Hayden Law Blog

SAME SEX MARRIAGE IN NEW YORK

2011-10-23T22:09:00.002-04:00

(from the Marriage Bureau, City of New York)
New York’s Marriage Equality Act was signed into law by Governor Cuomo on June 24, 2011, allowing same-sex couples to marry legally in New York for the first time.

New York City has always prided itself on its openness and diversity, and we look forward to welcoming all couples who want to get married amid our bright lights and legendary sights, including many landmarks of gay history. Whether you are a native New Yorker or someone who has dreamed of having your wedding in New York City, that opportunity is now yours. The City is committed to accommodating all eligible couples who would like to marry, whether they are of the same or opposite sex.

The New York City Clerk started issuing Marriage Licenses and performing civil marriage ceremonies for same-sex couples on July 24, 2011.

It’s important to keep in mind that getting married in New York City is a multi-step process. Couples must complete an application and receive a Marriage License at the City Clerk’s office before they can legally wed.

For general information about marrying in New York, please see the City Clerk’s website http://www.cityclerk.nyc.gov/html/marriage/same_sex_couples_faq.shtml.

COURT REJECTS SAME-SEX MARRIAGE BAN IN CALIFORNIA

2010-08-05T15:29:00.002-04:00

New York Times August 5, 2010
By JESSE McKINLEY and JOHN SCHWARTZ

SAN FRANCISCO — Saying that it discriminates against gay men and women, a federal judge in San Francisco struck down California’s voter-approved ban on same-sex marriage on Wednesday, handing supporters of such unions at least a temporary victory in a legal battle that seems all but certain to be settled by the Supreme Court.

Wednesday’s decision is just the latest chapter in what is expected to be a long battle over the ban — Proposition 8, which was passed in 2008 with 52 percent of the vote. Indeed, while striking down Proposition 8, the decision will not immediately lead to any new same-sex marriages being performed in California. Vaughn R. Walker, the chief judge of the Federal District Court in San Francisco, immediately stayed his own decision, pending appeals by proponents of Proposition 8, who seem confident that higher courts would hear and favor their position.

But on Wednesday the winds seemed to be at the back of those who feel that marriage is not, as the voters of California and many other states have said, solely the province of a man and a woman.

“Proposition 8 cannot withstand any level of scrutiny under the Equal Protection Clause,” wrote Judge Walker. “Excluding same-sex couples from marriage is simply not rationally related to a legitimate state interest.”

Supporters of Proposition 8 said that the decision defied the will of the people of California, and could well be an issue in November’s midterm elections.

“This is going to set off a groundswell of opposition,” said Jim Garlow, the pastor of Skyline Church in La Mesa, Calif., and a prominent supporter of Proposition 8. “It’s going to rally people that might have been silent.”

Wednesday’s decision applied only to California and not to the dozens of other states that have either constitutional bans or other prohibitions against same-sex marriage. Nor does it affect federal law, which does not recognize such unions.

Still, the very existence of federal court ruling recognizing same-sex marriage in California, the nation’s most populous state, set off cheers of “We won!” from crowds assembled in front of the courthouse in San Francisco. Evening rallies and celebrations were planned in dozens of cities across the state and several across the nation.

In West Hollywood, Ron Cook, 46, an accountant who is gay, said he was thrilled by the decision. “If the court had come back and upheld it,” he said. “I would have moved out of the state.”

The plaintiffs’ case was argued by David Boies and Theodore B. Olson, ideological opposites who once famously sparred in the 2000 Supreme Court battle between George W. Bush and Al Gore over the Florida recount and the presidency. The lawyers brought the case — Perry v. Schwarzenegger — in May 2009 on behalf of two gay couples who said that Proposition 8 impinged on their constitutional rights to equal protection and due process.

On Wednesday, Mr. Olson called the decision a “victory for the American people,” and anyone who had been denied rights “because they are unpopular, because they are a minority, because they are viewed differently.”

For advocates of gay rights, same-sex marriage has increasingly become a central issue in their battle for equality, seen as both an emotional indicator of legitimacy and as a practical way to lessen discrimination.

“Being gay is about forming an adult family relationship with a person of the same sex,” said Jennifer Pizer, the marriage project director for Lambda Legal in Los Angeles, who filed two briefs in support of the plaintiffs. “So denying us equality within the family system is to deny respect for the essence of who we are as gay people.”

But Andrew Pugno, a lawyer for the defense, said Proposition 8 had nothing to do with discrimination, but rather with the will of California voters who “simply wished to preserve the historic definition of marriage.”

“The other side’s attack upon their good will and motives is lamentable and preposterous,” Mr. Pugno said in a statement.

During the trial, which ended in June, plaintiffs offered evidence from experts on marriage, sociology and political science, and emotional testimony from the two couples who had brought the case. Proponents for Proposition 8 offered a much more straightforward defense of the measure, saying that same-sex marriage damaged traditional marriage as an institution and that marriage was historically rooted in the need to foster procreation, which same-sex unions cannot, and was thus fundamental to the existence and survival of the human race.

But Judge Walker seemed skeptical of those claims. “Tradition alone, however,” he wrote, “cannot form the rational basis for a law.”

Even before appeals to higher courts, Judge Walker seemed ready to continue to hear arguments, telling both sides to submit responses to his motion to stay the decision by Friday, at which point he could lift or extend it.

How the decision might play politically was also still unclear. In 2004, same-sex marriage was seen as a wedge issue that helped draw conservatives to the polls, and Richard Socarides, who advised President Bill Clinton on gay rights issues, said that this decision could be used as a rallying cry for Republicans again. “But Democrats and most importantly President Obama will now have to take sides on whether gays deserve full equality,” Mr. Socarides wrote in an e-mail.

In California, it could also affect the race for governor. Jerry Brown, a Democrat, has been vocal in his support of same-sex marriage in his current role as California attorney general and hailed the decision on Wednesday. Meg Whitman, a Republican, has taken the position that marriage should be between a man and a woman — in line with the language of Proposition 8 — though she says that she strongly supports the state’s domestic partnership laws, which afford many of the same rights as marriage.

Gov. Arnold Schwarzenegger in a statement on Wednesday supported the ruling, saying it “affirms the full legal protections” for thousands of gay Californians.

Some gay rights activists initially feared the case, believing that a loss at a federal level could set back their more measured efforts to gain wider recognition for same-sex marriage, which is legal in five states and the District of Columbia. But those concerns seemed to fade as the trial began, and on Wednesday, the mood was of elation and cautious optimism that Mr. Boies and Mr. Olson’s initial victory might change the debate.

Kate Kendell, executive director for the National Center for Lesbian Rights, said that she believed that there were members of the Supreme Court who “have a very deep-seated bias against L.G.B.T. people,” meaning lesbian, gay, bisexual and transgender. But, she added, “This legal victory profoundly changes the conversation” by involving “folks in the legal world and the policy world who were previously unmoved by this struggle.”

For those who had actually filed the suit, Wednesday’s victory, while measured, also seemed sweet.

“This decision says that we are Americans, too. We too should be treated equally,” said Kristin M. Perry, one of the plaintiffs. “Our family is just as loving, just as real and just valid as anyone else’s.”

ESTATE TAX IN LIMBO

2010-06-20T13:11:00.001-04:00

By Jeanne Sahadi, senior writer
June 18, 2010

NEW YORK (CNNMoney.com) -- Estate planning attorneys may worry that their persistent headaches are a sign of something more serious. But once they remember what they do for a living, the headaches start to make perfect sense.

That's because they are operating in a kind of weird estate tax limbo. The federal estate tax was here, now it's gone for a year. It's probably coming back soon, although no one can say exactly what it will look like.

Unless Congress acts, the estate tax will be back next year and no more than $1 million of a person's estate would be exempt from it. That's well below the $3.5 million exemption in place last year. And the top estate tax rate would be 55%, up from 45% in effect last year.

Oh, and just because there is no federal estate tax this year doesn't mean heirs of someone who dies in 2010 have no federal tax liability on their inheritance. They very well may, but it can be hard to tell them in some instances what it will be because of ambiguities in the law.

So what's an estate planner to do?

"You try to do as little as possible," [[for the estate of] someone who died in 2010," said Steve Hartnett, associate director of education at the American Academy of Estate Planning Attorneys.

And when you absolutely have to do something, he said, you make your best guess and hope it turns out to be the right one when Congress gets around to clarifying the estate tax rules of the road.

One potential minefield is how to deal with the change in "step up" rules for heirs.

Under the old regime, heirs who wanted to sell inherited assets had to pay the capital gains tax on the gains accrued since the day they inherited the asset. In other words, the "cost basis" of the asset was essentially stepped up to present day. Those rules go back into effect next year.

This year, however, when heirs sell appreciated assets they will owe capital gains tax on all the gains since the deceased bought the asset. But the first $1.3 million in gains is treated as tax free. And for surviving spouses, another $3 million is as well.

Say an estate's assets with $5 million of gains are sold. Non-spousal heirs would only pay the capital gains tax on $3.7 million. A widow who is sole beneficiary would only owe tax on $700,000.

As a result of the new step-up rules, estate planners face an array of new complexities. One of them is advising clients when to sell an asset to minimize the tax bite. For instance, if the heirs of someone who dies this year don't sell an appreciated asset until 2011 or beyond, which step-up rules will they be subject to? Hartnett says how the law will be applied isn't clear.

Equally confusing is how best to cook up an estate plan for someone who is living now and plans on doing so at least until 2011.

The 'who knows?' factor
The only good news is that generally speaking relatively few taxpayers are affected by the federal estate tax itself.

At most, only an estimated 1.76% of estates would be affected in 2011 if the estate tax is resurrected with a $1 million exemption, according to a recent report by the Congressional Research Service.

Then again, every estate of someone who died this year, no matter how small, will be affected by changes to rules governing heirs' step-up in cost basis.

Optimists still hold out hope Congress will offer clarity before 2011, but the smart money says it won't come before the mid-term elections in November.

Then again, who knows?

Lawmakers shocked the death rattle out of people by actually letting the estate tax lapse this year. Soon after, there was talk that they would reinstate the estate tax retroactively. Wrong again. Now halfway through the year, few expect that will happen.

Next expectation? Lawmakers absolutely, positively will come up with a more lenient version of the federal estate tax for 2011 than the one slated for currently.

Several key senators have been trying to cut a deal for months. Negotiations have stalled on more than one occasion.

"We're almost half a year away from a tax policy that a super majority of senators say they don't support. Yet, we're stuck," Sen. Charles Grassley, R-Iowa, said earlier this week. "This time-sensitive issue has taken a back seat to everything else."

Anne Mathias, director of research at Concept Capital's Washington Research Group, thinks it's a fair bet to assume the new exemption level will fall somewhere between $3.5 million to $5 million.

But she also said if Republicans sweep the mid-term elections, and win at least 60 seats in the Senate, they may push to extend the repeal of the tax.

When Hartnett was asked what he thinks will happen with the estate tax next year, he gave the only answer he and his colleagues can give for many estate tax questions these days: "I don't know."

REAL ESTATE: TOUGH TIME FOR SELF- EMPLOYED BORROWERS

2010-05-18T15:05:00.002-04:00

May 12, 2010
A Tough Time for Self-Employed Borrowers

By BOB TEDESCHI
MOST borrowers are facing a much tougher mortgage environment than a few years ago, but for those who are self-employed or own small businesses, maneuvering through a loan application can be even more arduous.

Before 2008 these borrowers, many of whom have difficulty documenting their income, often used what are known as stated-income loans. Lenders focused on credit histories and earnings estimates, circumventing the need for pay stubs or W-2s.

But during the mortgage crisis, stated-income loans became known as “liar’s loans,” because some borrowers falsely inflated their incomes, and qualified for more than they could afford.

Today, stated-income loans have nearly disappeared. Those still available through regional lenders like Hudson City Savings Bank come at a cost: interest rates around a quarter of a percentage point higher than conventional loans and down payments of at least 30 percent.

The self-employed borrower’s only choice, mortgage brokers say, is to submit two years’ tax returns and hope that they qualify for a conventional loan.

That would not be a problem, the brokers said, if all self-employed people filled out their tax returns conservatively. But in this economic climate, the self-employed have been more likely to lighten their tax liabilities by taking business deductions, thereby lowering their official income levels, as well as the likelihood of qualifying for a loan.

“You have to be more conservative about how you claim your deductions, or how you approach unnecessary purchases for the business,” said Robert Duquette, the president of the New York Association of Mortgage Brokers.

Mr. Duquette says that self-employed borrowers will have no trouble qualifying for loans if they have significant cash, as well as credit scores of at least 700, and stable and significant profit for the previous two years.

But many small-business owners, hit by the recession, are showing losses on their income tax statements.

“Of course, a borrower can make an argument for extenuating circumstances, like reserve duty for a few months, or a temporary hospitalization,” said Regina Mincey-Garlin, the president of RCG Mortgage Solutions in Montclair, N.J.

Mr. Duquette of the New York Mortgage Brokers Association said the mortgage crisis had hurt small-business owners more than others. “Everyone who’s getting income from places other than salary and wages is getting hit harder than everyone else,” he said, “because they’re being scrutinized more carefully.”

And those who have only recently started a business — perhaps after a layoff — may face even greater difficulties, he added. During the recession, many companies laid off workers, hiring them back on a contractual basis. Because these people have no long-term history of stable earnings, Mr. Duquette said, lenders often reject their applications or impose higher rates.

Still, self-employed applicants shouldn’t give up hope, said Debra Killian, the president of Charter Oak Lending, a mortgage broker in Danbury, Conn. Many people wrongly assume they cannot qualify for a loan at all, she said, “but 30 percent of the time — maybe 40 — they’ll qualify. They may be frustrated at all the documentation we ask them to provide, but they can still qualify.”

Small-business owners considering whether to qualify a purchase as a business or personal expense on their taxes, Ms. Killian said, should do the math.

If a business owner shows too little net income to qualify, say, for a $300,000 mortgage at 5 percent, and instead qualifies for a 5.25 percent loan, the monthly payments add up to an extra $5,520, roughly, for the first 10 years of the more expensive loan.

“If you save yourself a few thousand dollars in taxes in a year by taking those extra deductions,” Ms. Killian said, “how much will that cost you on your mortgage, or your ability to even get a loan?”

DEMAND GROWS FOR FHA MORTGAGES IN NEW YORK

2010-05-10T18:29:00.002-04:00

Demand Grows for F.H.A. MortgagesBy ELIZABETH A. HARRIS
Published: May 5, 2010, The New York Times

THE government program that allows qualified people to buy homes with very little money down is gaining traction in New York.

The loans, offered through the Federal Housing Administration and available since 1934, provided 1 percent of the home loans in the region in 2007, but the number jumped to around 18 percent in 2009.

As credit tightened, developers also got on board when they realized their new apartments weren’t selling.

“When we started the process, nobody was familiar with F.H.A.,” said David Behin, an executive vice president of the Developers Group, whose recent projects include the Edge condominiums in Williamsburg, Brooklyn. “And to be frank, I wasn’t that familiar with it either. But we had problems with our buyers’ being able to get loans. The world was in flux, and new development faced its own special set of problems.”

Mortgage brokers, he said, suggested the F.H.A.

The agency does not actually make loans but insures them. The mortgages can then be given to people with scant credit history — like young first-time buyers — or even tarnished credit, and the down payments can be as low as 3.5 percent. The F.H.A. vets buyers to determine whether they’ll be able to pay the loan back.

“F.H.A. has stuck to the basics through the years,” said Vicki Bott, a deputy assistant secretary at the Department of Housing and Urban Development. “We always documented income, we always evaluated credit. We want to be sure that the underserved market can still obtain a home, as long as they can make the payments.”

According to Ms. Bott, the F.H.A’s goals are threefold: to serve underserved markets, to give the housing market a boost when loans are hard to come by, and to protect itself to make sure it can keep doing business.

In the national market, “F.H.A. has always played a countercyclical role,” Ms. Bott said. According to HUD data, the percentage of F.H.A. loans in the mortgage market fell to just below 5 percent in 2005 and 2006. “Now it’s grown to 30-plus percent as capital has withdrawn from the market,” Ms. Bott said.

To qualify for an F.H.A. loan, the home as well as the buyer must be approved. If the home is in a condominium building, the entire structure must be submitted as a whole. (The F.H.A. does not insure loans made in co-op buildings.)

During the credit boom, developers did not often see the need to submit to the application process — and even now, condo boards can be tough to convince.

Another quirk that helped minimize F.H.A’s presence in the New York City market was price. Until 2008, the maximum loan amount for F.H.A. financing was $362,790, far lower than the price of most apartments.

But two years ago, as the government tried to prop up the sputtering housing market, the limit in expensive areas like New York shot up to $729,750.

