Summer 2006 Edition
Vol.11 – No.1
Elder Law Seminars
“Wills, Estates and Elder Law” seminars will be presented by attorney/author Robert Friedman on Saturday, October 14, 2006 from 11:00 a.m. to 12:00 p.m. at the Clarence Senior Center, 4600 Thompson Road, Clarence, New York and Wednesday, October 25, 2006 from 6:30 to 8:30 p.m. at Hamburg High School, 4111 Legion Drive, Hamburg, New York. Learn about the techniques to minimize the costs and delays of probate, how to qualify for Medicaid for nursing home care, financial management and medical decision-making in the event of disability, how to provide for your dependents and favorite charities and asset protection strategies. The legal tools for retirement, financial and estate planning to be discussed include: wills, trusts, life estate deeds, limited liability companies, guardianships, living wills and health care proxies. To register for the Clarence Senior Center seminar, call 716-542-5444. To register for the Hamburg High School seminar, call (716) 646-3306. There is no registration fee.
Attention All Landlords! Get accurate, up-to-date information on the legal aspects of your rights and responsibilities. “Legal Survival for Landlords” will be presented by attorney/author Robert Friedman at Clarence High School, Learning Assistance Center, 9625 Main Street, Clarence from 6:00 p.m. to 9:30 p.m. on Tuesday, October 17, 2006. Mr. Friedman will discuss how landlords and property managers should handle toxic mold litigation, Section 8 tenants, the new Bankruptcy Law, terrorists, evictions, leases, Small Claims Court, discrimination laws, civil liability, insurance, security deposits, elderly tenants, drug dealers, debt collection, lead paint and much more. There is a registration and book fee. To register call (716) 407-9001 or visit www.clarenceschools.org.
Our Practice Areas
- Accidents/Personal Injury
- Commercial Litigation
- Debt Collection
- Divorce/Family Law
- Elder Law/Wills/Trusts
- Municipal Law
- Not-for-Profit Corporations
- Real Estate
Proper Handling of Security Deposits
Security deposits are trust funds which are used by the landlord to pay for damages to the apartment and to cover non-payment of rent. However, a tenant who causes damages or does not pay rent is entitled to the return of his or her security deposit if the landlord does not comply with the following requirements of the Security Deposit Law, according to a recent New York County Civil Court case.
First, landlords may not combine security deposit funds with their personal accounts. Combining or commingling of a security deposit with a landlord’s personal funds is considered a form of theft or conversion that requires the landlord to immediately return the funds to the tenant. The security deposit plus interest earned are the tenant’s property and must be held in trust by the landlord. The tenant must report on his individual income tax return the gross amount of interest earned on his security deposit during the calendar year even though he may not actually receive the interest.
Second, the landlord must provide the tenant with a separate written notice of the name and address of the bank, account number and the deposit amount.
Third, landlords must respond when tenants seek information regarding the status of their security deposits, eg. account history.
Collecting a security deposit from the tenant is an absolute necessity because lawsuits against tenants for property damage and unpaid rent are very costly. The tenant may be “judgment proof” and the landlord does not have a right to seize the tenant’s property or obtain a lien for unpaid rent. The security deposit should be collected before the tenant is given the apartment keys. When the tenant moves out, the landlord should provide the tenant with an itemization of all deductions that are made from the security deposit.
“As Is” Does Not Trump Disclosure Form
The New York State Property Condition Disclosure Act requires sellers of one-to-four family homes to provide buyers with a Property Condition Disclosure Statement (PCDS) before the signing of the sales contract or provide a $500 credit. In a recent case, although the seller knowingly acquired the property in “as is” condition, the seller was still found liable for damages attributable to an undisclosed water leak that occurred prior to the sale. The seller delivered a PCDS to the buyer prior to the signing of the sales contract in which he answered “no” to the question: “Are there any flooding, drainage or grading problems that resulted in standing water on any portion of the property?” However, there was prior water leakage in the basement during a severe storm. The seller had actual knowledge of it, but did not disclose it in the PCDS because he felt that it was “an anomaly”. The New York Supreme Court, Appellate Term, Second Department determined that the “as is” agreement did not vitiate or otherwise waive the protections of the Act. Adoption of the seller’s position would effectively nullify the statutory remedy afforded to the buyer where the seller, having provided the buyer with a PCDS which certifies that the information is true and complete to the seller’s actual knowledge as of the date signed by the seller”, includes statements about the property condition which, to the seller’s actual knowledge, are misrepresentations. Furthermore, there is nothing in the Act to suggest that the “as is” provision in the contract of sale should be deemed inconsistent with a PCDS, or that it is superceded by an “as is” provision.
