By now almost everyone is familiar with the transfer taxes imposed by the City and the State on sales of real property or co-operative apartments. However, not everyone knows that non-residents must also pay a tax on their gain at the time of closing. This can lead to a delay in the closing by unaware sellers.
The procedure by which transfer taxes are paid and transfer documents are recorded is the execution and subsequent filing of the New York City Real Property Transfer Tax Return and the New York State Combined Real Estate Transfer Tax Return (“TP-584”).
First things first. When selling real estate (be it an apartment house, office building, townhouse or a co-operative or condominium apartment) Sellers should enter into a written agreement with their Broker setting forth their understanding. The agreement should be fair and reasonable for BOTH sides. Selling real estate is a collaborative effort and the agreement between the Sellers and their Broker should keep both sides eager to work together and ensure that neither feels they have been or will be treated unfairly.
As interest rates for commercial loans remain low, many property owners will pursue financing for their businesses or seek to refinance their current loans. The first document that a borrower is asked to sign in connection with a commercial loan is the loan commitment letter. The main goal of the loan commitment letter is to set forth the basic terms of the loan (how much, for how long, at what rate) as well as outline some other critical provisions (e.g., prepayment rights, transfer rights and required escrows).
Contracts for the purchase or sale of real property in New York invariably include a provision that requires the seller to deliver a so-called “FIRPTA” affidavit to the purchaser at closing. Often times, the parties are not familiar with the requirements surrounding the FIRPTA affidavit. However, in today’s market, with the ever growing presence of foreign real estate investors and developers, it is imperative that real estate buyers and sellers understand the implications of the FIRPTA requirements.
One has to think that the old adage “No Good Deed Goes Unpunished” was designed specifically for the executor whose job it is to gather up and distribute the assets of the decedent while paying off any claims and juggling the bent out-of-shape beneficiaries who feel that they somehow and someway have been shortchanged.