Suddenly, apartments in buildings with lap pools and gyms could qualify. Trendy complexes like the Toren in downtown Brooklyn and the Edge in Williamsburg started publicizing their F.H.A.-approved status. And companies like National Condo Advisors have sprung up to help developers and boards navigate the paperwork.

And as the loans have become more prevalent, the stigma that once trailed the F.H.A. has begun to melt away.

“I think some buyers might have thought it was only for people who couldn’t obtain regular financing when credit was easier,” said Stephen G. Kliegerman, the executive director of development marketing at Halstead Property. “But that’s really not the truth. It’s an alternative for anyone who wants a lower cash-down alternative.”

Meanwhile, as the F.H.A has taken on a bigger role in the mortgage industry, it has seen its default rate rise and its reserve fall below levels mandated by Congress. And its responsibilities are about to increase. Later this year, some homeowners whose houses are worth less than their mortgages can begin the process of refinancing through F.H.A. loans as part of the Obama administration’s effort to deal with the foreclosure crisis.

Some on Capitol Hill have expressed concern. Last year, Representative Scott Garrett, a New Jersey Republican, introduced legislation that would have raised the minimum F.H.A. down payment to 5 percent. H.U.D. itself has decided to raise the down payment to 10 percent for buyers with credit scores below 580.

But according to Ms. Bott, the F.H.A.’s presence in the market is so pronounced that any pullback could hurt housing as a whole.

“F.H.A. is in a tough place,” said Ingrid Gould Ellen, co-director of the New York University Furman Center for Real Estate and Urban Policy. “Its role is to provide credit to the market at times when private lenders withdraw because they see it as too risky. On the one hand, we get upset if it isn’t lending enough, but by definition they’re coming in at risky times. It’s a little bit of a Catch-22.”

The Effectiveness of a "Will Contest" Clause in a Last Will and Testament

2009-11-01T22:13:00.001-05:00

from The New York Times
October 29, 2009
Clauses Aimed at Keeping the Heirs Quiet
By DEBORAH L. JACOBS

TO deter lawsuits, many estate plans include a no-contest clause, which provides that anyone who formally challenges the plan gets nothing. Brooke Astor, the New York philanthropist, had one in her will. Michael Jackson reportedly used one in his living trust, a private document that disposed of most of his assets.

While some lawyers recommend the clauses for all wills and living trusts, others include them only when they see red flags for disputes, as when a parent favors one child over others or when there are tensions between someone’s spouse and children from an earlier marriage.

These clauses are becoming more important as people live longer, said Dana G. Fitzsimons Jr., a lawyer with McGuireWoods in Richmond, Va., who handles will contests. The decline in mental faculties that sometimes accompanies old age and the reliance on one child as caretaker are common patterns in court cases, he said.

The provisions that rein in lawsuits by disappointed heirs are known in legal jargon as “in terrorem” clauses, and that Latin term is certainly apt. They threaten to disinherit anyone who sues — for example, asserting that there was some impropriety surrounding the will.

With or without such a clause, if a will is found to be invalid, assets are distributed according to the terms of a previous will or state law, depending on the circumstances, said Howard M. Zaritsky, a lawyer in Rapidan, Va. With a no-contest clause, those who lose a case to have the will thrown out, or bring one on lesser grounds, forfeit what they otherwise would have received.

After Michael Jackson’s death, questions arose about whether his mother, Katherine Jackson, would lose her 40 percent share of the trust assets if she opposed the people named as executors in his will. Ms. Jackson applied to California’s Superior Court for a ruling on this limited issue, as state law permitted her to do. Judge Mitchell Beckloff ruled that she could challenge the executors’ authority without running afoul of the no-contest clause.

A common misconception is that a no-contest clause can turn back heirs who have been disinherited. But the clause has no teeth if they have been left nothing, because “there’s no downside to contesting the plan,” said Paul N. Frimmer, a lawyer with Irell & Manella in Los Angeles. He recommends leaving disfavored heirs enough money so that they will not risk bringing a case.

Although no-contest clauses are usually aimed at relatives, the one in Mrs. Astor’s 2002 will specifically refers to any “entity” — clearly meant to dissuade the charities named in the document from challenging it, said Lisa M. Stern, a lawyer with Proskauer Rose in New York. A 2003 codicil, or amendment, to the will reduced the charities’ share of the estate. But if they participate in a will contest, now expected in Westchester County Surrogate’s Court, and the case fails, they risk getting nothing, Ms. Stern said.

(The fate of Mrs. Astor’s estate has been complicated by the recent conviction of her son, Anthony D. Marshall, and one of her lawyers, Francis X. Morrissey Jr., on charges that they conspired to steal from her by tricking her into changing her will. This might support the charities’ argument that an earlier version of her will is the valid one. Andrew M. Cuomo, the state attorney general who by law represents charities, is not affected by the no-contest clause.)

Most states permit some form of no-contest clause, but Florida specifically prohibits them. If you sign a will while living in another state and it contains a no-contest clause, and then move to Florida and die there without changing your estate plan, the clause would be invalid for most of your assets, said Julie Ann Garber, a lawyer with the Andersen Firm in Key West. One exception might be real estate owned in the state where you lived previously, she said.

In states that permit no-contest clauses, standards for applying them vary and their wording is subject to interpretation, said Matthew P. Matiasevich, a lawyer with Evans, Latham & Campisi in San Francisco, who represents clients in estate lawsuits.

A classic example involved the will of William Randolph Hearst, the newspaper tycoon who died in 1951. More than half a century later, several relatives who were receiving income from a trust established by the will wanted to sue the trustees for investment decisions that they claimed favored future beneficiaries. Court papers show that in 2005 each current beneficiary was to receive an $8.3 million payout from the trust, financed with a portion of the dividends from Hearst Corporation stock.

In a Dec. 19, 2006, decision, the California Court of Appeal affirmed a 2005 trial court order and found the suit would violate the no-contest clause.

GIVEN the complications that can arise, estate planners said the best defense against will contests was to take steps during life to preserve the peace. For example, rather than leaving relatives guessing about the motives behind your decisions regarding who gets what, you may want to spell out your reasoning in your estate-planning documents — or have a frank discussion beforehand.

Other strategies anticipate the two most common grounds for contesting a will or trust. One is undue influence, which refers to efforts by someone to coerce you to sign estate-planning documents that favor him over others. Another is the argument that you lacked capacity when you signed the document, meaning that you didn’t know what assets you had, what you wanted to do with them and who your relatives were.

When one child plays an active role in caring for an elderly parent, others may worry that their sibling is pressuring the parent for a larger share of the inheritance, and that can lead to a claim of undue influence, Ms. Stern said. In such situations, she asks that the child be out of earshot during phone calls or meetings about estate planning. To document a client’s mental state, lawyers sometimes rely on doctors’ exams and videotapes that show a client signing the document and discussing its contents.

For extreme cases there’s another tactic. It involves setting up barriers to will contests by signing a series of documents, each only slightly different from the one it replaces, over a period of years. Those who want to contest the plan must then have each of these documents found invalid before they get to the one they want to apply. And that can be a daunting task.

LIVING WILLS ARE NOT DEATH PANELS.

2009-08-14T09:25:00.003-04:00

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.

NEW YORK GOVERNOR WILL DELAY SAME-SEX MARRIAGE BILL

2009-07-14T15:41:00.001-04:00

FROM THE NEW YORK TIMES
July 11, 2009
With Senate Astir, Governor Will Delay Same-Sex Marriage Bill
By DANNY HAKIM
ALBANY — Gov. David A. Paterson will delay his plan to force a vote on a bill to legalize same-sex marriage until early September because the Senate is too unsettled now to take it up, his spokesman said on Friday.

The governor had vowed three weeks ago to force the senators to take up the matter before they left for their summer break. But the Democrats were struggling to reorganize themselves on Friday, a day after they reclaimed control of the Senate and ended a bitter leadership feud that had halted action in the chamber for more than a month.

“Governor Paterson believes that marriage equality is an important civil rights issue and will be working with Senate leaders to move the process forward,” said the spokesman, Peter E. Kauffmann, adding that the governor was more immediately focused on the state’s dwindling tax revenues.

Mr. Kauffmann said the governor would probably call a special legislative session in early September so lawmakers could close an anticipated hole in the state’s budget.

“At that time,” Mr. Kauffmann said, “he will also work with legislative leaders to include additional issues that were not addressed in regular session, such as unemployment insurance, marriage equality and ethics reform.”

Senate Democrats are unlikely to take up the marriage bill on their own. They remain deeply divided and, in many cases, estranged from one another, after the infighting and personal attacks of the nearly five-week leadership battle.

Democratic leaders said they would return to the capital next Wednesday and Thursday to conclude the legislative session but would avoid the most divisive issues.

“There was a general consensus that we wouldn’t take on extremely controversial bills in the next week,” said Pedro Espada Jr., who was named Senate majority leader on Thursday. He added, “There’s a point that was reached and exceeded in terms of the exhaustion factor for the institution as a whole.”

Notable bills whose fate remains unclear include a measure that would allow Mayor Michael R. Bloomberg to retain control over New York City’s public schools and legislation to expand the city’s rent control laws.

Lawmakers were negotiating with the city on Friday to amend mayoral control legislation supported by Mr. Bloomberg. Senator John L. Sampson, the leader of the Democratic caucus, supports a greater role for parents in the school system.

Mr. Espada said that he expected the Senate to take up the mayoral control measure next week, and that bills intended to bolster rent control laws were likely to be shelved, at least for now. Mr. Espada and other top Democrats have forged close ties to the real estate industry.

On same-sex marriage, several senators said privately that the caucus was reluctant to take it up because of the strident opposition of Senator Rubén Díaz Sr., a Bronx Democrat and Pentecostal minister. With the caucus holding a tenuous single-seat majority, there is a focus on keeping members happy.

“We just got unity,” Mr. Díaz said in an interview when asked about the marriage issue. “Don’t start to un-unify us. Let us have some kind of honeymoon.”

Last month, the governor, a champion of same-sex marriage rights, vowed to make sure that the Senate voted on the issue before breaking for the summer. “It has always been my intention to see same-sex marriage come to the floor,” he said on June 21, adding, “I don’t want there to be any confusion.”

Mr. Paterson declined to be interviewed about his shift in plans.

The Senate stalemate ended on Thursday after Mr. Espada, of the Bronx, abandoned an alliance with the Republicans. He returns to a caucus bitterly divided along racial lines and in the throes of reorganization.

Under a new leadership deal, Mr. Sampson, of Brooklyn, is the effective leader of the Senate and Mr. Espada has the vaguely defined title of majority leader. Malcolm A. Smith of Queens, the former Democratic leader, will remain as Senate president for what senators describe as a transition period.

Other bills that may be taken up include measures to overhaul the state’s embattled ethics oversight panel, the Commission on Public Integrity, and to provide less generous pension benefits to new public workers. Democrats are also negotiating with Republicans, in fits and starts, over rule changes to make the Senate operate more fairly.

“I don’t think we’re going to have a very ambitious agenda,” said Senator Eric T. Schneiderman, a Manhattan Democrat. He added, “Under the present circumstances, with all of the breakdowns in the system and the traumatized personal relationships, I think most of the senators would like to pass the things we have to pass and get out of town.”

The Senate resumed business late Thursday, and senators stayed until about 2 a.m. Friday to pass largely uncontroversial bills.

Senators were in a feisty mood. Some criticized the governor as taking an unusually hard line against them over the last month. And they took the rare step of voting down, by a 35-to-27 vote, a measure backed by Comptroller Thomas P. DiNapoli that would have allowed local governments to borrow state money to pay their pension bills.

The vote was widely seen as a rebuke to Mr. DiNapoli, who had withheld the paychecks and travel vouchers of senators in recent days to try to prod them to end their standoff. There was broad laughter in the chamber after the bill was defeated.

Senators concluded by approving a sales tax increase for New York City, raising the tax by one-half of a percentage point, to 8.875 percent. The stalemate delayed passage of the bill, costing the city an estimated $60 million.

A number of Democrats criticized the measure as unfairly burdensome to the poor. Senator Liz Krueger, a Manhattan Democrat, said the Senate should let the city balance its own budget.

“We, as we know, have our own headaches here running our state government,” Ms. Krueger said. “I’m not sure we’re up to taking on, solving the problems of, every local government.”

Jeremy W. Peters contributed reporting.

THE IMPORTANCE (AND RISKS) OF A POWER OF ATTORNEY

2009-06-03T23:33:00.000-04:00

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.

CALIFORNIA HIGH COURT UPHOLDS GAY MARRIAGE BAN

2009-06-03T23:30:00.002-04:00

FROM THE NEW YORK TIMES
May 27, 2009
California High Court Upholds Gay Marriage Ban

By JOHN SCHWARTZ
The California Supreme Court upheld a ban on same-sex marriage Tuesday, ratifying a decision made by voters last year. The ruling comes at a time when several state governments have moved in the opposite direction.

The court’s decision does, however, preserve the 18,000 same-sex marriages performed between the justices’ ruling last May that same-sex marriage was constitutionally protected and voters’ passage in November of Proposition 8, which banned it.

The court’s opinion, written by Chief Justice Ronald M. George for a 6-to-1 majority, noted that same-sex couples still had a right to civil unions. Such unions, the opinion said, gives those couples the ability to “choose one’s life partner and enter with that person into a committed, officially recognized and protected family relationship that enjoys all of the constitutionally based incidents of marriage.”

Justice George wrote that Proposition 8 did not “entirely repeal or abrogate” the right to such a protected relationship. Instead, he said, it “carves out a narrow and limited exception to these state constitutional rights, reserving the official designation of the term ‘marriage’ for the union of opposite-sex couples as a matter of state constitutional law.”

The 18,000 existing marriages can stand, he wrote, because Proposition 8 did not include language specifically saying it was retroactive.

Heated reaction to the decision began immediately, with protesters blocking traffic near the Supreme Court building in San Francisco and advocates for same-sex marriage making plans for their own ballot initiative.

In Los Angeles, Jennifer C. Pizer, marriage project director for the gay rights organization Lambda Legal, said the decision “puts it to us to repair the damage at the ballot box.” One of the state’s largest gay rights groups, Equality California, sent an e-mail message to supporters pleading for contributions to raise $500,000 toward “a massive campaign to put an initiative on the ballot and win.”

Shannon Minter, legal director of the National Center for Lesbian Rights, called the decision “a terrible blow to the thousands of gay and lesbian Californians who woke up this morning hoping and praying their status as equal citizens of this state would be restored.”

Those who backed Proposition 8 were elated. Andrew P. Pugno, general counsel for ProtectMarriage.com, the leading group behind last year’s initiative, said he and his allies were “very gratified” by the decision.

“This is the culmination of years of hard work to preserve marriage in California,” Mr. Pugno said in an e-mail message.

Kenneth W. Starr, dean of the Pepperdine University School of Law, who had argued before the justices in favor of Proposition 8, said the ruling “represents a ringing judicial affirmation of the right of the people of California to amend the State Constitution at the ballot box.”

The California court ruled last May that same-sex couples enjoyed the same fundamental “right to marry” as opposite-sex couples. That sweeping 4-to-3 decision provoked a backlash from opponents that led to Proposition 8, which, after a bitter campaign fight, garnered 52 percent of the vote in November.

Tuesday’s opinion focused on whether the use of a voter initiative to narrow constitutional rights under Proposition 8 went too far.

Supporters of same-sex marriage, who filed several suits challenging the proposition after its adoption, argued that the change to the state’s Constitution was so fundamental that the initiative was not an amendment at all but instead a “revision,” a term for measures that rework core constitutional principles.

Under California law, revisions cannot be decided through a simple signature drive and a majority vote, as with Proposition 8. Instead, they can be placed on the ballot only with a two-thirds vote by the Legislature.

But the justices said the proposition was an amendment, not a revision. It has been historically rare for the state’s courts to overturn initiatives on the ground that they are actually revisions, and many legal scholars had deemed the challenge to Proposition 8 a long shot.

During oral arguments, in March, the justices’ questions clearly anticipated the reasoning of Tuesday’s majority opinion, with Justice Joyce L. Kennard suggesting then that even if the initiative took away the “label of marriage,” it did not undermine the substantive rights involved. Mr. Minter, representing the plaintiffs, disagreed, arguing that without the word “marriage,” same-sex couples would find “our outsider status enshrined in our Constitution.”

Chief Justice George’s opinion dealt directly with that point, stating that the court understood the importance of the word and was not trying to diminish that importance. But, he wrote, the legal right of people to call themselves married is only one of the rights granted to same-sex couples in the decision last May, and so “it is only the designation of marriage — albeit significant — that has been removed by this initiative measure.”

