Contact:
Alison Arden Besunder
212-695-8100, ext. 289
[email protected]

Creating a Family Legacy

It is said that wealth cannot last for more than three generations. That is because it introduces a complicated family dynamic, and inherited wealth can diminish the motivation, ambition, and drive of later generations. What is important is not only the desire to pass wealth on to future generations but to do so in a holistic way that passes along values needed to lead a meaningful and productive life along with the wealth and opportunity it brings. These family-centric, value-based conversations across generations are difficult but important to have. Doing so will avoid, if not altogether eliminate, feelings of resentment or dissatisfaction, thereby minimizing the possibility that your estate plan will be challenged by litigation, eroding the hard-earned wealth and legacy you spent your life amassing. Following are some important things to think about when you are creating a family legacy.

Pass On Your History

The best legacy is not a bank ledger but stories and story-telling. The passing of the last member of any generation closes the door to discovering those valuable – indeed, priceless — assets. If you don’t know where you have come from and where you have been, you cannot understand who you are and where you should be going. Some families manage to pass on their values to subsequent generations, and some do not. Knowing your own personal history maximizes the possibility of later generations being engaged, satisfied, and purposeful in their life goals.

Build a Methodology–and a Mission Statement–to Manage Conflict

Wealthy or not, all families risk conflict. It is critical to have a methodology in place to help families make decisions, discuss disagreement in a productive way, and resolve conflict. The principal goal of a family governance should be to encourage and perpetuate the continuation of a family’s vision with a view toward making it more likely that decisions will not be challenged and respected over time. A family – whether a family business or not – should be treated as a business, complete with a mission statement that every family member can ratify and fulfill. This becomes a guidepost for whether all generations are moving along the right course. Again, making decisions together as a family helps prevent discord and minimize the potential for costly litigation that can divert family assets. Continuous communication is key. Consider the Psychology of Wealth Many conflicts arise because of money. There are key issues that lie at the heart of any family struggling to pass on wealth, either through family businesses or outright, and how to prepare the next generation for handling and managing those assets:

1. Are the individuals honest about money?
2. Are they motivated?
3. How do you relegate power and control?
4. How to transition the increasing responsibilities and complications associated with having money?
5. How to empower future generations to make a meaningful contribution to society.

Discuss the Reasons for Philanthropy

There is nothing more satisfying than knowing that you have amassed sufficient wealth to not only provide for your loved ones but also to help those less fortunate. Philanthropy should be tailored to one’s own identity and value system. As with a plan for leaving a legacy, a philanthropic plan should be formed much like a business plan. This can be an opportunity for family members to bond through working together toward a common goal. Families can start by collectively answering a few simple questions:

1. What is the objective?
2. Why are we doing this?
3. What do we want to achieve?

The philanthropic plan should include a mission, objectives, and accountability mechanisms. The implementation of the mission may be not only through monetary contributions but through committed activism, volunteering, and the contribution of other efforts. This simple opportunity to participate in an activity as a family can pay dividends beyond mere monetary benefits. The family members over time will feel that hey have made an impact both individually and collectively, and feel a personal connection with each other that minimizes the risk for conflict and discord. Next Steps Start by asking yourself some important questions before you set out to create your family legacy.

1. What do you want to communicate to the next generation?
2. At what point are you OK with “letting go”?
3. How do you want to create motiviation and strength in your children and grandchildren?
4. When will it be time to reduce your involvement and pass on control of the business or management of the wealth or trust?

In short, creating a legacy is not only through your bank accounts but through values, words, deeds, and action. This is a goal worth not only your money but your time and emotional investment.

Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram

Author

Alison Arden Besunder

Alison Arden Besunder, Esq. is Chair of the Trusts & Estates Planning and Fiduciary Litigation group at Goetz Fitzpatrick. She has extensive experience and focuses her practice in the areas of Trusts & Estate Planning, Guardianship, Estate Litigation, Commercial Litigation, Elder Law, and Business Succession Planning.

