Author Archives: Hallmark Abstract Service

About Hallmark Abstract Service

Hallmark Abstract Service provides title insurance for residential and commercial real estate transactions in New York State and nationwide, underwriting through Chicago Title. HAS opened its doors in 2008 with two primary goals in mind! Number one was to create a title insurance company that would provide our clients with a superior finished product while affording them a seamless and stress-free process. Number two was to make the experience of working with Hallmark Abstract Service as easy and as pleasurable as obtaining title insurance for a real estate transaction could possibly be! From the sheer number of satisfied clients who keep coming back to Hallmark Abstract Service for their title insurance needs, I believe that we have accomplished our goals in the past, and we will continue striving to improve on them in the future! My Background In 1980 I earned an undergraduate degree in economics followed in 1984 by an MBA in finance with a concentration in the tax-exempt market. With this focus on the municipal market I became a municipal bond analyst at Shearson/Lehman Brothers tasked with following both general obligation issuers on the city and state level as well as housing bonds secured by mortgage pools. This experience at Shearson/Lehman Brothers followed by stints at PaineWebber and Citigroup provided a broad framework of understanding concerning the mechanics of mortgage debt in terms of prepayment experience, mortgage quality and the expected duration of a portfolio. Leaving Wall Street I started Exeter Commercial which funded commercial mortgage loans. Title insurance was a critical part of the underwriting and closing process. At the peak of the financial crisis, I recognized both an opportunity and need as many title firms, for a variety of reasons, closed their doors. Out of this, Hallmark Abstract Service was born.

Breaking News About Combat Veterans And Death By Suicide!

Spirituality and faith at the Western Wall

As readers of the Hallmark Abstract Service blog know, the firms CEO Mike Haltman serves as Board Chair for the nondenominational combat veterans 501(c)(3) Heroes To Heroes Foundation!

The firm has thrown its support behind this charity based on the tragic statistic that 20 Veterans, Each And Every Day, Die By Suicide!

But in addition, our dedication to the cause is also based on the unique way that Heroes To Heroes is successfully working to reverse this statistic…

Through spirituality and a reconnection of these American heroes to their faith!

This is a brief summary of the organization, with the critically important Breaking News directly below it.

Heroes To Heroes Foundation Overview

Mission: To provide spiritual healing and peer support for Combat Veterans of all conflicts and all faiths who have attempted suicide or are on a path to self-destruction due to moral injury.

Vision: To have the United States be a place where our Veterans can truly come home.

Impact: Over 300 Veterans have participated in the Heroes to Heroes program. 20+ marriages have been saved. Dozens of lives have been saved. Over 300 lives have changed for the better.

Heroes To Heroes Foundation is a nondenominational 501(c)(3) that successfully helps combat veterans (men and women) from all wars who suffer with moral injury, and who have attempted suicide or are on a path towards self-destruction, heal. Journeys to Israel are a key component to the organizations phenomenal results!

The Heroes To Heroes Foundation program is based in spirituality, helping these American heroes reconnect with the faith they have lost due to the horrors of war they have experienced. It is loss of faith that is a critical factor for a great many who attempt suicide.

Heroes To Heroes Foundation Breaking News

1) Long-term study being conducted for a validation of the efficacy of the Heroes To Heroes program:

A team at the University of South Alabama, led by Dr. Joseph Currier, a psychologist with ‘special expertise in moral injury and spiritually integrated care’, has initiated a long-term study (begun in August 2019) that will evaluate the effects of the Heroes To Heroes mission on the combat veterans who participate.

To date the statistics are proving to be quite positive!

A copy of the October 2019 Report of Preliminary Results can be obtained by sending and email to Mike Haltman at

2) Heroes To Heroes and the Veterans Administration: Heroes To Heroes has formed a ‘partnership’ with the Veterans Administration Chaplain Corps where, beginning in 2020, a chaplain will be accompanying each Journey in place of one of our coaches.

In addition to the positive impact that these chaplains will have, particularly during each evenings discussion sessions, this affiliation with the VA represents a significant departure from the federal government stance of avoiding faith-based organizations.

With that in mind, it is a strong indication of the positive impact on moral injury and suicide prevention that they view our 501(c)(3) has had, and will continue to have into the future!

If anyone is interested about learning more about the Heroes To Heroes Foundation, or of how you or your business can become involved with us, please send an email to Mike Haltman at


Related Post

The Heroes To Heroes Foundation – Because 20 Veterans A Day Die By Suicide!

Heroes To Heroes Foundation

Hallmark Abstract Service Nominated Best of Long Island, Best Title Insurance Company! Cast Your Vote Today!

Hallmark Abstract Service, Nominated Best of Long Island!

Hallmark Abstract Service, Nominated Best of Long Island!

Hallmark Abstract Service, Best Title Insurance Company on Long Island!

Cast Your Vote For Hallmark Abstract Service LLC in the Bethpage Federal Credit Union Best of Long Island!

Voting is quick, easy, very much appreciated and you can vote once every day!

Go to:

Click on the Services icon On the left side of the page in the Services section, scroll down to Title Insurance Company, And click the Vote icon next to Hallmark Abstract Service.

Voting is quick, easy, and you can vote once every day. 

Learn more about why the company was nominated in the article:

Is the Honeymoon with Your Title Insurance Provider Over?

Questions? Contact Hallmark Abstract Service CEO Mike Haltman at (516) 741-4723 or

Derivatives 101: Great Financial Tool Or Sinister Financial Time Bomb? – Update

time bomb photo

(Note: Why is a title insurance company writing about investing and hedging tools like credit default swaps? Because the potential risk to the economy and to the financial well-being of all Americans would affect every industry and every business, title insurance included!)

As a result of the travel firm Thomas Cook filing for bankruptcy a few days ago, thousands of employees are going to lose their jobs and tens of thousands of travelers required British government help to return home!

Many losers from this event, no doubt.

But, on-the-other-hand, the investors who bought and owned credit derivative instruments known as credit default swaps or CDS betting on a bankruptcy, made a killing!

