Condominium Offering Plans go Digital

After more than a decade of frustration, condominium sponsors can now provide copies of offering plans and amendments to prospective purchasers in digital format. The Attorney General of the State of New York has issued a new cooperative policy statement that allows the distribution of such documents in digital format (CD-ROM, DVD, other other acceptable formats). The catch is, whether the documents be provided in traditional hard copy format or digital format is within the sole discretion of the prospective purchaser. With the new policy statement comes a handful of ancillary certification and filing requirements, and there are specific requirements for the digital copies, their labeling, as well as the manner in which they are distributed. A full copy of the requirements can be found at http://www.ag.ny.gov/bureaus/real_estate_finance/pdfs/CPS-10_FINAL.PDF

The new policy is effective as of November 1, 2011 but will be mandatory starting on January 1, 2012.

HOA Foreclosures Subject to 'Help for Homeowners in Foreclosure' Notices

Homeowners Associations that are seeking to foreclose on liens arising under the HOA Declaration, for failure to pay assessments for example, should be aware that they are are required to comply with the statutory 'Help for Homeowners in Foreclosure' notices set forth in the Real Property Actions and Proceedings Law. New York courts have held that the provision in RPAPL Section 1303 requiring such notices, is broad in that it applies to all foreclosures of owner-occupied one to four family dwellings, regardless of what the lien pertains to.

Private Transfer Fees on Real Estate May Make it Harder for Purchasers to Find Financing

The Federal Housing Finance Agency has proposed rules that would prohibit regulated entities (namely, Fannie Mae and Freddie Mac and Federal Home Loan Banks) from dealing in mortgages on properties that are encumbered by private transfer fee covenants. It is not uncommon for condominiums and homeowners association properties, for example, to be subject to a fee, charge or some other payment to be due in connection with the transfer of the property. Many state legislatures have already banned private transfer fees but New York has yet to make them illegal.

If the proposed federal rule becomes final, if any private transfer fee encumbers a property, the regulated entities cannot purchase or invest in a mortgage on the property unless that transfer fee provides a direct benefit exclusively to the property being encumbered. Among other things, this would affect any transfer fee that benefits the property developer or some third party entity, even if such entity is a not-for-profit organization. The lenders will have 120 days following publication of the final rule to come into compliance. The comment period on the proposed rule ends on April 11, 2011.

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Cumo named to Women Leaders Panel

Tammy Cumo of Whiteman Osterman & Hanna LLP was selected to particulate on a panel for the Rensselaer County Regional Chamber of Commerce's program entitled "Women Leaders: Styles, Strategies & Stories" set for Thursday, April 22 at the Hilton Garden Inn in Troy. The panel will include a group of professional women from diverse industries and generations. Each will discuss their accomplishments, experiences and strategies on how they achieved leadership possitions.

For more information and to register for the event, go here:

http://http://www.renscochamber.com/chamber_events/details.cfm?ID=1282

Condominium Associations should be aware of the new form of Power of Attorney in New York

Much of the legal world was all a buzz last fall when the new New York law went into effect that replaced the old all-purpose statutory short form of power of attorney. Powers of attorney are common in the world of trusts & estates, elder law and in real estate transactions. Most believe that the law that was intended to clarify and streamline powers of attorney has only complicated them. The new law doesn't require that the statutory form is used but does require that in order for any other form to be used, it must be in 12 point font and contain all of the explanations provided by statute to the person giving the power of attorney and to the agent, verbatim, as set forth in the statute. All of the powers of attorney that were executed prior to September 1, 2009 are still valid but any powers signed after that date must comply with the new law.

It is commonplace for a condominium unit owner to be required to sign a unit power of attorney in favor of the condo board of managers at the closing for purchase of their condominium unit and for purchasers to sign one at the closing for the resale of a condominium unit. The form such power of attorney will take is contained in the condominium offering plan and there will be many occasions where that offering plan was accepted and in place prior to September 1, 2009 but unit closings occur after September 1, 2009. Sponsors, condominium associations and the attorneys that represent them need to be aware that the new form of power of attorney should be used in lieu of the form contained in the pre-September 2009 offering plan. There are currently several proposed bills in the legislature that seek to amend some of the scope and provisions of the new law. Until the form, its provisions and the applicability of requirements are clarified, use caution and consult an attorney when preparing or signing a power of attorney.

Proposed Changes In the Way Mortgage Loans Are Closed

Last week, H.R. 4229 was introduced in Congress to amend the Real Estate Settlement Procedure Act of 1974. The new provisions would be referred to as 'Borrowers' Right to Inspect Closing Documents Act of 2009'. If the Act passes both houses, lenders of federally related mortgage loans would be required to provide the loan documents to the settlement agent at least 4 days prior to the scheduled settlement date. The settlement agent would be required to provide the loan documents and the settlement statement to the borrower at least 3 days prior to the scheduled settlement date. The documents could be transmitted to the borrower by email, fax or by making hard copies available for inspection at the office of the settlement agent.