Visit The Hayden Law Office Website
www.haydenlegal.com

419 Park Avenue South 7th floor New York, New York 10016

Thank you for visiting New York City attorney Sean Hayden's blog. Please check back later as this page is being currently updated!

Friday, August 14, 2009

LIVING WILLS ARE NOT DEATH PANELS.

Living Wills, also known as Advance Directives, are an important part of anyone's life planning and estate documents. Contrary to falsehoods being spread during the current healthcare reform debate, a living will actually puts the PATIENT in control to dictate what specific care the patient desires to be administered or withheld in the event of an end of life condition. In the absence of such, the default mechanism is to keep the patient alive, even if the patient would indefinitely be in a persistent vegetative state. 99.9% of my clients, in fact, do not want to be kept on a ventilator or other life sustaining measures indefinitely - which would occur in the absence of a living will. Living Wills should be executed to prevent such a scenario, along with Healthcare Proxies and Powers of Attorney.

Wednesday, June 3, 2009

THE IMPORTANCE (AND RISKS) OF A POWER OF ATTORNEY

from the New York Times
May 21, 2009
Putting Your Faith in a Power of Attorney

By DEBORAH L. JACOBS
TRUST and estate lawyers routinely tell their clients about the importance of signing a durable power of attorney. Often written at the same time as a will, it appoints a family member, friend or adviser as an agent to act on your behalf in financial and legal matters — even if you become incompetent.

But as essential as these documents are, they face new — and continuing — obstacles. One is using them amid the disruptions in the financial services industry. Another is an old problem that may have grown more acute after recent scams and frauds: Many people mistrust these documents, which give unbridled power to your agent. So some people sign them to appease their lawyers but never give them to the person designated to handle their affairs.

“A power of attorney is a license to steal,” said Bernard A. Krooks, a specialist in elder law at Littman Krooks in New York who nonetheless encourages clients to sign a power of attorney. “You have to be careful who you appoint as your agent.”

Some states have tried to reduce abuses. In New York, for example, a new law requires that as of Sept. 1 all new powers of attorney be signed not only by the principal (the person granting the power) but also by the agent — a reminder of his or her obligation to put the principal’s welfare first.

In addition, if the power of attorney includes the authority to make total annual gifts of more than $500 to one person or charity, that power must be included in a separate rider that, like a will, must be signed in the presence of two witnesses.

The law, enacted Jan. 27, may deter some people from signing a power of attorney, Mr. Krooks said.

He and other lawyers remind their clients that even if signing a power of attorney makes the client feel vulnerable, it’s far better than living without one. If you become incompetent, you lack the capacity to make legally binding commitments. Without a power of attorney, your family might have no choice but to ask a court to appoint a guardian to oversee your finances. This can be an expensive and sometimes embarrassing ordeal and can involve unpleasant, even acrimonious, exchanges.

Although the two are sometimes confused, a durable power of attorney, which deals only with financial matters, and a health-care proxy, which authorizes an agent to make medical decisions on your behalf, are distinctly different. And when thinking about signing a durable power of attorney, it is important to consider the following issues:

WHOM CAN YOU TRUST? The best person to put in charge, lawyers say, is a close family member — preferably one who lives nearby. Most financial advisers do not want this responsibility, nor is it cost effective to pay their hourly fee to handle routine tasks like paying bills.

Naming joint agents, which is allowed only in some states, is one way to provide checks and balances. Or you can appoint another person, like an attorney, an accountant or a family friend, to supervise the arrangement.

Before appointing an agent, it is important to determine whether that person is willing to take on the duties. If you’re nervous about giving the signed document to your designated agent right away, you could leave it with your lawyer with instructions on when to turn it over, said Gloria S. Neuwirth, a lawyer with Davidson, Dawson & Clark in New York. In that case, remember to tell your agent whom to contact.

WHAT POWERS SHOULD BE INCLUDED? You ought to authorize your agent to take any financial action you could take yourself, said Lawrence P. Katzenstein, a lawyer with Thompson Coburn in St. Louis. This could include estate-planning strategies like financing college savings plans for children or grandchildren, prepaying charitable bequests and converting traditional I.R.A.’s to Roth I.R.A.’s.

If you have set up a living trust — a way to provide for yourself financially and to transfer assets to friends or family after your death instead of having them distributed under the terms of a will — you should carefully distinguish between the responsibilities of the trustee and those of the agent, Mr. Katzenstein said. He recommends that you indicate whether the agent may take money out of the trust, and that you give the agent the authority to transfer assets into it if you become incompetent.

Even if most assets are ultimately held by the trust, you still need the agent to perform quasi-personal functions like signing a nursing home contract or tax return and accessing a safe-deposit box.

This is not always easy, and the digital world has made it harder, in some ways.

Wendy S. Goffe, a lawyer with Graham & Dunn in Seattle, relied on a power of attorney that her husband, Scott Schrum, had given her to piece together his paperless financial life after it was found that he had cancer. While he was disabled, the form gave Ms. Goffe access to electronic records, including those for her husband’s rollover I.R.A. and 401(k) and the 529 college savings plan he had managed for their daughter Maya, 7.

