DippelLaw New York Law Blog

Clients ask me this question quite often. The answer is almost always no. I believe the common misconception that a homeowner needs their original deed in order to sell their home arises from their experience with another document of ownership, a title to an automobile. In New York State, the Department of Motor Vehicles issues certificates of title to vehicles, the original of which an owner needs in order to sell their car. If the title is lost, the car owner must obtain a new title from the Motor Vehicle office. This is not the case with deeds to real property.

In New York State, the deed is the document used to transfer ownership of your home to a buyer. Unlike a title to a car, it is not a document issued by a government agency, but is typically prepared by an attorney representing a seller. Once a deed has been signed by the seller and their signature acknowledged by a notary public, the deed is recorded in the office of the county clerk in the county where the home is located, or, in New York City, in the office of the city register. “Recording” is the process by which the deed is included in the public land records, that is, made available for viewing by the general public. When the deed is submitted for recording, it will be digitally imaged, indexed and available for viewing at the county clerk’s office or the office of the city register and in the case of the city register, available for viewing online.

After the deed has been recorded, the original deed will be returned to the home owner or their attorney. This original document, once recorded, while it might be a nice souvenir, has no legal importance. It is the act of recording that gives the new owner title to the property and other legal protections, not physical possession of the original deed.

So if you have lost your original deed, don’t worry, as long as it has been recorded you should have no problems. If you still want a copy of your deed for purposes other than selling your home, such as establishing residency, for example, you can always obtain a copy from your county clerk’s office. In New York City, you can obtain a copy from the city’s ACRIS website. ACRIS stands for “Automated City Register Information System.”

Cooperative Apartment Corporations and Condominiums have “master” or “blanket” insurance policies insuring their buildings against fire and other hazards. But should you also have your own insurance policy?

You definitely should! The blanket or master policy does not cover your personal property in your co-op or condo and will not protect you if a guest injures themselves while in your apartment. Additionally, if a fire or other disaster results in you having to temporarily relocate until the building is restored, your relocation expenses, moving expenses, rent, etc., will not be covered.

Cooperative apartment and condominium owner’s policies insuring against such risks are relatively inexpensive. Speak to your insurance broker if you’re buying a co-op or condo or if you’re a current owner and don’t already have such coverage.

When buying a home in New York State and especially in New York City, mortgage tax can often be the single largest component of your closing costs. For example, the mortgage tax in New York City for a mortgage, under $500,000, on a one-family home is equal to 2.05% of the principal amount of the mortgage. In such a case the homeowner pays 1.8% (minus $30 for a one or two-family home) and the bank pays .25%.

With interest rates at historically low levels, many homeowners are refinancing their mortgages, so must they also pay mortgage tax when they refinance? Well, it depends. The mortgage tax is due when the mortgage is signed and recorded with the NYC Register, which in New York City, is the office responsible for maintaining land records. If you’re refinancing with your existing lender, your lender will not be recording a new mortgage, but just modifying your existing one, so no mortgage tax will be due.

What if you’re refinancing with a different lender? In that case you should ask your new lender to take your existing mortgage by “Assignment” from your old lender. In other words, your new lender will essentially “buy” your existing mortgage from your old lender and modify its terms. As no new mortgage is being recorded, no mortgage tax is due.

For New York counties outside of New York City, the mortgage tax is substantially less so you should weigh your potential savings from a mortgage assignment against the lender’s additional fees they charge when assigning and taking a mortgage by assignment before making a decision.

Short Sales have become more common as more and more homeowners find themselves “Under Water,” meaning that they owe more on their mortgage than their home is worth.  Normally, a homeowner Under Water would not be able to sell their home as the price a buyer would be willing to pay would not be enough to allow the homeowner to pay off their mortgage.  In the case of a Short Sale,  the seller’s mortgage lender has agreed to accept less than the amount due on the mortgage, so a sale can proceed.

How does this affect you as a buyer?  First, you must know that banks are not required to agree to a Short Sale, so the contract will have a clause allowing the seller to cancel the contract should their bank not agree to the sale.

Second,  timing will  be an issue as the process the seller must go through to obtain the bank’s approval of the Short Sale could be lengthy, often longer than the typical 60 days required to close an ordinary purchase. Therefore, as a buyer, the contract should, at the minimum, offer you an out if the short sale has not been approved before your mortgage commitment expires, for example.

Because of these and other complications involved, it is always best to speak to an attorney before making an offer to purchase a property in which the seller is seeking their bank’s approval of a Short Sale.