The State of New Jersey law requires an owner of income producing property to notify the Division of Taxation prior to closing regarding the upcoming event.

The purpose of this law is for the State of New Jersey Division of Taxation to make sure any and all monies owed by the property owner get paid to the State of New Jersey at the time of closing.

The Buyer’s attorney provides a copy of the Contract for Sale to the Division of Taxation.  In the event that this is not done, the Buyer can become responsible for the Seller’s Tax obligations.

Certain forms of ownership are exempt from the Bulk Sale law requirements. For the above reasons, it is very important that a property Seller of investment property include their tax accountant in the preparation of the upcoming sales transaction.

The tax accountant can proactively identify and clean up any outstanding problems with the State of New Jersey in advance – and can thereafter provide the necessary information (to the State) in order to release the Bulk Sale Escrow quickly.

***Scillieri Best Practice Alert***
Think ahead, plan ahead and make sure your tax accountant is part of the process if you are buying or selling an income producing property.

It is surprising how many clients put their home on the market for sale, but do not yet have plans made before their relocation.

Often times the Seller wants to wait to see the house is going to sell and see how much money they will receive for it before making future plans.

While it is common for a Contract for Sale to be made contingent upon the buyer selling their home, it is not common for the Contract to be made contingent upon the Seller finding a new home.

A Seller must have the capability to move out of the property on the target date of closing.  By not doing so, the Seller risks that the Buyer will lose their mortgage commitment or worse.

It is surprising that during many transactions a Seller must be ‘read the riot act’ that they are required to vacate the premises! Sellers often feel it is their home and no can force them out.

***Scillieri Best Practice Alert***
Read your Contract for Sale carefully and be aware of what is included when selling your home. Please know that you must abide by the Contact.

I have many clients that put the ownership of their assets in other names.

The usual scenarios (and related challenges) include:
 

Scenario #1: Putting their assets in a trust thinking that they will avoid tax related responsibilities

Related Challenge: This often results in difficulties regarding reasserting their ownership of these assets in the future.

Scenario #2: Putting their assets in joint accounts thinking that it will facilitate convenience

Related Challenge: This tends to result in a situation where their assets have been snatched.

Scenario #3: Putting their assets in their spouses name in an effort to avoid creditors.

Related Challenge: This can lead to difficulties obtaining future loans and pursuing other business opportunities wherein it is necessary for the client to show assets.

***Scillieri Best Practice Alert***

While it sometimes serves a beneficial purpose to remove an asset from the owner’s name, it often creates greater problems in the future than it resolves. Make the time to explore your options and potential consequences before deciding how to proceed.

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.

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!

Welcome back to our Blog! Thank you for visiting our website. We hope you find it informative and helpful.

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.