The biggest chore was tracking down shares of stock that Mr. Schrum, also a lawyer, had purchased by exercising employee options online. Because of “a string of bad luck,” Ms. Goffe said, the financial institution holding the options and the couple’s brokerage company had been sold, their Web sites eliminated and the records put into storage. The shares, worth $7,500, had been credited to a stranger’s account. In dealing with each institution, she needed to present the power of attorney.

WHEN DOES THE DOCUMENT TAKE EFFECT? You can choose to make it effective from the moment you sign it, or specify that it be activated by a specific event, for instance, if you become incompetent.

The problem with the second approach, known as a springing power, is that someone must decide when you have reached that state, said Ms. Neuwirth, the New York lawyer. Traditionally, this has required a medical opinion and can lead to disputes.

Even when powers are effective immediately, the agent may not be sure when it’s necessary to take control. That is what happened to Dr. Mark Segall, a surgeon in Los Gatos, Calif., who said his elderly parents gave him power of attorney in 1996.

Knowing that they were private about financial matters and valued their independence, he did not use it until last year, when he said they seemed relieved to have his help. He then discovered that they had been shredding all their mail, including bills, for many months and had accumulated about $1,100 in finance charges on their credit card (at Dr. Segall’s request, the company waived the late fee).

WHERE IS A POWER OF ATTORNEY VALID? Because state laws vary, you cannot assume that a power of attorney signed in one state will be honored in another. Howard M. Hujsa, a lawyer with Cummings & Lockwood in Bonita Springs, Fla., recalled a client whose son was unable, under his mother’s power of attorney, to sell her house after she became incompetent.

Her power of attorney was signed in Massachusetts, which at the time required only one witness; his mother had moved to Florida, where the property was located, and Florida law says an agent with power of attorney cannot sell real estate on behalf of the principal unless the document is signed by two witnesses.

The family had to go to court to have the son appointed as guardian. He continued in this role until his mother died several years later and he had to file annual reports to the court, something an agent under a power of attorney is not required to do. The process wound up costing the family more than $30,000 in additional legal fees, Mr. Hujsa said.

Likewise, if you plan to spend time overseas and buy or sell real estate, conduct business or open a bank account there, you need to find out what the law in that country requires, said Anne J. O’Brien, a lawyer with Arnold & Porter in Washington. Very few countries will honor durable powers of attorney from other jurisdictions, she said.

While some countries have an equivalent form, others permit the arrangements only under court supervision, said Mark Summers, a lawyer with Speechly Bircham in London. In Britain, you must use a power of attorney that is 25 pages long.

Many Americans are surprised to find out that a British power of attorney can cost several thousand dollars, he said, about 10 times what a lawyer would charge in the United States to prepare a much shorter document.

Sunday, March 8, 2009

WHAT CONTRACT?


from the New York Times
March 8, 2009
What Contract?

By MICHAEL M. GRYNBAUM
COULD the days of the iron-clad contract be numbered?

It used to be that once a buyer went to contract on an apartment, the terms of the deal were all but set in stone. Sales prices never budged, and if the buyer balked, the down payment went bye-bye.

But double-digit price declines and the lending drought have started to threaten this once near-inviolable pillar of New York real estate. Buyers are demanding concessions from developers on apartments that they say have lost up to 30 percent in value. Others are hoping to back out of their contracts entirely, while keeping their down payments in the process.

The sudden demand has sent lawyers scurrying to uncover avant-garde legal tactics for ducking out of a deal. Downtown conversions like 75 Wall Street and new developments like One Hunters Point in Long Island City are facing suits from buyers seeking to break contracts on the basis of a once-obscure consumer protection law.

The number of New Yorkers filing claims with the attorney general’s office to claw back their down payments has more than tripled in the last two years, although most disputes don’t reach this step. In 2007, 57 claims were filed; in 2008, 168. By Feb. 20 of this year, the office had already recorded 74 claims.

The ultra high end is not immune. At the Brompton, a heavily marketed Upper East Side condominium designed by the architect Robert A. M. Stern, lawyers say some buyers are calling on the project’s developer to pay closing costs, cover taxes and relocation expenses, and, yes, even retroactively drop the price of apartments.

It remains unclear whether these efforts will be convincing, whether at the negotiating table or in a court of law. On the developer’s side is the legal strength of a signed contract and the financial leverage of a buyer’s deposit.

But the incentives have realigned in a market where many apartments are now worth less than their purchase prices. It may make financial sense for buyers to cut their losses and leave their deposit on the table rather than move into a money pit. And while developers would pocket the down payment, they might be stuck with a unit that eventually sells for much less — or even worse, just sits. This new math may put some developers in a negotiating mood.

“Behind this, the big elephant in the room is the price,” said Adam Leitman Bailey, a real estate lawyer who says he is representing unhappy buyers from nearly 50 buildings.

The traditional method for a buyer to break a contract is to prove that some element of the completed unit differs from the developer’s offering plan. This is why lawyers have been known to use lasers to measure square footage to within a millimeter and to debate descriptions of views and amenities.