That said, for every winner there is a loser, namely the seller of the CDS on the other side of the aforementioned trade.

Confusing? Yes! But the dollar amount of derivatives in the marketplace is in the tens of trillions of dollars ($200+ trillion as of 2017), and were there to be sudden turmoil in the financial markets that specific CDS or other derivatives were written on, the derivatives ‘time bomb’ could go off!

This hedging/speculation explosion would impact, in a big way, the title insurance industry, real estate, banking, insurance, manufacturing, retail and pretty much every other aspect of the global economy, akin to the financial crisis that began in 2007.

With that in mind, it is an opportune time to reprint the 2015 article from the Hallmark Abstract Service blog titled…

Derivatives 101: Great Financial Tool Or Sinister Financial Time Bomb?

By  | October 13, 2015

Derivatives…Derivatives? D-E-R-I-V-A-T-I-V-E-S!

Most if not everyone who reads this article have heard the term derivatives at some point in time. And when they have, it’s likely been in the context of how these financial instruments that are not typically seen and not really understood by the masses are actually fiscal time bombs that, if ever detonated, could bring the global financial system to its knees!

But for you and I who march through our days trying to maximize sales and profits for our businesses and who are possibly managing retirement or investment portfolios, do derivatives really play any role in our lives and are they something that we need to know more about and/or be concerned with?

The answer to that question is that of course we should know more and certainly they potentially could be something that we need to be concerned with. You will see that in the article below from Sprott Money which highlights the MASSIVE exposure that some TBTF (too big to fail) banks have to derivatives bets that hide outside of the light of day (or GAAP).

If you thought that the financial crisis of 2008 posed global systemic risk to the financial system, just imagine if some portion of the $53 TRILLION in bets at an institution like Bank of America begin to go wrong.

The Derivatives Market: Bets, Bookies, and Fraud – Jeff Nielson

No one “understands” derivatives. How many times have readers heard that thought expressed (please round-off to the nearest thousand)? Why does no one understand derivatives? For many; the answer to that question is that they have simply been thinking too hard. For others; the answer is that they don’t “think”, at all.

Derivatives are bets. This is not a metaphor, or analogy, or generalization. Derivatives are bets. Period. That’s all they ever were. That’s all they ever can be. This can be easily illustrated by simply examining and defining some of the more well-known “derivatives”, meaning those derivatives with whom everyone is familiar with their labels.

Let’s start with the two largest and most-important forms of this gambling (and fraud): “interest rate swaps” and “credit default swaps”. What is an interest rate swap? This is a bet between a banker (i.e. the people who control interest rates) and a Chump, on which direction an interest rate will move.

Can anyone see a problem with this form of gambling/fraud? Correct. If you place bets on the direction of interest rates against the criminals who control those interest rates, you’re probably going to lose on those bets, almost all of the time. Is this what we saw in the interest rate swap “market”?

Not at first. At first the Chumps were allowed to win – on their small bets. That’s how you gets lots and lots more Chumps to get suckered into the scam, and how you get the Chumps to place larger and larger bets. But after the initial “success” of the Chumps, it was lose, lose, lose.

Case in point, self-declared “economic genius”: Larry Summers, former Treasury Secretary of the United States, and at that time, President of Harvard. No one thinks that Larry Summers knows more about economics and finance than Larry Summers. So it should be no surprise that this “genius” decided to bet against his friends the bankers in financing Harvard’s debt, via interest rate swaps.

How did he do? Summers managed to lose nearly $1 billion in financing a mere $2 billion of debt. To be more precise, not only did Harvard pay the full rate of interest on their debt, but (thanks to Summers’ gambling) the university paid an additional $900+ million in “penalties” – to avoid losing even more money on Summer’s gambling.

That’s what happens when you bet on interest rates against the people who create those interest rates. It’s obvious fraud, and it has resulted in at least one jurisdiction filing criminal charges against three of the largest fraud-factories in this scam: JPMorgan Chase & Co., Deutsche Bank, and UBS. But that’s all “old news” now.

To really understand “the derivatives market” as a whole requires understanding exactly what it is: history’s largest book-making operation (i.e. bookies). This is all that this rigged casino has ever represented: bookies taking bets. Here readers also need to understand how a bookie’s “market” operates.

Bookies take bets according to “odds”, the prevailing gambling-ratio for that particular bet, or the price it costs to place that bet. But these odds change over time. How do they change? They change based on the amount of money placed on each side of the bet. When more money is placed on one side of the bet, the price to place the bet (on one side) declines, while the price to place the bet on the other side rises.

The gambling itself moves the market. The financial crime syndicate noticed how this gambling operated, and figured out how they could create their own “book-making operation”, where all the bets were rigged, and where these banksters were not only allowed to take bets (i.e. act as bookies), they would also be allowed to place bets, in this same market. All they had to do was to make-up a bunch of euphemisms to hide this systemic crime.

Here we see fraud in its most-elementary form. ‘Legitimate’ bookies never bet in their own “market”. Even in the world of quasi-illicit gambling, it is recognized that allowing this would allow bookies to rig their own gambling. But not in the world of “banking” and “derivatives”. Here the biggest bettors in this fraudulent gambling (by many orders of magnitude) are the bookies themselves.

Goldman Sachs — $47.7 trillion

Bank of America — $53 trillion

Citigroup — $56 trillion

JPMorgan — $78.1 tillion

Read the rest of the article at Sprott Money here.

H/T Zero Hedge

(Note: You may have noticed that many articles here do not specifically relate to either title insurance or real estate. The reason for this is that most of the topics discussed have the potential, in one way or another, to impact real estate and by extension title insurance)

Michael Haltman is President of Hallmark Abstract Service in New York. He can be reached at

Important Information for New York State Buyers AND Sellers of Residential Real Estate Held by an LLC!

home photo

Title Insurance Companies Have Been Mandated by an Amendment to a New York State Law, to Determine the Actual LLC Owners in ANY Residential Real Estate Transaction For Both the Buyer and the Seller, Regardless of Price or Locality!

