Articles Posted in Real Estate

For many New York estates, real estate is the most valuable asset.  This is true whether a decedent dies with a Last Will and Testament or Intestate (without a Will).  If a Last Will exists, the person nominated as Executor has the task of petitioning the Surrogate’s Court to admit the Will to probate and having Letters Testamentary issued to the Executor.  In the case of intestacy, next of kin who are the decedent’s heirs have the right, pursuant to Surrogate’s Court Procedure Act section 1001 entitled “Order of priority for granting letters of administration”, to be appointed as the estate’s Administrator and receive Letters of Administration.  The New York Probate Lawyer Blog has published numerous articles concerning probate and intestate administration.

In over 40 years of representing individuals in trust and estate cases, I regularly represent estates where real estate assets are subject to foreclosure actions.  Foreclosure occurs for many reasons.  Sometimes no one steps forward after a death to obtain the appointment of a fiduciary or keep the mortgage payments current.  On occasion, a decedent may have been ill or in financial difficulty prior to death resulting in the foreclosure.  In any event, following a death there may be mounting pressure from the foreclosing bank to satisfy the loan or lose the property to a foreclosure Court sale.  This is complicated even more when a property may not be able to be sold until final authorization is obtained from a Surrogate’s Court which must appoint a fiduciary or approve a sales contract.

The rules and procedures in estate cases and foreclosure actions can be complicated.  Unfortunately, these matters are occurring in separate Courts with different Judges who are not overseeing the entire process.  Thus, the intervention of an experienced estate and real estate attorney may be essential for coordinating the various legal proceedings and protecting the estate assets.  The typical goal is to sell the estate property before a foreclosure is finalized and a bank sells a property at auction.  I have dealt with these issues on many occasions.

The assets which may be owned by a Decedent can take many forms.  There may be financial items such as bank accounts or brokerage accounts.  These can be pure savings held in a Decedent’s name or retirement savings in the form of Individual Retirement Accounts, a 401K or other pension type plan.  Sometimes there is life insurance.  However, it must be remembered that only assets held in a Decedent’s name alone will be in an estate.  If there are named beneficiaries or joint survivorship owners, such assets will be paid directly to the beneficiary or survivor without passing through an estate.  The New York Probate Lawyer Blog has published many articles discussing estate settlement.

Estate assets will come under the control of either an Administrator or Executor depending upon whether or not a Decedent died leaving a Last Will and Testament.  In either case, one of the most valuable assets owned by a Decedent is real estate.  Real property can be in the form of a personal residence or commercial property.  A condominium unit is real property.  A cooperative apartment is not real property since the ownership is the shares of stock in the cooperative corporation.  However, in many ways co-ops appear to be real estate.

It is not uncommon for a real estate asset to be encumbered by a mortgage.  Mortgages can take many forms.  There can be the typical home loan.  Also, there may be a Reverse Mortgage or a Home Equity Line of Credit.  In all these situations an Executor or Administrator is faced with the task of paying or satisfying these loans during the course of estate administration.  Payment of ongoing or monthly charges may be difficult or impossible if an estate does not have any liquid funds.  If the property is difficult to sell or if other circumstances interfere with its sale, a lender may seek to foreclosure.  Circumstances such as tenants or occupants refusing to give up possession or a delay in obtaining Court authorization for a fiduciary to act may cause complications.  Dealing with a foreclosure where a lender is seeking to obtain a judgment and sale can result in a lot of stress on a fiduciary who wants to protect a valuable asset.

The settlement of a New York estate can be very complex based upon a number of factors.  To begin with, different rules apply where a decedent died with a Last Will and Testament as opposed to an intestate estate.  In the case of a Will, the distribution of estate assets is controlled by the terms of the Will.  In the case of intestacy, estate distribution is based upon the provisions of Estate, Powers and Trusts Law Section 4-1.1 entitled “Descent and distribution of a decedent’s estate.”

Also, where a Will exists, there is usually an executor appointed.  An estate administrator is appointed where there is no Will.  Both Executors and Administrators have essentially the same powers and authority although a Will may provide specific powers or directions to the estate fiduciary.

The New York Probate Lawyer Blog has published many articles concerning real estate and estates.  A very common issue which arises is that an estate’s primary and most valuable asset is real estate.  If there are multiple estate beneficiaries, the real estate may need to be sold in order to satisfy each of the beneficial shares.  In many cases, the asset may be occupied by third party tenants or even relatives.  As a result, the estate fiduciary may need to commence eviction or ejectment proceedings in order to obtain possession of the property before it can be sold.

There are many issues which a New York estate administrator may need to deal with.  The basic function of an estate executor or administrator involves identifying and collecting assets and resolving claims and other obligations affecting an estate.  The New York Probate Lawyer Blog contains many articles describing various aspects of estate settlement.

A decedent may own different types of assets.  These may include financial accounts and business interests.  However, one of the most common and valuable assets is a real estate residence.  While the decedent’s house may be the most valuable item in an estate, a number of problems may exist regarding the property.  For instance, there may be a mortgage which needs to be paid, or real estate taxes that are due.  The property may need repairs in order to maintain its value and structural integrity.  In many cases, an estate does not have sufficient assets to pay for such expenses.  As a result, the property would need to be sold to satisfy these items.  Also, real estate assets may need to be sold to be able to make payment of estate funds to various beneficiaries.

A major issue which often arises is that the real estate which is to be sold may be occupied by third parties or other family members. When this occurs, the administrator or executor must commence Court proceedings to obtain the eviction of the occupants.  This Probate Blog has discussed this issue in previous posts.

