Tag Archives: real estate

What is Privity?

Legal speak can sound much like gobbledygook, and many of us simply ignore the terms that are bandied about. What do they even mean? Privity is one such legal term, but if you’re involved in a landlord/tenant relationship, it’s time to take a closer look.

Privity

Privity refers to a direct, close, or successive relationship, which incorporates mutual interests and rights, such as a landlord/tenant relationship. The law that governs landlord/tenant relationships allows both landlords and tenants privity of contract and privity of estate.

Privity of Contract

Privity of contract allows either party in a contract to enforce the promises made by the other party. When you rent from a landlord, for example, you are both in privity of the promises set forth by the contract (or lease). If you’re owed the duty of repairs on the property you rent, you have the right to enforce this repair promise. If your landlord, however, hires a contractor to make the repairs and that contractor fails to comply, you have no privity of contract with the contractor and, thus, have no legal right to seek recovery from the contractor. Both the landlord and the contractor, however, have privity of contract with each other.

Privity of Estate

Privity of estate allows both you and your landlord to enforce those promises that are connected to the substance and the concerns of the premises. These promises must relate directly to the use, occupation, or enjoyment of the premises.

For example, your landlord can sell or pass the property you rent to a successor, and that successor will then have privity of estate with you and will be able to continue to enforce the provisions outlined in your contractual lease – including your obligation to make specified repairs, to pay rent, to purchase insurance, and to pay taxes. As a tenant, on the other hand, you will have the right to enforce the contractual promises of the successor. These include your right to enjoyment of the property, to tenant’s option rights, to rights of exclusivity, and to rights of extension.

Assignment of Lease

If you, as the tenant, go on to assign your lease to someone else, privity can become an important issue. If the assignee doesn’t assume the lease and if your landlord is unaware of this assignment, the landlord and the assignee will have no privity with each other and neither will be able to enforce the contractual promises of the other. Typically, lease contracts include default terms for such occurrences, but that isn’t always the case.

Sublease

If you were to sublease the property you rent – and thus reassign less than the premise’s entirety to an assignee – your landlord and the assignee would have no privity with each other. You and your assignee, however, would have mutual privity, and it would remain your responsibility to enforce any lease provisions against your landlord (and vice versa).

For More Information, Call 201-498-9768 Today

The legal obligations that govern the landlord/tenant relationship are complicated – seek the experienced professional counsel of a landlord tenant lawyer. At John L. Schettino law, we have the skill, knowledge, and commitment to help you efficiently and favorably resolve your landlord/tenant disputes. Please contact or call me at 201-498-9768 for a free consultation today.

New Jersey’s Fair Foreclosure Act and Faster Short Sales

New Jersey legislation is ready to shake up New Jersey short sales. A short sale occurs when homeowners owe more on their homes than they’re currently worth and become so frustrated that they choose to sell and walk away. A short sale can present a great purchase opportunity, but it can also quickly become complicated. New Jersey real estate legislation, however, is taking action, and the state recently amended its Fair Foreclosure Act to shorten up short sale timeframes.

Shorter Short-Sales

The new legislation goes into effect on September 19, 2017, and it requires that servicers of mortgage loans respond within 60 days to all good-faith short sale purchase offers. An appropriate response from these loan servicers can include an approval, a denial, or a request for more information regarding the short sale. Further, if the loan servicer doesn’t either approve of or respond to the short sale offer within those 60 days, the potential buyer’s deposit (if any) shall be returned and that buyer will be relieved of any further obligation regarding the property purchase.

Further Amending

The New Jersey Fair Foreclosure Act has been further amended to more completely define a short sale as the sale of real property in which the lender or servicer agrees to release the lien that is secured by a residential mortgage on the property upon receipt of a lesser amount than is owed on the mortgage. In other words, the lender takes a financial hit but doesn’t have to foreclose, the seller walks away, and the purchaser can be financially incentivized by the deal. This amendment affects neither the loan servicer nor the debtor’s right to participate in either mediation or settlement negotiations pertaining to the short sale mortgage. A short sale can get complicated and can go long, but experienced real estate attorneys are here to help.

