Hamburger, Maxson, Yaffe, Knauer & McNally, LLP July 9, Original Content
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1 HMYLAW Hamburger, Maxson, Yaffe, Knauer & McNally, LLP July 9, 2013 Original Content Standard Forms Are Standard For A Reason Getting Possession After A Tax Deed Location, Location, Location: Change Venue Standard Forms Are Standard For A Reason What is often referred to as boilerplate language or standard form is standard for very good reason. Recently a defendant husband filing for divorce learned this the hard way. In Galetta v. Galetta N.Y.3d (2013), the highest court of the state of New York was faced with a wife s claim that a prenuptial agreement she and her husband signed was invalid due to a defective acknowledgment. In a majority opinion the lower appellate court held that the certificate of acknowledgment was defective, but determined that the deficiency could be cured after-the-fact and that the notary public affidavit raised a triable question of fact as to whether the prenuptial agreement had been properly acknowledged when it was signed in A two-justice dissent in that court would have reversed and granted the wife summary judgment declaring the prenuptial agreement invalid and incurable. The Court of Appeals agreed with the dissent. New York State s Domestic Relations Law requires that an agreement made before or during the marriage shall be valid and enforceable in a matrimonial action only if such agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded. New York s Real Property Law 291 governing the recording of deeds states that a conveyance of real property on being duly acknowledged by the person executing the same, or approved as required by this chapter, may be recorded in the office of the clerk of the county were such real property is situated. The Court of Appeals recognized that the acknowledgment requirement fulfills two important purposes. First, acknowledgment serves to prove the identity of the person whose name appears on an instrument and to authenticate the signature of such person. Second, it necessarily imposes on the signer a measure of deliberation in the act of executing the document. Just as in the case of a deed where the law puts in the path of the grantor formalities to check haste and foster reflection and care
2 [h]ere, too, the formality of an acknowledgment underscores the weighty personal choices to relinquish significant property or inheritance rights, or to resolve important issues concerning child custody, education and care. The Court also noted that Real Property Law 292 requires that the party signing the document orally acknowledge to the notary public or other officer that he or she in fact signed the document. Real Property Law 303 precludes an acknowledgment from being taken by notary or other officer unless he [or she] knows or has satisfactory evidence that the person making it is the person described in and who executed such instrument. Real Property Law 306 also compels the notary or other officer to execute a certificate stating all the matters required to be done, known approved and to endorse or attached the certificate to the document. At the time the parties had signed the prenuptial agreement at issue, proper certificates of acknowledgment typically contained boilerplate language substantially the same as that included in the certificate accompanying the wife s signature: before me came (name of signer) to me known and known to me to be the person described in and who executed the foregoing instrument and duly acknowledged to me that s/he executed the same. The Court of Appeals noted that the language to me known and known to me to be the person described in the document satisfied the requirement that the official indicate that he or she had ascertained that the signer was the person described in the document. It further noted that the clause beginning with the words and duly acknowledged established the signer had made the requisite oral declaration. However, the certificate of acknowledgment relating to the husband s signature did not have the phrase to me known and known to me. The Court held that absent the omitted language, the certificate does not indicate either that the notary public knew the husband or had ascertained through some form of proof that he was the person described in the prenuptial agreement. New York courts have long held that an acknowledgment that fails to include a certification to this effect is defective. On the issue of whether or not this was a curable defect, the Court noted that it did not have to definitively resolve the question before it, because, even assuming it could be cured, the proof submitted by the husband was insufficient as a matter of law to raise a triable question of fact as to the propriety of the original acknowledgment procedure. The wife was, therefore, entitled to summary judgment declaring that the prenuptial agreement was unenforceable.