Karl M. Manheim, a professor at Loyola Law School Los Angeles who had filed a brief with the court opposing Proposition 8, called the decision a “safe” one from justices who can be recalled by voters. The change wrought by Proposition 8 was anything but narrow, Professor Manheim said, and claiming that the word “marriage” is essentially symbolic is like telling black people that sitting in the back of the bus is not important as long as the front and the back of the bus arrive at the same time.

In nearly three months since the case was argued, three other states have legalized same-sex marriage, joining Massachusetts and Connecticut, which had already done so. On April 3, the Iowa Supreme Court, repeatedly citing California’s decision of last May, struck down a state statute that limited civil marriage to the union of a man and a woman.

Less than a week later, the Vermont legislature narrowly overrode Gov. Jim Douglas’s veto of a bill that allowed same-sex couples to marry.

Then, on May 6, Maine’s legislature, too, passed a bill allowing same-sex marriage, and Gov. John Baldacci promptly signed it.

Initiatives legalizing same-sex marriage are also moving forward in New York and New Jersey. A similar measure stalled by a slim margin in the New Hampshire legislature this month but could come up for a new vote in June. In addition, opinion polls of Americans’ attitude toward same-sex marriage indicate that they favor allowing it.

The sole dissenting vote in Tuesday’s decision came from Justice Carlos R. Moreno, previously mentioned as a possible choice by President Obama for the United States Supreme Court.

Justice Moreno wrote that Proposition 8 means “requiring discrimination,” which he said “strikes at the core of the promise of equality that underlies our California Constitution” and, he added, “places at risk the state constitutional rights of all disfavored minorities.”

NY GOV PATERSON INTRODUCES SAME-SEX MARRIAGE BILL

2009-04-18T08:50:00.001-04:00

April 17, 2009
Paterson Introduces a Same-Sex Marriage Bill

By JEREMY W. PETERS
Gov. David A. Paterson introduced a bill on Thursday to legalize same-sex marriage, vowing to personally involve himself in the legislative debate at a level that is rare for a chief executive in New York.

Throwing the weight of his office behind legislation that still faces considerable obstacles in Albany, Mr. Paterson said he would leverage the personal relationships he developed over two decades in the State Senate to see the bill voted on — and passed. The vote is expected to turn on the thinnest of margins in the Senate, and some advocates say Mr. Paterson’s direct involvement could prove pivotal.

At a news conference in Manhattan on Thursday, Mr. Paterson, a Democrat, invoked the abolitionist movement of the 1800s, the writings of Harriet Beecher Stowe and the Supreme Court’s Dred Scott decision to argue that New York had neglected civil rights for gays and lesbians for too long. “I’m putting a stop to it,” he said. “We have a duty to make sure equality exists for everyone.”

The announcement came amid growing activity around the country on same-sex marriage: Iowa and Vermont have legalized the practice in the past month, and the New Hampshire State Senate has been debating it this week. Massachusetts and Connecticut already have gay marriage, and a campaign is under way to extend it across New England by 2012.

In New York, the State Assembly passed a same-sex marriage bill in 2007 by a vote of 85 to 61, a margin expected to widen when the measure is reconsidered this spring. But the path in the Senate is less clear: 32 votes are needed, and Democrats say about 25 of their 32 members now support it. So the outcome will most likely hinge on whether Mr. Paterson and other advocates can persuade Republican senators reluctant to break ranks with their leaders to back the bill.

Gay-rights advocates expressed confidence on Thursday that Governor Paterson’s personal involvement could make a difference, despite his dismal approval ratings and struggle to advance other aspects of his agenda. They said lawmakers sometimes feel less confined by partisan loyalty on civil rights issues like same-sex marriage.

“This isn’t something that hinges on his popularity — it’s too personal of an issue,” said Alan Van Capelle, executive director of the Empire State Pride Agenda, the gay-rights group pushing same-sex marriage. “It defies ordinary Albany political logic.”

Mr. Van Capelle and other advocates pointed out that in 2002, 13 Republicans joined 21 Democrats to pass a law that specifically banned discrimination based on sexual orientation. The outcome of that vote was in doubt until the last minute — an uncommon occurrence in Albany, where the leaders of the Senate and the Assembly rarely allow bills to reach the floor without being sure they will pass.

Some supporters of same-sex marriage, most notably Mr. Paterson, are pushing for a similar approach now. By forcing a vote without knowing its result, the logic goes, dubious senators might feel pressured to support the bill for fear of appearing hostile to gay rights.

Gay advocacy groups are a powerful force in Albany. The Human Rights Campaign, Gill Action Fund and Empire State Pride Agenda funneled hundreds of thousands of dollars into a handful of competitive campaigns last year, helping Democrats pick up two seats to capture a majority in the Senate for the first time in more than four decades.

“It’s sort of a carrot and stick argument,” said Daniel J. O’Donnell, an assemblyman from the Upper West Side who is leading the effort in that house to shore up support for Mr. Paterson’s bill. “If you move ahead with the bill, you could use the stick and say, ‘You’re not our friend if you vote against us, and we’re going to find someone to replace you.’ ”

But Austin Shafran, a spokesman for the Senate majority leader, Malcolm A. Smith, said on Thursday that the bill would “be brought to the floor as soon as there are enough votes to pass it.”

Mr. Paterson’s role in steering the bill through Albany, which is still being worked out among his aides, legislative officials and lobbyists, is the latest in a list of personal campaigns on gay-rights issues throughout his career.

As a rank-and-file state senator in the 1980s, Mr. Paterson led the first effort to establish hate crimes laws in New York. Years later, when a hate-crimes bill passed, in 2000, it included protections for gays and lesbians at Mr. Paterson’s urging.

In 2002, as the Senate minority leader, Mr. Paterson led Democrats in rounding up enough votes to pass the law prohibiting discrimination against gays and lesbians. He has frequently attributed his passionate advocacy of gay rights in large part to his close relationship with a gay couple who were friends with his parents in Harlem. He still affectionately refers to the couple, now deceased, as Uncle Stanley and Uncle Ronald.

His emotional investment in the issue was on display Thursday in a 15-minute speech that placed gay marriage in the historical context of slavery, disenfranchisement of women and shunning the disabled.

“We have all known the wrath of discrimination,” said Mr. Paterson, New York’s first black governor. “We have all felt the pain and the insult of hatred. This is why we are all standing here today.”

Surrounded by some three dozen members of the state’s political establishment, including members of Congress, senior state legislators and Mayor Michael R. Bloomberg, he added: “We wish to fulfill the dreams of those Americans, both the living and the dead, who struggled unremittingly and courageously over the past two centuries to expand those freedoms to more Americans. Often we have fallen short, but the marvel and the miracle of America is that we keep marching forward for justice.”

GAY VOWS, REPEATED FROM STATE TO STATE: WILL THE US SUPREME COURT STEP IN?

2009-04-13T16:56:00.001-04:00

From the New York Times
April 12, 2009
Gay Vows, Repeated From State to State

By ADAM LIPTAK
WASHINGTON — And now there are four. In the space of a week, the number of states allowing same-sex marriage has doubled, with Iowa and then Vermont joining Massachusetts and Connecticut. In California, gay and lesbian couples were exchanging vows for five months before voters put a stop to the practice in November. Californians are still talking it over, though, and loudly. New York and New Jersey may be next to debate the question.

In other contexts, this sort of turmoil might amount to an invitation for the United States Supreme Court to step in. But there are all sorts of reasons the court is likely to keep its distance, and a central one is the endlessly debated 1973 decision that identified a constitutional right to abortion.

“The concern about creating another Roe v. Wade looms large,” said Nathaniel Persily, who teaches law and political science at Columbia. “At least five members of this court, if not more, would probably be reluctant to weigh in on this controversy, especially given the progress that is being made in state legislatures, state courts and public opinion.”

Court decisions on issues like school desegregation, abortion and same-sex marriage can raise questions about the judicial branch usurping the democratic process. But there are strategic issues as well. The Supreme Court not only decides cases but also decides which cases to decide. In jurisprudence as in life, timing is everything.

Even some strong supporters of abortion rights believe, for instance, that Roe went too far too fast and may have been counterproductive. One of them is Justice Ruth Bader Ginsburg.

“The court bit off more than it could chew,” Justice Ginsburg said in remarks after a speech at Princeton in October. It would have been enough, she said, to strike down the extremely restrictive Texas law at issue in Roe and leave further questions for later cases.

“The legislatures all over the United States were moving on this question,” she added. “The law was in a state of flux.”

Roe shut those developments down and created a backlash that lasts to this day.

“The Supreme Court’s decision was a perfect rallying point for people who disagreed with the notion that it should be a woman’s choice,” Justice Ginsburg said. “They could, instead of fighting in the trenches legislature by legislature, go after this decision by unelected judges.”

Until the Vermont Legislature acted on Tuesday, victories for same-sex marriage also came only from courts, but they were state courts. These courts based their decisions on state constitutions, which, moreover, means that the United States Supreme Court almost certainly could not review those particular rulings, even if it were inclined to.

Successive state court lawsuits from supporters of same-sex marriage reflect a strategy that is pragmatic about building local support, said Andrew Koppelman, a law professor at Northwestern. “The Iowa decision,” he said, “is the product of a very smart legal team researching every state supreme court and every state legislature.” The Iowa Supreme Court ruled in favor of same-sex marriage a little over a week ago.

“It’s courts that started this,” Mr. Koppelman said of the same-sex marriage movement. “The courts are able to make a difference if there is a social movement that could go either way.”

Patrick J. Egan, who teaches politics and public policy at New York University, said the aftermath of controversial court decisions tended to follow a pattern. Immediately after a decision, he said, the mere fact of judicial endorsement of a position increases public acceptance slightly. Then politicians’ initial reactions can help sway public opinion.

The pattern on same-sex marriage, Professor Egan said, is that “Republicans react very opposed and Democrats react very, very neutrally.” As a consequence, he said, “opposition to same-sex marriage shoots up a bit in the month or two or three after a big court decision.”

Later, though, unless the decision is overturned, the public lives with the consequences and decides for itself. “Over time,” Professor Egan said, “people’s experience with the policy changes their attitudes.”

Professor Koppelman said Roe followed that general pattern.

“On the one hand, Roe certainly triggered an enormous backlash,” he said. “On the other hand, it created a generation of American women who grew up with the right to abortion assumed.”

In “Public Opinion and Constitutional Controversy” (Oxford, 2008), Professors Egan and Persily, along with Kevin Wallsten, tracked public opinion about gay rights after several court decisions.

When the Supreme Court, in Lawrence v. Texas in 2003, struck down a Texas law making homosexual sex a crime, public support for same-sex marriage — a question not directly implicated by the decision — dropped sharply. “Even that case actually provoked a major backlash,” Professor Persily said.

Five months later, the Supreme Judicial Court of Massachusetts issued its decision allowing same-sex marriages, causing public support for such marriages to fall further. It did not recover to pre-Lawrence levels until 2005.

But since then there has been remarkable movement in support of same-sex marriage.

“The most recent CNN poll put it at 44 percent,” Professor Persily said. “More important, the opposition has gone down. And people who are opposed are much more likely to favor civil unions,” as opposed to no rights at all for gay couples.

“There has been a shift of about 10 percentage points in five years” in public support for same-sex marriage, Professor Persily added. “On a deep moral issue like this, that’s very rare.” Public opinion about abortion, by contrast, “has been largely frozen for years.”

The trend toward greater support for same-sex marriage is likely to continue, Professor Egan said. Part of it is generational: younger people are far more apt to support gay rights than older people. And part of it is a product of changing social attitudes.

Since the Vermont Legislature decided to allow same-sex marriages, legal scholars have been debating whether that political victory could have been secured without the judicial decisions that preceded it.

“Without the activist decisions on same-sex marriage,” Professor Persily said, “there might not have been a fire lit under the legislature that passed it.”

NEW YORK HIGH COURT TO HEAR APPEALS ON OUT OF STATE SAME-SEX MARRIAGE CASES

2009-04-01T10:04:00.001-04:00

From the New York Times.
April 1, 2009
State Court of Appeals to Hear Two Same-Sex Marriage Cases

By JEREMY W. PETERS
ALBANY — The state’s highest court agreed on Tuesday to hear arguments in two cases that challenge New York’s recognition of same-sex marriages legally performed elsewhere.

Lower courts have already sided with two government entities that revised their policies to honor the marriages, but those decisions were appealed by the Alliance Defense Fund, a Christian group that is waging multiple legal battles in New York to stop state and local entities from recognizing marriages of same-sex couples who were wed in places, like Massachusetts and Canada, where the ceremony is legal.

Neither case involved Gov. David A. Paterson’s directive last May that ordered state agencies to recognize legal same-sex marriages performed outside New York State.

One case, Godfrey v. Spano, stems from the Westchester County executive’s 2006 decision to begin officially honoring out-of-state marriage licenses for gay couples the same way it did for heterosexual couples.

The other case, Lewis v. New York State Department of Civil Service, was filed after the department agreed in 2007 to begin recognizing out-of-state, same-sex marriages for the purpose of extending health insurance to spouses of public employees.

Brian Raum, senior legal counsel for the Alliance Defense Fund, said Tuesday that the group believed that the Court of Appeals would reverse the lower courts in both cases.

“We’re confident that we’re on the right side of the law,” he said. “The law in New York states it will not recognize marriages that conflict with public policy in New York. Since New York only recognizes marriage between one man and one woman, for any court to recognize same-sex marriage would be to recognize marriages that run contrary to New York law.”

Susan Sommer, senior counsel from Lambda Legal, a gay rights group that is representing Westchester County and the civil service department, said she had hoped the court would decide not to hear the cases, but added that she was optimistic it would not rule against same-sex couples.

“I think the rulings in the lower courts were correct and consistent with all the other prevailing decisions in the state,” she said. “I’m looking forward to making the same arguments to the high court so we can ask it to affirm those same arguments that have prevailed in all other cases.”

WHAT CONTRACT?

2009-03-08T13:58:00.001-04:00

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?”

STUDY ESTATE PLANS BEFORE LAWS SHIFT

2009-03-01T22:49:00.003-05:00

FROM THE NEW YORK TIMES

February 26, 2009
Study Estate Plans Before Laws Shift

By DEBORAH L. JACOBS
BARRING a Congressional logjam, there is likely to be a new estate tax law by the end of 2009. The Obama administration has said that making the tax permanent, avoiding a one-year repeal starting next year, is a high priority. Yet details of the proposal the White House will support are unclear.

For people who are setting up estate plans, or updating existing ones, not knowing what proposal will emerge might be temptation to take a wait-and-see approach. But that could be a mistake.

Estate plans should be reviewed at least every five years, more often if there’s a change in finances or circumstances — if health or marriage takes a turn for the worse, or if there’s a birth or death in the family.

Under the existing law, the current 45 percent tax would be repealed for 2010. Then, after a year with no estate tax, the tax would return in 2011 but at a higher rate, 55 percent.

Meanwhile, the amount of an estate that is exempt from taxes has gone up gradually during the past eight years, and took a big jump to $3.5 million this year, from $2 million in 2008. But in 2011 it is due to drop to $1 million.

Most tax experts think that, whatever law Congress passes, it will keep the $3.5 million exemption and 45 percent rate. But uncertainties remain. That, coupled with the financial crisis that lowered many people’s net worth, makes a review more urgent.

“With people having a lot less money than they used to, you really need to look at your documents and see if they do what you intended,” said Joshua S. Rubenstein, a lawyer with Katten Muchin Rosenman in New York. A review will allow you to use tax-planning tools that Congress may soon curtail or eliminate.

Here are things to consider:

Formula clauses in wills “Although people hate reading these documents because they don’t exactly read like Jacqueline Susann,” Mr. Rubenstein advised skimming them for buzzwords that could be problematic, given the increased exemption and perhaps a drop in net worth. He said terms like “that portion,” “that fraction” or “that amount” (without saying what it is) are signs of lawyers trying to take maximum advantage of the exemption. Be sure that’s what you want.

Instead of naming a specific sum that will go into a trust, many wills refer to an amount up to the exemption or express the sum as a percentage of whatever the limit happens to be when the person dies. This is good standard practice, but with the exemption at $3.5 million, make certain it reflects your intent.

Bypass or credit-shelter trusts These tools, used to preserve the estate-tax exemption for both spouses, are an area in which formula clauses may lead to undesirable results. Here’s how bypass trusts (often called family trusts) work: assume your will includes a formula clause that would allocate up to the $3.5 million exemption to the trust if you die before your spouse. The trust distributes income and principal to your spouse and family members while your spouse is alive, then distributes what is left to family.

Since money in the bypass trust is covered by the exemption amount, it will not be taxed when you die. Putting the funds in trust, rather than leaving them to your spouse outright, ensures that neither the assets nor any appreciation on them will be considered part of your spouse’s estate. Therefore, they are not subject to tax when he or she dies.