If You Are Thinking about a Short Sale Purchase, Call 201-498-9768 Today for More Information

Making a short sale purchase can be a great deal, but it can also be complicated and needs to be executed with care. The new real estate amendments to the NJ Fair Foreclosure Act could help make the process more transparent and, well, shorter. If you’re thinking short sale, you need an experienced real estate attorney to ensure that the complexities of your purchase are well managed. Your real estate lawyer will protect your interests and your rights as you make your way through the maze that is a New Jersey short sale. At John L. Schettino law, we have the skill, experience, and commitment to help you successfully execute your short sale purchase. Contact or call me at 201-498-9768 for a free consultation regarding your real estate transactions.

Four Reasons a Landlord Needs a Quality Lease Agreement

If you are a landlord, you need a quality lease agreement with your tenants. While you may think the process of developing a lease is too time-consuming or not necessary because your tenant is a family friend, you should not fall into that trap. Developing a quality lease is not that difficult. You just need to spend a few minutes thinking about problems that could arise and questions that your tenant might ask about the property. Regarding that family friend, things can change.

Whenever responsibilities are not explicitly stated, people are at risk for additional money being taken out of their bank account to fix repairs, pay for fines, or address overdraft charges. When money is at stake, people can quickly feel burned by the other party, and friendships get dissolved. Once the friendship is ended, and you have no lease, you have no way to bind the person to your expectations or to get him or her evicted. If you’re worried about the details, a quick consult with a real estate lawyer, who is fully prepared to discuss real estate law with you, will put your mind at ease.

Why do you need a quality lease as a landlord? Let’s explore four specific reasons. There are more, but these are the most important reasons.

Expectations

The top and the most important reason for creating a quality lease is to establish responsibilities and expectations. You must spell out how much the deposit is, when rent is due, how much rent is, and what happens in the event of an overdraft. By getting these financial responsibilities out of the way, your landlord and tenant relationship can be less stressful. Additionally, you need to establish when and how much of the deposit will be returned at the end of the lease. You must be specific about what tasks should be completed and how much your tenant will be charged for dirty rugs or broken windows. With all these items clearly detailed, you can avoid small claims court. Or, at the very least, you will avoid a judgment going in your tenant’s favor.

Value

The next reason you need a quality lease is to retain the value of your property. If your tenants trash your home, you lose the value of your home. It is important to have utility and upkeep items spelled out as well. If you are responsible for snow removal and mowing, let your tenant know. However, if they are responsible for keeping the utilities up in the winter and taking out the trash, you need to explain that up front. Also, you need to identify times that you will be allowed into and/or onto the property to conduct tours. It is essential to make sure that your tenant is keeping your property well maintained. Moreover, you need to be able to observe if trash is left lying around, to spray for bugs, and to ensure the heating and cooling systems are in proper working condition.

Avoid Calls

If you own multiple properties with numerous clients, having a quality lease can prevent repeated calls from tenants. Spelling out what to do if the trash company is running late and listing phone numbers for TV services, water, and electric will help your tenants. Also, you can add specific rules for the neighborhood that your tenants wouldn’t already know, such as where they can park, emergency snow routes, trash days, and hours for the community laundry and pool.

Neighborhood Responsibilities

When you’re a landlord over an apartment building or condo, you will need to spell out how many parking spots can be used, what isn’t allowed on sidewalks (such as skateboards or bicycles), and what the rules for noise levels are. Also, you will need to add what recreational activities tenants can hold at or in your building. If these are not spelled out, tenants can quickly get crossed with the other tenants. As a result, you will be required to drop everything and resolve a complaint. Lastly, if your tenant breaks these rules for “being a good neighbor,” you can begin the documentation process for eviction.

In Conclusion

You must have a quality lease to protect your property, your assets, and the rights of your tenants. By having a quality lease, you can eliminate a portion of your stress. If you need help in drafting a quality lease, contact a lawyer who is trained in real estate law. Contact us today.

Thinking About Buying a Short Sale?

