U12: violations, seller's reps, purchasers reps, Caveat emptor, deeds Flashcards
What are the three components to a violation?
Condition Causing the violation must be cured
must pay the fine if there is one
must have the building dept who issued the violation confirm that the violation was cured.
Which violation’s must be cured?
only violations of record on the date of the k must be cured by the seller
“sellers are only liable to cure violations issued PRIOR to closing”
What is NY Emergency Repair Program?
City has the right to fix problems in rentals where the LL will not fix the property.
What happens to expenses made by the city in removing notices of violations?
the bill becomes a lien on the property.
the lien has priority over other liens except for real estate tax liens
personal liability may be placed on “owners” for the removal of violations noted to acquiring interest in the property.
“owners” include the record owner and any person directly or indirectly in control of the property.
Are liens enforceable against subsequent purchasers in good faith?
No- no lien created pursuant to this code shall be enforced against a subsequent purchaser in good faith.
“good faith” = you made due dilligence and did not discover any liens or violations
What should seller’s do about violations?
put cl. in rider saying seller has the right to cancel the k if the costs of removing notices of violations costs more than half of the purchase price
- the buyer can waive that and take title subject to the violations and receive an abatement in the purchase price in the same number
What should the buyer do about violations?
want the seller to represent that the premises are not subject to violation of gvmt laws, rules nor any violations subject to which title is conveyed hereunder.
Differences btw representations, warranties and covenants
representation: a statement of an alleged fact. One has liability only if the statement is untrue
- “roof is working today”
warranty: a promise that a fact or condition will be true or exist at a future date or over a future time.
- “Your responsibility to fix the roof to make sure it is working on the day of closing”
covenant: an agreement to act or to refrain from acting a certain way.
what is FIRPTA?
Holds that buyer must withhold 10% of the purchase price of U.S. realty if the seller is a foreign person
who is a foreign person under FIRPTA?
A non-resident alien
foreign corporation, partnership, estate
a REIT with 50% of more foreign ownership
What is U.S. realty?
real property located in the U.S.
shares of a corp. that owns real property or that owned it in the preceding 5 years.
when is a buyer relieved from FIRPTA?
A buyer is relieved from FIRPTA withholding if seller provides a certificate of non-foreign status.
when is the buyer exempt from FIRPTA?
A buyer is exempt from FIRPTA witholding where the property is purchased for primary residential use and price is 300k or less.