If the rest of your assets go to your spouse, the tax on this portion, called the marital share, is not eliminated, but rather will be postponed until that person’s death. Assuming the assets pass outright or through another special kind of trust, no tax will be assessed when you die, because assets inherited from a spouse are entitled to an unlimited marital deduction. But if your spouse doesn’t spend all that money, what remains of the marital share will be taxed when he or she dies. (Special rules apply to spouses who are not United States citizens.)

The current exemption creates this situation: if your estate plan is structured to take full advantage of the estate tax exemption, more than ever before will go into a bypass trust and less will go to your spouse. For instance, if you die with $3.5 million of your own, your spouse’s entire inheritance would go into the bypass trust. And that could seriously limit her access to the funds.

There are a number of solutions, said David A. Handler, a lawyer with Kirkland & Ellis in Chicago. One is to put the full exemption amount into the family trust while making sure that your spouse is a major beneficiary of the trust who can receive distributions liberally for broad purposes.

State estate tax About half the states, including New York, Connecticut and New Jersey, impose an estate tax, and many of these have an exemption smaller than the federal one. This poses a dilemma for married people who have divided their estates between a bypass trust and a marital share, said Lloyd Leva Plaine, a lawyer with Sutherland, the Washington-based firm.

For example, in New York, where the state exemption is only $1 million, fully funding the bypass trust to take advantage of the federal exemption would require your estate to pay a 16 percent state tax when you die on the $2.5 million not covered by the state exemption.

This presents a tough choice. If you allocate more to the marital share, your estate avoids federal and state estate tax when you die, but could pay more federal tax if assets appreciate, as well as state tax, when your spouse dies.

If you put more in the bypass trust, there’s no federal tax on this sum when you die, but your heirs must immediately pay state estate tax. Consult your lawyer about ways to allow your executor — the person who puts your will into action — the flexibility to resolve these issues after you die.

Grantor retained annuity trust (GRAT) This is a strategy designed to avoid or minimize the gift tax that applies to lifetime transfers of more than $1 million. To do that, you put appreciating assets into a short-term irrevocable trust (two years is typical) and retain the right to receive an annual income stream for the term of the trust.

This annuity is based on the Section 7520 rate, which is set each month by the I.R.S. If you survive the trust term — a condition for this tool to work — any appreciation above this set rate can go to family members or to trusts for their benefit when the term ends. If you die during the term, a portion of the trust will be included in your estate.

Under current law, it is possible to set up a GRAT that will result in no taxable gift, or a nominal one. There is talk that Congress might change that, requiring that the gift equal at least 10 percent of the initial trust value.

In that case, new GRATs would be less appealing, but those created before the law took effect are likely to be grandfathered, said Gideon Rothschild, a lawyer with Moses & Singer in New York. Meanwhile, low asset values and an extremely low Section 7520 rate — 2.4 percent for March — make GRATs especially attractive right now, he said.

Family limited partnerships This tool involves two steps. First, you put assets, like marketable securities, real estate or shares of an operating business, into a partnership. Then you sell or give away shares in the entity that holds the assets — not the assets themselves. Since these shares cannot readily be sold outside the family, they are discounted for both lack of marketability and lack of control (typically a total discount of about 35 percent).

Congress may put a stop to this technique, which has been under attack from the I.R.S. for more than a decade. The first estate tax bill of the year, introduced in the House of Representatives on Jan. 9, proposed closing the loophole, and would take effect when the bill is signed into law. If you use discounts before then, you would not be affected if the law changes.

Beneficiary designation forms Money in individual retirement accounts or employer-sponsored retirement plans, like 401(k)’s and 403(b)’s, will not normally be covered by a will. Instead, the money goes to the people, trusts or charities designated in beneficiary forms for the account. With all the consolidation in the financial industry lately, it’s a good idea to make sure that the financial institution where you have the account has a copy of your beneficiary designation form on file, said Natalie B. Choate, a lawyer with Nutter McClennen & Fish in Boston. If it does not, fill out a new one, keep a copy with your will and have your lawyer coordinate it with the rest of your estate plan.

GOOD PLANNING MAKES ALL THE DIFFERENCE IN ESTATE PLANNING

2009-03-01T11:48:00.004-05:00

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.

A GLUT OF ONE BEDROOM APARTMENTS

2008-08-03T21:16:00.002-04:00

August 3, 2008

from the New York Times

By CHRISTINE HAUGHNEY
OWNERS of one-bedroom apartments in Manhattan may be surprised if they put their homes up for sale anytime soon.
Price appreciation for one-bedrooms — long a bastion for singles and newly married couples who want to stay in Manhattan and live close to work — is sluggish compared with other types of apartments.
Buyers, many of whom are having difficulties getting mortgages, are unwilling or unable to pay the prices sellers still expect. And by one estimate one-bedrooms have been taking nearly three weeks longer to sell than bigger, or smaller, apartments.
Although the average sale price for a one-bedroom apartment grew by 7 percent in the last year, overall apartment prices in Manhattan jumped by 21 percent — not including condo sales at the ultra-expensive 15 Central Park West and the Plaza Hotel — according to Halstead Property.
“If you want to look at what area is experiencing the least amount of growth, it’s one-bedrooms,” said Gregory J. Heym, the chief economist who works for Halstead and for Brown Harris Stevens. “It is the lowest increase of any size category.”
That is a notable change from the situation a year earlier. From the second quarter of 2006 to the second quarter of 2007, prices for one-bedrooms rose by 10 percent, while overall apartment prices rose by only 7 percent.
Now that has changed. One-bedrooms are sitting on the market largely because the buyers most likely to purchase them can’t get mortgages. “Getting financing is very challenging,” said Diane M. Ramirez, the president of Halstead Property. “It can be difficult if the buyer of the one-bedroom is a first-time buyer. Some of the buyers who were able to get financing when the banks were throwing things at them are gone, and the requirements are stiffer.”
The number of studios available for purchase is not piling up in the same way because there are fewer of them, Ms. Ramirez said.
Brokers say that many people who bought their apartments at or near the top of the market and now must sell are often simply trying to avoid losing money on the deal.
In May 2007, John and Wendy Penn bought a one-bedroom on West 72nd Street for $650,000. The couple, whose main residence is on Long Island, wanted an office and a pied-à-terre in Manhattan to expand their insurance business.
They bought the apartment as a long-term investment and quickly completed about $30,000 in renovations, including the restoration of the apartment’s prewar details. But when Mr. Penn became an independent insurance agent, he no longer needed space in Manhattan.
So in February, the couple put the apartment up for sale, pricing it at $769,000. Three price cuts later, the apartment is listed at $725,000 and still has not sold.
Their broker, Danica Cordell-Reeh of Halstead, said that the Penns have the burden of finding a buyer who will pass the co-op board when most buyers’ assets have shrunk in value because of Wall Street declines. She has shown the apartment to about three dozen prospects and received three offers.
Looking back, the Penns wish they had negotiated more with the first prospect, because the second and third bidders’ finances were not solid. Ms. Cordell-Reeh advised them not to accept offers from buyers who might ultimately face rejection from the co-op board.
The Penns never thought they would have such a hard time. While their apartment is on a less-desirable low floor (the first), it is newly renovated and has a flexible floor plan, giving new owners the ability to change the location of the kitchen and the bathroom if they choose. “Hopefully, we’ll get close to breaking even,” Mr. Penn said.
But sellers of one-bedrooms might be even worse off, if not for changes in recent years in the Manhattan apartment mix. In the 1980s, developers built one-bedrooms for a market dominated by professionals and young couples, and investors who planned to rent out their units.
But by the time the latest construction boom started, the mix of buyers had changed. Developers found that building large apartments for wealthy families was more profitable in many neighborhoods, because more families were willing to pay a premium to stay in the city.
On the Upper East Side, the Worldwide Group built only five one-bedrooms in its 77-unit building at 255 East 74th Street, choosing to focus mainly on three- and four-bedrooms.
Even around Madison Square Park, a neighborhood that attracts many singles, the Clarett Group included a relatively low number of one-bedrooms in its new building at 11 East 29th Street. Veronica Hackett, the firm’s managing partner, said there were only 23 one-bedrooms in the 139-unit building. “I tend to believe that when people buy, they stretch to buy a two-bedroom instead of a one-bedroom,” she said.
But even though developers have not concentrated on building smaller apartments, there are more one-bedrooms on the market now than there have been in at least 20 years, according to Jonathan Miller, chief executive of Miller Samuel Inc., a real estate research company.
There are also more one-bedrooms available than apartments of other sizes. As of July 30, there were 3,390 one-bedrooms or sale in Manhattan compared with 3,229 two-bedrooms and 1,063 studios, according to data tracked by StreetEasy.com.
Mr. Miller has found that one-bedrooms sit on the market longer than any other size of apartment. He sees “a drag in demand on one-bedroom units, which is allowing inventory for one-bedrooms to be disproportionate to others.”
This is a tough time for sellers who are moving for job-related reasons. Rabbi Tom Gardner, who recently accepted a job at a synagogue in Baton Rouge, La., needs to sell his one-bedroom on Riverside Drive at 101st Street. Because he has sublet the apartment before, he cannot do so again under his co-op’s rules.
He bought the apartment for less than $400,000 in 1998, and last year, he was told he could sell it for $750,000. But by the time he put it on the market at the end of April, he set the asking price at $695,000, based on advice from his broker, Susan Faber of Barak Realty. Since then, the number of similar one-bedrooms for sale in his neighborhood has grown sixfold, Ms. Faber’s colleague Antonio del Rosario said.
After getting few offers, Rabbi Gardner cut the price to $650,000. When a buyer offered him less than $600,000, the rabbi made a counteroffer of $630,000. The buyer said no.
Despite the time pressures he faces, Rabbi Gardner is reluctant to yield on what he believes is the inherent strength of the unit he owns. “I think there’s still a certain value to an apartment in a full-service building on the Upper West Side,” he said.
Other sellers are even more determined to wait for the price they want.
Three years ago, Kenneth Kuo, a concert cellist who owns music schools in Manhattan and in Greenwich and Westport, Conn., and his cousin bought a one-bedroom at 120 Riverside Boulevard at Trump Place, the building where Mr. Kuo lives in a one-bedroom penthouse. They paid about $675,000.
They have been trying to sell the investment apartment for the last six months, but they are determined not to accept less than $1 million.
Mr. Kuo has a list of other sales in his building through the middle of 2007 that indicate the asking price for his apartment is in line with the building’s sales history. He also says that last year, he sold another one-bedroom he owned in the building for $790,000 after buying it in 2005 for about $550,000. He thinks he was justified in waiting for a high price.
But he was willing to consider a slightly lower bid. “Even if I could get $999,999, I would be happy,” he said. “There are just so many one-bedrooms out there on the Upper West Side.”
Late last month, he cut the price to $1.015 million. He also listed it for rent at the same time, on the advice of his friend Andy Kim, a broker at Nest Seekers. He had a tenant in a week willing to pay $3,400 a month, and plans to try to sell the apartment again in a few years.
For buyers, the growing inventory of one-bedrooms is enabling them to negotiate good deals.
When April Hartstein shopped for a new one-bedroom condo in Williamsburg, Brooklyn, in April, she asked brokers whether developers would negotiate. By the time Ms. Hartstein found her ideal condo at the Jacksonia at 131-145 Jackson Street, she had learned that many costs were negotiable. She persuaded the developer to pay her $7,000 transfer tax, build a second larger closet in her bedroom and cut the price by about 3 percent. (Apartments like hers are priced at $495,000 to $499,000.)
Ms. Hartstein stresses that she had to push, but that she found many developers would work with buyers. “No one just offered,” she said. “No one was like, ‘This is a slashed price.’ ”
Christine Blackburn, the Prudential Douglas Elliman broker overseeing sales at the Jacksonia, acknowledges that there are many one-bedrooms for sale right now in Williamsburg and relatively few larger apartments available. In Brooklyn, developers built more smaller units than in Manhattan to cater to younger first-time buyers.
She said that developers realized they had a lot of competition. “They built a lot of one-bedrooms, and there’s heavier competition in that market,” she said. “It’s a supply-and-demand thing.”
In this market, some buyers are finding that they can get apartments that would have been out of reach before.
Adam and Zena Rudzki had been searching for a one-bedroom near their daughter‘s home in Washington Heights for the past year. They found a one-bedroom at Cabrini Terrace, 900 West 190th Street, for $350,000. The apartment, listed by Simone Song Properties, has river views. They negotiated a $5,000 reduction in the price and closed on the apartment last week. “We had the luxury of looking and waiting for something that is reasonable in price” and attractive, Mr. Rudzki said. “We are very pleased.”
Bargain-hunting one-bedroom buyers are finding that the longer they wait, the more opportunities they are offered.
In March, Bruce and Eva Forrest started looking for a one-bedroom near Madison Square Park. The couple, who live in Rockland County, weren’t in a rush to buy. They intended to use the apartment as a pied-à-terre, and they wanted to make sure they found an apartment big enough for their 4-year-old son, Alexander, to run around in.
By June, they had a contract for a one-bedroom at the Stanford, 45 East 25th Street. The Forrests negotiated the price down to $867,500 from $875,000 with the help of Jenet Levy of Coldwell Banker Previews International.
But when the sale was delayed, Mr. Forrest looked at the market again. He noticed that prices for one-bedrooms had dropped 5 to 8 percent and that more sellers of one-bedroom co-ops were advertising that they would accept buyers interested in pieds-à-terre.
Although he is happy with the deal he had negotiated on his apartment and plans to close on Aug. 11, he notes that there are even more one-bedrooms to choose from today than when he found his apartment.
“It was amazing how much property was on the market, and it was amazing that it was sitting there,” he said.

Rich But Rejected

2008-07-16T23:30:00.002-04:00

from the New York Times
By Rebecca McAlpin

ALMOST overnight, investment bankers and others on Wall Street have gone from being Manhattan’s most aggressive apartment buyers to real estate pariahs

As financial services companies continue to cut jobs and bleed billions of dollars, their employees have far less cash to spend on high-priced apartments, and very little optimism about taking a risk right now anyway.

Those in the financial industry who still want to buy real estate are often unable to persuade lenders and co-op boards to work with them.

The biggest problem is that buyers who work on Wall Street no longer have the guarantee of huge bonuses to bolster their financial status. And even those who continue to get bonuses are finding that banks and co-ops will not let them count all that money as part of their income, because unlike a salary, it can fluctuate wildly.

Workers in financial services-related businesses make up roughly 25 to 30 percent of Manhattan buyers, according to estimates by Halstead Property. Although some lenders and building boards are accepting these buyers after tightening requirements, others are becoming far more interested in buyers outside the financial industry.

“They’re looking for people who have stable incomes that are not so market dependent,” said Melissa Cohn, the president of the Manhattan Mortgage Company, who has noticed the changing standards regarding bonuses in the last month.

Lenders, she said, fear that “bonus levels won’t be the same in 2009 as they were in 2008” and will no longer take any risks.