But if the issue is more financial than material, buyers may be forced to “in essence, throw themselves at the mercy of the developer,” said Peter Graubard, a real estate lawyer.

“They are saying, ‘Hey, listen, I’m in a financial hardship and the loss of this 10 or 15 percent deposit is going to be devastating to me right now,’ ” said Mr. Graubard, explaining that every one of his clients who went to contract before October 2008 — about 30 in all — is trying to renegotiate or abandon a deal.

Officials at the attorney general’s office said they were seeing more appeals based on such emotional pleas.

But these arguments may not fly. Unless a contract includes a mortgage contingency, nothing in the law allows for a change in financial circumstances or the lending market to constitute a “right of rescission.”

Sometimes, though, a bit of saber-rattling can shake loose concessions.

“Threatening not to close, threatening legal action, maybe the threat of an attorney general’s action, all can bring a developer to negotiate,” Mr. Graubard said.

Some lawyers are looking beyond the traditional methods of arguing breach of contract.

A Web site called No-Condo.com opened in December and immediately received nearly 100 queries from New York residents who want their deposits back. It is the brainchild of Lawrence Weiner, a lawyer at Wilentz, Goldman & Spitzer in Woodbridge, N.J., whose arsenal includes the Interstate Land Sales Full Disclosure Act, a 41-year-old consumer protection law rarely applied in the city.

Created to protect against speculators selling uninhabitable plots, the act requires developers of condominiums or conversions with more than 100 units to provide buyers with a particular type of property report containing information like proof of ownership and the availability of public utilities.

“I wouldn’t categorize it as a technicality,” Mr. Weiner said. “A lot of developers, in a rush to bring things to market, chose not to comply, or maybe they didn’t even realize they needed to comply.” Since December, Wilentz has filed lawsuits on behalf of buyers at 20 Pine Street, 75 Wall Street, One Hunters Point, One Brooklyn Bridge Park and 111 Fulton Street. The developers of these buildings all declined to comment or did not return calls.

The law has its limits as a negotiation device: a developer is exempt from the act if he or she has pledged to complete the unit within two years. But for distressed buyers in certain buildings, the Land Sales Act may offer a way out.

Cynthia Ehrlich, a self-employed tax accountant in her early 50s, made an $85,000 down payment — “all the money I had” — last March on a small one-bedroom at 75 Wall Street, a full-service condominium converted from an old bank building.

The problems began almost immediately. Ms. Ehrlich said she had been attracted to the property by a 10-year tax abatement, but soon learned that the development had not yet qualified for the abatement program. In May, she lost a major source of revenue, and was consequently turned down for a mortgage. Because her contract did not have a contingency clause, she said, the developer declined to return her deposit.

She plans to file suit this month for a return of her deposit on the grounds that the property violated the Land Sales Disclosure Act by not providing the proper property report. Ms. Ehrlich said she had regained hope after learning of the existence of the act.

“It’s the only good news I got,” Ms. Ehrlich said. “It’s a lot of money to lose, and I don’t make a lot.”

The developer of 75 Wall Street, the Hakimian Organization, declined to comment.

At the Brompton, with its “Stylishly Proper” slogan, luxe location on East 85th Street and prices to match, several buyers said they were in financial straits. A group of nearly 30 buyers recently organized over the Internet and held a meeting to discuss their options.

“We just feel this is not primarily a real estate issue,” said Patricia Congiu, 45, an Upper East Sider who went to contract on a 1,900-square-foot three-bedroom in September 2007. “This is not a situation where someone signed a contract and the price went down. It’s a global recession, like nothing seen since the Great Depression.”

Ms. Congiu said she and her husband had “wanted the building to be our final home. We were looking forward to raising our family there.” But now she is not sure whether her income can support the property. Like several other buyers in the Brompton, she said she hoped the developer, the Related Companies, would sympathize with their situation and provide relief so they can move in. “If they gave us a concession,” she said, “we can have a cushion. I don’t want to hurt the building.”

Other unhappy buyers at the Brompton say financial concerns are not the issue. Marc Rossell, 54, went to contract with his wife in August 2007 for a 3,600-square-foot spread, combining three ninth-floor apartments.

He said he was told by the developer that his southern view would clear an adjacent building, but on a walk-through inspection, he found “a water tank right there outside of our windows, and an ugly rooftop.” Mr. Rossell did not think the view matched the description in the offering plan, and believed the discrepancy could help him get free of his contract.

“It didn’t seem to be of the same quality that they basically represented in the showroom,” he said. “We definitely have the money. It’s not that at all.”

Through a spokeswoman, Related declined to comment.

As buyers become more cautious, contracts may begin looking more like they did before the housing boom of the last 15 years.

“You’re going to see a shift back toward an inclusion of mortgage contingencies,” predicted Jay B. Solomon, a partner at Klein & Solomon, a real estate law firm. Such contingencies provided an out for buyers when financing was not available, but they fell out of favor in the last 15 years as buyers faced more competition for apartments.