Residential real estate: One to Four Family Dwelling

Summary (Courtesy of NYSLTA):

New Law Requires

Full Disclosure of LLC Members

On Friday, September 13, 2019, Governor Cuomo signed a bill that went into effect immediately, A7190/S1730 amends §1409 of the Tax Law and §11-2105 of the Administrative Code of the City of New York.

The law requires that when a grantor or grantee residential property is an LLC, all members be identified.

If a member of the LLC is another LLC or other business entity, the “members, managers or authorized persons” of said LLC or entity must be listed. This must continue until ultimate ownership by a natural person is achieved.

New York State Assembly Bill Summary

A07190 Summary:

BILL NO A07190
SPONSOR Zebrowski
COSPNSR Colton, Wright, Davila, Cook
Amd §1409, Tax L; amd §11-2105, NYC Ad Cd
Requires the real property transfer tax return relating to residential property sold or purchased by a limited liability company to include information on the ownership of such company.


A07190 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)

SPONSOR: Zebrowski
TITLE OF BILL:  An act to amend the tax law and the administrative
code of the city of New York, in relation to real property transfer tax
returns of limited liability companies
This bill requires limited liability companies to disclose the individ-
ual members of the company when it files a joint tax return for any sale
of real residential property that it is named the grantor or grantee in.
This only applies to residential property containing one-to four-family
dwelling units and requires that the joint tax return be accompanied
with a list identifying all the members, managers, and any other author-
ized persons of the company. This practice has been successfully imple-
mented in New York City as of 2015.  This bill seeks to codify the prac-
tice in New York City and apply it on a statewide level.
Section 1 of the bill adds a new subdivision (h) of Section 11-2105 of
the administrative code of the city of Now York to require any limited
liability company who is the grantor or grantee of a deed for residen-
tial real property containing one- to four-family dwelling units to
accompany the filing of any joint tax return a list identifying all the
members, managers, and any other authorized persons.
Sect on 2 of the bill incorporates the same provisions into section 1409
of the tax law into paragraph (a) for statewide application.

Section 3 of the bill establishes that this act will take effect imme-
The issue of transparency that this bill addresses is important because
when real estate transactions take place involving an LLC, those behind
the companies are often unable to be identified. This bill seeks to
address the anonymity and related concerns by requiring limited liabil-
ity companies that engage in residential property sales to disclose
their members when filing a joint property tax return.  This practice
has been successfully implemented in New York City as of 2015. This bill
seeks to codify the practice in the city and apply it on a statewide
Skoufis: 06/15/16 passed assembly.
Carlucci: 6/15/16 referred to Rules
Skoufis: 01/03/18 ordered to third reading
Carlucci: 1/03/18 referred to Investigations and Government Operations
The bill takes effect immediately.

Text of the full Bill can be found here.

Hallmark Abstract Service Nominated Best of Long Island 2020, Best Title Insurance Company!

Hallmark Abstract Service nominated Best Titie Company on Long Island


Hallmark Abstract Service is very proud to announce that the firm has been nominated in the Bethpage Federal Credit Union Best of Long Island 2020, Best Title Insurance Company!

But, of course, we protect commercial and residential properties across New York State.

Voting opens on October 1, and we will share the link then to cast your ballot!

If you are wondering why the firm has been chosen for this honor, please read the article ‘Is the Honeymoon with Your Title Insurance Provider Over?

Michael Haltman, CEO
Hallmark Abstract Service

(Main Office) 101 Sunnyside Blvd., Suite 103
Plainview, New York 11803

276 Fifth Avenue, Suite 704
New York, New York 10001

Office: (646) 741-6101
Mobile: (516) 521-3499

Hallmark Abstract Orders:

Agents for Chicago Title, Fidelity National Title, Commonwealth Land Title and AmTrust

NY’s 2019 Rent Stabilization Law: Opposing Views, Paths Forward by Jason Gordon, AmTrust Title

On July 31, 2019 Hallmark Abstract Service published the article, ‘Are there any winners in the NYC multifamily marketplace?‘, providing some background into the parameters of the new law and potential impact that the Housing Stability and Tenant Protection Act of 2019 could have. This impact would be on a variety of stakeholders including multifamily building owners in New York City, banks and non-traditional lenders, building trades and tenants.

The following excerpt provides an overview…

The Housing Stability and Tenant Protection Act of 2019 (the “Act”) that was signed into law June 14, 2019, has a little bit of something inside for most of the participants in NYC’s multifamily real estate market!

For building owners, developers, tradespeople, banks, alternative lenders and more the impact is likely going to range from negative to extremely negative.

For potential buyers looking to come-in (at some point after the dust settles) and pick at the carcasses of owners who may have been decimated by the law and who are looking or needing to sell, it may be a positive. Of course, whether the bottom ultimately will be a 5 cap, 6 cap, 7 cap or somewhere else is anybody’s guess.

At least in the near-term, the affordable housing sector may see a boost as it will remain as a viable investment option for developers.

Tenants and prospective tenants on the surface appear to be winners, although the unintended consequences of this legislation may ultimately prove to be negative. This negativity could manifest in different ways, such as through deteriorating building conditions, a lack of improvements or renovations to lobby’s or apartments or through the inability of prospective tenants with shoddy credit to get into an apartment.

Following is an article written by Jason Gordon, President of AmTrust Title that as the title suggests, delves deeper into this legislation having the potential for an incredible impact on a variety of people, combined with as yet undetermined unintended consequences!

NY’s 2019 Rent Stabilization Law: Opposing Views, Paths Forward 
– Jason Gordon

In the view of many of New York’s residential landlords, the fix is in.

