THE IMPORTANCE OF COUNSEL IF YOU'RE NOT USING A REALTOR

Hey, I get it – in today’s economic climate, I’m as much in favor of trying to save a buck as the next guy… There’s a difference, however, between trying to save a buck and jeopardizing your interests. At least in the Western New York region, the real estate market is presently pretty gosh darn hot. In an effort to save that proverbial dime, I’ve noticed that many buyers and sellers are navigating the market without the assistance of a realtor, all in an effort to keep costs down. I’m not here today to debate the sageness of buying or selling a home without the benefit of a good realtor – regardless of whatever I might say, there will always be those who simply undertake to do it themselves. That being the case, I offer the following to those brave souls determined to purchase or conduct a For Sale By Owner (FSBO) on their own.

Is it impossible to conduct a real estate transaction without the benefit of a realtor? Hardly, but buyers and sellers need to understand that realtors bring many unique characteristics to the table that benefit their clients, not the least of which include their experience in negotiating and their familiarity with the necessary contractual documents. When you remove realtors from the equation, buyers and sellers alike are eliminating a font of professional experience from the process that likely needs to be filled in order to bring the deal to fruition. The question becomes one of who will fill that void to ensure your interests are truly protected?

For the sake of this discussion, I’m setting aside the issue of your negotiating prowess. If you’re doing it on your own, hopefully you’ve at least educated yourself on the market and your area comparables so you have some sense of the deal your making. My fingers are crossed for you that you aren’t getting robbed, regardless of which side of the table you’re sitting. My real concern today relates to the dangers of undertaking real estate contracts on your own.

Unless you’re an experienced real estate investor who routinely flip houses, it’s unlikely that you have the knowledge and requisite understanding of real estate law to prepare a purchase offer agreement, a counteroffer or the associated addendums that almost always accompany such offers. Here’s the danger, and I believe it’s very real. Unless a real estate contract has been prepared and executed properly, you could well be setting yourself up for disaster, either in terms of having drafted an unenforceable contract, having prepared an incomplete contract that doesn’t fully set forth your intentions, or exposing yourself to liability down the line if you failed to disclose something you should have. None are pleasant thoughts, and all will almost certainly cause you to have a very bad day if brought to light or used against you.

No one wants to go through the purchase and sale process only to later find that the deal you were so intent on can’t or won’t be closed for some reason that was entirely within your control from the very beginning. Rather than risk that potential, the solution is simple. In order to close, you’re going to need counsel in the first instance to review and approve whatever contract you execute. If you’ve chosen not to use a realtor, do the smart thing and engage your attorney to prepare the necessary purchase offer or counterproposal too! If your attorney routinely practices real estate law, he or she is intimately versed with these contracts and will be happy to assist you at usually nothing more than a nominal fee over and above their usual closing cost. Yes, it might be slightly more expensive than doing it yourself, but I can guarantee you that it will certainly be less expensive than using a realtor or the costs associated with the litigation that could ensue from a poorly, inarticulately or incorrectly drafted contract.

Are there guarantees in life that your deal won’t fall through even with a perfectly drafted contract? Certainly not, but using counsel at least ensures that you’ve done all you can to protect those interests to the best of your ability. As the old saying goes, don’t be penny wise and pound foolish. Save money where and if you can, but not at your own expense!

WHY SHOULD YOU REGISTER YOUR FOREIGN BUSINESS?

The statistics really haven’t changed over the past few years. New York not only remains one of the most expensive states in our fair Union to live and do business, but we also have one of the most oppressive tax structures to boot. All in all, this usually makes for an incredibly unfriendly environment for starting and/or maintaining a business in New York State.

Call it a trickle down effect if you will, but this hostile fiscal climate invariably impacts entrepreneurs’ decisions as far as where to incorporate or whether to even do business in New York. Such being the case, even when companies decide to do business in New York, before doing so, they will often make a strategic decision first – namely, forming their business in another state so that their business is subject to not only friendlier corporate governance laws, but also a less oppressive tax and regulatory structure. That’s all well and good in theory, at least until you start “doing business” in New York.

Quick side note. Just so there is no confusion, when I use the term “foreign” business, I’m not talking about a company that’s been set up in Bangladesh or some other far off land. Foreign in this sense that I’m using it refers to businesses that were formed outside of New York in another state (even if that business was formed by a New York resident with the intention of doing business exclusively in New York). If we were talking about companies formed in another country, those would be referred to as “alien” entities.

New York, like many other states, requires “foreign” businesses to register with the Department of State before conducting business in order to take full advantage of the State’s laws and corporate protections. Registering your foreign entity is a simple enough matter. I do, however, always recommend utilizing competent attorney to assist with the process because failure to do so properly could lead to disastrous consequences for your business later. In order to register, it’s merely a matter of filing some paperwork with the Department of State and thereafter obtaining a Certificate of Authority to transact business here. Simple enough, right?