Under New York state law, buyers in a new development have the right to get out of their contracts if the developer does not close at least one unit within a year of the originally projected start date. Developers almost always find a way to meet this requirement, but lawyers say that buyers are now putting those initial deals under a microscope.

“If you see one unit that’s closed and nothing else for three months, that seems sort of suspect,” said Meg Goble, a partner at the real estate law firm Hanley & Goble. “If you see the unit has closed and there’s no certificate of occupancy, that also looks sort of suspect.”

Ms. Goble said evidence that the sponsor had spun some sort of sweetheart deal for the unit, like giving it away to a friend, could provide a legal ground for breaking a contract.

Of course, not everyone in the industry has sympathy for the buyer who wants concessions or money back.

“I think it is the height of audacity,” said Stuart Saft, a partner in the real estate division of Dewey & Leboeuf, which represents several large developers in contract disputes. “The buyer calls and says, ‘The apartment is not worth as much as when we signed for it.’ My response for that is, if the market went up 20 percent, would you have given us 20 percent more because the market improved?”

And for his part, Mr. Graubard, primarily a buyers’ lawyer, is skeptical of efforts to undo purchase agreements. “You really can’t get that creative; there’s only so far you can go,” he said. “Without the enforceability of a signed contract — well, really, what do we have?”

Sunday, March 1, 2009

GOOD PLANNING MAKES ALL THE DIFFERENCE IN ESTATE PLANNING





From the New York Times
February 26, 2009
Good Advice Makes All the Difference in Estate Planning

By DEBORAH L. JACOBS
IT’S always been painful to spend money on estate planning, because you don’t live to reap the benefits even if you know your heirs will. Amid the current financial duress, you may be tempted to eliminate what might seem like a discretionary expenditure.

Yet your estate plan may urgently need a tuneup or a total overhaul because of the increase in the federal tax-free amount or changes in your personal circumstances. To find the best person for the job and pay for only what’s essential, consider these issues:


DO YOU NEED A NEW LAWYER? After a brief conversation by phone or in person, the professional who created your last plan might be able to make any necessary changes at little cost. On the other hand, if you hope to use sophisticated techniques like avoiding the generation-skipping transfer tax, achieving valuation discounts through family limited partnerships or protecting assets from creditors, be prepared to pay for expert guidance. And don’t be afraid to ask, “How many of these kinds of transactions have you done?” If the answer isn’t dozens, consider finding someone else.

HOW DO YOU FIND A GOOD LAWYER? Start with referrals from people you know who are in similar situations or from professionals whose judgment you trust, like accountants, financial advisers or other lawyers. State and local bar associations can direct you to lawyers in your area but can’t vouch for their skills. Other names can also be found on Martindale.com, the nationwide lawyers’ directory that you can search by location and area of practice, and on www.actec.org the Web site of the American College of Trust and Estate Counsel, a group of trust and estate lawyers.

Depending on where you live, you may have a choice between large national firms with many practice groups or estate-planning boutiques — small firms that specialize in trusts and estates work. The latter tend to be less expensive because their overhead is lower.

Meet with the lawyer before you decide to work together (most professionals charge for this initial consultation only if you go forward). Pay attention to chemistry.

Barbara E. Shiers, a lawyer with Frankfurt Kurnit Klein & Selz in New York, said it’s important to consider this question: would you feel comfortable revealing highly personal information that bears upon your estate plan? This might include not only your finances but also the state of your marriage and relationships with other family members, and whatever might keep you awake at night, like children’s substance-abuse problems or spending habits.

“Everyone would write the best possible will for themselves if only they had the knowledge,” said Pam H. Schneider, a lawyer with Gadsden Schneider & Woodward in Radnor, Pa. You want a lawyer who can listen to your concerns and put herself in your shoes when she drafts the necessary documents, Ms. Schneider said.

HOURLY RATE OR FLAT FEE? While most lawyers charge an hourly rate, some offer flat fees for a package of basic estate planning documents, like a will, living trust, power of attorney, living will and health-care proxy. John L. Berger, a lawyer with Lowenstein Sandler in Roseland, N.J., bills by the hour but gives clients an estimate of the total cost. If clients require more changes or explanations than he factored in, he gives them a heads-up before they incur additional charges.


SHOULD YOU AND YOUR SPOUSE HAVE SEPARATE LAWYERS? This adds to the cost, because two people will need to get up to speed on your situation and draft documents, rather than having one lawyer produce his-and-hers versions of the same wills and trusts. But under most state laws, when couples are jointly represented, everything you tell the lawyer, even privately, is not confidential from your spouse

Separate representation may be desirable in second marriages between those who already have children, said Stephanie E. Heilborn, a New York lawyer. It’s even more important for people in troubled marriages or when one spouse has skeletons in the closet — like a secret companion or an out-of-wedlock child.

You may dread the day when that bill comes, but look at it this way, Ms. Heilborn said: A good estate plan is a surefire way to save taxes, and that’s money in the bank for your heirs. Few investments can make the same promise.