In late June, New York City’s largest rental landlord, The Blackstone Group, announced it was halting all non-mandatory apartment renovations and other planned work at their adjacent Manhattan properties, Stuyvesant Town and Peter Cooper Village, which together comprise over 11,200 apartments. “In light of the recent legislation, we are in the process of evaluating capital investments at Stuyvesant Town,” a spokesperson for Blackstone said in a statement to Crain’s New York.
The firm’s stunning announcement came in response to the passage of The Housing Stability and Tenant  Protection Act (HSTPA) by Albany lawmakers on June 14 and signed into law the same day by Governor Cuomo. The law dramatically changes the guidelines concerning rent increases landlords can charge in rent-stabilized properties to offset their renovation expenses. But this aspect of the law is just one of the provisions landlords find untenable, even suffocating, in terms of maintaining their business models.

Here’s a list of some of the more salient provisions of the HSTPA which will impact landlords and the city’s nearly one million rent-stabilized apartments which house approximately 2.4 million people:

  1. In the past, landlords could renovate apartments and add a fraction of that expense to the monthly rent bill of the tenant. That increase to the rent would be permanent. The new law stipulates that landlords can only pass on a total of $15,000 worth of renovation expenses over 15 years (about $89 per month), after which it disappears from the monthly rent bill.
  2. The HSTPA, for the first time, has made the rent regulation laws, themselves, permanent. Since the inception of rent stabilization in the city, some 40 years ago, the laws were always temporary, needing extension every several years.
  3. The law eliminates vacancy bonuses which permitted landlords to boost rents by 20 percent when a tenant moved out. It also terminated preferential rents, a method which allowed landlords to charge less than an apartment’s legal rent but permitted a rent increase to the legal maximum when the tenant renewed his lease.
  4. Before the HSTPA went into effect, an apartment which reached a rent of a $2,774 threshold through the normal yearly/biyearly rent increases (and the vacancy boost) became deregulated; the landlord could then seek to rent the unit at the market rate. The new law prohibits landlords of rent stabilized apartments from ever seeking market rate. In essence, they remain stabilized forever.
  5. Landlords can now only pass on two percent (previously 6 percent), to tenants for major capital improvements (MCIs). These are building-wide renovations such as plumbing, electrical system upgrades, roof replacements, etc. Additionally, rather than becoming permanent rent increases, MCIs will be removed from the rent after 30 years

The Landlord’s Perspective

Blackstone is hardly isolated in their plans; many other New York residential landlords, large and small, issued similar statements. In an ominously titled article, “Game Over,” The Real Deal offers an informal survey of landlords impacted by the new rent stabilization guidelines.

Edward Kalikow of the Kalikow Group which owns about 6,000 rental units in New York (90 percent of which are rent-stabilized) said his firm too plans to cut back on renovations. Kalikow added that landlords whose business plan called for flipping apartments to market rate will be most negatively impacted by the HSTPA. “Anyone that bought a property at a 3 or 4 percent cap rate, planned to turn over units legally, that business model is going to be completely destroyed.”

John Tashjian, a principal of Centurion Real Estate Partners which currently owns and operates 24 mixed use properties in NYC said that while the industry was aware adjustments were needed on reimbursement costs for renovations, the new law “pushed past reason.”

Marla Siegal, executive director of mid-sized Sugar Hill Real Estate which owns about 1,300 rent-stabilized units in the city and specializes in acquiring buildings in need of upgrading, expressed concern about the new law’s impact on basic necessities: painting common areas, improved lighting, the installation of security systems, etc. “This is a total about face in the way we operate … [and therefore] our ability to make improvements in buildings that are really old. Often, when we acquire them, they’ve been undermanaged and not maintained for many years.”

“I think there will come a time when the New York City housing stock will be in terrible shape, like it was in the ’70s,” developer Myles Horn told The New York Times recalling an era when the city had to seize apartment buildings from landlords who fell behind on property taxes and mortgage payments.

Taken together, the law’s elimination of the landlord’s ability to deregulate when a rent threshold is reached, the elimination of the vacancy bonus, and the new regulations concerning both individual apartment and building wide renovations have left landlords despairing. From their point of view, the lure of ownership of multi-family buildings has always been a profit driven enterprise. They now feel that the HSTPA will serve to make it very difficult to realize that profit. As a result, landlords of buildings with rent stabilized units fear the value of their properties will decrease, perhaps sharply.

The Tenant’s Perspective

Proponents of the new law argue that occupants of rent stabilized units represent many of the most vulnerable of the city’s residents. A survey conducted by a NYC agency determined that the median household income for tenants in rent stabilized apartments is about $44,000 compared to bout $67,000 in non-regulated units. Also, tenants in these units are disproportionately racial minorities – about 75%.

Additionally, compared with non-regulated units, rent stabilized households are more likely to contain at least one adult who is 62 years of age or older and more likely to be headed by a single adult.

Tenant advocates also cite statistics which show NYC has lost 152,000 rent regulated apartments since 1993, as landlords have steadily pushed the rents higher. Another 130,000 units have been lost to co-op and condo conversions.

While an April study by the NYC Rent Guidelines Board acknowledges that operating costs for landlords have increased 5.5% in the year ending in March 2019, net operating income for landlords of rent stabilized buildings have increased for the 13th consecutive year.

Finally, Tenant advocates allege that landlords have abused the rent stabilization laws for decades. They argue, for example, that individual apartment improvements (IAIs) were usually done while an apartment was vacant and that landlords often reported inflated costs to the Department of Housing and Community Renewal, the state body which oversees the rent guidelines. If a tenant didn’t challenge the renovation costs, the landlord’s reported outlay was accepted as accurate.

The Landlords Go to Court

Late last month, two of the city’s largest landlord organizations challenged the HSTPA on constitutional grounds. In interviews with several owners, The Real Deal reports that landlords will argue that their 5th amendment rights have been violated. Scott Mollen, a partner at Herrick, Feinstein LLP said, “Generally, government cannot take private property without due process and just compensation.” Mollen elaborates that the new rent laws erect barriers and create “substantial limitations” on a landlord’s ability to realize a profit, which represents “an unconstitutional taking of property.”

In the same article, Charles Moerdler, a partner at Strook said that he believes the new law “raises serious questions of [a] constitutional dimension.”

