From CNN: Mortgage rates tick down for the second week in a row

Mortgage rates continued to decrease slightly this week, dropping to 6.69% average from 6.71% the previous week, influenced by the Fed’s recent decision to pause rate hikes. For more info, you can read the full article here.

The lightning development of AI tools such as ChatGPT is already being felt in many industries. As reported by the Guardian, this includes the field of cybercrime, and particularly the common type known as “phishing.” Phishing is the transmission of a virus or other harmful software, often via email and generally disguised as a legitimate email link or attachment. However, up till now most phishing attempts were relatively poorly constructed and easy to spot, full of grammatical inconsistencies, odd phrasing, and spelling errors. However, the ability to automatically generate a coherent email using AI is making these attempts significantly more difficult to spot, and the risk to real estate transactions if one or more parties fall victim to a scammer can be dire.

To avoid falling for a phishing attempt, it is important to use great caution when acting on a received email, whether clicking on attachments or links, or providing sensitive personal information. Beforehand, check the sender email address to make sure that it appears correct. If you are not sure what you have received, its best to check with the sender at a known telephone number (not the number in the suspect email) before opening or proceeding. If you are wiring funds as part of a real estate transaction, it is imperative to verbally verify any wire instructions that you receive via email via telephone in this manner.

For more information, you can read the article here.

According to date from Freddie Mac, mortgage rates have continued the overall downward trend that has been dominant since last November, apart from a slight rise during February 2023. As of the week ending March 30, the average rate had reached 6.32%.

To learn more, you can find the original article from CNN here:

For many New York City homeowners and renters, subdividing apartments with temporary walls can be an easy way to maximize space. Many renters are familiar with “flex” units where a new bedroom is created with space taken from living areas. However, the legal requirements for these walls can be complicated, and homeowners and tenants should be aware of the challenges before proceeding.[1]

There are two common types of temporary walls in New York City condos, co-ops, and rental apartments: temporary pressurized walls, and partial walls.[2] Temporary pressurized walls look and feel like any other wall and provide a floor to ceiling divider with a standard door.[3] These walls may create the most complete division, but they also require the most burdensome legal approvals.[4] To build a temporary pressurized wall, usually you will need to file building permits with the NYC Department of Buildings (DOB) and after completion, receive a new Certificate of Occupancy.[5] Both processes can take a significant amount of time.[6] Because of these procedures, it’s important to hire an experienced contractor for your temporary pressurized wall installation.[7] Failure to file legal permits can result in fines and can make your unit harder to sell in the future.

Partial walls are an easier option for many New Yorkers hoping to subdivide their space.[8] Partial walls are made from the same material as temporary pressurized walls.[9] The primary difference is that they must leave a gap of at least 12 inches between the top of the wall and the ceiling.[10] For some residents, such a gap would be unacceptable. But partial walls do not typically require any permits or certificates of occupancy.[11]

For either temporary pressurized walls or partial walls, it’s critical to speak with your building management.[12] Most landlords, management companies, condo and co-op boards require their approval before beginning construction, regardless of city permitting rules.[13]

 

NOTES:

[1] Street Easy, Everything to Know About Putting Up Temporary Walls in a NYC Apartment, Street Easy, (October 19, 2020), https://streeteasy.com/blog/temporary-walls-for-apartments/

[2] Id.

[3] Id.

[4] PropertyClub, Flex Wall Guide: How to Build Temporary Pressurized Walls in NYC, PropertyClub, (August 15, 2022), https://propertyclub.nyc/article/a-guide-to-building-a-temporary-pressurized-wall-in-new-york-city#temporary-pressurized-walls-vs-full-walls

[5] Evelyn Battaglia, From 1 room to 2: The insider’s guide to temporary pressurized walls, Brick Underground, (August 24, 2022), https://www.brickunderground.com/blog/2011/12/From_1_room_to_2%3A_%20An_insider%27s_guide_to_building_a_wall_in_NYC

[6] PropertyClub, supra note 4.

[7] Battaglia, supra note 5.

[8] StreetEasy, supra note 1.

[9] Id.

[10] Id.

[11] PropertyClub, supra note 4.

[12] StreetEasy, supra note 1.

[13] Id.

Homebuyers in New York City may be presented with the opportunity to purchase a “sponsor unit,” a type of property unique to New York City real estate.[1] At the most basic level, “a sponsor unit is an apartment that has never been sold” before.[2] However, this term can have a different meaning depending on whether the unit is in a condo or co-op building.[3] Before choosing to do so, buyers should understand what sponsor units are, along with the advantages and disadvantages of purchasing one.

In a condo building, a sponsor unit is being sold directly by the developer.[4] Sometimes these are units in a brand-new building, or they may be units that the developer itself rented out.[5]  For many NYC homebuyers, the opportunity to purchase a unit that has never been lived in is a huge bonus.[6] However, in the competitive NYC real estate market, condo sponsor units may even be sold before the building is completed.[7]

In a co-op building, sponsor units are either being sold by the original owner or have been converted from a rental by the co-op corporation.[8] In either circumstance, co-op sponsor units are often in original condition meaning a buyer may need to make significant renovations.[9] Purchasing a co-op sponsor units may mean you’re not beholden to the same rules as shareholders in the co-op, including the sometimes-burdensome board approval process.[10] However, there may be significantly higher closing costs and more complicated legal issues.[11] Before purchasing a co-op sponsor unit, be sure to have an experienced real estate attorney view all the materials in the transaction.[12]

NOTES:

[1] Erika Riley, What Is a Sponsor Unit in NYC Real Estate?, Street Easy, (July 28, 2021), https://streeteasy.com/blog/what-is-a-sponsor-unit/#ib-toc-anchor-1.