Friday, April 25, 2008

FINDING YOUR FIRST APARTMENT

from the New York Times
April 20, 2008
Finding Your First Apartment
By
VIVIAN S. TOY
THE dream: finding a one-bedroom, one-bath apartment in an elevator building with a doorman in Greenwich Village for $2,000 a month. The reality: nearly impossible.


Spring is the season when newly minted college graduates flock to
New York City to start their careers. They begin the search for their dream apartment, brokers say, with the same single-minded determination that earned them their degrees and landed them their jobs in the first place.
But that determination only goes so far when it comes to
Manhattan real estate.

“Almost every single person I’ve worked with thinks there’s a golden nugget of an apartment waiting right for them,” said Paul Hunt, an agent at Citi Habitats who specializes in rentals. “They all want to be in the Village, and they all want the ‘Sex and the City’ apartment.” The first shock for a first-time renter will probably be the prices.


Consider that the average monthly rent for a one-bedroom in the Village is more than $3,100 and that the average for a studio is just over $2,200. Or that the average rent for a one-bedroom in a doorman building anywhere in Manhattan is close to $3,500. Mr. Hunt said that when he shows prospective renters what their budget really can buy, they are sometimes so appalled that “they think I’m trying to fool them or something, and they run away and I don’t hear from them again.”

Alternatively, the renter checks his or her expectations and grudgingly decides to raise the price limit, look in other neighborhoods or get a roommate. “When expectations are very high, the process can be very frustrating,” Mr. Hunt said. The thousands of new graduates who will be driving the engine of the city’s rental market from now until September will quickly learn that renting in New York is not like renting anywhere else.


The second shock is likely to be how small a Manhattan apartment can be. It is not uncommon in New York, for example, to shop for a junior one-bedroom or a convertible one-bedroom, neither of which is a true one-bedroom at all but really a studio that already has or can have a wall put up to create a bedroom.

Aside from the realities of price and space, the requirements set by New York landlords are also bound to help turn a bright-eyed first-time renter’s outlook grim. To start with, landlords want only tenants who earn at least 40 times the monthly rent, which means an $80,000 annual salary for a $2,000 apartment. According to census data, more than 25,000 graduates ages 22 to 28 moved to the city in 2006, and their median salary was about $35,600. Those who don’t make 40 times their monthly rent need a guarantor, usually a parent, who in turn must make at least 80 times the monthly rent. In addition to a security deposit, some landlords also want the first and last month’s rent. Tack on a broker’s fee and a prospective renter for that $2,000 apartment is out of pocket nearly $10,000 just to get the keys to the place.


