NYSBA SPRING 2002 | VOLUME 30 | NO. 2 N.Y. Real Property Law Journal A publication of the Real Property Law Section of the New York State Bar Association A Message from the Section Chair It is more attack on New York and indifference and the 9/11 attacks were not on than six months of people not wanting to deal with them. Many real estate lawyers are since the “day this problem. The second is the fear now involved in “work-outs” on of destruction” of being a “victim” by coming to hotels here in the city. The hotels and the effects New York City. Even in Manhattan have suffered and are badly in need of September 11 there are people that regard the prob- of relief and help in coping with the are still upon lems of lower Manhattan as remote loss of tourism that post 9/11 has us. September and not part of “our Manhattan.” created. Many of the commercial 11 has had a While many people have opened office buildings downtown are suf- huge effect on their hearts and pocketbooks to the fering also. The tenants have left; real estate, especially in the lower victims of 9/11, there are millions of many buildings were hurt by the part of New York State. The real people who do not want to know dust, flying concrete, steel, and glass estate market both in the commercial about the attack on the World Trade near Ground Zero and have not yet and residential area south of 14th Center but only deal with it as if reopened. Many tenants, including Street in Manhattan has been para- New York were a foreign country law firms both large and small, have lyzed. Commercial buildings have had prospective tenants leave and refuse to even look downtown. Lessees who have signed leases near Inside Ground Zero have defaulted and Habitability Issues at Ground Zero: Have Reports of the Death of the Duty elected to relocate to midtown Man- Reconsidering Real Property Law § 235-b to Mitigate in New York Been Greatly hattan. Residential tenants have in the Wake of September 11th 43 Exaggerated? A New Interpretation of entered into agreements to end their (Jay Berg) Holy Properties Ltd., L.P. v. Kenneth leases and have relocated. The reloca- Cole Productions, Inc. 77 Insurance Issues Resulting from the (Jason Kee Low) tion of these residential people have Attack on America— created in the suburbs—Westchester, September 11, 2001 51 Real Estate Developers: Rockland, Nassau and Suffolk Coun- (James E. Branigan) Don’t Buy the Farm! 82 (John D. Kern) ties, as well as nearby New Jersey—a City and State Rulings Open the Door tight market for homes and apart- for Synthetic Leases in New York 55 BERGMAN ON MORTGAGE FORECLOSURES: ments in these areas, thus already (Joshua Stein) Non-Judicial Foreclosure Renewed placing on a tight seller’s market a in New York 88 Federal Preemption of Real Estate lot of competition among home buy- (Bruce J. Bergman) Lending Activities of OTS Regulated ers. Statistics have shown that for- Lenders 59 New York State Bar Association eign and domestic tourists have (John G. Hall) Committee on Professional Ethics 89 stayed out of New York for two rea- (Peter Coffey) sons. The first is the “embarrassment Housing Cooperatives: Ownership by Trusts: A Retrospective and a Forecast 65 Bar Association Announces Web Site of the victims,” the populace not (Anita Rosenbloom and Richard Siegler) Redesign 91 wanting to know or be part of the (Michael J. Berey) relocated to midtown or other places. apartments. How do they obtain father, Eugene Morris, who received Many of the businesses have gone to title? How do they get breaks in pay- the Real Property Law Section Pro- nearby New Jersey, Westchester ment of loans or maintenance fessionalism Award. Gene richly County and even downtown Brook- charges because the “bread- deserves this award. lyn. This was especially true of law winner(s)” was killed? Problems in The Condominiums and Cooper- firms. Some, but only a few, have regard to the need for death certifi- ative Committee also had a CLE ses- returned to lower Manhattan. Many cates and how individuals can obtain sion; some of their speakers were Joel will never return. One large New death certificates were dealt with. Miller, Professor Paul Shupack, Terry York law firm that took a sub-lease in Contract rights—where people were Lewis and Com. John Lariviere, midtown immediately after is again buyers or sellers and the real estate speaking on the Uniform Commer- looking downtown for a large block was damaged by dust, etc., and even cial Code and Cooperatives. Ronald of space, even if the space is not where there was no physical dam- Kahn and Leatha Sturges spoke on ready for occupancy for some time. age—were also discussed. Problems the new cooperative contract now in The