A second but related argument landlords will make according to The Wall Street Journal is that “The complaint [will] demonstrate the rent laws are arbitrary and irrational and violate constitutional protections against government actions. It argues, for example, that the law doesn’t promote more housing, and provides strong protections to affluent renters.”

While courts have dismissed similar challenges, landlords contend that their chances of prevailing have improved due to the severity of the restrictions on rental properties.

But legal opinion is divided; many real estate and constitutional attorneys contend the strategy is a long shot. In any case, litigation could take months, if not years to wend its way through the courts.

A Way Forward?

With each side unwilling to recognize the reasonable arguments on the opposing side, there appears to be little hope for compromise.

But the facts for the foreseeable future is that the rules have changed for residential landlords. Perhaps a way forward for owners is through creative approaches. There may yet be ways landlords can maintain their profit margin, while economically challenged residents are not squeezed beyond their means.

In this regard, on July 30th The Wall Street Journal reported that L+M Development Partners “has agreed to pay $1.2 billion for a portfolio of 2,800 New York rental apartments with an investment strategy … that appears to run counter to conventional real estate wisdom.” Although all the apartments L+M is purchasing are renting at market rate, the firm plans is to convert about two-thirds of the units into units that are affordable to financially challenged tenants.

L+Ms business plan calls for subjecting the apartments to rent stabilization laws in exchange for property tax breaks. The city and L+M will utilize a tax incentive known as Article XI, a provision which allows the city to negotiate tax arrangements with individual landlords who, in turn, will set rents at no more than 30% of median income for households. The lost income resulting from bringing the units under the rent stabilization guidelines, will be compensated for by the tax break.

Louise Carrol, commissioner of NYCs Department of Housing Preservation said in a statement, “This landmark transaction will reclaim a large portfolio of once-affordable housing and provide thousands of New Yorkers the security of knowing that they can afford to stay in their communities for years to come.”

Camber Property Group and Belveron Properties employed the same strategy when they paid $77 million for a 400-unit building in the Bronx. The investors plan to rent all the units to tenants with limited incomes, in exchange for the same Article XI tax breaks.

These, and other kinds of creative strategies should be explored by landlords who must now navigate the new residential real estate landscape.

Are there any winners in the NYC multifamily marketplace?


The Housing Stability and Tenant Protection Act of 2019 (the “Act”) that was signed into law June 14, 2019, has a little bit of something inside for most of the participants in NYC’s multifamily real estate market!

For building owners, developers, tradespeople, banks, alternative lenders and more the impact is likely going to range from negative to extremely negative.

For potential buyers looking to come-in (at some point after the dust settles) and pick at the carcasses of owners who may have been decimated by the law and who are looking or needing to sell, it may be a positive. Of course, whether the bottom ultimately will be a 5 cap, 6 cap, 7 cap or somewhere else is anybody’s guess.

At least in the near-term, the affordable housing sector may see a boost as it will remain as a viable investment option for developers.

Tenants and prospective tenants on the surface appear to be winners, although the unintended consequences of this legislation may ultimately prove to be negative. This negativity could manifest in different ways, such as through deteriorating building conditions, a lack of improvements or renovations to lobby’s or apartments or through the inability of prospective tenants with shoddy credit to get into an apartment.

The following are the thoughts of Schwartz Sladkus Reich Greenberg Atlas attorneys (cited at the end) concerning the ‘negative consequences the Act will have for cooperative corporations and its applicability to condominium associations, along with suggestions for successfully navigating them’.

1. Application Fees: Pursuant to the Act, a lessor (which would include a cooperative corporation pursuant to its proprietary lease) may not charge an application/processing fee in connection with a new tenancy.  As such, cooperative boards are no longer permitted to charge an application fee or processing fee in connection with the sale or lease of a cooperative apartment.

In addition, the Act limits charges for background checks to the actual cost of the background check or $20.00, whichever is less.

While individual condominium unit owners would also be prohibited under the Act from charging application/processing fees in connection with the leasing of their own condominium units, the Act does not prohibit a condominium board, or its managing agent, from charging an application/processing fee to a unit owner in connection with the unit owner’s application for a waiver of the condominium’s right of first refusal.

Suggestion: Because this section of the Act does not specifically mention “managing agents” like other sections of the Act do, an argument can be made that managing agents may collect application and/or processing fees for their handling of sales and leases of cooperative apartments.

2. Security Deposits: The Act prohibits a lessor (including a cooperative board) from collecting security deposits or advances that are in excess of one month’s rent.  Thus, cooperative boards may no longer condition the approval of a purchase application on the deposit of a maintenance escrow in excess of one month’s maintenance.  That said, boards may still condition their approval of a purchase application upon the execution of a maintenance guaranty by a financially-responsible guarantor.

Suggestions: A) The Act expressly provides that it does not affect any security deposit arrangements for leases that were entered into before July 14, 2019.  Thus, if a cooperative has a maintenance escrow in place prior to July 14, 2019, the cooperative may continue to hold the escrow, draw upon it pursuant to the terms of any pre-existing escrow agreement and, if provided in the agreement, require replenishment.

B) While the Act prohibits a landlord (board) from requiring a tenant (shareholder) to deposit more than one month’s rent, it does not prohibit a landlord from requiring a tenant to provide a guaranty.  So a possible workaround may be for a landlord to require a lease guarantor to post an escrow to secure the guarantor’s obligation under the guaranty.

C) Products such as security deposit insurance policies may become more prevalent to protect landlords.

3. Late Fees:  The Act prohibits a lessor (including a cooperative board) from requiring any payment, fee or charge for the late payment of rent that is in excess of five (5%) percent of the monthly rent or $50.00, whichever is less. Thus, irrespective of the terms of a cooperative’s proprietary lease (many of which specifically provide for a late fee to be determined by the cooperative board from time to time and for the imposition of an interest charge), a cooperative board may not charge fees and/or interest in excess of $50.00 per month on delinquent maintenance payments.  Condominium boards are not similarly restrained, due to the lack of a landlord-tenant relationship between the condominium and the unit owner.