“There’s a lot of stuff that doesn’t happen in other markets,” said Gary Malin, the president of Citi Habitats. “On top of that, every owner also has their own requirements, so just because you qualified here doesn’t mean you’ll qualify there. And there’s no rhyme or reason to it.” So the key to finding that first apartment is to learn as much as possible about the market before arriving in the city and also to know that keeping an open mind will make the search easier. “People who walk in with blinders on and can only say, ‘I want, I want, I want,’ when their budget doesn’t allow for it, they create this anxiety,” Mr. Malin said. “You have to be flexible and you have to come to the city armed with information and financial paperwork.”
Mr. Malin said that the volume of calls his agency has fielded in the last few weeks would suggest the city is headed for another strong rental season. The market was so tight last year that the vacancy rate hovered under 1 percent, but the rate has now inched a little over 1 percent, he said, so there will be slightly more inventory and prices may stay stable. Daniel Baum, the chief operating officer of the Real Estate Group New York, a brokerage in Manhattan, said he felt the market had softened enough that there might be room for negotiation, particularly in areas that recent graduates would consider better suited for their parents, like the Upper East Side.
In certain neighborhoods, he said, “there may be opportunity to get concessions from landlords; maybe one month’s free rent or a chunk of the brokerage commission.”
To understand the rental market, brokers and recent first-time renters recommend searching the Internet for listings and getting recommendations from friends who already live in the city. That elusive $2,000 one-bedroom apartment, for example, can be found in neighborhoods like
Harlem, Morningside Heights and Washington Heights, probably in a nondoorman building. And the average price for studios is below $2,000 in the East Village, the Lower East Side and neighborhoods north of Midtown.
Most real estate agency Web sites have guides that explain the intricacies of New York’s rental world. Citi Habitats sends agents to about 20 universities nationwide to offer seminars on what it takes to get an apartment.
Cullen Hilkene, an agent who ran a Citi Habitats seminar at
Princeton University last week, said that prospective renters need to know the limitations the market might impose on them. “I give them information so they can figure out how they’re going to be able to live in New York,” he said. “It’s better to know sooner rather than later that they need to bring in a roommate because they won’t be able to rent a studio on their own.”
Alex Sooy, who moved into a two-bedroom near Union Square last June with his roommate, David Isaacs, said he knew the first thing they had to decide was whether to use a broker. For placing you in an apartment, brokers typically charge 15 percent of the annual rent or 1.8 times the monthly rent, which means $3,600 on a $2,000 apartment.
Mr. Sooy said he tried looking online for no-fee apartments, “but we would have to go to all these places on our own and work individually with the landlords and that was an overwhelming process.” Like many recent graduates, Mr. Sooy and Mr. Isaacs planned to travel after graduation and they had only three days to hunt for an apartment. “We hated to pay the fee, but it was the easiest way to look at a number of places in a row without having to do so much legwork ourselves,” Mr. Sooy said.
Their goal was to find a $3,000 two-bedroom downtown. They visited eight apartments with brokers from two firms before choosing one near Union Square with two real bedrooms, as opposed to ones carved out of a living room, for $3,600. They did not need guarantors because Mr. Sooy works for a consulting firm and Mr. Isaacs works for an investment bank and their combined income satisfied the landlord.
Mr. Sooy says his rent is much more than the $400 a month he paid when he was in school and it eats up more than 50 percent of his after-tax income. “I would prefer to have more disposable income,” he said, “but it’s a good apartment and the location is great.”
Alicia Schwartz, a former Citi Habitats agent and director of
howtorentinnyc.com, said that trolling the Internet for no-fee apartments had become easier in recent years. The Web site Craigslist, for example, offers no-fee listings by owners, no-fee broker listings where the landlord will pay the broker’s commission and fee-based broker listings.
There are also listing services that charge a fee for providing no-fee listings. Ms. Schwartz said, though, that those Web sites can be outdated. “At the height of the rental season, landlord listings change from hour to hour,” she said. “And the only ones who talk to landlords hour to hour are brokers, not listing services.”
It’s also possible to search for management companies directly. Ms. Schwartz’s Web site lists some 300 management companies and posts uncensored reviews of many of them. “So many management companies have gone online that you can get an apartment without a broker, especially if you have a friend who’s rented through a company and can recommend it,” she said.
Some management companies represent only high-end buildings that would be too expensive for a typical new hire, but others offer a range of apartments.
For instance Jakobson Properties, which manages some 2,000 apartments in about 30 buildings in Manhattan and
Queens, offers what it describes as middle- and upper-middle-income housing. Peter Jakobson Jr., a principal, said, “Our clientele is in school, going back to school, first job, second job, and not from New York.”
He says that Jakobson leases most of its apartments through its Greenwich Village office and its Web site,
nofeerentals.com, but that brokers bring in about 35 percent of its business. Ms. Schwartz said, however, that some management companies work exclusively through brokers.
Lindsey Zuckerman, who has moved twice and found renters to take over her leases by advertising on Craigslist, knows that first hand. She said that the first time she listed an apartment, she had trouble getting through to her leasing company on behalf of prospective renters, but the company would take calls from brokers.
She also said Craigslist might work better for people who aren’t first-time renters. She recently sublet her $2,400 alcove studio in NoLita to someone who responded to her listing on Craigslist. “I got a ton of responses,” she said, “but they tended to be from people who already know the market. Students who wanted to see it a week from when I posted it would have been too late.”
Because the competition for desirable apartments can be intense, brokers and renters say that having all the necessary documentation in hand when apartment hunting is crucial.
Leslie Lazarus, the agent for DJK Residential who helped Mr. Sooy find his apartment, said that because landlords have such different policies, prospective renters should have guarantors lined up even if they don’t think they will need them. For people in the financial industry, she said, some landlords will accept bonus potential as part of their income and others won’t.
And while some landlords will accept the combined incomes of two or three roommates, some don’t and will require one guarantor who can cover the rent for all the roommates.
Many landlords require the same level of financial documentation for both a renter and the guarantor, which means a sheaf of personal records that includes tax returns, pay stubs, bank statements, proof of income for stocks or other investments and reference letters. “That can be a difficult thing for parents to understand because it is so invasive,” Ms. Lazarus said.
Brokers agree that being upfront about credit problems is also important because the $25 to $150 application fee that landlords charge goes toward a credit check. “Some people won’t have a credit history or they’ll have ruined it already with that $30 nonpayment to the cellphone provider,” said Senad Ahmetovic, a vice president at Halstead Property. “You would be surprised to see how many of those cases I’ve had, and they do not realize how damaging that can be to their credit score.”
The best time to plan a visit to the city to view apartments is four to six weeks before an expected move-in date. Brokers say that while most recent graduates want to stay downtown and want to look in the Village or in Murray Hill, more reasonably priced apartments can be found on the far east and west sides of town and on the Upper East Side, where there are more large apartment buildings, including Normandie Court on East 95th Street, a building so popular with recent graduates that it is known as Dormandie Court.
But Ms. Lazarus said that many 20-somethings consider anything above 86th Street to be the suburbs. “It all boils down to the money,” she said. “If you can afford what you initially say is your dream apartment, then great, let’s go out and get it.”
For others, the suburbs aren’t so bad.
How to Prepare for an Apartment Search
FINDING the right apartment in
New York City is a challenge for anyone, but for recent graduates who are first-time renters, meeting the landlord’s financial requirements and coming up with enough cash to get in the door can be even more daunting.
This is documentation that many landlords want to see from prospective tenants and their guarantors:
A letter from an employer stating position, salary, length of employment or anticipated start date.
Pay stubs if already working.
Tax returns for at least two years.
Recent bank statements.
Proof of other income, like revenue from stocks, securities, real estate or trust funds.
Contact information for previous landlords.
Personal reference letters.
Business reference letters.
An estimate of the money that renters might need to have on hand to get a $2,000 apartment (* = not always required):
Nonrefundable application fee — $25 to $150
First month’s rent — $2,000
Last month’s rent* — $2,000
Security deposit — $2,000
Broker’s fee (15 percent of the annual rent)* — $3,600
TOTAL — $4,025 to $9,750

Sunday, March 2, 2008

DO IT YOURSELF LEGAL

By Sean Hayden, Esq.