At the end of the day, business owners need to understand that forming a business in another state is not a panacea to your New York corporate woes. While there may be times that doing so makes sense, owners need to recognize certain facts, not the least of which include that you could be opening your business up to potential litigation in more than one state by undertaking this strategy, and that you will face increased costs by maintaining your business in two separate states. Whether this approach makes sense for your business is fact dependent and one that should be considered with counsel.

Assuming for a moment that you do form a foreign business – then what? What happens if you fail to register it or if you do so improperly? What risks do you run? The long and short of it is that doing business in New York as an “unauthorized” company will subject your business to considerably greater liabilities. The downsides are very real. Depending on the nature of your industry, your company may be entirely banned from conducting business here unless you’ve registered and secured the permission of the necessary state agencies to conduct business (i.e., insurance companies and other industries subject to strict governmental regulation). Your business could likewise find itself subject to fines depending on the illegal practice(s) in which you’ve engaged.

Another reality of doing business in New York as an unauthorized foreign entity is that you will be precluded from affirmative access to the court system unless and until you have qualified to do business in the State. This prohibition is codified in New York’s Business Corporation Law, and is designed to “to protect domestic corporations from unfair competition and to place them on an equal footing with corporations who are using the facilities provided by the state of New York in the conduct of their business.” Others, however, will still be able to gain jurisdiction over you, even though you’re not registered here. One of the goals of any company, regardless of the locale in which it is conducting business, is to enjoy the protections offered by that jurisdiction’s laws, while similarly being able to access its legal system. Without the benefit of those advantages, an unauthorized company could well find itself behind the eight-ball as far as protecting its interests.

Whatever your rationalization for forming your business in another state, the lesson here is simple. If you’ve chosen to do business as a foreign entity, make sure to register with the Department of State! It’s fairly quick. There’s only a nominal expense for doing so. But it will likely save you a major headache down the road should some dispute involving your company arise. Heaven knows there are certainly enough challenges in business without creating additional and unnecessary burdens for yourself; this is an easy fix, so strongly consider it.

WHAT CAN I DO ABOUT MY NEIGHBOR'S #@&$ TREE!

Let’s face it – one of the first lessons you likely learned as a homeowner was that you can’t pick your neighbors, no matter how much you might like to at times. Consider yourself one of the lucky ones if you in fact have neighbors that you like, get along with and can openly speak with (I’m fortunate enough to count myself in this latter category). Regardless of whether you’ve got neighbors that drive you bonkers or ones that you get along with famously, another sad lesson in life is that it often doesn’t take much to sour even the best of relationships. While I wouldn’t deign to write about how to keep a harmonious neighborhood, I will offer some general advice on a topic that has unnecessarily spoiled many a friendly relationship.

It’s silly. It’s small. It’s seemingly innocuous and likely petty. It’s all of these things and more, at least until you’re the one faced with it. What dastardly thing could divide once loving neighbors like the Hatfields and McCoys?? The answer? Shrubbery! Well, any foliage really, but hopefully you get the point. I know, I know. That’s plain silly, right? To an extent I agree with that assessment, at least until you recognize that a family’s house is its castle. That said, most liege lords don’t like things that threaten their property rights, even if those threats are minor.

With all flourish aside, let’s settle into the questions de jour. What are your rights when faced with a neighbor’s tree or hedgerow infringing onto your property? What rights do you have to trim or remove a tree or hedge which belongs to your neighbor but which resides partly on your property? Does it make a difference whether an overhanging tree poses a threat to person or property?

Barring local ordinances to the contrary (yes, they exist, so be sure to check your local rules!!), New York law does allow neighbors to tend to trees and hedges that infringe on their property. This is a limited right though, and one that must be exercised carefully. Homeowners have a right to trim infringing branches only up to their property line, but they must take care not to damage or kill the remaining tree, hedge or bush. If you do harm your neighbor’s foliage, be heedful of that fact you could well find yourself liable to your neighbor for any damages that she suffers from your actions. The aesthetics of a poor pruning job aside, so long as you don’t kill your neighbor’s tree and you only trim up to the property line, you’re well within your rights to cut it back.

Let’s assume your neighbor has exercised her rights to trim your tree up to your property line. What should you do if your neighbor demands reimbursement for the costs she incurred to trim back the branches? Unless the tree is posing a hazard to your neighbor’s person or property (yes, that standard is somewhat open to interpretation), the law does not require you to personally trim the branches or reimburse your neighbor for any expenses she might have incurred from electing to trim back the tree herself.

Propriety aside, even if you are legally entitled to trim back that overhanding branch or creeping hedge row, before you do so, you may want to ask yourself how you would feel if roles were reversed and your neighbor started hacking away at your property without so much as consulting you. While’s there’s certainly no guarantee as to how your neighbor will react, an explanation of what you plan on doing beforehand, with particular emphasis on the fact that you will only be trimming up to the property line, will probably be better received than simply starting up the chainsaw without any notice to her.

Keep in mind that although you may not need to secure your neighbor’s permission to do the work, you’ll still likely be well-served by communicating with her first, if for no other reason than to try and maintain cordial relations with your neighbor. And you never know what might come of that conversation – not only might your neighbor have some useful suggestions for the trim job, but she might even offer to help with the work!