What do Real Estate Lawyers Do in NYC?
Real estate lawyers in New York City play a crucial role in various aspects of real estate transactions and disputes. Their duties can be broadly categorized into transactional work and litigation.
Here’s a detailed look at what NYC real estate attorneys do:
Transactional Work
Contract Drafting and Review: Real estate lawyers draft and review purchase and sale agreements, leases, and other real estate contracts. They ensure the terms are clear and enforceable and protect their client's interests.
Due Diligence: Lawyers also conduct thorough investigations into the property's legal status. This includes title searches to confirm ownership and check for encumbrances, liens, or easements, as well as reviewing zoning laws and compliance with local regulations.
Title Examination and Insurance: NYC real estate lawyers verify the property's title and arrange for title insurance to protect against future claims.
Closing Process: Prepare and review closing documents, including deeds, mortgages, and settlement statements. Represent clients at the closing to ensure all documents are correctly signed and recorded and all financial transactions are completed.
Negotiation: They negotiate terms for their clients. This includes price, contingencies, and repair requests.
Financials: Assist in obtaining and reviewing financing documents for mortgages and loans. Ensure compliance with all financial terms and lender requirements. When buying a condo in NYC, it's important to also have your lawyer review the building's financials.
Litigation and Dispute Resolution
Property Disputes: Represent clients in disputes over property boundaries, easements, and rights of way. They also handle landlord-tenant disputes, including evictions and lease enforcement.
Foreclosures: Attorneys represent clients in foreclosure proceedings, either defending homeowners or assisting lenders.
Breach of Contract: Handle cases where one party fails to fulfill their obligations under a real estate contract.
Construction Disputes: Address issues related to construction defects, contract breaches, and non-payment for services.
Co-op and condo purchases can get tricky at times, and having a legal professional in your corner is essential. Between the bylaws, rules & regulations, and house rules, first-time buyers often find themselves very confused by the overwhelming amount of documents. A NYC real estate attorney can help make sense of everything and ensure your interests are protected.
Additionally, apartments in New York City are sold “as is.” Therefore, it is up to you to do your homework and not solely rely on the seller’s team to convey the information that is most important to you.
Having an experienced attorney representing you is essential, especially if you're buying a co-op in NYC for the first time, as the process is trickier than purchasing a condo.
Is A Real Estate Attorney Required in NY?
No, you’re not required to hire a real estate attorney when buying or selling real estate in New York. However, it’s highly recommended that you hire a lawyer as they will look out for your interests and protect your investment, especially if you're buying in NYC. In almost all transactions in the city, both the seller and buyer will have an attorney representing them.
If you are considering purchasing an apartment in New York City, a good starting point is to ensure that you understand how the process works, as well as the implications and differences between buying a co-op versus a condo.
Reasons to Hire a Real Estate Lawyer in NYC
1. Lawyers are (more or less) required
In New York State, real estate contracts must be written by a party to the transaction or a lawyer. As such, almost 100% of the time, the parties in a New York City real estate transaction are represented by lawyers. Therefore, unless you are a licensed New York State attorney, it would be prudent to hire a lawyer to purchase or sell.
Additionally, you should avoid having the seller’s attorney draft the contract without having your attorney review it. If you rely solely on the seller’s lawyer to draft the sales contract, you run the risk of it being a one-sided contract. Lastly, most mortgage companies will typically not only expect but also require you to have your own lawyer before they agree to finance the transaction.
2. Lawyers protect your investment
If you’re a Seller: A seller is always advised to consult with a lawyer before signing a brokerage agreement to sell their property. If a seller does not carefully review the brokerage agreement, they may end up being liable for a commission, even if the property doesn’t sell. Additionally, the seller’s lawyer is usually responsible for the first draft of the sales contract.
If you’re a Buyer: If you’re buying a home in NYC, it’s vital to hire an attorney. Before you sign a contract for an apartment, your lawyer will perform due diligence. For starters, the lawyer will review 2-5 years of board meeting minutes. Reviewing the board minutes will clue the lawyer in on any issue going on in the building, such as a major roof repair that is needed or a recurring bed bug infestation. Lastly, as part of the due diligence process, the lawyer will also review financial statements, the building’s offering plan, and the bylaws (and any amendments). Overall, after performing due diligence, a lawyer can spot a “bad deal” and can advise you to pursue another property.
Once your attorney is satisfied with the due diligence, he will obtain a draft of the sales contract from the seller’s lawyer. The two lawyers will then go on and negotiate the terms. Once your attorney is satisfied, he or she will instruct you to sign the contract and hand over the 10% down payment, which will be placed in an escrow account by the seller’s lawyer.
3. Your attorney will help close the transaction
Once you have signed the contract and paid the down payment, your lawyer will begin preparing for closing. If purchasing a condo or single-family home, your lawyer will order a title report to identify any issues that the seller must resolve before closing, such as liens or property violations. This is also the point where an inspection will occur. Based on the results of the inspection, coupled with the title report, your lawyer will negotiate repairs and any other terms that need to be amended before closing.
Additionally, your attorney will be around to assist you with information and documents that your lender may request as part of your mortgage application as well as get you a good faith estimate of your closing costs.
4. You will have an advocate at closing
A closing is a transaction where the title of a property is transferred from a seller to a buyer. In NYC, the closing typically takes about three hours to complete. The seller, buyer, attorney for all the parties, the managing agent for the coop, the mortgage lender, and the real estate agents are all typically present at the closing. At the closing, your lawyer will be there to walk you through the transaction. They will also be there to ensure the accuracy of all the closing documents, such as the deed, transfer tax returns, and mortgage documents, and again double-check the payment amounts. Lastly, your lawyer will be there just in case something goes wrong or any of the documents are inaccurate.
How Much Does A Real Estate Lawyer Cost in NYC?
Real estate lawyer fees in NYC vary wildly, ranging from $2,000 to $5,000 for a closing, depending on the complexity of the transaction. On average, you can expect to pay a $3,000 fee to hire a good real estate attorney in New York City.
You can also find some discount attorneys who advertise flat-fee pricing under $1,000, but as the saying goes, “You get what you pay for.” Most of these attorneys will cut corners or are located outside of Manhattan and have less experience performing due diligence on NYC condo and co-op buildings.
Even though lawyers can be expensive in New York City, the expense is well worth it because you are protecting one of the most significant investments that you will make.
Do You Need A Lawyer If You Have A Buyer’s Agent?
For starters, your agent or broker is not a lawyer. Unfortunately, some buyers rely solely on the legal expertise of their broker to purchase an apartment. While most brokers are incredibly knowledgeable, they cannot replace the legal guidance of a licensed attorney. We would be leery of any agent or broker engaging in the “unauthorized practice of law” and jeopardizing their license by giving legal advice. As such, it's still highly recommended that you hire a lawyer to represent you.
If you don't have an attorney but are working with an agent, you can always ask your agent for a recommendation.
You Can Get A Free Consultation With a NYC Real Estate Attorney
If you’re still not sure you want to hire a lawyer or simply want to ask a few questions, there are plenty of New York City attorneys who offer a free consultation.