Your house is your castle, and purchasing a new home is an exciting – if hectic – time in your life. While home buying can be stressful, it’s also a great opportunity to find the home that’s right for you and your family. Purchasing a new home probably seems complicated enough, but if you’re considering buying a short sale, you’re going to face a few additional hurdles. What’s a short sale? When a homeowner owes more on a home than it is even worth and becomes so frustrated with the situation that he or she choose to sell the house, it is known as a short sale.

Banks and Short Sales

The first consideration when looking at purchasing a short sale is that banks often take much longer to approve these purchases. In fact, the process can take up to nine months because the current owners will have to prove to the bank that they really can’t cover the bills associated with the house. This is not to say that a short sale can’t be worth the wait. Some short sales are in great condition and represent a good value that’s worth waiting for. Be sure to have a qualified and reputable real estate inspector determine whether the house you are interested in is worthy.

Multiple Mortgages

If the short sale you are looking at has two mortgages, you’ll have to deal with double trouble in the form of two banks. Don’t be surprised if one of the banks initially approves your deal and the other denies it. Next, don’t be surprised if the bank that initially denied your deal swoops in sometime later and approves the deal – leaving you with just a few short weeks to close. In other words, buying a short sale can be even more of a real estate roller coaster than going through with a regular purchase. Don’t despair, however. If you have found the right home for you, a short sale can add up to a great value – even if you do have to jump through a few extra hoops.

If You Are Ready to Purchase a Short Sale, Call 201-498-9768 Today for More Information

Buying real estate is major, and if you’re purchasing a short sale, it’s more major. An experienced real estate attorney can help ease the real estate purchase process and ensure that the complexities of your short sale are handled appropriately and in a timely manner. Buying a new home is no time to go rogue. Your real estate lawyer will protect your interests as you maneuver through the maze of buying your house. At John L. Schettino law, we heave the skill, knowledge, and commitment to get you into the home that’s right for you. Contact or call me at 201-498-9768 for a free consultation regarding your real estate transaction.

TRID and What it Means for your Home Purchase

In October of 2015, new requirements put in place by the federal Consumer Financial Protection Bureau (CFPB) went into effect that dramatically changed the nature and timeline of many real estate closings. The CFPB maintained that previous mortgage disclosure forms were often inconsistent and misleading for potential mortgage applicants and, therefore, it enacted the TILA-RESPA Integrated Disclosure (TRID) Rules aiming to streamline disclosures and ensure real estate purchasers are properly informed. While the intention behind the TRID Rules was to protect mortgage borrowers, many closings may be complicated or delayed as real estate professionals adjust to the changes.

New Disclosure Forms

Under TRID, several past forms have been integrated into two new forms—the Loan Estimate form and the Closing Disclosure form. The Loan Estimate form must be delivered shortly following a mortgage application submission and informs consumers about risks, costs, and features of a particular mortgage loan.

The form that will most affect real estate closing procedures is the Closing Disclosure form, which essentially combines the previous HUD-1 and Truth-in-Lending (TIL) disclosures. This disclosure must inform the purchaser of all actual mortgage costs.

3 Day Rule

Perhaps the most important change brought by TRID is the 3 Day Rule, which requires that the Closing Disclosures are received by purchasers at least 3 business days prior to closing. In the past, it was not uncommon for HUD and TIL forms to be issued on the day of the closing or even during the closing process. While this was less than preferable for consumers to have to review the information at the closing, it was often necessary for closings to proceed on schedule. Now, if the Closing Disclosure is not prepared on time and received within the required 3 days, closings may be delayed by 7 days or more. However, it is important to comply with the new TRID rules regardless of potential delays.

Call a New Jersey Real Estate Attorney for a Consultation Today

Real estate laws and regulations are ever-changing on both the federal and state level and it is critical that all rules are properly followed to ensure your closing goes smoothly and that your rights are protected. Whether you are selling or purchasing real estate in New Jersey, you need an attorney representing you who fully understands the new TRID Rules and who can help to facilitate a smooth and timely closing and can ensure all required closing disclosures are issued. Please contact The Law Office of John L. Schettino for a consultation today at 201-498-9768.