Read the full article here http://www.nytimes.com/2008/07/13/realestate/13cover.html?_r=1&ref=realestate&oref=slogin

COVETING THY NEIGHBOR'S CONDO

2008-05-08T08:44:00.003-04:00

from The New York Times

May 4, 2008
Coveting Thy Neighbor’s Condo
By TERI KARUSH ROGERS
BOTOX. The iPod. Arugula. Each in its own way ushered in an era of heightened expectations — for brow lines, personal music players and salad courses, respectively.
Then there is New York City’s recent condominium boom: Its in-your-face ubiquity and fantasy-minded marketing have raised the bar for apartment seekers exposed to an excess of spa bathrooms, Zen gardens and Boffi kitchens. That’s fine for those willing to pay new-construction prices and wait up to a year or two for the keys.
But buyers lacking patience or money are finding their tastes have gotten more expensive, as apartments that might have thrilled them five years ago have come to resemble throwbacks to an age of portable CD players.
In other words, said one real estate agent frustrated by her frustrated clients, it can be hard to shop at Bloomingdale’s after visiting Barneys.
“What happens is buyers go to new construction and see the health club, the Pilates and yoga classes, the swimming pools, the libraries, the meditation rooms — along with the oversized bathrooms and the high ceilings,” said Kathryn T. Higgins, an associate broker at DJK Residential. “They can’t afford that and the rational part of them knows that, but the emotional part of them hasn’t accepted it. It makes them disappointed and envious and influences their attitude toward the older apartments and buildings.”
These buyers are angry on a lot of levels, Ms. Higgins said, and they hold it against the seller by negotiating harder and simply being more selective about what to bid on in the first place.
Just ask Peter Sicilia, a 37-year-old renter in Park Slope, Brooklyn, who is torn between new and used. Since last summer, he and his broker, David Austin of Halstead Property, have been touring two-bedroom apartments of every vintage in Brooklyn’s brownstone neighborhoods.
“The bar has absolutely been raised by new construction,” said Mr. Sicilia, whose kitchen consciousness has ascended to the point that he won’t even look at resales that can’t accommodate a new-condo-style kitchen. “You just can’t compare it to resales.”
“A huge yoga room doesn’t necessarily appeal to me,” said Mr. Sicilia, “but I do like it when some careful planning and interior design has gone into a unit — like a granite countertop in a thought-out kitchen as opposed to just slapping a stove in the middle of the room, which is what I see on the resale side.” He is willing to spend up to $750,000, including any renovations that he might have to make.
The economic slowdown has certainly helped create more of a buyer’s market in New York, giving home shoppers the chance now to be choosier.
Yet some brokers say it’s not just the prevailing gloom that is making buyers more skittish and hard-driving.
“Their eyes have been trained differently,” said Sherry Matays, a senior vice president at the Corcoran Group, of buyers exposed to new construction. “They feel something’s being stolen from them, even though they can’t afford it. So if they’re going to live without a gym, a pool, radiant heat on the bathroom floors or whatever, they want to know the sacrifice is worthwhile and they’re getting more space for their money.”
These days, it can be hard to find buyers untouched by the new construction ethos. The number of new Manhattan condos available has risen over the last five years, to one-third of the total unsold inventory today from 15 percent in 2003, according to Miller Samuel, a Manhattan appraisal firm.
Most, if not all, buyers kick off their searches by trolling new developments online or window-shopping at sales centers. By the time they start working with a broker, it is, in a sense, too late. Their paradigms have been upgraded.
“As the old line goes, once you’ve been to Paris, it’s hard to go back to the farm,” said Grant McCracken, a cultural anthropologist affiliated with the Massachusetts Institute of Technology and the author of eight books on consumer culture.
“Once our choice set has been expanded to include things that we never dreamed of that are gloriously better than what we have, it’s very tough for us to be content with the things that used to give us pleasure. And in Manhattan, where people have always had to kind of hold their noses and learn to live with constrained circumstances, I guess this is almost a natural impatience waiting to happen.”
Ms. Higgins of DJK ticked off a few of the telltale signs of new construction envy.
“When people used to say, ‘Does it have any outdoor space,’ they were generally talking about a terrace,” she said. “Now they mean a common garden or Zen meditation space. They want to go do their yoga or tai chi outside and they want to know why doesn’t the building have some sort of space where they can do this? I’m ready to dig them a Zen garden. Please. I had one buyer who said, ‘This one has a garden, but the other one had a garden with a waterfall.’
“Or, we’re standing in a prewar building and they’re in the lobby looking around. And I say, ‘What are you looking for?’ They say, ‘Does it have a library,’ like in some of the newer buildings that have a common reading room with a faux fireplace.”
Inside the apartments, buyers influenced by new construction are feeling a number of other painful absences, none of which make their hearts grow fonder.
One of the biggest voids is where the washer-dryer ought to be.
“Anything that’s been built in the last 10 to 15 years has a washer-dryer, so giving up on one is really one of the biggest difficulties for people,” said Joan Sacks, an associate broker at Stribling & Associates. “I have one client who lived on the Upper East Side for 20 years without a washer-dryer in her apartment. We started looking at new condos as well as established buildings and as soon as she saw the washer-dryer in the new units she said, ‘Oh, that is something I absolutely have to have.’ ” Ms. Sacks’s client bought a new condo in Chelsea with en suite laundry.
Buyers looking at resales in buildings built before five or so years ago are increasingly minding the absence of central air-conditioning, tall ceilings and expansive double-glazed soundproof windows. They are also expecting a lot more from kitchens and bathrooms.
“A kitchen with ’80s cabinets is a deal breaker,” said Darren Sukenik, an executive vice president for luxury sales at Prudential Douglas Elliman. “Everybody wants to think of a Boffi or Dada kitchen even if it’s not.”
And compared with the new-condo “spa” bathroom (typically replete with double sinks, glass shower, soaking tub and gorgeous finishes), earlier versions can appear almost cruelly stunted.
“The small prewar bathroom used to be charming, and now it’s just a small bathroom that’s going to cost $50,000 to blow out,” Ms. Higgins said.
Jan Boyle, a lifelong renter shopping for a Manhattan apartment, can pinpoint the moment her standards shifted.
While visiting friends in Harlem last October, Ms. Boyle paid an impromptu visit to a newly built condominium at 50 West 127th Street.
“There was a limestone facade on the outside and mahogany tilt-and-turn windows and full marble bathrooms from floor to ceiling that were very spalike,” said Ms. Boyle, 49, a marketing consultant, recalling her kid-in-a-candy-store reaction. “It was beautifully finished and the fitness center was brand new with Bang & Olufsen speakers wired throughout.”
And just like that, she said, “I got caught up in this new construction thing.”
Working with Robert Cabrera, a senior vice president at Halstead Property, she began touring new condos in Harlem and the financial district. She hasn’t yet made up her mind between new and old, but said the resales she has seen suffer dreadfully by comparison.
In addition to having proletarian bathrooms and communal laundry rooms, “they’re just dreary,” Ms. Boyle said, “and even if they’re renovated, I feel like you’d need to redo it anyway.”
Too frequently, she said, sellers have spent “a gazillion dollars on some mosaic weirdness tile, and they’ve put down this ugly floor they’ve also spent a gazillion dollars on, and they think it’s a redone apartment and they’re passing along the cost.”
Indeed, brokers say, new construction envy is prompting buyers like Ms. Boyle to recoil from renovations that fall short of the new-condo aesthetic. Buyers are also increasing the amount of money they deem necessary to bring a resale closer to new-condo status.
Ms. Matays counsels her buyers to figure $300 per square foot for a basic “upper end” renovation, all the way to $450 per square foot for a gut job that would essentially mimic new construction. Using those figures, a 1,200-square-foot two-bedroom priced at $1.5 million might cost another $360,000 to $540,000 to redo in style.
Ms. Matays said that the yearning for “hybrid” apartments (resales renovated in the new-condo fashion) has become so widespread that when listing an apartment, she no longer touts renovations that fall short of the new baseline.
“You can’t get away with that anymore,” she said. “I’m selling a prewar apartment with original 1920s bathrooms and I told them short of being done up to the standard of a high-end condo —which can still be traditional as long as it has really high-end finishes — it’s better to keep the bathrooms like they are.”
Just who should foot the bill for making new-condo-style improvements to a resale is a matter of some contention.
“I’ve had people buy into postwars with perfectly nice bathrooms that have maybe been done in 1987 when the building was new,” Ms. Higgins said, adding “They’re looking at the sellers saying we need a new bathroom and it’s going to cost $50,000. This is where it gets very, very tense.”
“I sort of drag the buyer away and say that’s a perfectly good bathroom — they’ve priced the apartment with that bathroom, not with your vision,” she said.
Buyers don’t necessarily agree.
Tom Julian, a 40-something homeowner in Battery Park City, started looking a year ago for a two-bedroom two-bath apartment in the neighborhood, with the help of Pierre Moran, an agent at DJK Residential. Though he is considering both new construction and resales, Mr. Julian, who owns a one-bedroom condo, is keenly cognizant of the ways in which resales fail to measure up.
“I envy the central air,” he said. “All of the new buildings have it. And granite and stone and stylish wood choices, whether it be bamboo or elm — parquet floors are over.”
And if the choice was between a $2 million new condo and a $1.5 million resale that needed a $500,000 renovation, Mr. Julian said, he would opt for new.
He has lots of company. When it comes to buying older apartments, buyers increasingly “put in a lowish offer to see if they can make a deal, and if they can’t, they’ll go back to new construction,” Mr. Cabrera said.
Brokers try their best to recalibrate what they consider unrealistic expectations.
“We’ll take the best three or four properties that meet their budget, and then we’ll show them a couple of things that specifically meet their criteria but not their budget,” said Michael Signet, the director of sales at Bond New York. “Then we sit them down over a cup of coffee and say it’s your decision whether to increase your budget or come off your wish list a little bit. A lot of times they’ll say, ‘We’ll wait another six months until we can afford something we really want.’ That’s not what we want to hear, but we’d rather hear it the first day than after working with them for six months.”
Rather than feel embittered about being unable to afford it, some buyers become empowered by their brush with new development.
“We didn’t visit a lot of new construction,” said Alan Iny, 31, a management consultant, who went shopping for an apartment with his wife, Roberta Griff, two years ago. “We reasonably quickly realized from a price and timing perspective that we didn’t want to go there if possible — we had kept hearing horror stories about people who were delayed by two years.”
But the universe of possibilities persuaded the couple not to compromise on their own smaller list. With the help of their broker, Julie Friedman of Bellmarc Realty, Mr. Iny and Ms. Griff persevered until they found a two-bedroom two-bath prewar apartment in the West 60s that had been freshly renovated à la new.
“I knew it would conceivably be possible to find something with a doorman, gym, terrace, modern amenities, etc.,” Mr. Iny said, “so I wasn’t really willing to settle for something that didn’t.”

FINDING YOUR FIRST APARTMENT

2008-04-25T08:09:00.002-04:00

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

THEY JUST DON'T UNDERSTAND: BANKS AND WALK-UPS AND STUDIOS

2008-03-31T20:57:00.002-04:00

from New York Magazine
In a tight market, banks look askance at walk-ups and studios. What’s a New Yorker to do?
ByS. Johanna Robledo
Published Mar 24, 2008

Refinancing was tough for the candidate, but not for the usual reasons. On paper, he was a dream: good job, great credit score, tons of equity in a big, well-renovated Inwood apartment. But many banks refused, for one simple, though confusing, reason: He lived in a fifth-floor walk-up. Never mind that in his neighborhood, Inwood—indeed, all over the city, even in the best neighborhoods—walk-ups are everywhere.
Never mind, also, that most of the big banks are headquartered in New York, and that their bean-counters might be expected to understand our peculiar landscape. The fact is, broad national rules often put ridiculous constraints on New York deals. Paul Cole, of the mortgage-brokerage firm Trachtman and Bach, notes that New Yorkers who are neither subprime borrowers nor financially dicey are often confounded by arcane house rules that are incompatible with our urban landscape. “The business of mortgages and common sense don’t necessarily mix,” says Cole.
Take four-unit co-ops. While they’re standard-issue in well-off brownstone neighborhoods like Park Slope, Cole says they’re practically untouchable for some lenders. So are apartments with window bars; if an appraiser photographs them, a red flag will sometimes go up. Some banks won’t fund co-op deals at all, says Jeffrey Guarino, managing director of Gotham Capital Mortgage—and cooperatives constitute 75 percent of New York’s salable housing stock. Small properties can also be suspect. One magazine editor was stunned to discover that JPMorganChase wouldn’t write him a home-equity loan because his West Village studio, worth more than many suburban houses, was under 600 square feet. Cole gets agitated just talking about it: “You and I know you can sell a ten-by-ten storage unit in the city and get a bidding war!” he says. (Reached for comment, Chase’s Mike Fusco says that “the dimensions of a co-op do matter when applying for a home-equity loan.”)
The solution, fortunately, is not difficult. If you find yourself up against one of these rules, find another bank. You may have to settle for the second-best interest rate, say, or a lender that’s less convenient. If you’re working on your own, this may require more shopping; if not, most New York mortgage brokers know the game inside out, and will do the screening for you.
So why don’t the banks just wise up? Even though the city is thickly speckled with Chase branches—and those of other banks—lending rules are often hatched in far-off places, where walk-ups are considered slums and 500-square-foot apartments are hard-to-sell oddities. “Here’s the thing: We forget sometimes that New York City is a small piece of a lender’s portfolio,” says Guarino. Today’s suspicious mortgage climate doesn’t help, either. “No one’s in the mood to make exceptions,” explains Cole. “You may think you’re qualified, but that may not matter.

'YOU SAY RECESSION. I SAY RESERVATIONS!"

2008-03-25T23:05:00.001-04:00

From the New York Times

You Say Recession, I Say ‘Reservations!’
By MICHAEL BARBARO and CHRISTINE HAUGHNEY
THE collapse of a major financial institution is usually an occasion for hand-wringing and tut-tutting over potential job losses, lower consumer spending and missed mortgage payments.
In New York City, it’s also seen as an opportunity.
For many of the city’s middle class, especially those in the creative class, who have felt sidelined as the city seemed to become a high-priced playground for Wall Street bankers, the implosion of the brokerage house Bear Stearns raises a tantalizing possibility: participation in an economy they have been largely shut out of.
Few romanticize the nearly bankrupt New York of the 1970s or the recession of the late 1980s. But if the city suffers an economic downturn, as many now predict, there are fantasies of New York returning to a pre-Gilded Age, before the average Manhattan apartment cost $1.4 million, SAT tutors charged $500 an hour and dinner entrees crossed the $40 threshold.
Andre Anderson, 34, an account executive at TheDeal.com, a financial news Web site, would like to buy a Manhattan apartment with his girlfriend, but he said their combined incomes still make it nearly impossible to afford one.
Like many, he is rooting for what could be called a Bear Stearns discount, as newly unemployed financiers cut back on the buying binges that inflate the cost of life in the city.
“If there is greater good for everyone, is it worth a few people losing their jobs?” Mr. Anderson asked. “I think so. I hate to see people lose their jobs, but prices in the city have become ridiculous.”
From the Bronx to Staten Island, the disintegration of a bank known for its seven- and eight-figure salaries seemed to expose just how eager many New Yorkers are to release a little air from the city’s wealth bubble. Corey K. Cox, 32, who works at an equity research firm, hopes that the troubles for Bear Stearns workers may make it easier to buy a three-bedroom apartment or even a house in Brooklyn. His wife is expecting their second child in April.
“The environment right now is definitely more favorable to people who don’t make those Wall Street bonuses,” Mr. Cox said.
On Web sites devoted to New York, there was a healthy dose of schadenfreude.
“I am willing to risk a recession if it means tons of ibankers will be gone,” wrote one anonymous poster on Curbed.com, a Web site about real estate.
New York City has always been defined by the yawning gap between its haves and have-nots. But the last 15 years have witnessed the rise of a class of financiers whose salaries and bonuses have reached staggering heights. Over the last five years, the median compensation for a managing director working in investment banking rose from $650,000 to $1.37 million, according to Johnson Associates, a compensation consulting firm.
That is a pittance compared with hedge-fund managers. The highest-paid managers earned at least $240 million a year in 2006, according to the Institutional Investor’s Alpha magazine, nearly double the amount of 2005 (and up from a minimum of $30 million in 2002).
Their pay — and eagerness to spend it — has encouraged the growth of a luxury market in everything from groceries to restaurants to spas to specialty boutiques. Witness the Marc Jacobs-ization of the West Village, the surging average price of a two-bedroom apartment in Harlem to $1.1 million, and the rise of $15 tubs of ice cream in, of all places, the Lower East Side, at Il Laboratorio del Gelato.
In a city where the median household income in 2006 was $46,480, it’s no wonder that many people are bitter.
Robert H. Frank, an economics professor at Cornell, has written about the phenomenon of Americans who feel impoverished because of the towering wealth of those above them. In New York City, he said, those feelings are compounded by the sense that much of the wealth at the top is derived from financial instruments that merely move money around.
“It’s one thing if people are adding value to society,” Professor Frank said. “But there is skepticism that this is all a shell game and these guys are not adding value, at least to the extent that justifies their salaries.”
Kathryn Lyon, 62, who works at a legal staffing firm, and her husband, who works for the city, have wanted to buy an apartment in Manhattan for the last seven years, but have felt priced out by the wealthy.
“The city has been so damaged by this wealth, and the middle class has been forced out,” Ms. Lyon said. “You’re holding on by your fingernails to stay in the city.”
“I love New York,” she added, “But there’s always the risk of the city being swallowed up by wealth.”
At the same time, the troubles at Bear Stearns and the rest of Wall Street may well create hard times for New Yorkers. Many of the 8,000 Bear Stearns workers in the city are expected to lose their jobs. Citigroup announced that it will lay off 2,000 employees, and more job cuts are likely at companies like Merrill Lynch and Goldman Sachs.
The trickle-down effect may allow people like Ms. Lyon to buy an apartment, but it could also make the city a far less desirable place to live. During the last prolonged slump on Wall Street, after the crash of the stock market in 1987, a combination of large job losses at banks, trouble in the credit markets and a glut of new commercial and residential real estate on the market (sound familiar?) battered the city .
Office vacancies soared. Housing prices fell, with bad loans leaving some buildings worthless. Crime surged. And tourism plunged.
Jonathan Miller, the president and chief executive of Miller Samuel, a Manhattan real estate appraisal company, remembers appraising a studio co-op apartment in the now-exclusive Tudor City for $11,000 in 1990.
Even though he could afford to charge the studio on his Visa, he decided that it wasn’t worth the risk. “There was great concern whether many of these co-ops would remain solvent,” he said.
That’s why the troubles at Bear Stearns are a mixed blessing for New York’s lower ranks. The same masters of the universe who have made housing so expensive have beefed up the tax base, its sanitation services and its police force. They have, in many ways, underwritten the “new” New York City of the late 1990s and 2000s, defined by pristine parks and low murder rates.
Some Bear Stearns executives already are unloading homes. One of them called a Manhattan broker last week to put his town house up for sale. Ray Schmitz, an associate broker at Coldwell Banker Previews International who stood outside of Bear Stearns on Monday morning handing out business cards, said he received calls from two employees interested in selling.
But, at least so far, New York real estate prices show few signs of declining. The weak American dollar is encouraging thousands of foreigners to buy what seem like bargain apartments. “The condo market is not negotiable because we have Europeans throwing so much money at it,” said Darren Sukenik, an executive vice president for luxury sales at Prudential Douglas Elliman.
And don’t count on suddenly getting a next-day reservation at New York’s most popular restaurants. Waits for prime-time tables at Nobu are still four weeks, said Drew Nieporent, the force behind more than a dozen restaurants, including Rubicon and Tribeca Grill.
Even at the height of the ’80s economic downturn, Mr. Nieporent did not lower prices at his restaurants. But he did make one big concession: a B.Y.O.B. Monday at Montrachet.
Still, many New Yorkers hope prices decline. Even some on Wall Street.
Michele Kleier, the president of Gumley Haft Kleier, a Manhattan brokerage, received a call from a giddy client, a financier. The bidding war over a seven-room $4 million apartment had suddenly turned in the client’s favor. His rival, it turned out, was an executive at Bear Stearns, a once-glittering credential that might now hurt his chances with the seller and the co-op board.
“It’s like an old Western movie where the vultures are gathering,” Ms. Kleier said between showings for multimillion-dollar listings.