New York State Bar Association of landlords where their tenants wish use. The co-chairs, who did a terrific Real Property Law Section has tried to relocate were dealt with, including job, were David Berkey and Joseph to do its part in the post 9/11 circum- the inability to pay rent. Walsh. stances. Many of the firms in mid- All of our work has not been in town took in law firms from lower The Professionalism Subcommit- the 9/11 area. We have continued to Manhattan and gave them free space. tee had a CLE program chaired by oppose legislation where there were Some firms took in others having Co-chair Peter Coffey. The program no purposes for it and to promote nothing to do with the law. Some of was on “Can Attorney Professional- legislation that was badly needed. this available space was “matched” ism Survive?”, a discussion of the We have Section members working by the NYSBA. Qs and As for both pressures on today’s attorney. Co- in such areas as mortgage recording residential and commercial tenants chair Janet Stern was a participant in tax and consumer-oriented legisla- and owners were worked on by a setting up the program. Some of the tion. subcommittee chaired by Second speakers were John Blyth, John Hall, Vice-Chair Matthew Leeds. Partici- The January program held at the Hon. Justice Anthony V. Cardona, pants in that endeavor were Ed Baer, Marriott Marquis Hotel was a huge Melvyn Mitzner, Lorraine Power Joshua Stein, Harold Lubell, Karl success. First Vice-Chair John Privat- Tharp, Mark Solomon, Joseph Dulin, Holtzschue, John Hall, Jeffrey Chan- era put together an excellent pro- Isabel Franco, Mark Ochs and Mimi cas, Beatrice Lesser and David gram, which was well received and Netter. It was a very successful pro- Berkey. applauded. Those who spoke and gram. their topics were: Matthew Leeds, Some of the topics worked on by Another program that did well with a World Trade Center Report; the committee were real estate taxa- was the one on Attorney Opinion David Berkey, on Rights of Condo- tion in regard to diminishing value of Letters, successfully co-chaired by miniums and Cooperative Unit Own- real property and the inability to pay David Zinberg and Jill Myers. ers when access is denied; Steven real estate taxes. Mortgage payment Among the speakers were Stephen Baum, discussing the Sailors and Sol- relief in areas where there has been a MacDonald and David Portal. diers Relief Act; Leonard Sienko, on death of one of the parties at Law Firm Record Retention in the “ground zero” or on the airplanes Recently the need for “terrorism” 21st Century; Joseph Philip Forte, that went down or into the World insurance on large buildings has just discussing the Risk of Lost Collateral Trade Center. Questions about peo- about killed the sale and refinancing in the Securitized Market. Also ple’s rights as to title and possession of large trophy buildings in New speaking were James Branigan, who of real property because of a death at York City. However we are optimistic discussed the effect of 9/11 on the the World Trade Center, etc., were that a solution may be near. Hopeful- Real Property Insurance Market; discussed. What commercial tenants’ ly from the Congress; if not, maybe Edward Baer, on September 11th’s rights and obligations are because of from the insurance industry. ramifications on Residential Land damage caused because of proximity Commercial Leases; Karl Holtzschue, The Real Property Law Section to the World Trade Center were dis- discussing the Property Condition has been continuing its business even cussed and advice supplied. Ques- Disclosure Act, which went into after 9/11 and our help to the Bar tions as to liability on a commercial effect on March 1; and Sean Michael and all people has been well- lease were written about for Griffin, who spoke to us on Industri- received. We will continue to do instances where one of the parties to al Development Agency Matters. whatever is necessary to assist the the lease (i.e., tenant(s)) died at the Bar and public to recover. World Trade Center site. Many peo- At the Real Property Law Section ple had questions about cooperative luncheon, Dick Morris introduced his Melvyn Mitzner 42 NYSBA N.Y. Real Property Law Journal | Spring 2002 | Vol. 30 | No. 2 Habitability Issues at Ground Zero: Reconsidering Real Property Law § 235-b in the Wake of September 11th By Jay Berg I. Introduction to the property owner and there was law such as civil rights, finally began some action that the owner could to catch up with the times.12 Indeed, Much has been written lately have taken that would have prevent- in a topical folk song from that era about whether residential tenants in ed or mitigated the ensuing damage.