The standard residential contract of sale used by attorneys in the New York Metropolitan area will often state that the closing will take place, for example, “on or about December 1, 2018.”  In New York, unlike many other states, the “Closing Date” contained in the contract, especially if the words “on or about” precede it, is a fluid date.  It is rare that a closing actually occurs on the date specified in the contract. The phrase “on or about” has been interpreted by the New York courts to mean that either side has a reasonable period beyond the “on or about” date in which to close.

If all progresses on schedule, a closing can usually occur within 60 days after the contract has been fully executed by the seller and purchaser. However, not all real estate transactions proceed as planned.  While many of the transactions do eventually close (unless a buyer is unable to obtain financing or an appraisal comes in too low), there are some that do end up in a dispute or litigation.  If a party is unwilling to close within a “reasonable” time after the closing date, many times, before litigation is commenced, the attorney for the party wishing to close can send what is referred to as a Time of the Essence Letter (“TOE Letter”) to the other party.  That letter will set forth a new closing date stating that “time is of the essence.” If the party receiving the letter does not close by that date they can be declared in default under the terms of the contract of sale.

It is important to note that the “time of the essence” standard is not a statutory standard but rather one established by the courts and case law, and is constantly changing depending on each case that is decided by the courts.  While the courts are silent as to what constitutes a “reasonable” time, many real estate attorneys practicing in the New York Metropolitan area have come to a consensus that “reasonable” is generally about 30 days.  However, the case law has explained that the other party must be given a reasonable time in which to act and what amounts to a reasonable time to perform depends on the circumstances of the case.

Whether dealing with a TOE Letter or an “on or about” closing date, the closing date and closing time frames can quickly change and extend far beyond the “on or about” closing date depending on the circumstances.

Most people obtain financing when purchasing a house, condo, or co-op.  In that case, the contract of sale will contain a mortgage contingency clause making the sale contingent upon the buyer obtaining a mortgage in a certain amount.  If the buyer's loan application is denied by the lending institution, the buyer can then cancel the contract and get the down payment back.

In order to benefit from the protections allowed by the mortgage contingency clause the buyer must strictly abide by all its terms, i.e. the buyer must only apply for a loan in the amount stated in the clause (or such lesser sum as buyer shall be willing to accept), and obtain the mortgage within the time frame given in the clause.  If the buyer applies for a loan greater than the amount stated in the clause and is then denied a loan, the buyer will have forfeited the protection afforded by the clause and will not be able to cancel the contract.  If the buyer is then unable to obtain other funds to complete the purchase the buyer will be in default under the terms of the contract and more than likely lose their down payment.  On the other hand, if the buyer is approved for a loan greater than stated in the mortgage clause, then no problem.  Nonetheless, I  would never advise a client to take such a risk and put their down payment in jeopardy.  There are many reasons why the loan may be denied that have nothing to do with the financial qualifications of the buyer and are beyond the buyer's control.  An experienced real estate attorney will help you navigate through this process.

The mortgage contingency clause is there to protect your down payment should your loan be denied.  To best protect yourself when purchasing a home with a mortgage, hire an experienced real estate attorney who fully understands all aspects of the mortgage contingency clause and will guide you through the entire closing process.

Title insurance is crucial for a home buyer because it protects you and the lender from the possibility that your seller doesn't -- or previous sellers didn't -- have free and clear ownership of the house and property and, therefore, can't rightfully transfer full ownership to you. Problems with the title can limit your use and enjoyment of the property, as well as cause you financial loss.  This is why you need title insurance.  

Your real estate attorney will arrange the process of getting you title insurance soon after your Contract of Sale is signed.

Title insurance protects against the following common hidden risks just to name a few:

Title insurance is typically a combination of two policies: a lender's policy and a borrower's policy. Your lender -- assuming you're taking out a mortgage, will require that you buy a lender's policy (also called a "mortgagee's policy") to pay for its legal defense costs and reimburse any mortgage payments you can't make because you've lost the house to someone else's claim on it.

The lender may also require you to buy an "owner's policy," covering your own legal fees and other losses, as yet another step toward protecting the lender's collateral. Your title insurance policy remains in effect as long as you, or your heirs, retain an interest in the property.  Title insurance will give you the peace of mind in knowing that the investment that you have made in your home is a safe one.