SUBPRIME CASES HEAD TO COURT

2008-03-19T22:19:00.002-04:00

From the New York Times
March 14, 2008

By BOB TEDESCHI
A GROWING number of borrowers who have run their finances aground with poor mortgage decisions are calling lenders and seeking to renegotiate. A smaller, but also quickly growing, number of borrowers are calling lawyers instead.
The number of lawsuits filed against mortgage-related companies has soared in recent months, said Jeff Nielsen, a managing director of Navigant Consulting in Chicago who has helped to lead a study on the topic.
And although it is too soon to tell whether these cases will succeed, the surge of litigation may help shield future borrowers from loans for which they are poorly suited.
“When it comes to consumer-protection issues with respect to mortgages, we will see a watershed change,” Mr. Nielsen said. “That’s one of the byproducts of what we’re going through, with litigation.”
Already, Mr. Nielsen and other industry analysts said, federal regulators and legislators are pursuing a number of mortgage-related regulations, including measures requiring lenders to simplify their explanations of loan terms — “disclosure” in industry parlance — and proposed laws to discourage mortgage originators from steering borrowers into costlier loans.
In his study of lawsuits in the subprime mortgage industry, Mr. Nielsen found that cases related to subprime lending in federal courts nearly doubled, to 181 from 97, in the second half of 2007 compared with the first half. Nearly half of the cases were filed in California and New York.
Mr. Nielsen, who conducted similar studies during the savings and loan crisis of the 1980s, said the number of subprime cases filed in 2007 alone is nearly half the number settled by the federal government in the first five years of the savings and loan meltdown. “And this is just the beginning,” he said.
Forty-three percent of the subprime cases were class-action suits filed on behalf of multiple borrowers, while 44 percent involved disputes between investors or other companies in the mortgage industry.
Prominent in the class-action claims are allegations that lenders failed to adequately disclose the terms of the loans with interest rates that rise sharply after a short introductory period. In other cases, borrowers claim they were discriminated against because of their race and were offered loans with interest rates that were higher than those offered to other racial groups.
Most of the class-action suits, Mr. Nielsen said, have been brought in California, which led the nation in subprime borrowing.
In one New York case, Ronald Anderson, a Brooklyn resident, contends that the Option One Mortgage Corporation induced him “into a financial trap in the form of a mortgage structured to hide extraordinarily high rates.”
Randall S. Newman, the Manhattan lawyer representing Mr. Anderson, said that Option One failed to disclose clearly in late 2004 that the interest rate on Mr. Anderson’s $370,000 mortgage would rise to 10.75 percent from 7.75 percent after 24 months. Mr. Newman said that increase, about $775 a month, was too much for Mr. Anderson to manage. Option One, which is seeking to foreclose against him, declined to comment.
Mr. Newman contends that Option One’s actions violated the federal Truth in Lending Act, which requires lenders to provide certain disclosures about mortgage fees. He said that the loan should be rescinded and Mr. Anderson should be compensated.

DIGNITY FOR ALL STUDENTS ACT FACES STATE SENATE

2008-03-06T08:33:00.001-05:00

On February 27, the New York State passed the Dignity for All Students Act by a large bipartisan majority with a vote of 130-9. The Act will now go to the State Senate.

The Dignity for All Students Act seeks to ensure that all students in public schools have an environment free of harassment and discrimination based on race, national origin, ethnic group, religion, disability, sexual orientation, gender (including gender identity and expression), and sex.

As Empire State Pride Agenda urges: "Students in public schools can not afford to wait for these protections. Just last month, a 15 year-old California student named Lawrence King was murdered in the classroom by a fellow student in what appears to be a hate crime motivated by King’s perceived sexual orientation and gender expression. We cannot let New York become the next state where we lose a student to hate-based harassment and bullying."

You can get involved by writing your State Senator to urge passing of the Act in the State Senate. Learn more here:
http://www.prideagenda.org

REDUCING THE TAX BITE ON HOME SALES

2008-03-04T22:24:00.002-05:00

From the New York Times

By Jay Ramano

MOST co-op and condominium owners know they get income-tax deductions for the mortgage interest and property taxes they pay on their apartments. But what they may not know is the full range of tax breaks available when their apartments are sold.

“As a starting point, many owners of co-ops and condos overstate their profit when they sell because they understate their tax basis,” said Julian Block, a tax lawyer in Larchmont, N.Y. “And that is because they fail to take into account improvements made to the building itself and in the case of co-op owners, their share of the amortization of the building’s mortgage.”

At present, Mr. Block said, owners who sell their houses or apartments can exclude up to $250,000 in profits on the sale, provided the home was their principal residence for two of the five years before the sale. (For married couples filing jointly, the exclusion is up to $500,000.)
The profit — or capital gain — is calculated by subtracting the tax basis of the home and the costs associated with the sale (broker’s commission, lawyer’s fees, transfer taxes) from the sale price. The tax basis is the acquisition price plus the costs associated with the purchase and any capital improvements.

Co-op or condo owners are covered by these rules, just as any other homeowner is. So, for example, an apartment owner who completely renovates the kitchen can add the cost to the tax basis. But an owner who simply paints the kitchen walls cannot add that cost to the tax basis because routine maintenance is not considered a capital improvement.

What is unique for owners of co-ops and condos is that they can include in their basis their proportionate amount of the money spent for buildingwide capital improvements. “Over the years, this can amount to a significant amount of money,” Mr. Block said. Co-op owners get an additional tax break. Along with an annual deduction for interest paid on the mortgage on their apartments, co-op owners also get to increase their tax basis for their share of payments that reduce the principal of the building’s mortgage. This does not apply to condo owners because there is no mortgage on the building itself. “And there is yet another way for a co-op or condo owner to reduce capital gains,” Mr. Block said. Many co-ops and some condos impose flip taxes, often a small percentage of the sale price. Since the flip tax is really a transfer fee, the seller can subtract it from the sale price as a cost of the sale, thereby further decreasing the gain realized.

Joel E. Miller, a Queens tax lawyer, said that since co-ops and condos keep detailed financial records, it should be fairly easy for owners to determine their share of qualifying capital improvements made over the years — as well as their share of the amortization of the underlying mortgage — by getting the information from the managing agent. But he added that it was up to individual owners to keep accurate records of capital expenditures made in their own apartments.

DO IT YOURSELF LEGAL

2008-03-02T21:10:00.003-05:00

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.

MAITENANCE FEES: UP UP UP

2008-02-29T22:49:00.004-05:00

From The New York Times

By Terri Karush Rogers

New York City apartment owners can hardly be blamed for feeling nostalgic, and a little depressed, as they receive their increases in condominium common charges and co-op maintenance fees this year, for many, the fifth or sixth in a row.

In the old days, the fees rarely rose, and then usually by very little. Owners and prospective buyers, rationally or not, expected common charges and maintenance to remain about as constant as their mortgage payments. But six years ago, rising operating costs and property taxes put an end to that.

Average co-op maintenance fees in Manhattan last year were 30 percent higher than in 2002, compared with a 9 percent difference in the previous five-year interval, according to an analysis of residential sales data by Miller Samuel Inc., the Manhattan appraisal company. (Data for other boroughs was not available.) Condos had a 38 percent increase in combined common charges and real estate taxes in the most recent five-year comparison, versus 27 percent in the previous five-year period.

The old yardstick of $1 in maintenance for each square foot in the apartment has gone the way of the nickel candy bar. Doorman buildings in Manhattan now average $1.37 per square foot in maintenance fees or in the case of condos, real estate taxes and common charges, according to Miller Samuel. Buildings without a doorman average $1.22 per square foot. Many brokers selling in Manhattan’s prime residential areas put the range higher — at $1.40 to $1.60 for a doorman building to more than $3 a square foot for ultraluxury buildings.

Surprisingly, the increases have not been met with the loud and bitter complaining that one would expect. “New York is just so strange right now — anytime you go out to dinner or to the dry cleaner, everything costs so much money that nobody flinches anymore,” said Dennis Mangone, a senior vice president at the Corcoran Group. Mr. Mangone recently sold a $13 million co-op at 15 Gramercy Park North with maintenance charges of $13,000 a month. Even he struggled to comprehend the monthly sum: “I’m a simple guy from the Bronx and nothing makes sense. But if they want to have room service at 2 in the morning, they can have it.”

This year, according to several large property managers, many ordinary buildings ended up with another round of 5 to 7 percent increases. As usual, the reasons were largely outside the control of the buildings or their managers. “Co-ops control a very small percentage of their actual costs,” said John R. Janangelo, the president of Bellmarc Property Management. “About 85 percent you really have very little or no control over. Real estate taxes, insurance, payroll, fuel, water and sewer costs make up the vast majority of the budget. The leftover 10 or 15 percent you have some control over, like repair and maintenance costs, your service contracts, your building supplies, the administrative costs.” Unfortunately, prices for nearly every item in the 85 percent category have surged in recent years.

Read the full article here:

http://www.nytimes.com/2008/02/24/realestate/24cov.html?ref=realestate

THE MAGIC NUMBER FOR GETTING A LOAN

2008-02-26T16:10:00.003-05:00

NEW YORK (CNN) -- From mortgages to refinancing and home equity lines of credit -- it's getting harder for people to qualify for a loan. And that makes your credit score even more vital.

Most lenders will look at your FICO credit score. The scores range from 300 to 850. The higher the number, the better credit you have and the lower interest rate you'll get.

Today, you'll need a higher score to get good loan terms. "You really have to have good credit," said Bob Moulton, president of the Americana Mortgage Group. Your credit score may have to be as high as 720 he says. "You can get credit in some places for 680. But that number gets higher every month," according to Moulton. The first step to improving your credit is -- knowing where you stand. You can get a free copy of your report once a year from each of the three credit bureaus at https://www.annualcreditreport.com/cra/index.jsp. This is especially important if you think you will apply for a loan in six months.

Your credit report includes specific account information, like your balance, the date the account was opened and your payment pattern.

Pay close attention to detail. A study done by the U.S. Public Institute Research Group found that 25 percent of the credit reports contained errors serious enough to result in the denial of credit. If you do find an error, make sure to put your complaint in writing, include any supporting documents and send it to the credit bureau. The credit bureau must investigate your claim and update your report if necessary. Keep in mind that your credit report is free, but you'll have to pay for your FICO score -- which will cost you about $15.

When it comes to calculating your credit score, your payment history is one of the biggest factors. So, keep making payments on time. Automate your bills online if it will help you avoid late fees. Even if you've made a few late payments, you can still re-establish a good credit score. The older the negative information, the less it counts against you. "It may be tempting, but don't close old credit card accounts if you want to improve your credit score," says John Ulzheimer of Credit.com.

Your score also takes into account the difference between what credit is available to you and the amount you're using. If you shut down credit card accounts, the total amount of your available credit is lowered and your balances look much larger in comparison. This ratio then hurts your score. Ideally your purchases should be within 10% of your credit limit, said Ulzheimer. For example, if your credit limit is $6,000, don't charge more than $600.

Your FICO score also looks at how long you've been managing credit. So, the longer history you have, the better. If you have a card that you haven't used in a while, it's a good idea to use that credit card once every six months to keep it active, according to Craig Watts of Fair Isaac. This will ensure that your account is included in the calculation of that credit utilization ratio.

Read the full article here:

http://www.cnn.com/2008/LIVING/personal/02/26/credit.repair/index.html

MONROE COUNTY APPEALS SAME-SEX MARRIAGE RULING

2008-02-25T22:24:00.001-05:00

From 13WHAM News, Rochester

Rochester, N.Y.) - Monroe County is fighting a court ruling that changed the way New York State views same-sex marriage.Earlier this month, the state supreme court ruled in favor of a local couple who were legally married in Canada. The ruling said Monroe County Community College (MCC) had no right to deny the couple insurance benefits which were granted to other married couples.

Just weeks ago, Pat Martinez and Lisa Golden felt very good about a “safety net of protections” that came as part of a ruling that forced the State of New York to recognize the womens' Canadian marriage."I knew we would end up winning at some point, if not here, than on appeal," Martinez originally said.Now it's Monroe County that hopes to win on appeal.Monroe County Executive Maggie Brooks said, "In this particular case, we're letting people in Ontario, Canada define marriage for people who live in New York State. I don't think that's appropriate." Brooks said, "We believe...the ruling ...is a misinterpretation of law...this could set up a very expensive legal precedent that impacts not just government as an employer, but every employer...every entity that provides benefits across this state."

Martinez's lawyer Jeffrey Wicks sees the appeal as nothing but political. "My sense is that their conservative, Republican base is screaming, ‘Appeal this!’ …and that, in my view, is why the county is appealing this, not because of any legal considerations," Wicks said."You're going to get all kinds of interpretations of why Maggie Brooks, that Republican, conservative County Executive...is appealing a ruling of this nature…I can assure you that our decision to appeal was not based on any moral judgment," Brooks said.Monroe County's appeal puts the insurance benefits granted to Martinez and her mate --on HOLD.The matter is now up to the state's highest court, the Court of Appeals-- to decide if this appeal will be heard. At the state Supreme Court level, the ruling was unanimous--in favor or Martinez.

PROTECTING ELECTRONIC BUSINESS RECORDS

2008-02-20T22:19:00.004-05:00

Many of my clients who operate small businesses or work as consultants are being asked to sign agreements with their clients which state that will protect their business records with adequate security measures. The Small Business Section of the New York Times has a great article on the alternative services out there.

from the New York Times February 20, 2008

By DAVID STROM

PROTECTING the electronic records of your business has gotten easier and more affordable, thanks to services that can make backups of computer files across the Internet.

These services are useful for three reasons. First, for a few hundred dollars a year, you can buy inexpensive protection for disaster, fire or theft. Second, they can work automatically so you don’t have to remember to make backups. Finally, once they are set up they don’t take a lot of skill to maintain.

The trick is figuring out which backup provider offers the right combination of services, support and price for you and protects all the computers on your network. Before you decide, find out if a free version is available and what its limits are. Generally there is a 15- or 30-day trial period, and some have free versions with capacity limits but no restrictions on use. America Online’s Xdrive (xdrive.com) offers five gigabytes of free storage for each user, and can store up to 50 gigabytes for $100 a year. EMC’s Mozy (mozy.com) has a free version that works on both Windows and Macintosh computers and can store up to two gigabytes on two PCs. The more capable paid version is available only for Windows.

It’s a good idea to try out a service to see how long it takes to make a complete backup of each computer you want to protect. In some cases, the first backup will take hours, if not days, because of the speed of the Internet connection between your computer and the service provider. Keep this in mind when you have to do a full restore, too — can you operate without a system for the time it takes to do the restoration?