Do It Yourself. Great idea for redoing your kitchen tile. Perhaps not a great idea for creating your own legal documents.
Consumers these days are besieged by ads for internet downloads and store bought mass market do-it-yourself legal kits. These products promise to save you hundreds of dollars in legal fees. However, when one considers the role that a legal document, such as a Last Will and Testament or a Living Trust, plays in your life, it’s important to realize some things are best for professional advice.
This summer after spending a bit too much time in the sun, I noticed a couple of skin moles. Naturally, I was concerned about skin cancer. I could have consulted the internet to self diagnose myself. After all, there are lots of sites with pictures and descriptions of which moles are malignant and benign. Instead, I made an appointment with a pathologist to properly check them out. And a clean bill of health later, I’m glad I did.
I think it’s the same way with legal matters. While we’re not talking about a literal life and death matter, faulty estate documents, in particular, can mean financial ruin for your loved ones after your death. When a prospective client brings in a document he has prepared through an internet or software form, invariably the final product simply does not express what the client intended. Many times the document simply has no legal effect. Interestingly, most of these premade forms carry the disclaimer “You should seek appropriate legal, financial, or other expert advice or assistance as may be required.”
An internet form can, however, provide you with a framework to start thinking about issues you’ve never had to contemplate. And the internet can be a great tool to educate yourself about legal matters so that your representation by an attorney can be more effective. But be aware there is a lot of misinformation out there. (I can’t tell how many people visit my office thinking a Living Trust will save estate taxes or that the City of New York domestic partner registry conveys full inheritance rights.)
Still, it seems many people will avoid seeing a lawyer and opt for DIY because they don’t believe they can afford legal services and they see the internet as a cheaper alternative. Yet I’m amazed to hear of friends who can easily can justify spending on that long weekend to Mexico or that splurge at the Barney’s Sale but will scrimp and save when it comes to medical and legal care. Fortunately, there are plenty of reasonably priced attorneys out there to suit almost anyone’s budget. And at some point, we simply have to decide that one’s well being, whether it is medical or legal, is worth the personal investment.
So remember, DIY may be great for that new kitchen tiling. After all, if you make a mistake you can always do it over. When it comes to estate documents, there is no "do-over." After you pass away, your loved ones may be left picking up the pieces of your bargain.

Tuesday, January 22, 2008

DIY LEGAL

By Sean Hayden, Esq.

TOPIC: ATTORNEYS

Do It Yourself. Great idea for redoing your kitchen tile. Perhaps not a great idea for creating your own legal documents.

Consumers these days are besieged by ads for internet downloads and store bought mass market do-it-yourself legal kits. These products promise to save you hundreds of dollars in legal fees. However, when one considers the role that a legal document, such as a Last Will and Testament or a Living Trust, plays in your life, it’s important to realize some things are best for professional advice.

This summer after spending a bit too much time in the sun, I noticed a couple of skin moles. Naturally, I was concerned about skin cancer. I could have consulted the internet to self diagnose myself. After all, there are lots of sites with pictures and descriptions of which moles are malignant and benign. Instead, I made an appointment with a pathologist to properly check them out. And a clean bill of health later, I’m glad I did.

I think it’s the same way with legal matters. While we’re not talking about a literal life and death matter, faulty estate documents, in particular, can mean financial ruin for your loved ones after your death. When a prospective client brings in a document he has prepared through an internet or software form, invariably the final product simply does not express what the client intended. Many times the document simply has no legal effect. Interestingly, most of these premade forms carry the disclaimer “You should seek appropriate legal, financial, or other expert advice or assistance as may be required.”

An internet form can, however, provide you with a framework to start thinking about issues you’ve never had to contemplate. And the internet can be a great tool to educate yourself about legal matters so that your representation by an attorney can be more effective. But be aware there is a lot of misinformation out there. (I can’t tell how many people visit my office thinking a Living Trust will save estate taxes or that the City of New York domestic partner registry conveys full inheritance rights.)
Still, it seems many people will avoid seeing a lawyer and opt for DIY because they don’t believe they can afford legal services and they see the internet as a cheaper alternative. Yet I’m amazed to hear of friends who can easily can justify spending on that long weekend to Mexico or that splurge at the Barney’s Sale but will scrimp and save when it comes to medical and legal care. Fortunately, there are plenty of reasonably priced attorneys out there to suit almost anyone’s budget. And at some point, we simply have to decide that one’s well being, whether it is medical or legal, is worth the personal investment.
So remember, DIY may be great for that new kitchen tiling. After all, if you make a mistake you can always do it over. When it comes to estate documents, there is no "do-over." After you pass away, your loved ones may be left picking up the pieces of your bargain.

