Are you wasting money on Private Mortgage Insurance? Private Mortgage Insurance (PMI) protects lenders against loss if a borrower defaults. You are most likely paying for PMI if your mortgage on your home was 80% or more of the purchase price. The cost of PMI is added to your monthly mortgage payment and costs about .25% to 2% of your loan balance per year which can be a significant amount of money. However, you don’t have to pay for PMI forever. The Homeowners Protection Act of 1998, which applies to new mortgages originating on or after July 29th 1999, states three ways PMI can be canceled or terminated. Please note that the following do not apply if you are behind on any mortgage payments:

(1) Borrower Cancellation

You can send a written request to your lender if your mortgage has reached 80% of your home’s current value. This can happen in the following ways.

(a) Pay the mortgage down to 80% of the original purchase price and your home has not decreased in value.

(b) There is a sufficient increase in home value. You can cancel PMI if the increase is sufficient to reduce the mortgage to 80% or less of the current value of your home. An increase in value can be the result of home improvements or a natural rise of home prices in your area.

 (2) Automatic Termination

Even if you do not request cancellation, your lender must terminate PMI when you pay down the mortgage to 78% of the original purchase price.  Here, home value is based solely on the original purchase price. Thus, your lender must terminate PMI even if your home has decreased in value.

(3) Final PMI Termination

Your lender must terminate PMI when you have reached the midpoint in the repayment schedule of your loan. For example, on a typical 30 year loan, if a borrower has paid all mortgage payments through 15 years, the lender must terminate PMI.

Please note that if your loan is guaranteed by the Federal Housing Administration or Department of Veterans Affairs, these rules generally won’t apply.  If you have questions about mortgage insurance on an FHA or VA loan, you should contact your servicer.

James G. Dibbini & Associates, P.C. has over 20 years of experience helping homeowners protect their interests and save money. If you need help cancelling PMI, or believe it should be terminated, give us a call at (914) 965-1011 or email us at jdibbini@dibbinilaw.com to learn more.

This James G. Dibbini & Associates, P.C. Blog post is a publication of James G. Dibbini & Associates, P.C. All Rights Reserved. Quotation with attribution is permitted. This blog post offers general information and should not be taken or used as legal advice for specific situations, which depend on the evaluation of precise factual circumstances. Please note that James G. Dibbini & Associates, P.C. does not undertake to update its publications after their publication date to reflect subsequent developments. Prior results do not guarantee a similar outcome. This publication may contain attorney advertising.

If you are interested in buying a multi-family building located in New York City or Westchester County, specifically a building with six units or more, it is imperative that you learn more about the Division of Housing and Community Renewal (DHCR) and its requirements.

The DHCR is a state agency responsible for supervising, maintaining and developing affordable low and moderate income housing in New York. The DHCR administers housing development and community programs and regulates housing accommodations which are subject to rent control or rent stabilization under the Rent Stabilization Code (RSC), in New York City, and the Emergency Tenant Protection Act of 1974 (ETPA), in Westchester County.

Generally, the RSC applies to privately owned properties in NYC built between February 1, 1947 and December 31, 1973 which contain six units or more. It also applies to tenants in buildings built before February 1, 1947 who moved in after June 30, 1971.  The ETPA applies to privately owned properties outside of NYC, including some cities and towns throughout Westchester County, built before January 1, 1974 which contains six units or more. Also, some buildings built after these dates or have less than six units may be subject to rent stabilization laws for tax abatement purposes.

Property owners of buildings subject to rent stabilization laws are required to register the rents of these units with the DHCR annually. If property owners do not register with the DHCR, they can be disqualified from applying for, charging or collecting any rent increases and could be subject to additional, significant penalties. It can also delay or prevent a sale or refinance of the property.

However, there are exceptions which can release a property owner from having to register with DHCR.  For instance, an occupied apartment becomes exempt if the legally regulated rent for that apartment exceeds $2,500.00 and the tenant’s total annual income exceeds $200,000.00 for a period of two years.  Further, any apartment with a monthly rent of at least $2,500.00 becomes deregulated when it becomes vacant so long as the property owner files a report of decontrol with DHCR.

Property owners can also apply to the DHCR for approval to raise the rents of rent stabilized units based on major capital improvements (MCI). Some examples of MCI items include boilers, windows, electrical rewiring, plumbing and roofs. Also, to be eligible for the MCI increase, it must be a new installation and cannot be a repair to old equipment. These improvements help increase the rent which eventually may lead to deregulation of the rental unit.

If no exceptions apply or the unit is not deregulated, a property owner must file registrations with the DHCR by completing and mailing Annual Registration Summary (Form RR-2S), as well as an Annual Apartment Registration Form (Form RR-2A) for each rental unit, prior to July 31st of each year.  Also, all vacancy and renewal leases for apartments dated October 1, 2014 and later must include a lease rider or addenda, depending on where the property is located, with all registrations. The rider form for rent stabilized apartments in New York City is named RA-LR1 and can be found by clicking on the following link: http://www.nyshcr.org/Forms/Rent/ralr1.pdf.  The addenda form for rent stabilized apartments in Westchester County is named RA-LR1 (ETPA) and can be found by clicking on the following link: http:// www.nyshcr.org/Forms/Rent/ralr1-ETPA.pdf.