Suggestion: While cooperative boards are prevented from charging late fees in excess of $50.00, they may nonetheless seek the imposition of pre-judgment interest from the date of the initial default in any resulting litigation against the delinquent shareholder.

4. Receipt for Payment of Rent (Maintenance):  The Act requires a lessor (cooperative board) to provide a written receipt in connection with all payments of rent (maintenance) that are made in cash or in any manner other than the lessee’s (shareholder’s) personal check, and also requires the lessor to maintain records of cash payments by tenants for at least three (3) years.

Suggestion: This means that cooperative boards (or their agents) will have to provide payment receipts to any shareholders who make ACH, direct deposit, Clickpay, wire or other similar forms of payment.  Auto replies that include the date, the payment amount, the identity of the premises, the period for which the payment is made, and the signature and title of the person receiving the rent may constitute a valid written receipt.

5. Notices of Non-Payment:  In a significant departure from prior law, the Act now requires a lessor (or cooperative board) to provide a notice by certified mail to any tenant who is at least five (5) days late in the payment of maintenance charges.  Failure to send such a notice may bar the cooperative from recovering the unpaid rent in a summary proceeding.

Suggestion:  Management companies must now carefully monitor delinquent accounts and ensure that notices are timely sent.

6. Reimbursement of Attorneys’ Fees/ Late Fees / Repair Fees / Etc.: The Act provides that lessors (cooperative boards) may not pursue any fees or charges other than basic rent in a summary landlord-tenant proceeding.  As such, a board will have to pursue two separate actions – a summary eviction proceeding for unpaid maintenance and a plenary action for unpaid assessments, legal fees, late fees, repair fees, sublet fees and any other amounts due and owing.

Suggestion:  There is an inconsistency in the Act’s revisions to the Real Property Law and the Real Property Actions and Proceedings Law, which makes it unclear whether a Court will permit a cooperative to recover legal fees in a non-payment proceeding.  Given this discrepancy, we will continue to request awards of attorneys’ fees.

7. Tenant’s (Shareholder’s) Rights to Cure Non-Monetary Defaults: In the case of a non-monetary default, the Act provides a tenant (shareholder) with a thirty (30) day period to begin curing a default after the lessor (cooperative board) obtains a judgment in connection with the default.

Suggestion:  If the tenant’s (shareholder’s) breach involves the creation of a nuisance, the cooperative board may, if permitted under the lease, exercise its right to terminate the lease for objectionable conduct, which is a non-curable default.  This would result in an eviction if the Court agrees that a nuisance exists and that the shareholder is responsible for causing the nuisance.

The Act imposes numerous obligations and restrictions on landlords which we are ready and able to discuss with our clients.  Industry-wide efforts have already begun to exempt cooperative corporations from various provisions of the Act, and SSRGA is taking an active role in those efforts.
Jeffrey M. Schwartz, Esq.
Steven D. Sladkus, Esq.
Jeffrey S. Reich, Esq.
Maria I. Beltrani, Esq.
Schwartz Sladkus Reich Greenberg Atlas LLP is a dynamic law firm with deep experience and a passionate commitment to providing smart, effective solutions for our clients.
Our mission is to serve our clients with loyalty and integrity and to help our clients leverage opportunities and surmount challenges. We strive to maintain a culture characterized by hard work, respect and dignity for all, non-egotism, fairness and a sense of humor.

Multifamily Building Owners and Developers: New York City Real Estate Experts Opine About the State of the Market! (Part 1)

New York City multifamily housing

In the NYC real estate market the developers of apartment buildings, current multifamily building owners, residential tenants and prospective tenants face an uncertain future due to the Housing Act of 2019, signed June 14, 2019!

Today I had the opportunity to attend a real estate panel discussion organized and presented by AmTrust Title as part of the company’s Summit Series.

The topic of discussion could not have been more important, and the opinions of the panelists could not have been more telling in terms of:

  1. The potential negative impact to the New York City multifamily housing sector (and the ancillary industries around it such as banks, building employees, construction workers, etc.) from the Housing Stability and Tenant Protection Act of 2019 (Act).
  2. The potential and likely unintended consequences impacting tenants from the law, that politicians never seem to consider as long the majority of voters involved are initially happy. In this case the law appears on its surface to be great for tenants, and thus will please a very large block of voters. Meanwhile, a relatively small block of voters known here as the ‘evil empire of developers’ (Jeff Levine) will be extremely unhappy. However, this initial euphoria experienced by tenants may fade later as the impact of the law becomes known, but by this time the politicians responsible are either out of office, not up for election or will simply be depending on the short memories of most of their constituents,
  3. The potential for investment opportunity at some point in the future, as out of any period of pain for a specific asset class comes the ability for those unscathed of with ‘dry powder’, to buy on a price drop. The nature and size of any drop at this point in time is an unknown.

Michael Stoler was moderator, and panelists included Jeff Levine (Douglaston Development), David Schwartz (Slate Property Group), Eli Weiss (Joy Construction), Victor Sozio (Ariel Property Advisors), Jeffrey Goldman (Belkin Burden), Dan Harris (Oceanfirst Bank), Tony Fineman (Acore Capital) and Joseph Pistilli (Pistilli Realty Group).

In the next article I will offer the thoughts of the panelists, but first I want to share the specifics of this Act as it’s important to understand the sweeping changes that it puts into place. This summary is courtesy of REBNY:

Housing Stability and Tenant Protection Act of 2019

A.8281/S.6458 (C.36 of the Laws of 2019)

Adopted June 14, 2019

On Friday, June 14, 2019 Albany lawmakers approved, and Governor Cuomo signed, legislation entitled The Housing Stability and Tenant Protection Act of 2019. A technical correction by way of a Chapter Amendment passed the Legislature on June 20, 2019 and was signed by the Governor on June 25, 2019. This legislation will significantly change New York State’s rent laws.