LEARN MORE >

Contact:
Alison Arden Besunder
212-695-8100, ext. 289
[email protected]

Common Misconception That Married Couples Do Not Need Wills

As an estate planning attorney I often hear married couples state that they do not need a Will because their spouse will receive everything anyway. This is a common and incorrect presumption if you have children. If all of our assets are held jointly with rights of survivorship, that assumption may be correct, but in today’s society most couples still have bank accounts in their individual names in addition to joint accounts. If you have children, by the laws of intestacy in the State of New York the first $50,000 plus only half of the balance of any individual assets (bank or brokerage accounts or real property) will go to your spouse and the other half will go to your children. If you have minor children, the money that is supposed to go to your children will be under the Court’s jurisdiction until that child is 18 years old.  There are two major problems with that. First, if the surviving spouse wants to access any of those funds for the child, they must ask the Court for permission to withdraw funds by filing a petition.  In addition, each year the surviving spouse must file an account of the assets with the Court. This can be a daunting process and with the final decision being made by a judge who does not fully understand your family situation. Second, if you have substantial wealth it may not be wise for a child of 18 years old to receive a large sum of money.

Rather, the better option is to execute a Last Will and Testament that directs that your assets are distributed to the surviving spouse, and only upon the surviving spouse’s death do your assets go to your children, but to be held in trust until that child is at least 25 years old (or older) and nominating a family member as the trustee of that child’s trust. Therefore upon your death, after your Will is admitted to probate with the Court, the Court will no longer have jurisdiction over your estate and family matters.

Of course every family situation is different and this simplifies the suggested plan. There are many variations that can alter this fact pattern. I always advise prospective clients that if they do not have a Will already, they must have a Will when they have children.

Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram

Author

Alison Arden Besunder

Alison Arden Besunder, Esq. is Chair of the Trusts & Estates Planning and Fiduciary Litigation group at Goetz Fitzpatrick. She has extensive experience and focuses her practice in the areas of Trusts & Estate Planning, Guardianship, Estate Litigation, Commercial Litigation, Elder Law, and Business Succession Planning.

LEARN MORE >

Contact:
Alison Arden Besunder
212-695-8100, ext. 289
[email protected]

What to Expect When Meeting with an Estate Planner

If you have made the decision to meet with an estate planner, congratulations. You will thank yourself in the future. Now, before your meeting, there are some questions you should be prepared to answer. These are some of the major points you will want to consider regarding your estate.

Guardians and Alternate Guardians of Minor Children

Who do you want to serve as guardian should something happen to you? Who do you want to appoint as successor guardian if the primary guardian is unable, unwilling, or unavailable to serve? Do you want the guardian’s spouse or another individual to serve as co-guardian? Do you want a different guardian to be appointed for different children? Should a bond be required? Where do you want your minor children to live? Do you want your children to live in their guardian’s home, or would you like your guardian and their family to move into your home? In either case, will there be a need for capital to make improvements to accommodate or house the expanded family unit?

Trustee(s) and Successor Trustee(s) for Minors’ Trust

Minors’ Trustees are effectively guardians of the property of your minor children. They oversee the money left to your children if they are still minors (usually when both spouses predecease). The Trustee does not need to be the same person as the guardian, and there are certain merits to keeping them separate, i.e., ensuring checks and balances on the money and distributions, and ensuring that both sides of a family are in contact after the parents are deceased. The guardian is usually someone who you feel can impart the most important values to your children, while the Trustee is someone who can handle money, will be responsible, and have a long-term view of preserving principal while balanced against providing for the minor children.

Age at Which Minor Children Receive Money

If both spouses pass away, you need to specify at what age your children will receive distributions of remaining principal. While the Trustee usually has the discretion to distribute both income and principal for the health, education, maintenance, and support for the minors (a fairly broad standard), you need to state at which age the minor children will receive what is left. One common setup is to allow for 100% of the remainder (or their share) at the age of 21, 25, 30, or 35. Another is to allow for one third each at age 25, 30, and 35. Another is to allow for half at age of 25 and the other half at 30 if the child graduates from an (accredited) college or graduate school, otherwise at 30 and 35.

Executors

Spouses are usually named executors for the other’s will, as well as successors. An exception can be in second marriages where there are children of the first marriage and the Testator wants to ensure that the assets pass to the children of the first marriage after the death of the second spouse. Things to consider: Do you want your executor to be compensated? Do you want to impose a limitation on the amount of compensation they should receive? Keep in mind that being an Executor (or Trustee) can entail a lot of work – it is essentially managing the aspects of your personal life that you manage now, such as balancing bank accounts and maintaining oversight over assets and satisfying liabilities. Should your Executor be required to post a bond? (i.e., insurance if the Executor loses or absconds with money).