The moral of the story is that sellers should provide a $500 credit to the buyer, rather than provide the PCDS, which makes it easier to defend post-closing lawsuits.
Chronic Late Payer Can Be Evicted
The tenant usually paid rent late in the month. He continued to make late payments despite the landlord’s repeated service upon him of three-day notices for non-payment of rent and several notice of petitions and petitions commencing non-payment eviction proceedings. Rather than continuing to serve three-day notices and petitions, the landlord commenced a nuisance hold over eviction proceeding. The tenant moved to dismiss the eviction, claiming that the repeated late payments did not constitute a basis for a nuisance proceeding. The New York Supreme Court, Appellate Term, First Department held that chronic late payment and non-payment of rent may constitute a nuisance warranting eviction if not adequately explained by the tenant. A tenant’s personal financial difficulties do not constitute an excuse for failing to timely pay rent. The type of excuse that would adequately explain a tenant’s late or non-payment of rent usually must pertain to some failure on the part of the landlord, warranting a withholding of rent by the tenant, such as for a landlord’s breach of warranty of habitability or quiet enjoyment.
How to Save Your Home If You Go To A Nursing Home
Q. My eighty-four-year old mother is selling her house and moving in with me. Can she purchase a life estate in my home in order to preserve her money in case she enters a nursing home?
A. Yes, under the Deficit Reduction Act of 2005 (DRA), a person who purchases a life estate interest in another’s home for full consideration and lives there for at least one continuous year does not face an ineligibility period for Medicaid nursing home benefits. If your mother expects to live in your home for at least a year, she could purchase a life estate in your current home or in a new home, which gives her certain rights to your property, including the right to live there. This provision does not apply to a transfer of property which your mother previously owned. An attorney can assist you in determining the amount for which the life estate should be purchased, based on your mother’s age and the value of the home. The life estate has no value for purposes of determining an individual’s eligibility for Medicaid. As the life tenant, your mother has the legal right to live in the property for life or for a specified period without paying rent. Upon her death, the life estate is extinguished. If you sell your home during your mother’s lifetime, your mother would have to sign the deed and a portion of the sale proceeds would be payable to her as the life tenant. Those proceeds would count as her resources for Medicaid purposes. Q. What if my mother does not sell her house? Can she transfer it to anyone without being penalized?
A. Yes. Transferring the house to the following people would not affect her eligibility for Medicaid:
- child under the age of twenty-one or a child who is certified blind or certified disabled at any age
- sibling with an equity interest in the home who has resided in the home at least one year immediately prior to the date the patient became institutionalized and continues to lawfully reside in the home
- caretaker child who has resided in the home for at least two years immediately prior to the date the patient became institutionalized and who provided care.
Q. What if my mother enters a nursing home before she sells her home?
A. If her equity interest in the home is $750,000 or less and she intends on returning home, it will not be considered as a resource in determining her eligibility for Medicaid. The equity value is derived by subtracting encumbrances such as liens and mortgages from the fair market value. Reverse mortgages and home equity loans can be used to reduce the equity interest. Medicaid law is constantly changing and is subject to various interpretations. Because the DRA is so new, there are many ambiguities and uncertainties. Do not take any action without first consulting an attorney who thoroughly understands the Medicaid rules.
New Medicaid Rules
The New York State Department of Health issued an Administrative Directive on July 20, 2006, advising social services districts of the nursing facility services Medicaid eligibility provisions of the Deficit Reduction Act of 2005 (DRA). There rules amend and clarify the law as reported in the Spring 2006 issue of the LegalSurvival.com newsletter. The highlights of the rules are:
The look-back period remains 36 months (60 months for trusts) until February 1, 2009 at which time resource documentation for the past 37 months (60 months for trusts) will be required. The look-back will increase by one-month increments until February 2011 at which time the full 60-month look-back period will be in place for all transfers of assets.
For transfers made on or after February 8, 2006, the penalty period starts on the first day of the month after which assets have been transferred for less than fair market value, or the first day of the month the institutionalized individual is receiving nursing facility services for which Medicaid would be available, which is later.
