Sanitation:
Department of Environmental Protection:
TRANSFER OF PROPERTY BY NON-RESIDENTS
Effective September 1, 2003, new rules apply to transfer of properties by non-resident owners. Non-resident Owners in New York State will be required to pay estimated personal income taxes upon the sale of such property. The estimated tax rate will be equal to the highest individual rate.
The New York State Department of Taxation and Finance has issued a new form to be filed in connection with this transfer. This is a new rule that did not apply before and it is anticipated that the rule will create significant confusion at closings in the future.
If your transaction involves, or if you are a non-resident of New York State who is transferring property, I suggest you review this issue in detail with competent real estate counsel and your title company well in advance to make sure that your transaction goes smoothly.
We have much to be thankful for, especially at this time of the year. We at David A. Kaminsky, P.C. want to wish all of our clients, friends and families peace, happiness and prosperity. Thank you all for your continued interest in our newsletter and please go to our new website www.daklawyer.com and visit us there!
BREAKING A LEASE
Can a tenant break a lease? In these difficult times, many tenants want to vacate their space before the lease comes to an end. The landlord will often like to hold them to the lease terms and insist they still pay the rent which was contracted for under the lease. Generally speaking, if a rent controlled tenant vacates, the landlord will be pleased because they will be able to charge a new and much higher rent. There are generally two other types of scenarios, i.e. residential leases and commercial leases.
In a commercial setting, the landlord will invariably want to enforce the terms of the lease unless a new tenant is immediately coming into the space paying a significantly higher rent. In the commercial scenario the landlord has no duty to mitigate damages which means that the landlord has no obligation to make efforts to re-rent the premises in order to lessen the financial obligation of the tenant. A landlord could merely do nothing and let the rent bills pile up, while counting on the tenant who signed the lease to be responsible for the rent.
In a residential scenario, where a residential tenant vacates the premises and breaks the lease, the landlord does have an affirmative duty to mitigate damages. This means that if the landlord wants to hold the tenant responsible for the rent after the tenant breaks his lease and vacates the landlord must be prepared to show in Court that he has made efforts to re-rent the premises. This would include showing that the landlord placed newspaper advertisements, listed the apartment with real estate brokers for rental, made efforts to show the apartment and interview prospective tenants. If a tenant seeks to break the lease, the tenant should do whatever she or he can to provide the landlord with lists of appropriate replacement tenants or have otherwise good reasons as to why he or she can no longer live in the apartment that relate to the landlord’s failure to provide a habitable housing accommodation. Before any tenant elects to vacate an apartment in the middle of a lease they should consult an attorney to best situate him or herself so as to avoid potential liabilities.