Wills and Credit Shelter Trusts

Each spouse can establish a Credit Shelter Trust in his or her will up to the maximum amount that can be exempt from federal estate taxes; currently $5.34 million for 2014 and adjusted annually for inflation. A Credit Shelter Trust can also help save on state estate taxes. This Trust is typically funded at death with the surviving spouse being named the co-Trustee. Each spouse must choose a co-Trustee that the other will feel comfortable serving with. As with any fiduciary, you should choose someone who is responsible and a “prudent” investor, but who will also make distributions to provide for the spouse. You want to choose a “friendly” Trustee that will cooperate, so that if your spouse needs access to principal for a reasonable purpose, the Trustee will not deny that distribution.

Insurance Trust

The insurance trust, or irrevocable life insurance trust (ILIT), is often used to set aside cash proceeds that can be used to pay estate taxes, as the life insurance policy should be exempt from the taxable estate of the decedent. Once placed in the trust, the insured person no longer owns the policy, and it will be managed by the Trustee on behalf of the policy beneficiaries when the insured person dies. Again, as with choosing any fiduciary for a living or testamentary trust, you should pick a Trustee that is prudent but not unreasonable, and that the surviving spouse can work with after you die.

Advance Directive (also called Power of Attorney, Health Care Proxy)

These are documents that are effective during your lifetime. Spouses usually name each other to make decisions for them, with successor agents to act in the event that the spouse is unable. While you can name one or more co-agents on the Power of Attorney, only one person can act at a time under a Health Care Proxy in New York. Successor agents are critical and should be identified, together with their appropriate contact information.

Living Will

A living will is a directive authorizing your agent to withhold certain life-sustaining measures (such as artificial respiration, CPR, resuscitation) in the event that you are suffering from a condition from which you will not recover. Absence of a Living Will does not mean that the agent cannot make those decisions, however, the Living Will gives the health care agent the comfort, assurance, and authority to make those decisions in the event of a dispute with another family member or the hospital or health care professionals.

Special Bequests

You should identify any specific items such as art, valuable books, collections, jewelry, heirlooms, or outright monetary bequests that you want to be given to certain individuals, and specify them in your will. New York does not recognize personal property memoranda that are outside the will. It is at the discretion of the Executor whether to honor them, but are non-binding.

Taker of Last Resort and Common Disaster Clause

If both spouses and children pass away, where will the money go? Typically it goes to parents, siblings, nieces, and nephews. However, consider the situation of those people – leaving money to your parents could disrupt their own long-term planning needs and any Medicaid or other government benefits they might be receiving.

Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram

Author

Alison Arden Besunder

Alison Arden Besunder, Esq. is Chair of the Trusts & Estates Planning and Fiduciary Litigation group at Goetz Fitzpatrick. She has extensive experience and focuses her practice in the areas of Trusts & Estate Planning, Guardianship, Estate Litigation, Commercial Litigation, Elder Law, and Business Succession Planning.

LEARN MORE >

Contact:
Alison Arden Besunder
212-695-8100, ext. 289
[email protected]

Who Needs a Will?

Everyone.

Whether you realize it or not, even if you never executed a Last Will and Testament, you already have a Will. The State has written one for you. This is called intestacy. Because of the intestacy laws, everyone essentially has an “estate plan” already; the only question is whether you write it or the government does.

The default intestacy plan may not reflect your ideal distribution. New York’s intestacy laws allow a spouse to inherit $50,000 plus half of the balance, with the remainder to the children. Without a spouse or children, the law leaves your estate to your parents, then your siblings, in that order.

Although clients delay estate planning because it forces them to make difficult decisions, a Will affords you control over who inherits and in what proportion, and to name an executor who is in charge of the administration of your estate. Advanced directives are further critical to ease financial and end-of-life decision-making. It is far better for you to decide these issues in advance than to leave it to chance.