[2] Id.

[3] Id.

[4] Hannah Frishberg, What Is a Sponsor Unit and Why Does It Matter?, Brownstoner, (July 8, 2016), https://www.brownstoner.com/real-estate-market/sponsor-unit-co-op-building-definition-mortgage/

[5]Id.

[6] Riley, supra note 1.

[7] Id.

[8] Id.

[9] Victoria Alexander, What Is a Sponsor Unit?, Realty Collective , (June 22, 2020), https://realtycollective.com/what-is-a-sponsor-unit-2/

[10] Id.

[11] Frishberg, supra note 4.

[12] Alexander, supra note 9.

CNN recently published an interesting article highlighting the growing prominence of AI programs such as ChatGPT, which generates detailed responses from simple prompts, in the real estate industry. Used largely as a time-saving device, the program has been used for listings and even in some instances the initial drafting of legal documents. As the use of AI programs is still in its infancy, and many of its legal, ethical, and practical implications are unclear, it remains to be seen what long term effect AI will have.

To read the article in detail, please find it here:

As reported by CNN, Mortgage rates are continuing to fall this year, reaching 6.09% at the beginning of February, and down from last year’s peak of 7.08%. Forecasts predict that rates will continue to decrease this year as inflation eases.

To read further, please see the original article here.

New York Governor Kathy Hochul has proposed several reforms to the state’s housing system which, if enacted, could dramatically impact NYC’s real estate market.[1] Many of the proposals are intended to spur new development to remediate NYC’s housing crunch.[2]

First, the Governor plans to repeal a New York state law that restricts the amount of residential space a developer can build on a given lot.[3] If the legislature adopts her plan, developers would be able to build many more units – hopefully expanding NYC’s supply of affordable condo units.[4] Second, the state will support New York City Mayor Eric Adams’ efforts to convert some of the NYC’s excess office space into new housing units.[5] The regulatory relief would make it easier for developers to change existing commercial space into new condo and rental homes.[6] Finally, the Governor will simplify the process for city homeowners to bring garden and basement units into legal compliance.[7] Off-market basement and garden-level units have been common in some parts of the Five Boroughs. With the suggested amnesty proposal, NYC may see more of these units on the market as rentals or condos.

Notes:

[1] See Press Release, Kathy Hochul, Governor, State of New York, Governor Hochul Announces Statewide Strategy to Address New York’s Housing Crisis and Build 800,000 New Homes, (January 10, 2023), https://www.governor.ny.gov/news/governor-hochul-announces-statewide-strategy-address-new-yorks-housing-crisis-and-build-800000

[2] Id.

[3] Kathryn Brenzel, Hochul plan for resi towers is tall order, TheRealDeal, (January 19, 2023) https://therealdeal.com/2022/01/19/hochul-plan-for-resi-towers-is-tall-order/

[4] Id.

[5] Greg David, In State of the State Speech, Hochul Backs Adams Housing Agenda,, The City, (January 10, 2023) https://www.thecity.nyc/2023/1/10/23549102/state-of-state-speech-hochul-adams-housing

[6] Id.

[7] Id.

The New York Times article by Ronda Kaysen, “Is It Worth the Risk to Sublet an Apartment Illegally?,” discusses a possibility that many unit owners in co-ops and condos may have considered: can I get away with subletting my unit without my co-op or condo’s approval?[1]

As you may have guessed, the answer is no.[2] Kaysen approaches the issue via the dilemma of a tenant who wished to extend her sublease by continuing to live in a unit without the Co-op’s approval.[3] Unfortunately for the tenant, the unit owner would likely be brought into turmoil with the co-op board, pressuring the unit owner to force out the tenant.[4] Some of the methods a co-op or condo can reprimand a shareholder for subleasing their unit without board approval include:

• Fines;
• Suing the shareholder; and
• Forcing the sale of the apartment.[5]

All of these tools a co-op or condo may have in their arsenal are likely very unappealing to you as a shareholder. We strongly urge that you abide by your co-op or condo’s rules to avoid such reprimand.

If you wish to view Kaysen’s full article, please find it here:

 

Notes:

[1] Ronda Kaysen, Is it Worth the Risk to Sublet an Apartment Illegally?, The New York Times (Oct. 29, 2022), https://www.nytimes.com/2022/10/29/realestate/illegal-apartment-sublet.html.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

What is important to consider (outside of the unit itself) when purchasing real estate in New York City? While some may be okay with walking 15 minutes to the nearest subway station, others may wish to live right next to one or prefer to drive instead. Considering your preferences is crucial, so that you do not experience buyer’s remorse down the line.

Some relevant considerations include:

• The distance to the nearest subway station from your apartment and where it leads;[1]
• Bus service;[2]
• Whether the building is a “walk-up” and what floor you would be living on;[3]
• School districts;[4]
• Nearby stores/businesses (this could include your grocery store of choice or a gym);
• Availability of cycling infrastructure;[5]
• and, of course, anything else you find relevant.

We propose that you order these considerations in order of importance and take a mental note of any non-negotiables. Doing so will allow you to streamline your homebuying process and improve your chances of finding not only a home you love, but also a neighborhood that you enjoy just as much.[6]

Should you wish to learn more, please visit Margaret Heidenry’s discussion of some of these factors in her article How’s the Commute? And Other Factors You Should Consider in New York City,[7] linked here for your convenience. We also recommend consulting a real estate agent as part of your property search, as they will have the necessary expertise to help answer your questions.

 

Notes:

[1] Margaret Heidenry, How’s the Commute? And Other Factors You Should Consider in New York City, Realtor.com (Sept. 1, 2018), https://www.realtor.com/advice/guide/new-york-city-neighborhood-factors-to-consider/.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id.