3 Getting Possession After A Tax Deed Recently, a District Court in Nassau County, in a holdover summary proceeding, enforced the statutory process of gaining possession of real property after obtaining a tax deed. Real estate taxes are considered delinquent if not paid within a specified period of time. If the taxes are not paid, after legal requirements are met (such as giving proper notice to the property owner as well as others holding an interest in the property, or by filing an action in the courts), the property is offered for sale at a public auction. At the sale, the minimum bid is generally the amount of back taxes owed plus interest, as well as costs associated with selling the property. In the event the property is not purchased, title may revert to the governmental entity that offered the property for sale. Title is generally transferred in a tax deed sale through a form of limited warranty or quitclaim deed, often referred to as a Tax Deed. New York allows for a post-sale "redemption period," whereby the former owner has a specified amount of time to reclaim the property by repaying the amount bid at auction plus a penalty. As such, purchasers of properties at tax deed sales are cautioned not to make major improvements on the property until after the redemption period has expired. Sometimes, the original owner remains in possession of the property after the deed. New York allows a swift process of obtaining possession by a warrant of eviction issued by a court in a holdover summary proceeding. In landlord/tenant law, the summary proceeding is a creation of the statute Real Property Actions and Proceedings Law Article 7. It is a mechanism for a landlord to take swift action against a tenant or occupant which remains in unlawful possession. There are two types of summary proceedings: non-payment and holdover. A holdover proceeding is maintained to remove a tenant or occupant which is holding over beyond the expiration of term. One way an occupant can hold over is after a statutory notice to terminate. In AJM RE Holdings VIII v. Cortese, a summary holdover proceeding was commenced by the purchaser of a tax deed. The District Court recognized the statutory procedures set forth in Real Property Actions and Proceedings Law where no landlord-tenant relationship had previously existed, which allows for a summary proceeding to be maintained upon a tax deed after a 10-day notice to quit has been properly served upon the previous owner. RPAPL 713, entitled Grounds where no landlord-tenant relationship exists provides, in relevant part, as follows: A special proceeding may be maintained under this article after a ten-day notice to quit has been served upon the respondent in the manner prescribed in section 735, upon the following grounds:
4 *** 4. The property has been sold for unpaid taxes and a tax deed has been executed and delivered to the purchaser and he or any subsequent grantee, distributee or devisee claiming title through such purchaser has complied with all provisions of law precedent to the right to possession and the time of redemption by the former owner or occupant has expired. The District Court held that [i]n order to maintain the proceeding pursuant to RPAPL 713(4), the petitioner must allege and prove: (1) that the real property involved has been sold for unpaid taxes; (2) that a tax deed was executed and delivered to the purchaser; (3) that the petitioner is the purchaser or subsequent grantee, distributee or devisee claiming through such purchaser; (4) that the petitioner has complied with all provisions of law precedent to the right of possession; and (5) that the time of redemption by the former owner or occupant has expired. Here, the District Court found that the petitioner properly alleged that it had complied with all the provisions of law precedent to the right of possession, after obtaining a tax deed from the Village of Rockville Centre, after properly serving a 10-day notice to quit upon the former owner, and after the time of redemption by the former owner had expired. Location, Location, Location: Change Venue In Panorama Catering, LTD. v. Sherwood Suffolk Co., No /2013 (Sup. Ct. N.Y. Cnty., June 25, 2013) the New York County Commercial Division agreed with this firm s arguments on behalf of a landlord, and granted its motion to change venue from New York County, where the plaintiff-tenant filed the lawsuit, to Suffolk County, where the leased property at issue in the case is situated. Generally, a plaintiff can commence an action in the county in which one of the parties resides. As far as domestic corporations are concerned, residence is in the county where the corporation s principal office is located. See CPLR 503. However, when the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property then venue shall be in the county in which any part of the subject of the action is situated. See CPLR 507. The CPLR, does not allow an objecting defendant to simply move to change venue right away. Instead, a defendant must follow several hyper-technical steps, or risk being permanently stuck in an improper forum.
5 The defendant must first make a formal written demand to the plaintiff that the action be tried in the county defendant specifies as proper. This demand must be made prior to, or along with defendant s answer to the complaint. The plaintiff then has just five days from service of the demand (plus an extra five days if served by regular mail) to either consent to the change, or reject the demand in an affidavit. Only then can the defendant make its motion to change venue. If the plaintiff failed to responded to the demand, the motion can be made in the court that the defendant specifies as proper otherwise, the motion must be made in the court plaintiff originally chose. Lastly, the defendant must act quickly; the motion to change venue must be made within 15 days of the original service of the demand. See CPLR 511. Sometimes, as in our case, this only leaves defendant with a couple days from the time it receives plaintiff s rejection in the mail to serve its motion to change venue. In this case, Panorama Catering, LTD. v. Sherwood Suffolk Co., the plaintiff-tenant rejected our demand, and served its responding affidavit on the 10 th day (the demand was served by mail). As a result, we moved in Supreme Court, New York County to change venue to Suffolk County. Plaintiff s complaint alleged that the landlord breached certain provisions of a commercial lease agreement (allegations which defendant denied) and demanded damages as well as the defendant-landlord s specific performance of certain repairs to the leased premises. Although the plaintiff-tenant attempted to characterize the action in opposition as essentially one for breach of contract and not within the purview of CPLR 507, the Court held that [c]ontrary to plaintiff s contention, its initial choice of venue in New York County, where it resides for venue purposes, was improper since the judgment demanded would affect the use or enjoyment of real property. Accordingly it is ordered that defendant s motion to change venue from New York County to Suffolk County is granted. Id. at 2 (internal citations omitted). Original Content
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