Basic planning documents – a will and advanced directives (power of attorney, health care proxy, living will), and, for some, a trust– are particularly imperative for those who are themselves or have family members who are minors, disabled, or are in unmarried or same-sex relationships. If you have minor children, you must specify who will take care of them in the event of your death. While the Court has final say who will be their guardian, your nomination is given great weight.

Without a Will designating a trust for minors or disabled beneficiaries, the Court must appoint a guardian to collect their interest in your estate. This adds another layer of court oversight and can be expensive. The Court also requires full distribution to minors at age 18, while a well-drafted minor’s provision lets you direct an age when the child is mature enough to handle the money.

By implementing an Estate Plan now, you can avoid dissension, stress and confusion later. An Estate Plan declares to your family members and/or beneficiaries how you would want things handled were a crisis to arise or upon your death. Dictating your intentions prevents lengthy, costly legal battles and preserves family harmony.

Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram

Author

Alison Arden Besunder

Alison Arden Besunder, Esq. is Chair of the Trusts & Estates Planning and Fiduciary Litigation group at Goetz Fitzpatrick. She has extensive experience and focuses her practice in the areas of Trusts & Estate Planning, Guardianship, Estate Litigation, Commercial Litigation, Elder Law, and Business Succession Planning.

LEARN MORE >

Contact:
Alison Arden Besunder
212-695-8100, ext. 289
[email protected]

Why Giving Your House to Your Kids Can Create More Problems than It Solves

Often parents will transfer the ownership of their home to a child in order to avoid probate or as a tax play. There are several risks in doing this, and at the end of the day it may not help you accomplish what you wanted to begin with. Some cautions are relatively obvious, for example your child could sell your home without your permission, or default on the loan, introducing the risk of creditors reclaiming it. But for all those who are saying “my kid would never…” read on for some other instances that may not be so obvious.

• If a child becomes divorced, the ex may have a legitmate claim on your home
• The transfer of your home does not make you automatically qualify for Medicaid–they have a 5-year lookback for property and asset transfers
• Taxes are likely to be far less if a home is part of a normal inheritance, since the cost basis will be predicated on when it is inherited, not when it was transferred, reducing the likelihood of capital gains
• You won’t have the option of a reverse mortgage, should you ever need to borrow against it

If transferring your home brings your estate below the estate tax level, then it could very well be a sound financial decision for you and your heirs, however there are ways to protect yourself. Ask an estate attorney about how you can get the benefits without the risk with the following solutions:

1.  A “life estate” where fair market rent is paid to the child to avoid retained interest in the house.
2. A QPRT (here we go again with the acronyms) is another option. It is a Qualified Personal Residence Trust, which allows for transfer at a discount with the agreement to allow parents to remain in the house.
3. A “defective grantor trust” that you gift or sell the home to, freezing its value at the time of transfer while immediately reducing the value of the estate.

Source: Wall Street Journal

Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram

Author

Alison Arden Besunder

Alison Arden Besunder, Esq. is Chair of the Trusts & Estates Planning and Fiduciary Litigation group at Goetz Fitzpatrick. She has extensive experience and focuses her practice in the areas of Trusts & Estate Planning, Guardianship, Estate Litigation, Commercial Litigation, Elder Law, and Business Succession Planning.

LEARN MORE >

Contact:
Alison Arden Besunder
212-695-8100, ext. 289
[email protected]

Pre-Nuptial Agreements

Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram

Author

Alison Arden Besunder

Alison Arden Besunder, Esq. is Chair of the Trusts & Estates Planning and Fiduciary Litigation group at Goetz Fitzpatrick. She has extensive experience and focuses her practice in the areas of Trusts & Estate Planning, Guardianship, Estate Litigation, Commercial Litigation, Elder Law, and Business Succession Planning.

LEARN MORE >

Contact:
Alison Arden Besunder
212-695-8100, ext. 289
[email protected]

Why Should I Pay an Attorney When There Are Forms Available on the Internet?

A form is not able to give you specific legal advice tailored to your particular situation and needs.

The laws impacting estate planning are constantly changing. Retaining counsel to help you navigate the process is critical and will help your descendants avoid unnecessary litigation and probate or administration costs.

As baby boomers and their parents age, they are living longer and often, living with chronic medical conditions. The cost of long term care continues to spiral out of control and families struggle to meet the needs of their aging members.