In prior years, the rent regulation law was up for examination and renewal, based on whether a housing crisis still existed, every 4-8 years. Now the rules have no expiration date. Additionally, other municipalities outside of New York City and its neighboring counties of Rockland, Westchester and Nassau may also opt-in to the provisions of stabilization.

Chapter Amendment

A.8433/S.6615 – Part Q (C.39 of the Laws of 2019)

Effective Date: June 14, 2019

The Chapter Amendment provides a series of technical corrections and edits to the adopted bill. The Rent Regulations sections of the bill (Part Q) are retroactive to the same date as Chapter 36 of the Laws of 2019.


Please note, in parentheses is the relevant sub-section of A.8281/S.6458 for reference.

Changes to stabilization:

– Sunset Provision: Eliminates the sunset provision of the Emergency Tenant Protection Act (ETPA) and makes rent regulation permanent (Part A).

– Extension of the ETPA state-wide as an opt-in program by individual counties meeting the criteria of a housing emergency, as defined by a vacancy rate of less than 5% (Part G).

–  High-rent vacancy and High income/high rent (luxury) deregulation are eliminated (Part D).

– “Owner use” provision limited to a single unit for a “immediate and compelling necessity” and lowers the tenure provision from 20 years to 15. Additionally, tenant is due damages and reasonable attorneys’ fee for fraudulent statements (Part I).

– Non-profit status: Units rented by non-profits for homeless must remain in stabilization (Part J).

– Overcharges – extends the overcharge look back from four to six years, allows for the examination of all available rental history, no “safe harbor” for proactively providing refunds (Part F).

– $10 fee is increased to $20 per unit to offset the cost of administering the ETPA (Part K).

– DHCR is subject to greater accountability through an annual public reporting requirement (Part L). According to the Chapter Amendment, it must promulgate its rules and regulations and have its centralized electronic retention system operational by June 14, 2020.

Changes that impact 421a/Affordable New York

– As amended by the Chapter Amendment, A.8433/S.6615, there are no changes to the 421a or Affordable New York programs’ stabilization status.

– However, those changes outlined in Part M that affect all rental units would apply, and if an owner sought a co-op or condo conversion, those changes as outlined in Part N would apply as well.

– Elimination of the vacancy allowance.

Status of De-Regulated Units prior to the 2019 Act

·The Chapter Amendment adds clarifying language that units lawfully deregulated prior to the adoption of The Housing Stability & Tenant Protection Act of 2019, Chapter 36 of the Laws of 2019 are not being re-regulated.

Changes that impact the ability to raise rents to cover expenses or improvements:

– 20% vacancy allowance and longevity bonus are eliminated (Part B) and prohibits a rent guidelines board (RGB) from instituting vacancy allowances (Part C)

– Preferential rents cannot be increased to the legal rent at renewal unless such rents are set pursuant to a regulatory agreement with a local government agency and uses project based rental assistance (HUD Funding) where the rents are set by a federal, state or local governmental agency (Part E)

– Rent controlled apartments now limit the maximum collectible rent increase to a five-year average of RGB increases and eliminates the fuel pass through (Part H)

– Individual Apartment Improvements (IAIs) are significantly curtailed along with increased oversight by DHCR (Part K):

o Improvements limited to $15,000 cap that can be expended on no more than three separate IAIs within a 15-year period.

o Licensed contractors must be used and there can be no common ownership between the landlord and the contractor or vendor.

o Increases shall be 1/168 for buildings with 35 or less units or 1/180 for buildings with more than 35 units, for a period of 30 years.

o Surcharges are eligible for increases but such increases must also be removed at the end of 30 years.

o Mandates DHCR to create a notification and documentation procedure and the electronic retention of such.

o The Chapter Amendment requires that forms for tenant consent of IAIs are provided in English and the top 6 other languages spoken in the state.

o The Chapter Amendment clarifies that new caps on rent increases for IAIs will go into effect at the next lease renewal for affected tenants.

–  Major Capital Improvements (MCIs) are significantly curtailed along with increased oversight by DHCR (Part K):

o Increases shall be capped at 2% for a period of 30 years, amortized at a 12-year period for buildings with 35 or less units or 12.5 years for buildings with more than 35 units.

o For any previously granted MCIs between June 16, 2012 and June 14, 2019, increases will be capped at 2% instead of 6%. The Chapter Amendment clarifies that new caps on rent increases for MCIs will go into effect at the next lease renewal for affected tenants.

o Surcharges are eligible for increases but increases must cease at the end of 30 years.

o Licensed contractors must be used and there can be no common ownership between the landlord and the contractor or vendor.

o DHCR must set a schedule of reasonable costs for MCIS, included a ceiling for what can be recovered, and prohibits group work done in an individual unit that is otherwise not an improvement to an entire building.

o The law prohibits MCI in buildings with fewer than 35% of units that are stabilized.

o The law specifically prohibits MCIs if the landlord is receiving federal grants or insurance proceeds for the repair. However, insurance and Federal recovery aid can take multiple years to process, leaving MCIs as the bridge to recover a portion of the costs. Insurance and recovery aid often do not cover the full cost of repairs following a natural disaster.

o DHCR must inspect and audit for the review of 25% of the filed MCI applications.

o Tenants have a 60-day comment/review period.

o DHCR must provide reasons for approval or denial of a MCI application.

Changes that impact ALL rental units

Part M, entitled “Statewide Housing Security and Tenant Protection Act of 2019” enacts the following changes which would apply to all rental units, regardless of stabilization status:

–  When signing a new lease:

o Limits security deposits to one month’s rent.

o Bans the use of “tenant blacklists.”

o Limits application fees.

–  For lease renewals:

o Prohibits denying lease renewals or an unreasonable rent increase as a retaliatory measure when code complaints have been made.

o Aside from what the lease itself may state, if the owner intends to raise the rent above 5% or intends to not renew the tenancy, the owner must send notice. If the tenant has occupied the unit for less than one year, 30 days’ notice is required. For a tenant that occupies a unit for more than one year but less than two and has a lease of more than one year but less than two, 60 days’ notice is required. For tenants that have occupied a unit more than two years or a lease term or at least two years, 90 days’ notice is required.

o Requires written notice of late payments.