As stated above, failure to file registration statements can prevent or substantially delay the sale or refinance of a property.  Potential purchasers of rental properties generally and justifiably request to see DHCR registrations for the previous four-year period before entering into a contract of sale.  Potential purchasers want to make sure the rent being charged is legal; they do not want to buy a property that may be subject to lawsuits by tenants who file rent overcharge complaints.  Further, lenders generally refuse to provide financing to Purchasers if DHCR records are not available because of owner’s failure to file the required registrations.  Thus, it is in the best interest of the owner of rent stabilized property to file the DHCR registrations annually.

James G. Dibbini & Associates, P.C. has extensive experience in DHCR matters and can assist you with all DHCR matters, including annual registrations, defending against tenant complaints for loss of services or rent overcharge and completion of applications for exemption based on major improvements to the property.  Do not expose your company or yourself to rent overcharge claims or a roll-back of tenants’ rents.  Call or email us today for more information on how to get in compliance with DHCR.

Municipalities subject to the ETPA in Westchester County: Croton, Dobbs Ferry, Eastchester, Greenburgh, Harrison, Hastings, Irvington, Larchmont, Town of Mamaroneck, Mount Kisco, Mount Vernon, New Rochelle, Pleasantville , Port Chester, Sleepy Hollow, Tarrytown, White Plains and Yonkers.

Mechanic’s liens give contractors, subcontractors, suppliers and other professionals in the business of improving real property a way to collect after doing work for, and/or providing supplies to, owners that don’t want to pay up. A mechanic’s lien is a security interest in the title to property held by an individual, or company, who has improved the property by supplying the owner with labor and/or materials.  Once a mechanic’s lien is properly filed, a lienor can recover by commencing an action to foreclose on the lien which forces the owner to sell the property in order to pay the lien off.

A mechanic’s lien can be an effective tool in making sure you get paid but it is crucial that you follow all applicable laws when filing the lien because if you don’t, it may be defective and it could be declared void by the Court. Also, if it is declared void after the statute of limitations is up, you cannot re-file and it may be harder to recover from the property owner.

Mechanic’s liens can be filed against property owned by the state or a public corporation, which is known as a public improvement, or property owned by an individual or entity, which is known as a private improvement.

Lienors can file a mechanic’s lien, or the “notice of lien,” anytime during the progress of the work or can file within eight months either after the contract is complete or from the date the last item of work was performed or material was supplied. However, for single family dwellings, the mechanic’s lien must be filed within four months instead of eight.

So what do you have to include in your mechanic’s lien? There are several pieces of information you need to collect before you begin drafting your lien. The following information must be included in your mechanic’s lien:

• Owner’s name and correct legal address of the property including the section, block and lot. Note: You can get this information from the property deed.
• Name and address of the company or individual you contracted with to do the work and/or supply materials.
• Agreed price, and the amount unpaid, for the services and/or materials provided.
• Description of the work performed and/or items supplied.
• Dates when you started and finished.

Once you have your mechanic’s lien drafted, it’s time to file it with the County Clerk’s office and serve it on the owner. The lien must be filed in the County in which the property is located. Also, it is important to call the Clerk’s office before filing to see if there are any additional fees. Another important aspect of filing the mechanic’s lien is making sure the lien is properly served on the property owner. Without proper service, the lien will be found defective. The notice of lien must be served upon the property owner within five days before, or thirty days after, filing the notice of lien. Also, once served, you are required to file proof of such service with the Clerk’s office within thirty-five days after the notice of lien is filed.

It should be noted that a mechanic’s lien lasts for only one year after it is filed unless an action is commenced to foreclose the lien. However, before the one year is up, lienors can file an extension to extend the lien for another year as long as the property is not a single family dwelling. Extensions for liens on single family dwellings can only be extended by court order.

James G. Dibbini & Associates, P.C. has over 20 years of experience helping contractors and sub-contractors protect their interests and recover from non-paying property owners either through settlement or foreclosing on the lien. If you need help filing a mechanic’s lien, give us a call at (914) 965-1011 or email us at jdibbini@dibbinilaw.com.

This James G. Dibbini & Associates, P.C. Blog post is a publication of James G. Dibbini & Associates, P.C. All Rights Reserved. Quotation with attribution is permitted. This blog post offers general information and should not be taken or used as legal advice for specific situations, which depend on the evaluation of precise factual circumstances. Please note that James G. Dibbini & Associates, P.C. does not undertake to update its publications after their publication date to reflect subsequent developments. Prior results do not guarantee a similar outcome. This publication may contain attorney advertising.

I hope everyone is having a great start to the New Year despite all this snow Mother Nature has decided to dump on New York. Recently, Huff Post posted an article highlighting some of the new real estate laws New Yorkers should be aware of this year. I thought this article was informative, yet brief, so I wanted to share it with you. These new real estate laws include changes in flood insurance, estate and gift tax reforms, brokerage rebates and sprinkler systems.

The article pointed out that homeowners with costly flood insurance premiums may finally get a break due to the Homeowner Flood Insurance Affordability Act of 2014 which was passed to help mitigate some of those rate increases. New York also passed laws that have increased the estate tax exemption to $2,062,500 and allow real estate brokers to give their clients rebates, a move that may help them attract new customers.

Lastly, New York landlords must now provide notice to tenants on whether their rental units have fire safety sprinkler systems. We wrote a newsletter on this topic that discusses the new law in greater detail and points out the specific language that landlords must include in the notice to tenants. Our newsletter on this sprinkler system notice can be accessed by clicking HERE and to view the entire article by HuffPost click HERE.