Another important issue is whether the service performs the backups automatically. These methods are better because ultimately you will forget to make your backups. The level of automation can range from a schedule to having your files copied as you create and modify them. Microsoft’s Live OneCare (live.com), MozyPro and Acpana Business Systems Data Deposit Box (datadepositbox.com) are just a few offering this service.

A related matter is which files are protected with automation: some make copies only of what is located in the My Documents file rather than copies of the entire hard disk.
Be sure to read the fine print about what is offered. Some services, like MediaMax (mediamax.com), Drive Headquarters (drivehq.com) and Apple’s iDisk (apple.com/idisk), limit how much data can be uploaded over a month for particular plans. After exceeding these limits, you have to pay more for your storage.

Read the full article here: http://www.nytimes.com/2008/02/20/business/businessspecial2/20storage.html?_r=1&scp=1&sq=SO+MUCH+DATA&st=nyt&oref=slogin

REPORT: NJ CIVIL UNIONS MAKE "SECOND CLASS STATUS"

2008-02-19T07:40:00.009-05:00

From Associated Press:
By GEOFF MULVIHILL
Associated Press Writer
9:13 PM EST, February 16, 2008

A commission established to study same-sex civil unions in New Jersey has found in its first report that civil unions create a "second-class status" for gay couples rather than giving them equality. The report stops short of recommending that the state allow gay marriage. But it does find that gay couples in Massachusetts, the only state that now allows gay marriage, do not experience some of the legal complications that those in New Jersey do.

The Associated Press has obtained a copy of the initial report, which was scheduled to be made public on Tuesday, the one-year anniversary of the state's first civil unions. State lawmakers made New Jersey the third state to offer civil unions with a law adopted in 2006 in reaction to a state Supreme Court ruling that year that found gay couples were entitled to the same legal protections as married couples. The civil union law sought to give gay couples those benefits but not the title of marriage. As a part of the same law, the review commission was created to look into whether it was working. Gay rights advocates say the civil unions do not deliver and have pledged to push lawmakers to vote to allow gay marriage. Gov. Jon S. Corzine has said he would be willing to sign such a bill into law, but doesn't want the issue to be taken up before the presidential election.

The activists say that civil unions, in practice, do not offer the legal protections that marriage does. The commission largely agreed with them. The commission held three public hearings last year where the majority of the testimony came from people who were in civil unions and said they were still not being treated the way married couples are by government agencies, employers and others. For instance, the commission finds that many companies in the state that are self-insured, and therefore are regulated by federal rather than state law, refuse to provide health insurance to the partners of their employees. While employers in Massachusetts could legally do the same thing, most do not, according to the report. The commission also finds that many people in the state do not understand civil unions. "Civil union status is not clear to the general public," the report says, "which creates a second-class status." The commission's report says the misunderstanding of civil unions makes it more difficult for a child to grow up in New Jersey with gay parents, or to be gay themselves.

Through Jan. 19, 2,329 couples had received civil union licenses, according to the state Health and Senior Services Department. Some social conservatives have said that the commission is slanted in favor of allowing gay marriage. The commission's 12 members included four appointed by the governor and two each appointed by the president of the state Senate and the speaker of the state Assembly. Among those public members are some of New Jersey's more prominent gay rights advocates. The other six members represent state government departments, such as the Office of the Attorney General and the Department of Banking and Insurance. Opponents of gay marriage have been pushing back in New Jersey. Roman Catholic churches around the state have been planning special prayers on marriage for Sunday. A major aim is to promote marriage as being between only a man and a woman. A conservative Princeton-based group, the National Organization for Marriage, has aired radio commercials that say allowing gay marriage would undermine some religious teachings that homosexuality is wrong.

JITTERS FOR FIRST-TIME HOMEBUYERS

2008-02-18T11:51:00.009-05:00

from the New York Times

By CHRISTINE HAUGHNEY

IF there is a bright spot in New York City's uncertain real estate market, it is that over the last several months, some first-time buyers have found it easier to buy apartments.

With mortgage rates low and prices steady, some of these buyers are getting apartments at the most favorable prices and terms in years. “I haven’t seen a better time to be a first-time buyer in about a decade,” said Sarah Burke, vice president for sales and marketing at the Developers Group, a sales, marketing and brokerage firm based in Brooklyn.

“First-time buyers have time to get their ducks in a row. A year ago, there were a lot of people who all wanted the same apartment. You have time now to really review the contract with an attorney. You have time to ask questions. You don’t need to decide on the spot.”

But as attractive as mortgage rates are, getting approval for one is becoming much more difficult. Based in part on reports across the country that even some borrowers with strong credit are in danger of defaulting on loans, lenders are scrutinizing first-time buyers’ credit and employment histories. “First-time home buyers don’t have track records,” said Melissa Cohn, president of the Manhattan Mortgage Company. “Banks are scrutinizing the first-time home buyers more heavily to make sure that they can make the payments.”

Still, in New York, while such attention has delayed and even jeopardized some closings, sales are strong for studio and one-bedroom apartments, typically first-time buyers’ entry into the market. Jonathan Miller, the executive vice president and director of research at Radar Logic, a real estate research company, said that such apartments make up more than half of the Manhattan sales market. In the fourth quarter of 2007, 55 percent of the 2,518 apartments sold in Manhattan were studios and one-bedrooms. That, in turn, is good news for many sellers, who are happy to find purchasers not obliged to sell their own home before buying a new one.

Conversely, first-time buyers who run into snags and delay closings can hold up the sellers. “It plays a very important role in the health of the real estate market,” Mr. Miller said. If first-time buyers are “having a hard time, then all segments are having a hard time.” Greg Kochanov, 27, an agent for Halstead Property in the Bronx, found an apartment in Riverdale, his first real estate purchase, and also discovered just how much credit scores matter, especially when they dip below 700. (Credit scores range from 500 to 850; scores of 700 or more make it easier to get a mortgage.)He set his sights on a 600-square-foot studio for sale for $105,000 at 2500 Johnson Avenue. He knew that the apartment, an estate sale, needed extensive work. But he expected the value to rise drastically after he fixed it up. It’s in a desirable co-op building within walking distance of shopping and a Metro-North station. The building has amenities like a gym and swimming pool, and the maintenance is a low $550 a month.

In July, Mr. Kochanov reached a deal to pay $100,000 for the apartment and put down a $20,000 deposit. He wasn’t concerned about passing the co-op board interview because he had another $33,000 in savings, which would demonstrate that he could afford his monthly payments even if he lost his job. In August, he applied for a mortgage. With a credit score slightly higher than 700, he was accepted within three weeks. But then his mortgage broker told him that the lender had gone out of business and that the process would have to start over. By then, his credit score had dipped below 700. Mr. Kochanov said his score had dropped because he had opened one credit-card account, had closed a second account and had had multiple credit checks because he had applied for a mortgage and had rented a new apartment. (He hadn’t planned on buying and thought he would rent so that he could save more money to buy. But then he found a deal.) He finally received a conditional mortgage commitment on Sept. 25.

By November, he was approved by the co-op board and was ready to close. But then his lender decided not to give him a mortgage because of his credit score. He had until Dec. 10 to find a mortgage with another bank, or he risked losing his $20,000 down payment. “I really thought I lost the deal,” Mr. Kochanov said. Three days before his deadline, he got a mortgage and closed. But Brian Cohen, the sales supervisor with Wells Fargo Home Mortgage who made the loan, said it wasn’t easy because of Mr. Kochanov’s credit score. “A while ago, with his credit score, it would have been fine,” he said. Now Mr. Kochanov won’t show apartments to first-time buyers until he knows that their credit scores are over 700 — he is too concerned they won’t get mortgages. “The best thing for a buyer right now is to know where they stand,” he said. “Because it’s just going to waste everybody’s time.”

Read the full article here: http://www.nytimes.com/2008/02/17/realestate/17cov.html?_r=1&scp=1&sq=first+time+jitters&st=nyt&oref=slogin

WHY PERFECT DATES MAKE LOUSY PARTNERS

2008-02-13T15:04:00.004-05:00

TOPIC: SOCIAL DEVELOPMENTS

from MSNBC, February 12, 2008

Want to be in a committed relationship? Pick the socially-awkward type.

The best "catches" in dating land may be the worst choices in the long-run, new research shows.
Popular people who monitor themselves carefully in social situations and thereby appear to be the most socially appropriate are often highly sought after as romantic partners, a study finds, but these people show less satisfaction and commitment in relationships than socially-awkward people.

By self-monitoring, people assess how their actions affect others and adjust to fit the appropriateness of the situation. They screen their words and behavior to suit the people around them.

"High self-monitors are social chameleons," said Northwestern University professor of communication studies Michael E. Roloff."And, because they're quick to pick up on social cues, are socially adept and unlikely to say things upsetting to others, they are generally well-liked and sought after." Self-monitoring is often a helpful attribute.

"Research finds [self-monitors] to be excellent negotiators and far more likely to be promoted at work than their low self-monitoring peers,” Roloff said.
But there’s a downside for high self-monitors when it comes to their romantic relationships.

"High self-monitors may appear to be the kind of people we want to have relationships with, but they themselves are less committed to and less happy in their relationships than low self-monitors," Roloff said.

Read the full article here:

http://www.msnbc.msn.com/id/23128715/

HIGH SCHOOLERS SPAR WITH ROVE OVER GAY MARRIAGE

2008-02-12T15:01:00.001-05:00

TOPIC: SOCIAL DEVELOPMENTS

from ThinkProgress.ORG

February 12, 2008

"During his controversial speech at New England prep school Choate Rosemary Hall yesterday, former Bush adviser Karl Rove was challenged by a student “to explain how giving gay people the right to marry would endanger other people.” Rove dodged answering her at first, saying that the issue “should be resolved by a legislature or a referendum, not a court.” But the student, Choate senior Marla Spivak, continued to press him:Spivak kept pressing. “You never actually answered, how does it threaten anyone?” she asked.
Rove asked, what’s the compelling reason to throw out 5,000 years of understanding the institution of marriage as between a man and a woman?
What, Spivak countered, was the compelling reason for society to allow interracial relationships when they had once been outlawed.
Then Rove invoked the Declaration of Independence before Spivak interjected that its reference to “life, liberty and the pursuit of happiness” seemed to support her claims.
Eventually, Rove wiggled out of the debate by asking Spivak “when she planned to run for political office.”

LOVE ME, LOVE MY APARTMENT

2008-02-12T08:28:00.001-05:00

TOPIC: REAL ESTATE

So love is in the air this week. Or so the Hallmark corporation says.

New York City is unique in that relationships can often be accelerated simply due to the high cost and scarcity of real estate. Couples end up moving in together way before the annointed hour. The New York Times has a great article on this phenomenon. Note that if you, or someone close to you, is in an "accelerated relationship" it is vital that you execute a "living together" agreement to memorialize the financial agreement between the parties.

From the New York Times

February 10, 2008
Love Me, Love My Apartment
By VIVIAN S. TOY

REAL ESTATE in New York City has a way of looming large in matters of the heart.

Some couples move in together rather quickly just because a lease has run out. Some can’t decide who moves where because neither wants to give up a good deal on an apartment. Others make the leap and marry because they fear that a co-op board will reject them if they are just living together. And there are people who rule out potential partners simply because of where they live.

Fabulous apartments at equally fabulous prices are so hard to come by in New York that the possession of one, or lack thereof, can easily tip the balance in a relationship. While major life changes like marriage and children influence real estate decisions in all parts of the country, the scarcity of New York real estate bargains actually seems to cause life changes, or at least push them along.

“Real estate can define relationships in New York,” said Pam Fica, an agent with DJK Residential. Moving in together, for example, becomes an issue here sooner than it might elsewhere. “When you hit the one-year mark and you’ve said the ‘I love yous,’ then what?” she said. “In other places, you can afford to keep your own place, but here, everything is so expensive, you ideally want to be able to share the rent. So if you’re not talking about it, you start to wonder: What’s wrong with this relationship?”

And since New Yorkers tend to live in tight quarters, being able to share that space is often seen as the ultimate test for a relationship. Conversely, this may be the reason that relationships sometimes don’t last in New York. “I know people who figure if they can survive living in a studio or a small one-bedroom in forced closeness, then they know they can stay together,” said Amy Herman, an agent with Halstead Property.

That’s precisely what Vincenzo and Cynthia Roberto thought when he moved into her one-bedroom last January after having dated her for only three months. Seven months later, they married.
Mr. Roberto, who is an accountant, first suggested the idea of living together when a colleague asked if he knew of an apartment he could sublet for a month. “I said to Cynthia, ‘How about I sublet my place, and we could try to live together for a month?’ ” he said. Ms. Roberto, who works at Alessi, the Italian design company, said she agreed because “I was 36, and I didn’t want to waste time figuring out if he’s the one.”
Then “one month became two months, then three months, then six months and then I proposed to her,” said Mr. Roberto, 32. They were married in a civil ceremony last August, and they are now planning a big wedding this summer in Bari, Italy, which is Mr. Roberto’s hometown and coincidentally also the birthplace of both of Ms. Roberto’s parents.
But hasty real-estate-related decisions don’t always work out so happily. Ms. Fica, the DJK agent, said she had a client who initially planned to buy a modest one-bedroom in a condo under construction. But then he and his girlfriend decided to pool their money and buy a much more expensive penthouse.
“I told him I didn’t think it was a good idea because they’d only been together for a few weeks,” she said. But he felt certain that their relationship would last, and besides, at the suggestion of the girlfriend’s father, they had already drafted a plan for her to buy him out if they broke up.
“So they had an exit strategy, just like a pre-nup,” Ms. Fica said.
Fast forward 12 months to late 2007, when the building was finally completed. About a month after the couple moved in, the client called Ms. Fica to say they had broken up and he needed to find a rental. “All of a sudden he was apartment-less and furniture-less because he had sold all his things so they could buy new furniture together,” she said.
Her advice to buyers: “Don’t buy something with someone you just met.”

Read the full article here:

http://www.nytimes.com/2008/02/10/realestate/10cov.html?_r=1&st=cse&sq=real+estate&scp=5&oref=slogin

BEFORE RUSHING (OUT OF STATE) TO THE ALTAR....

2008-02-08T16:03:00.000-05:00

by Sean Hayden, Esq.

This past week, a New York State appeals court ruled that a New York college was required to recognize an employee's same-sex marriage which was performed in Canada for purposes of conveying health care benefits to the employee's partner. The ruling recognizes New York’s “marriage recognition rule” which requires that marriages which are validly performed in other jurisdictions must be recognized within the State of New York. Read the full opinion of Martinez v. MCC here:

http://www.13wham.com/media/news/a/6/b/a6be7b97-54df-4543-8752-d2ff9507ae73/Martinez_ADdecision.pdf

(As of this writing, Massachusetts is the only U.S. state offering same-sex marriage. Six U.S. states offer civil unions or domestic partnerships: Vermont (2001), Connecticut (2005), New Jersey (2007), and New Hampshire (2008). Domestic partnerships are offered in California (2000) and Oregon (2008). Several other states also offer some recognition of state rights for same-sex couples: Hawaii (1997), Maine (2004), Oregon (2008), Washington (2007) and District of Columbia (2002). Several countries offer same-sex marriage, namely the Netherlands, Belgium, Canada, Spain and South Africa , and numerous countries offer civil unions.)

Read about the same sex relationship recognition landscape here:

http://www.marriageequality.org/meusa/facts.shtml?marriage-status

Accordingly, some of my clients this past week have inquired whether it would be useful to rush to the altar in an outside jurisdiction. Before making that trip, you may want to think hard about the implications of your vows.

First, the recent New York decision recognizing same-sex marriages outside of New York is an appellate court decision. While the decision is encouraging, it is not yet the definitive word on the subject as it may be appealed and could be overturned by New York’s highest court.

Second, some states/countries actually have residency requirements to engage in a civil union/marriage (i.e. Massachusetts). However, more alarming is the fact that some states/countries have a residency requirement to dissolve a civil union or to obtain a divorce from a marriage. For instance, Canada and Vermont both require one party to live in the state for a full year before divorce/dissolution can be obtained. Yikes! (I have consulted with clients who traveled to an outside jurisdiction to exchange vows yet had no idea about the residency requirement for dissolution. )

It is also imperative that a same sex couple consult with an attorney prior to exchanging vows to ensure that the rights that are conveyed by the civil union or marriage are indeed the rights that the couple wants to claim. For example, a civil union or marriage could convey certain property rights or claims for support which two partners do not intend. If such is the case, the couple will want to execute a prenuptial agreement to “opt” out of the unwanted rights as well as to make provisions for fulfilling a residency requirement if applicable.

Finally, keep in mind that regardless of any outside union by another jurisdiction, federal rights will still not be conferred anytime soon. In 1996, the Clinton Administration under Bill Clinton's pen signed into law the Defense of Marriage Act (DOMA) which defines marriage as a union between a man and a woman. Thus, the over 1100 federal benefits, including tax benefits, conferred on married heterosexual couples cannot be conferred to a same-sex couple despite having a valid same sex civil union or marriage conferred by a state or an outside country.

