Welcome to David Scillieri, Esq.

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.

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.

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 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.

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.

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.

 

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.

Lately, I have seen a number of minor document errors create major headaches for my clients.  A simple inversion of 2 digits on a Deed can create hours of work and hundreds of dollars in additional filing fees to correct.  It is important that you make sure that whoever is preparing your legal documents takes the time to review and double check everything carefully.  Additionally, the client should check things over themselves to prevent typos that can create future problems.

While the client is not responsible for the legalese, the client can at least check the spelling of names and proper addresses inserted into the documents as errors are made very commonly, especially once a misstatement gets inserted into a computer.

Years ago, I was fortunate enough to handle a Capital Punishment Murder Case.  My client was found Not Guilty.  It was only the second acquittal in the State of New Jersey since they brought back the Death Penalty.

I was very fortunate to have been provided with the necessary time and resources to prepare the defense of my client.

In today’s fast paced internet world, everything needs to be done yesterday. A Lawyer needs to have the proper time and thought process in handling legal matters of all types.  It is especially true in criminal defense work.  The practice of law is not flipping a switch to illuminate the details in any case.  A Lawyers true strength is found in thoughtful review and analysis before taking action.

Therefore, anyone involved with criminal charges would be well advised to spend significant time with your Lawyer.

In the State of New Jersey, the filing deadline for Municipal Tax Appeals is April 1.  The date is rapidly approaching.

A property owner can only appeal the Assessment for the subject property set by the Municipality.

You cannot appeal your taxes and you cannot appeal the town tax rate.  You can, however, contest the Assessment by proving that the town is valuing your property too high.  The relevant date of valuation is the prior October 1.  This means that you must prove the value of your property as it was last October 1.  A property owner can bring in a licensed NJ appraiser with a written appraisal report as proof of the value of the property.  The property owner can also utilize recent comparable sales in the neighborhood.

Many recent comparable sales are not permitted if they were foreclosed properties, bank owned properties, or other transactions that are deemed to be arms length transactions.

It is best to hire a Real Estate professional to handle the tax appeal for you so that you did not lose on a technicality. Anyone planning to do so, however, must now act fast as April 1 is approaching.