Opportunities, pitfalls abound in recovering market.
For the first time in this decade, the signs are clearly pointing to a real estate recovery here in New York City. Among the most encouraging indicators: The economy is strengthening; Major new construction projects, front Times Square to the Coliseum, are gaining momentum; The new administration is proving to be a positive force in the resurgence; Our numerous real estate and construction clients are extremely busy.
Clearly, with the climate for business improving, all sectors of the real estate community - brokers, developers, co-op boards, contractors, engineers, architects and designers - will almost certainly seek out and rely, perhaps more than ever before, on the experience and expertise of their legal counsel to help them take full advantage of new opportunities in the marketplace while avoiding costly pitfalls that could sabotage their growth and profits.
Those specialized law firms that offer the greatest expertise and understanding of all aspects of the real estate and construction fields will, undoubtably, be the most sought-after. And with good reason.
Here, for example, are just some of the issues that we are. bringing to the attention of our real estate, construction and design clients these days:
* While still coming up short, two recent legal decisions should provide "at least a measure of relief" for condominiums seeking to recover common charges on units that are being foreclosed. The two Manhattan Supreme Court rulings hold that in a foreclosure action where a receiver is appointed, the receiver's duty to preserve and maintain the property includes the current payment of the common charges that accrue on the unit being foreclosed. Both decisions recognized that common charges are "expenses necessary to operate the premises."
* It's common procedure today for designers, engineers, construction managers and general contractors to look beyond the customary scope of their involvement on a project and seek to expand their responsibilities. But those who do so should beware that stepping outside the traditional boundaries sometimes means falling into a nasty trap filled with hazardous waste - which you could be responsible for cleaning up.
Before signing a contract that enlarges your realm of responsibility, we're advising our clients to prudently assess the potential for assuming liability associated with hazardous waste remediation, and to learn how to protect themselves from such an onerous situation. The key to doing this is relatively simple: develop a basic understanding of federal and state laws that may allocate responsibility for environmental clean-up to owners, operators, managers and transporters of hazardous materials.
With the economy on the decline in recent years, firms in the construction industry have been forced to accept an unpalatable combination: lower fees and more onerous contract terms. Many of the hardest bargains are driven by public entities which hire design professionals and contractors on a competitive basis. Often the opportunity to modify the terms of public contracts through negotiation is extremely limited, and as a 1993 decision demonstrates, anyone who signs on the dotted line and hopes that the courthouse may offer a reprieve from obligations which are especially one-sided is making a big mistake.
Clearly, the balance of the century Will be fraught with challenges as well as opportunities. As you attempt to exploit those windows of opportunity in the coming years, bolstering yourself with the broadest range of legal expertise, honed and wizened by the peaks and valleys of the last decade, is a must.
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|Title Annotation:||Review and Forecast Section I; New York, New York real estate market|
|Author:||Zetlin, Michael S.|
|Publication:||Real Estate Weekly|
|Date:||Jun 22, 1994|
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