Remember, the law in this area is changing every day. You will want to confer with an attorney who is knowledgeable in this area so that your trip down the altar will be all the things you dream of. A long year sitting out the Canadian winter may not be one of them.

SO WHAT'S GOING ON WITH SAME SEX MARRIAGE WITHIN NEW YORK?

2008-02-07T23:06:00.000-05:00

by Sean Hayden, Esq.

In light of the recent appellate decision recognizing same-sex marriages performed outside the State of New York, many of you have inquired this week regarding the status of recognition of same-sex marriages performed within New York.

Flashback to 2006: In Hernandez v. Robles, the high court of New York decided that the state's Domestic Relations Law limits marriage between a man and a woman and that such limitation does not violate the state's constitution. Accordingly, the court ruled that State of New York can exclude same-sex couples from the right to marry. Read the full opinion here: http://www.courts.state.ny.us/ctapps/decisions/jul06/86-89opn06.pdf

Following the defeat by the judiciary branch, the battle for same-sex marriage switched to the legislative branch. After Elliot Spitzer's election as Governor of New York, legislation introduced by Spirtzer was passed in June 2007 by the Democratic controlled New York State Assembly. However, after moving to the Republican controlled Senate, Republican Majority Leader Joseph Bruno refused to schedule debate on the marriage bill and it subsequently died.

Bruno and other Senate Republicans have now been targeted by the Human Rights Campaign and other marriage equality groups. The following recent Newsday article details the current strategies being enlisted by HRC and other groups to change the leadership in the Senate so that a future marriage equality bill will fare better.

Read the Newsday article here:
http://www.newsday.com/news/printedition/longisland/ny-limarr245549571jan24,0,409479.story

STATE COURT RECOGNIZES GAY MARRIAGES FROM ELSEWHERE

2008-02-02T10:34:00.000-05:00

from the New York Times

February 2, 2008
State Court Recognizes Gay Marriages From Elsewhere
By ROBERT D. McFADDEN

A New York appellate court ruled Friday that valid out-of-state marriages of same-sex couples must be legally recognized in New York, just as the law recognizes those of heterosexual couples solemnized elsewhere. Lawyers for both sides said the ruling applied to all public and private employers in the state.

Even though gay couples may not legally marry in New York, the appellate court in Rochester held that a gay couple’s 2004 marriage in Canada must be respected under the state’s longstanding “marriage recognition rule,” and that an employer’s denial of health benefits had discriminated against the couple on the basis of their sexual orientation.

“The Legislature may decide to prohibit the recognition of same-sex marriages solemnized abroad,” a five-judge panel of the Appellate Division of State Supreme Court ruled unanimously in rejecting a 2006 lower court decision. “Until it does so, however, such marriages are entitled to recognition in New York.”

For more than a century, the court noted, New York State has recognized valid out-of-state marriages. Moreover, it said that the Court of Appeals, the state’s highest judicial body, has said the Legislature may enact laws recognizing same-sex marriages. “In our view, the Court of Appeals thereby indicated that the recognition of plaintiff’s marriage is not against the public policy of New York,” the court held.

As a practical matter, the marriages of thousands of gay couples entered into outside the state have been recognized in recent years by many state and local agencies and by private employers for purposes of allowing health and life insurance coverage, child care and other benefits. But others have resisted doing so voluntarily, pending the outcome of numerous cases in the courts.
Friday’s ruling, legal experts said, was the first by an appellate division court, and would make the recognition of valid out-of-state gay marriages mandatory across New York. It was not clear whether Monroe County and Monroe Community College in Rochester, the employer in the case, would appeal.

Daniel DeLaus Jr., the county attorney for Rochester, said his office was reviewing the decision and would decide whether to seek an appeal. Jeffrey Wicks, a lawyer who represents the plaintiff, Patricia Martinez, said that New York had recognized common-law marriages, even marriages of closely related people that might not be allowed in the state. “There’s a long tradition in New York of recognizing marriages that couldn’t be performed in New York,” he said.

The New York Civil Liberties Union, which represented Ms. Martinez, a word-processing supervisor at the college, hailed the ruling. The union called it “the first known decision in the country to hold that a valid same-sex marriage must be recognized.”

“This is a victory for families, it’s a victory for fairness and it’s a victory for human rights,” said Donna Lieberman, executive director of the N.Y.C.L.U. “Congratulations to all same-sex couples validly married outside of New York State: You are now husband and husband, wife and wife. Now we need to work toward a New York where you don’t have to cross state or country lines to get married.”

The New York City Council speaker, Christine C. Quinn, the first openly gay leader of the Council, also applauded the ruling. “If this is saying companies have to do it, it’s a tremendous step forward in recognizing the diversity of families in New York City.”

New York City already extends marriage benefits to workers in domestic partnerships, and under a law passed in 2002, it provides all city benefits and services to same-sex couples whose unions are recognized by other jurisdictions. But the city has no power to impose such rules on private companies.

In 2004, the Council adopted legislation sponsored by Ms. Quinn that would have required large companies doing business with the city to provide equal job benefits to domestic partners. Mayor Michael R. Bloomberg vetoed the bill, and while the Council overrode the veto, the mayor said it violated state and federal laws and would prove costly to taxpayers. He sued successfully to block it in a case decided in 2006 by the Court of Appeals.

Mayor Bloomberg’s office declined to comment on Friday’s ruling, saying it had not seen the decision. Attorney General Andrew M. Cuomo also declined to comment, noting that his office may be involved in an appeal as the traditional defender of state agencies. Monroe Community College is a branch of the State University of New York.

In the past, Mr. Cuomo has said that state law requires that marriages performed in other states, and in Canada, be recognized in New York. In the case before the appellate division in Rochester, Ms. Martinez and her partner, Lisa Ann Golden, formalized their longstanding relationship in a civil union ceremony in Vermont in 2001, and were married in Ontario on July 5, 2004. A few days later, Ms. Martinez applied to Monroe Community College for health care benefits for her spouse. In November 2004, the college’s director of human resources, Sherry Ralston, denied the application, contending that the state did not recognize the marriage as a matter of law and public policy. Ms. Martinez sued in 2006, arguing that her constitutional and civil rights had been violated. A State Supreme Court justice, Harold Galloway, dismissed the lawsuit in August 2006, saying the state did not recognize same-sex marriages. The state, he wrote “currently defines marriage as limited to the union of one man and one woman.”

But the appellate court disagreed, citing the century-old “marriage recognition rule” applying to heterosexual couples and noting that the Court of Appeals had implied that the Legislature could adopt a law legalizing same-sex marriage. In early 2006, the court said, Monroe Community College had begun extending health-care benefits to Ms. Golden under a new contract provision. However, the judges held, the plaintiff was entitled to unspecified monetary damages for the period during which the benefits were wrongly denied.

Danny Hakim and Ray Rivera contributed reporting.

CLOSING ON THE TARGET

2008-01-24T21:40:00.001-05:00

TOPIC: BUSINESS

by Sean Hayden, Esq.

I am a huge James Bond fan. Huge. This week the producers of the 22nd James Bond film announced the title for the new film to be released later this year. And the winner is...(drumroll)“Quantum of Solace.”

Ahem… “Quantum of Solace?” Really?

I have stared at this title for about five minutes and I still don’t know what that means.

When it comes to my James Bond, I know what I want. I want my secret agent, some gadgets, the girls (one of whom will double cross Bond in the third act of the film) and some exotic locales. And... I want a title with a tinge of danger that easily fits into a great theme song laced with minor chords. I can’t imagine anyone singing “Quantum of Solace” as it rolls right off the tongue.

Sometimes you can simply overcomplicate things.

When its come to negotiating your business interests, whether its a partnership agreement, a coop purchase or a business acquisition, you have to keep your eye on the target. You have to ask yourself what is it that you really want and work towards that goal.

Unfortunately, many times your lawyer can get in the way of that happening. Attorneys are trained to be argumentative and some stretch this trait to the detriment of the client. The out of control attorney can overcomplicate things by "over-lawyering." Plenty of deals have been killed because someone's attorney became trigger happy over the fine print. Most of the time when the lawyering gets out of control, the only parties benefiting are the attorneys who are racking up their fees. Bond would call this "collateral damage." I call it a disaster.

So, how do you prevent this? First, you as the client have to decide what is important to you and what is not. Decide what you need and when are you willing to walk away. Then convey your goals to your counsel.

Second, you simply have to maintain control over your attorney. After all, you are the client! Ask questions. Stay in the loop of communication. If your attorney is stubborn on a point, make him or her explain to you why it is important. If you're not convinced and he won't budge, it's time to move on and hire new counsel! Preventative legal counseling with regard to material matters that will help you in future is one thing. But you don't want a deal breaker for your counsel. You want a deal maker.

Keep it simple and focus on the target. Maybe that’s just a good philosophy for life.

At least there's still time for those Bond people to change that title.

SAVING SAME-SEX RELATIONSHIPS

2008-01-23T22:52:00.000-05:00

TOPIC: SOCIAL DEVELOPMENTS

Time magazine writer John Cloud reflects on his breakup with his partner of seven and one half years and muses why gay and lesbian relationships end sooner than heterosexuals. “Legalizing same-sex marriage would probably help prolong gay relationships, if only because of the financial and legal benefits married couples enjoy. Federal benefits are unavailable to lesbian and gay couples even in Massachusetts, the only state that allows those couples to obtain marriage licenses,” he writes.” But there’s also a myriad of social influences that one has to consider as well.

Read the full article here:

http://www.time.com/time/magazine/article/0,9171,1704660-1,00.html

DIY LEGAL

2008-01-22T16:41:00.000-05:00

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.

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.”

CO-OPS REAP UNEXPECTED BONANZA

2008-01-21T12:10:00.000-05:00

TOPIC: REAL ESTATE

From the New York Times

January 20, 2008
Co-ops Reap Unexpected Bonanza
By VIVIAN S. TOY

FOR years, some New York City co-ops that have retail space in their buildings have been doing the unfathomable. They have rented out their commercial space at bargain rents, and to make sure they weren’t making too much money on the spaces, they have even occasionally given back thousands of dollars to tenants at the end of the year.

They have done so because of the 80-20 rule, a federal tax regulation that requires residential co-ops to get at least 80 percent of their gross income from tenant-shareholders and no more than 20 percent from other sources like commercial tenants.

But a change in the law modified those rules late last year, and co-op boards are now busy making sure they are getting every penny possible from their commercial space.
“This change will be a bonanza for co-ops with retail space,” said Richard Siegler, a Manhattan co-op and condominium lawyer. “Co-ops will be able to take in additional income, but the real beneficiaries will be shareholders, because now that buildings can pay expenses with rental income from commercial spaces, shareholders will get lower maintenance charges.”
Before the change in the law, buildings that fell off what was known as the “80-20 cliff” would lose their legal status as co-ops, and shareholders would lose the tax benefits granted to homeowners. But the new rules essentially allow all co-ops to keep their tax benefits without giving up rental income or going through financial and legal gyrations to stay on the safe side of the 80-20 rule.

Some brokers see benefits from the changes beyond the here and now. Richard Grossman, the executive director of downtown sales for Halstead Property, said that buildings would be able to pay for a high level of service without raising maintenance fees and that this “translates into higher values for the apartments.”

Read the full article here:

http://www.nytimes.com/2008/01/20/realestate/20cov.html?_r=1&scp=1&sq=co-ops+reap+unexpected+bonanza&oref=slogin

GAY COUPLES AN EXAMPLE TO STRAIGHT COUPLES

2008-01-18T18:23:00.000-05:00

TOPIC: SOCIAL DEVELOPMENTS

from United Press International

SAN DIEGO, Jan. 14 -- Studies of lesbian and gay couples reveal some key factors that may promote healthier relationships in straight couples, a U.S. psychologist says.Psychologist and researcher Robert-Jay Green of the Rockway Institute and of Alliant International University in San Diego says the studies of lesbian and gay couples found that the homosexual couples had flexibility about gender roles and an equal division of parenting and household tasks.

In a series of studies Green conducted with Michael Bettinger and Ellis Zacks, lesbian couples were found to be emotionally closer than gay male couples who, in turn, were found to be emotionally closer than heterosexual married couples. "It all comes down to greater equality in the relationship," Green said in a statement. "Research shows that lesbian and gay couples have a head start in escaping the traditional gender role divisions that make for power imbalances and dissatisfaction in many heterosexual relationships."Heterosexual couples could learn from gays couples about sharing housework and childcare, using softer communication in conflict and having more nurturing behaviors toward one another and their children, the researchers conclude.

THE INCREDIBLE REVOCABLE LIVING TRUST

2008-01-15T22:57:00.000-05:00

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!

PREDICTING NYC REAL ESTATE 2008

2008-01-15T17:37:00.000-05:00

TOPIC: REAL ESTATE

The question on everybody's mind these days is how will the New York real estate market fare in 2008. As a real estate attorney, I can attest there is currently still quite a bit of activity going on between buyers and sellers. However, perhaps the climate is not as frenzied (and not bordering on the insane) as we saw in past seasons. Buyers and sellers are more measured and deliberate in their decisions. Most seem to agree we should see a slight softening in the market in the coming year with scales tipping towards a buyer's market. Read both sides of the argument below from last Sunday's New York Times real estate section or click the link below for the full article.

"New York City may not follow the rest of the country into a slump, but there are signs that the market could become more tempting to buyers."

"LOOKING back, 2007 was supposed to be the year that the Manhattan residential real estate market slowed down and began to look a bit more like the slumping national market.

But that didn’t happen. While there were periods when condominiums and co-ops sat unsold because buyers and sellers couldn’t agree on prices, the year ended with the average price of a Manhattan apartment rising to a record $1.4 million, though the number ballooned in part because so many wealthy buyers purchased extraordinarily expensive condos.

No one is predicting that 2008 will be a repeat of 2007. The sprawling pieds-à-terre may still sell for millions at the Plaza and 15 Central Park West, but in general, economists are predicting that prices will drop in some segments of the market and in some neighborhoods around the city.

“New York has had a very good run, and there are still a lot of people sitting around with cash,” said Christopher Mayer, the Paul Milstein professor of real estate at Columbia Business School. “But that doesn’t last forever.”

There are already signs of a more sober market ahead: Wall Street workers may face leaner bonuses this year and in years to come, borrowers may have a harder time getting mortgages and foreign buyers may reconsider the potential returns of investing in New York.
Mr. Mayer said that a national recession could weaken Manhattan prices even further because fewer workers could afford to buy in the borough.

Diane M. Ramirez, president of Halstead Property, is less concerned about a recession because the inventory of property on the market is currently low. She said that in the recession of the late ’80s, Manhattan dropped sharply because the city had an oversupply of apartments. “We had a deeper, longer recession than most cities,” she said. “We lost 20 to 50 percent value.”

Read the full article here: http://www.nytimes.com/2008/01/13/realestate/13cov.html?scp=2&sq=+real+estate

CHOOSING AN ATTORNEY

2008-01-14T23:34:00.000-05:00

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!

SELLING REAL ESTATE THAT IS PART OF AN ESTATE

2008-01-11T16:49:00.000-05:00

TOPIC: REAL ESTATE/TRUSTS & ESTATES

The New York Times examines how to handle the sale of real estate when a loved one passes away....

How to Approach an Estate Sale

By TERI KARUSH ROGERS
Published: January 6, 2008

EVEN when heirs and executors move in harmony, estate sales can lumber along at an achingly slow pace.It can take at least several months for wills to be probated by courts, even though the apartments are often put on the market before probate is completed. Communication and consensus among geographically scattered heirs and executors eat up time and can hobble negotiations with the buyer. For this reason, and because an executor is legally obligated to obtain the best possible price, buyers should be cautious about lowballing, said Daniela Kunen, a managing director at Prudential Douglas Elliman. “Play less games with an estate,” Ms. Kunen said. She also noted that in an estate transaction, an accepted bid is really not accepted without a signed contract, because an executor must take the highest price that comes in from a qualified buyer. Finally, closings can be delayed by heirs who drag their feet cleaning out a loved one’s apartment, by lost stock certificates and by the failure to obtain proof that estate taxes have been paid. With planning, conflict among heirs and delayed sales can be minimized. To keep conflict from hijacking a transaction, “it’s absolutely better if the executor is not a family member,” said Jacky Teplitzky, a managing director at Prudential Douglas Elliman. Estate planning lawyers emphasize the importance of coming up with an estate plan that minimizes the ability of people to fight."

Read the full article http://www.nytimes.com/2008/01/06/realestate/06csid.html?_r=1&scp=9&sq=trusts&oref=slogin