Annuities purchased after February 8, 2006, by the applicant or the applicant’s spouse must name the state as remainder beneficiary for at least the amount of Medicaid paid on behalf of the annuitant.
For transfers made on or after February 8, 2006, undue hardship exists if the individual is not able to access the transferred assets and the individual’s health or life would be endangered without the provision of Medicaid for nursing facility services, or the transfer penalty would deprive the individual of food, clothing, shelter, or other necessities of life. Individuals applying for undue hardship must fully cooperate in the return of the transferred assets.
Verdicts for Assault and Battery
- $13,900,00 – A Wal-Mart cashier was handcuffed and slammed into the wall several times by the store security guard(an off-duty cop)-for refusing to allow an irate customer to checkout. (Jackson County, Mo., Cir. Ct.)
- $1,935,000 – In a squabble over a work station, a stock trader slammed a fellow trader’s head against a steel post on the Philadelphia Stock Exchange floor. Lax security was cited. (Philadelphia Co., Pa. Ct. C.P.)
- $1,000,000 – A black man strangled with a noose by a white co-worker claimed that it caused him to lose consciousness and cough up blood. (U.S. Dist. Court, Texas, Southern)
- $1,000,000 – A bar patron had a bottle forced into his mouth and was knocked to the ground and kicked. Then he was taken outside and choked to death by a bartender. (San Francisco Co., Calif., Sup. Ct.)
- $650,000 – A couple went to a Poison concert to rock out, but the husband ended up getting rocked n’ rolled by security guards over a ticket dispute. (Allegheny Co., Pa., Ct. C.P.)
- $310,000 – Four teens were coaxed by loss-prevention agents at Albertson’s to steal vodka. Then they were handcuffed, interrogated and forced to drink the vodka. One girl was sexually assaulted. ( Los Angeles Co., Calif., Sup. Ct.)
- $4,500,000 – Teacher didn’t intercede while boys postured in prelude to a fight. One boy sustained a punch that destroyed his left eye. (Bronx Co., N.Y., Sup. Ct.)
- $750,000 – High-schooler was repeatedly slashed by a student that had previously threatened her life.(Kings Co., N.Y., Sup. Ct.)
- $700,000 – An 11-year-old who sustained severe hip injury when tripped in the school’s cafeteria claimed that the teacher was aware that the attack was being planned but did not act. (Bronx Co., N.Y., Sup. Ct.)
- $375,000 – A 16-year-old student suffered fatal card�o��[�+������o��[�,������o�hat involved punching of players’ chests.
- $250,001 – A mentally disabled boy’s parents claimed that the school failed to stop repeated sexual harassment that led to a fondling episode. ( Mass.)
- $110,000 – A high school soccer player was ambushed by teammates and bound by duct tape. Parents claimed that the coaches ignored the act. (Fresno Co., Calif., Sup. Ct.)
- $50,000 – During a five-year period, a student was repeatedly harassed by schoolmates, based on his perceived homosexuality. Eventually, he was the victim of two off-campus assaults. ( 3d Cir., N.J.)
- $47,900 – Parents claimed that their 8-year-old daughter was sexually assaulted on an unattended school bus. (East Baton Rouge Parish, La., Dist. Ct.)
- $17,000,000 – A man drove his car over his ex-wife in her driveway at least seven times, getting out occasionally to find out if she was still alive. (Cook Co., Ill., Cir. Ct.)
- $9,930,000 – A woman who was shot by ex-boyfriend claimed that two NYPD officers failed to arrest him after she complained to the domestic violence unit. (Bronx Co., N.Y., Sup. Ct., No.)
While a great deal of care has been taken to provide accurate and current information, the ideas, suggestions, general principles and conclusions presented in this newsletter are subject to local, state and federal laws and regulations, court cases and any revisions of same. The reader is thus urged to consult legal counsel regarding any points of law – this newsletter should not be used as a substitute for competent legal advice. The purpose of this newsletter is to give the reader a general understanding of the law – not to provide specific advice. Every effort has been made to achieve accuracy. The law constantly changes and is subject to differing interpretations. Always consult with your attorney and act only on his or her advice. Victoria Square Publishing Co. Inc. and Friedman & Ranzenhofer, P.C. shall not be responsible for any damages resulting from any inaccuracy or omission. This newsletter is designed to provide accurate and authoritative information in regard to the subject matter covered. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Certain portions of this newsletter may be applicable only to New York State law.