If you already have an Estate Plan in place, you should review it throughout your lifetime as each stage of life brings different reasons for an estate plan; different issues that need to be addressed, and often changes in the law which may need to implemented into your plan.

Your Estate Plan should be reviewed with the birth of a child, upon a divorce, with the death of a spouse or child, each decade, upon a decline in health, retirement, and if there is a significant change in financial circumstances.

By implementing an Estate Plan now, you can avoid bickering and confusion later. An Estate plan spells out to your family members and/or beneficiaries how you would want things handled were a crisis to arise or upon your death. Being clear about your intentions can not only prevent drawn out costly legal battles but can keep harmony amongst your loved ones.

Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram

Author

Alison Arden Besunder

Alison Arden Besunder, Esq. is Chair of the Trusts & Estates Planning and Fiduciary Litigation group at Goetz Fitzpatrick. She has extensive experience and focuses her practice in the areas of Trusts & Estate Planning, Guardianship, Estate Litigation, Commercial Litigation, Elder Law, and Business Succession Planning.

LEARN MORE >

Contact:
Howard Rubin
212-695-7753
[email protected]

 Good Cause Eviction Law – One More Burden On Landlords

On April 20, 2024, New York enacted the Good Cause Eviction Law, which dramatically impacts the rights and obligations of landlords and tenants in New York by limiting evictions, requiring lease renewals, and capping rent increases for most market rate apartments in New York City, and potentially, other villages, towns, or cities state-wide. While this may be good politics, it is questionable whether it is fair to landlords.

IMPACT

Landlords are now subject to various limitations on seeking to remove a tenant from a residential unit. While the law caps rent increases, it also allows for consideration of certain operating expenses such as property tax increases and costs of major repairs. Although legislators secured carious exemptions to the law, its scope remains broad. Good Cause is effective immediately and will apply to all new leases and renewal leases, unless exempted, in New York City and to any other villages, towns, or cities that chose to opt-in to the law.

EVICTIONS REQUIRE A SHOWING OF GOOD CAUSE

Under Good Cause, unless an exemption applies, landlords are now subject to various limitations on seeking to remove a tenant from a residential unit, unless there is good cause to do so. Good cause is defined as the following:

• Non-payment of rent, unless the rent is “unreasonable”
• Violation of a substantial obligation of the tenancy;
• Nuisance;
• Malicious or grossly negligent substantial damage to the premises or building;
• Occupancy is in violation of law and an order to vacate has been issued, unless the condition is created by the landlord, through neglect or otherwise;
• Illegal use of the premises;
• Unreasonable refusal of access for necessary repairs;
• Owner occupancy as principal residence;
• Demolition;
• Withdrawal from the rental housing market; and
• Failure to agree to reasonable changes to a lease.

Significantly, Good Cause requires a landlord to obtain a court order to remove a tenant upon a showing of good cause, including removal by non-renewal of a lease. Like under the rent stabilization laws, a tenant cannot waive their right to the protections of Good Cause and any agreement attempting to do so will be found void as against public policy.

RENT INCREASE CAPS

A rent increase is presumed unreasonable if it is above the inflation index or 10%, whichever is lower. For New York City, the inflation index is defined as 5% plus the annual percentage change

in the consumer price index for all urban consumers for all items as published by the United States Bureau of Labor Statistics for New York-Newark-Jersey City. For illustrative purposes, the CPI-U rose 3.4% over the last twelve months, which would mean the total permissible rent increase would be 8.4%.

However, this unreasonable increase presumption is rebuttable and, when determining whether a rent increase is unreasonable, a court must consider property tax expenses and any increases thereto. A court must also consider increases based on completed “significant repairs,” where such repairs were not due to a landlord’s failure to maintain. Significant repairs are defined as the replacement or substantial modification of any structural, electrical, plumbing, or mechanical systems or abatement of hazardous materials, including lead paint, mold, or asbestos, but not cosmetic improvements, such as painting, decorating, or minor repairs. A court may consider other relevant facts, including, but not limited to, fuel, utility, insurance, and/or maintenance costs. Any increases that are below the lesser of the inflation index or 10% are per se reasonable.