– When ending a lease:

o Provides a “cure” path on behalf of the tenant to fix any issues to secure the full or partial security deposit amount.

o Limits recoverable rents for early lease termination.

o Warranty of habitability is amended to include a duty to repair, thus extending the warranty to include a retaliatory eviction due to complaints on housing condition. A finding of retaliatory eviction carries severe penalties.

– Changes to landlord-tenant proceedings:

o For all apartments, rent stabilized or fair market, RPL 226-c requires notice of rent increase of more than 5% or a notice of non-renewal depending on the term of the lease and RPL 232-a requires this notice to be served by a process server service, not mail.

o For all apartments, under RPL 232-e, a Landlord has a duty to mitigate damages.

o For all apartments, RPL 238-a limits fees that can be sought in a summary proceeding except if provided by regulation or statute.

o For all apartments, RPAPL 702 definition of Rent.

o Rent demands are now 14 days, not 3.

o RPAPL 745: Where you used to be able to seek use and occupancy in court as of the date the (notice of petition and petition) NPP was served, after Tenant adjournment of more than 30 days and get dismissal of defenses and counterclaims if not paid, now it is 60 days, a Tenant request to seek counsel does not count, the order to pay is only as of the date of the order not back to when NPP served and it must now be on written notice and if not paid pursuant to the court order, remedy is not dismissal of defenses and counterclaims, but a trial subject to Court’s scheduling. No Court order if Tenant can make a colorable claim of overcharge or hazardous or immediately hazardous conditions.

o RPAPL 749: Marshall notice now 14 not 3 days. Eliminated that issuance of warrant cancels lease [impacts bankruptcy], Court now has power at any time to stay, vacate or restore. Now Tenant in a nonpayment proceeding can pay anytime before execution of warrant. Before it used to be 5 days.

o RPAPL 753: Instead of court having discretion to give only up to 6-month stay if pay use and occupancy, it is now one year and where it applied only to tenants, it now applies to occupants. Factors to consider include extreme hardship for the Tenant. Changes the time to cure defaults after trial from 10 to 30 days.

Co-Op/Condo Conversions (Part N).

– Removes eviction plans from future filings;

– Prohibits unreasonable increases for eligible seniors or disabled tenants who are unable to purchase their units.

– Conversion rate increased to purchase of 51% of all apartments solely by tenants in occupancy.

– Exclusive right to purchase for 90 days with a six-month extension.

Mobile & Manufactured Home (MMH) tenant protections, including provisions around rent-to-own contracts, rent increases, a bill of rights, and changes in use to the underlying land are covered in Part O.

Mike Haltman, CEO

Hallmark Abstract Service

(646) 741-6101,

July 1, 2019 New York State and New York City Real Estate Transfer Taxes Slated to Rise!

July 1st the New York State Department of Taxation and Finance will be imposing an increase in the state real estate transfer tax and mansion tax in New York City! 

The NYS transfer tax increase will affect residential property sales above $3MM and all other property types sales above $2MM. the increase will be $2.50 per $1,000 for a total of $6.50 per $1,000.

The New York City mansion tax (residential properties only) will remain 1% of the sales price up to $2MM, with a sliding scale of tax increase for sales above $2MM. The additional tax will begin at .25% (1.25% of sales price) for sales between $2MM and $3MM, all the way up to an additional 2.90% (3.90% of sales price) for sales above $25MM.

New York State real estate transfer tax and New York City mansion tax

Related Articles

Reference Guide to the NYS Transfer Tax and Mansion Tax Hikes…

New York State Targets Low-Hanging Fruit To Raise Revenue – The Real Estate Transfer Tax and the Mansion Tax Are Hiked!

Is the Honeymoon with Your Title Insurance Provider Over?

Is Your Title Insurance Firm Making You Happy? If Not, Why Not Think About Trying One That Will!

Introducing, Hallmark Abstract Service!

Of course you currently have relationships with title insurance providers, but has the honeymoon ended?

And while you may feel that because the process isn’t particularly broken, so why look to fix it, these are some great reasons to consider giving Hallmark Abstract Service a try…

At Hallmark Abstract Service, Our Laser Focus Is On YOU, YOUR Client And The Ultimate Success Of The Real Estate Transaction!

Hallmark Abstract is all about making sure that we protect a buyer’s interests, while at the same time doing all that is in our power to ease the work burden on their attorney.

Some key points for the buyers attorney:

  1. You will have one point-of-contact at Hallmark Abstract throughout the deal who is knowledgeable about every aspect of the transaction,
  2. High level of responsiveness concerning issues and questions that may arise throughout the transaction, and potentially after,
  3. Proactive problem solving, if and when any issues arise,
  4. Work to take as many issues as possible requiring attention, off of the attorney’s plate. We view this as our responsibility, freeing the attorney up to work on other aspects of the deal or on other deals,
  5. Making clients aware of the points below can help an attorney in the area of business development, potentially generating introductions to new clients,

           a. Hallmark Abstract Service title policies are underwritten by companies who possess the greatest financial strength metrics,

           b. Hallmark Abstract Service possesses a stellar record, having no valid title claims over the 10-years we’ve been in business,

           c. The ancillary and ‘junk’ fees charged by Hallmark Abstract Service are among the lowest in the industry! Your clients can save as much as $500 – $1,000, a fact that will inspire referrals to people they know looking for an attorney.

       6. As long as the client is fully protected, we view our role as deal facilitators,

       7. Always a timely recording of documents, post-closing,

       8. Strive to make introductions to people with whom the attorney and their practice have good potential synergies.

I would love the opportunity to stop by or speak to you by telephone at your convenience to introduce myself, learn more about your practice along with any ways we would be in a position to help when the need arises.

Please let me know if you’d be open to either a brief introductory call or for me to stop by your office for a quick chat.

Mike Haltman, CEO
(646) 741-6101

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