Tuesday, January 15, 2008

THE INCREDIBLE REVOCABLE LIVING TRUST



TOPIC: TRUSTS AND ESTATES
By Sean Hayden, Esq.

One of the documents new clients most often ask me about is the Revocable Living Trust. If you’ve ever been stuck at home on Saturday nights watching Suze Ormon on CNBC (uh…guilty), you no doubt have heard her sing its praises.

For the rest of you who actually go out every Saturday night, the revocable living trust is a document everyone should have in addition to a basic Last Will and Testament. A Living Trust is a document which allows the assets placed in your trust to avoid probate upon a person’s passing.
Why do we want to avoid probate? (And hey...what is "probate"?)
Probate is a special court in which a Last Will and Testament must be submitted and a special certificate of authority called “Letters Testamentary” must be issued to the Executor of the Last Will. Only then can the assets can be distributed to the beneficiaries. Probate can be very slow, costly and can provide a venue for will contests from disgruntled family members.

So how does the Living Trust work?
Think of a Living Trust as a storage container with a front door, which remains open, and a back door which remains shut. During the lifetime of the person who sets up the Living Trust (we call her the “Grantor”), the Grantor can go in and out of the front door to place assets in the trust, remove assets at any time or even change her mind about the beneficiaries. That’s the “revocable” part. The Grantor is also called the “Initial Trustee” of the trust. Upon the Grantor’s death, the back door opens and the “Trustee” (a person appointed by the Grantor, much like an “Executor” under a Will) can then distribute the assets to the beneficiaries. There is no court procedure and no special certificates to apply for. Assets are swiftly distributed to beneficiaries. That’s great!

Why do you also need a Last Will and Testament?
Well, a Living Trust is “asset specific.” That means the Grantor must specifically itemize each asset and retitle each asset in the name of the Grantor in his capacity as the Trustee. In a Last Will and Testament, you can globally list your assets by specifying something along the lines of “all of my personal possessions, etc.” A person who only has a Living Trust and does not have a Last Will would therefore have assets not covered by any document as it is unlikely a person could possibly update a Living Trust continually to name every possible asset she owns. That’s bad.

So your Living Trust should work with your Last Will to cover your entire estate. However, you will want to make sure you update your Living Trust regularly to ensure as many assets as possible are covered by the Trust. For instance, my clients will visit me for an annual check up meeting to update their Living Trust as well as their other documents.

Together, your Last Will and Testament and your Revocable Living Trust will have you covered...and that's incredible!







Monday, January 14, 2008

CHOOSING AN ATTORNEY

TOPIC: ATTORNEYS

By Sean Hayden, Esq.

You’ve just put in an offer for your dream apartment and the seller’s broker says “So can I have the contact information for your attorney?” You say, “Uhhhh….”

One of the most daunting tasks a person can face is choosing a lawyer. And it not any easier when you’re under a time clock to secure counsel.

An attorney should be a part of your life planning “team.” I always say everyone should have in their back pocket a primary care physician, an accountant, a financial advisor and an attorney.

Often professionals in your life, such as brokers, financial advisors and accountants, will have good recommendations for legal counsel. Some of the best sources for attorneys can also be from your friends. Be sure to ask them what they liked and what they didn’t like about the attorney and whether they would enlist the attorney’s services again.

Once you find an attorney, schedule an initial consultation after confirming your matter is the type of matter handled by the attorney. Also be sure to confirm the cost of the consultation. Many attorneys will offer a consultation for no fee or for a reduced rate.

The initial consultation is your opportunity to interview the lawyer and assess whether he is right for you. It is helpful that you take any relevant questions and documents with you which the attorney may need to adequately address your concerns.

What types of questions you should pose in the consultation?

Does the attorney frequently handle your type of matter? How many similar matters has he handled in the past year? Remember attorneys have become more like doctors in that they specialize. You probably don’t want a lawyer who takes on anything that walks in the door.

Will the attorney you are interviewing be personally handling your file or will be passed to paralegals or to less experienced associate attorneys?

How available is the attorney at the moment? Is his workload such that your matter cannot be given priority?

How will you be billed? Will the attorney bill at a flat rate or an hourly rate?

Finally, what is your feeling about how responsive the attorney will be? Does he seem aloof and not sensitive to your needs? Many a client has been disappointed by his attorney client relationship because an attorney did not promptly return phone calls or repeatedly dismissed the client's concerns about his file. Your attorney doesn't have to be your best friend. However, he should be someone with whom you feel comfortable and someone you trust!

And remember, the consultation is a two way street. The attorney may determine he cannot represent you due to a conflict of interest or he simply doesn't believe the relationship presents the right fit for the parties.


Good luck and good legal health!