Joint property ownership can be a great solution for people who want to own a home, especially for first-time buyers. But joint ownership can limit your rights and options -- not only while you own the property, but also when you want to transfer ownership to an heir or another buyer. There are three major forms of joint property ownership (or "concurrent ownership") -- tenancy in common, joint tenancy, and tenancy by the entirety.

Tenancy in common (sometimes called a "TIC") is the most popular form of concurrent property ownership. Tenants in common (or co-tenants) each own an equal share of a piece of property -- whether it's a house, an apartment building, or other type of real estate. This generally means that each co-tenant has an equal right to possess or use the entire property, and that the rent or maintenance costs of the property are shared among the co-tenants according to their ownership interest. Each co-tenant also possesses a share in the value of the property as it appreciates.

Real estate owned by one or more persons as tenants in common gives a percentage ownership to each person, and upon that owner’s death, their percentage share goes to their estate. If they have a will, it goes to the persons named in their will. If they die without a will, then it goes to their legal heirs-at-law. With this type of ownership, each owner has the right to transfer their share during their lifetime, without obtaining the permission of the co-owner. If the deed is silent as to form of ownership, then there is a presumption in the law that the parties own as tenants in common.   Any co-tenant has the right to live in the premises without paying rent to the other owners, and every co-tenant may be entitled to credits for items such as taxes, maintenance and repairs. If the premises are rented to a non-owner, all co-tenants would be entitled to share in the rent. 

A co-tenant can transfer interest in a tenancy in common to another buyer or to an heir -- via a will, for example. A co-tenant can also mortgage a share in the property. What a co-tenant cannot do is transfer or sell the other co-tenants' interests in the property. Once a co-tenant's interest in a tenancy in common is transferred, the new owner steps into the shoes of the co-tenant seller and becomes a tenant in common with the other co-tenants.

Joint tenancy is sometimes called "joint tenancy with right of survivorship." Joint tenancy ownership implied that a joint tenant lost all interest in their property when they died. The deceased person's interest was automatically transferred to the other joint tenant.  Thus, in a joint tenancy, the last surviving joint tenant owned all the property outright.

If you want to create a joint tenancy or take possession of property as joint tenants, make sure that your lawyer or real estate agent is very careful about the phrasing in the deed or will. In general, courts prefer very specific wording that shows the desire to create a joint tenancy and the right of survivorship and not a tenancy in common. For example, a deed or will might include instructions that read "to A and B, as joint tenants with a right of survivorship, and not as tenants in common."

Sometimes, under state law, a joint tenancy will automatically convert to a tenancy in common. For example, if joint tenants die simultaneously, their property is treated as a tenancy in common by the courts, for purposes of inheritance and estate distribution. And if two or more people inherit property from a last surviving joint tenant, they do so as tenants in common instead of as joint tenants.

The third form of ownership -- tenancy by the entirety -- is only available to a married couple who owns a piece of property together.   The couple must be married at the time they acquire the property and must remain married in order for the tenancy by the entirety to be valid.  If a married couple divorce after taking title to the property as tenants in entirety, they then become tenants in common.

The deed should recite the names as follows: “John Doe and Jane Doe, husband and wife” or John Doe and Jane Doe, his wife.” If silent, it is presumed that a married couple has taken as tenants by the entirety. Not all states recognize tenancies in entirety -- but those that do often presume that a grant of property to a husband and wife automatically creates a tenancy by the entirety, unless some other type of ownership is specified.  If a different form of ownership is desired between a husband and wife, then it must be specified as either tenants in common or joint tenancy with right of survivorship.

Under a tenancy by the entirety in New York State, upon the death of one spouse, the other spouse owns the property free and clear of any encumbrances that may have been caused by the other spouse. Thus, if one spouse sells or mortgages the survivorship interest to a third party, the third party will get only a contingent interest.  For example, where the husband conveys or grants a mortgage to a third party, the third party will get nothing if the husband predeceases the wife.  It the wife dies before the husband, the third party will own the property outright, or will have an enforceable mortgage on the husband’s full fee interest.  Neither spouse can disinherit the other spouse by leaving the property to someone else in their will.