Where a rent increase is found unreasonable, a tenant’s failure to pay the increase does not constitute good cause for removal.

REQUIRED NOTICE

Good Cause imposes broad notice requirements, regardless of whether the unit is subject to or exempted from the law. In fact, all initial leases and renewal leases, as well as any notices and petitions, for all apartments in New York City (and any other localities that opt-in) going forward must include the “Good Cause Eviction Law Notice,” the form of which is provided for in Section 231-c of the law. If the unit is exempted from the law, the notice must identify the applicable exemption.

Given that Good Cause is already effective, every new lease and lease renewal, arrears notice, or petition going forward must include the “Good Cause Eviction Law Notice.” Indeed, prudent owners would be advised to send these notices to all tenants with any pending notice of renewal or initial leases that have not yet been executed or have not yet commenced.

EXEMPTIONS

Although Good Cause is expansive and applies to “all housing accommodations,” there are several exemptions that narrow its scope. These exemptions, most significantly, include the following housing accommodations:

• Units with a monthly rent that is greater than 245% of the fair market rent (above $5,846 for a studio; $6,005 for a one bedroom; $6,742 for a two bedroom; and $8,413 for a three bedroom), as published annually by the United States Department of Housing and Urban Development (HUD), or the

• into the law;
• Units owned by small landlords, who own 10 units or less within New York State;
• Owner-occupied buildings that contain 10 units or less;
• Units already subject to rent regulation pursuant to local, state, or federal law, rule, or regulation;
• Units which are required to be affordable for certain income levels pursuant to statute, regulations, restrictive declarations, or regulatory agreements with a local, state, or federal government entity;
• Units on or within a building that is owned as a condominium or cooperative, or on or within a building that is subject to an offering plan submitted to the office of the attorney general; and
• Buildings for which a Temporary Certificate of Occupancy or Permanent Certificate of Occupancy was issued after January 1, 2009, for a period of thirty years following the issuance of the certificate.

In addition, the requirements of the Good Cause Eviction Law do not apply to sublets, where occupancy is incident to employment, to seasonal use units, units within hospitals, manufactured homes, hotel rooms or other transient uses, dormitories, or units within religious facilities or institutions.

JURISDICTIONS OUTSIDE OF NEW YORK CITY

While Good Cause applies to New York City, other villages, towns, or cities state-wide may choose to opt-in. These jurisdictions may exempt units with rents at the fair market rent as published by HUD, or up to 245% of the fair market rent. However, if the opting-in village, town, or city does not specifically set the exempt rent, then, like New York City, only units with rents above 245% of the fair market rent will be exempt from Good Cause.

CONCLUSION

The extensive requirements of Good Cause will dramatically alter the rental housing landscape in New York City, and possibly, the state, as other villages, towns, or cities state-wide opt-in. Although legislators secured various exemptions to the law, its scope remains broad.

For further information about the law please contact Howard M. Rubin, Esq., Goetz Fitzpatrick LLP at [email protected].

Goetz Fitzpatrick LLP has been offering clients insightful solutions throughout the New York Metropolitan area since 1967. The firm provides its clients with expertise in the areas of Construction and Real Estate, Trusts & Estates Administration & Litigation, Commercial Litigation, Corporate, Bankruptcy, and Labor & Employment. The firm’s office is located at One Penn Plaza, Suite 3100, New York, NY 10119, Telephone 212 695 8100, [email protected], www.goetzfitz.com. You can learn more about Goetz Fitzpatrick on: LinkedIn | X (Twitter) | Soundcloud | YouTube | Facebook | Instagram

Author

Howard Rubin

Howard Rubin provides general counsel for his clients, representing startups and closely held companies in the real estate, commercial, and construction areas.

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Contact:
Alison Arden Besunder
212-695-8100, ext. 289
[email protected]

When is a Retirement Account Not a Retirement Account?

Author

Alison Arden Besunder

Alison Arden Besunder, Esq. is Chair of the Trusts & Estates Planning and Fiduciary Litigation group at Goetz Fitzpatrick. She has extensive experience and focuses her practice in the areas of Trusts & Estate Planning, Guardianship, Estate Litigation, Commercial Litigation, Elder Law, and Business Succession Planning.

LEARN MORE >