In New York there are many different types of residences that may have been occupied by a decedent.  The settlement of an estate may be impacted by the nature of such home.  For instance, a person may have been living in a rental apartment, or in a cooperative or condominium unit.  Another possibility is that a decedent owned and resided in a single or multi-family home.

An estate attorney in New York who is also experienced with landlord-tenant and real estate issues can assist with administrating such properties.  Where a decedent lived in a rental apartment, the estate does not own any equity in the apartment and it does not have any value that can be sold or collected.  However, some apartments, such as rent-stabilized or rent controlled units, are given certain rights which allow designated family members to continue to live there.  Such rights are called succession rights and these can be very valuable especially where the rent is low.

The protection of residence rights can be complicated.  In a recent Brooklyn case entitled College Apartments, LLC v. Gedeon decided by Civil Court Judge Hannah Cohen on December 18, 2020, a landlord had commenced a non-payment of rent eviction case against the tenant.  As it turned out, the tenant had died before the case was commenced.  The son of the decedent tried to settle the case with the landlord and alleged that he was entitled to succession rights.  After reviewing the case following a settlement, the Court dismissed the proceeding since the death of a defendant prior to the commencement of an action results in the action being a nullity.  Fortunately for the son, he was able to retain counsel who sought to dismiss the case even after the settlement.

Time after time, estate executors and administrators seem to be confronted by a common problem – the sale of estate realty occupied by a family member.  The duty or obligation of the estate fiduciary is to collect and protect the estate assets and satisfy the decedent’s debts and obligations and finally, to effectuate distribution of estate assets according to the provisions of a Last Will and Testament or the laws of intestacy.  The many facets of estate settlement have been discussed in numerous articles posted in the New York Probate Lawyer Blog.

Real estate, typically the residence of the decedent, is the largest asset in an estate.  Very often after the death of the decedent, the residence continues to be occupied by a family member or a third party.  When the real estate must or should be liquidated to allow an estate to be administered and finalized, the individuals remaining in occupancy must be evicted.  As is commonly known, evicting persons from their homes is neither pleasant nor easy.

In the case of a decedent’s estate, commencing summary proceedings in the local landlord tenant Court may be the most efficient avenue as to non-related third-party occupants.  However, when a case involves relatives or estate beneficiaries, the Surrogate’s Court procedures often offer a more accommodating forum.  Depending upon the preferences of the local court, a proceeding to remove an occupant from estate property may be commenced in the form of a turn-over proceeding or possibly as an ejectment case.  Article 19 of the Surrogate’s Court Procedure Act entitled “Disposition of Real Property” also provides a procedure to have the Court direct a sale or disposition of the realty.  My Blog, referred to above, has discussed these eviction matters in earlier posts.

The settlement of an estate typically focuses on the protection and collection of estate assets.  These assets may include bank accounts, retirement funds and other financial holdings.  However, the major asset in most estates is an interest in real estate.  Real estate may be in the form of a single family home, a multi-family residential building, commercial property or even a condominium unit.  While a cooperative apartment is not real property, since the interest is in the cooperative corporation, its value and ownership are generally equivalent to real estate holdings.

The decedent’s interest in real property is determined by the ownership document existing at the time of death.  This is typically a deed.  A deed can show different types of ownership interests.  The decedent may own a property as a joint tenant with a right of survivorship or he may just own the property in his name alone.

Problems arise when an estate property is held in the name of a number of owners as tenants in common.  In such a case, the decedent’s interest passes to his beneficiaries who then own the property along with the other owners, all as tenants in common.

Many decedents’ estates contain assets in the form of real estate.  A decedent may have owned a home or rental property or a commercial building containing a business.  Such items are typically the most valuable items among the decedents’ assets.

If a decedent left a Last Will, such document may provide for the disposition of a specific parcel of real estate to a named person.  When the Will does not contain such a provision or when a decedent dies intestate without a Will, the real property is part of the general estate.  In most of these situations, the property is typically sold to provide for the payment of estate obligations such as an outstanding mortgage or the disposition of funds to a number of estate beneficiaries.  The New York Probate Lawyer Blog contains many articles concerning estate administration.

The sale and closing of real estate by an executor or administrator is usually comparable to the process when a sales transaction is entered into among living individuals.  However, there are a number of important aspects regarding estate closings that should be taken into consideration.  Here are a few important items:

A New York decedent may have many different interests in property and assets. Such interests may include real estate such as a residence and financial and bank accounts. These assets are disposed of after death through a number of methods. There may be a Last Will and Testament which, after being admitted to probate, controls the disposition of items held in the decedent’s name alone. Also, assets that are owned jointly or that contain designated beneficiaries are distributed by operation of law to the designee. The New York Probate Lawyer Blog has published many posts talking about asset distribution from an estate.

Another very important right that may flow from a decedent is a right to succeed or take over the tenancy of a decedent’s New York City rent stabilized or rent controlled apartment. This right which is typically afforded to certain family members identified in the rent regulations is important because it preserves the tenancy and rent limitations for the successors. The rent laws and regulations provide very specific guidelines for someone to qualify for this favored treatment.

In addition to family members, the rules allow for so-called non-traditional family members to obtain these rental rights under certain conditions. Where individuals have relationships that in effect amount to financial and family-type interdependence, the law will recognize the need to allow the survivor to take over the apartment tenancy. In these cases, a Court will scrutinize the nature and extent of the relationship to see whether the statutory criteria have been satisfied.