Welcome to David Scillieri, Esq.

Selling Your Home? How To Make Sure Required Repairs Don’t Sneak Up On You

New Jersey Real Estate Contracts have extensive provisions to allow the Buyer to do “Home Inspections”. Buyers can inspect for many items including the Home itself, Wood Destroying Insects, Radon, Underground Oil Tanks, etc.

Often times, the parties negotiate and reach an agreement as to repairs and/or credits to be provided by the Seller to the Purchaser in order to satisfy the Inspection Clauses in the Contract.

However, Sellers  should also be aware that most Townships require that the Seller also provide a Certificate of Occupancy to the Buyer at the time of Closing. It is highly possible that the Township will require additional repairs pursuant to their Certificate of Occupancy Inspections. This is especially true in Multi-Family properties, and/or properties in disrepair.

In addition, a Seller must be very careful that they do not agree to a Resolution of the Home Inspection issues only to find out later on that the Seller must repair more items in order to satisfy the Township to obtain the Certificate of Occupancy. The Certificate of Occupancy is a requirement in order to Close. Therefore, the Seller will be stuck and will be forced to satisfy the Township at that time.

***Scillieri Best Practice Alert***
Consider making the Home Inspection repair claims settlement contingent upon the Seller receipt and review of the Township inspections performed to obtain the Certificate of Occupancy. In this manner, a Seller will not be surprised by a double hit after the Seller has already agreed to a Resolution of Inspection issues.

Learn About Me!

I am a general practitioner of law. Although, I have resided and have my office in Bergen County, my practice includes all of northern New Jersey. I am also licensed to practice law in the state of New York.

My area of specialty is anything involving real estate. I do real estate transactions for both residential and commercial matters. I represent buyers and sellers. I also do all other types of work associated with real estate such as landlord/tenant, tax appeals, variance work, etc. I do loan closings.

In addition to the real estate, my general practice of law includes municipal court matters, business transactions, business formations, and estate planning and administration.

Having practiced law in this area for over 30 years, I have a tremendous network of other attorneys with other areas of specialization that I can work with, or refer clients to when necessary.

I look forward to working with you!

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Controversial Matter

This past weeks dangerous and sad experience of a young boy who accidentally slipped into the Cincinatti Zoo and Botantical Garden’s gorilla enclosure has created controversy over animals in captivity.  A western lowland gorilla was killed to save a young boy.  The boy was in “imminent danger” leaving the zoo’s Animal Response team with no option but to shoot the 400 plus pound gorilla.

With so many critics of the mother, the zoo and the spectators who were panicked and creating a potentially worsening situation with their screams, it is easy to point the finger of blame all the away around.

There will most likely be weeks and maybe even years of discussion regarding this unfortunate incident, however, a child’s life was in danger and quick decision needed to be made.

Mortgage Financing

As a Real Estate Attorney, most of my clients need mortgage financing in order to purchase their homes and Real Estate investments.  All of my clients complain to me about the difficulty in satisfying the banking requirements in order to be approved for such loans.  The pendulum has certainly swung dramatically from the situation as existed prior to 2008.

It is good that the banks are properly scrutinizing their Borrowers. However, parties interested in pursuing Real Estate transactions must be well aware of the difficulties involved in obtaining Real Estate financing these days and such Buyers/Borrowers should do their homework well in advance so that the mortgage application process will not inhibit or deter their purchase intentions.

Buying and Selling Investment Properties

When buying and selling investment type properties, it is very important to discuss your intentions and the specific details of the transaction with your accountant as well as your Real Estate Attorney.  Too often, clients purchase properties in their own name which can have negative liability and /or tax ramifications.  An accountant and an Attorney can work together on your behalf to structure the investment  transactions in a manner designed to save taxes which may be the most important part of certain transactions.

Real Estate in the Spring

Real Estate is getting hot as Spring arrives.

I am seeing increased activity in Real Estate transactions this month. The interest rates are still low and people are now ready to make their moves.

New Jersey has taken a very long time to recover from the 2008 Real Estate recession.  This is largely due to the fact that the New Jersey Judicial Foreclosure process takes much longer than it does in other states.  There is still a large back log of properties that are underwater and in different stages of the Foreclosure processes.  This has dramatically slowed down New Jersey’s Real Estate recovery.

Each Spring, however, I see activity picking up and this month is an example of that.

1031 Exchange

Many of my Real Estate investor clients utilize a tax benefit known as a 1031 Deferred Exchange. This IRS regulation allows the seller of investment Real Estate ( and other types of investment Real Estate)  to sell the assets, make a profit, but not pay income tax on that profit in that year.

A 1031 Exchange allows an investor to defer the tax obligations incurred during the year of the sale by reinvesting those funds in a like/kind asset.

There are many variations of the 1031 Exchange plans the Real Estate investors can take advantage of .  I work with 1031 Exchange companies that handle all aspects of these transactions completely including all of the necessary reporting to the IRS so that my clients may rest easy that they have complied with the legal requirements to take advantage of these beneficial tax programs.

Bulk Sale Law

New Jersey applies the Bulk Sale Law to Real Estate sales regarding incoming producing property.  There is a lengthy list of specific types of transactions that are included, herein.  The purpose of this law is to make sure that any taxes that are owed or were previously due from an owner of income producing property have been satisfied.

The parties are required to notify the New Jersey Division of Taxation prior to the closing of the impending sale and to provide relevant data regarding the Seller including tax identification number.  The Division of Taxation will thereupon provide to the parties in the transaction an amount which must be held in escrow by the Purchasers Attorney until such time that the Seller resolves all of their outstanding tax obligations.  The Division of Taxation provides an estimated amount because they have not received all of the final tax information from the Seller.

Parties to these types of transaction need to keep the Bulk Sale Law in mind for several reasons.  There is a delay that occurs when waiting for the Division of Taxation to provide the escrow amount of the parties.  Additionally the sum to be held in escrow can be quite large which will affect the closing figures.

The Seller and its accountants can usually resolve the tax issues from the Division of Taxation rather quickly and if any money is owed , it can be paid from the the sum being held in escrow at the time of the closing.

 

Co-signing

Lately, I have been receiving many phone calls from clients regarding problems that have developed because they have co-signed mortgages for family/friends.  A co-signer is equally responsible for the repayment of the loan as is the actual home owner.

It is extremely important to obtain legal advice before agreeing to co-sign a Note or Mortgage to help someone else.  Too often, I have clients contacting me because their credit has been destroyed because they tried to help a friend or family member.

Furthermore, merely removing your name from the ownership of the Real Estate does not resolve the problem because a co-borrower is still responsible for repayment of the loan.  I have many clients coming to my office who have removed themselves from ownership of the asset but are still responsible for repayment of the indebtedness regarding that asset.

Again, any time that you are asked to sign documentation regarding Real Estate, whether it be a Deed, a Mortgage, or other loan type document , it is highly recommended that you speak with a Real Estate Attorney to understand all of the implications involved in executing such documentation.