Behind The Hedges 03.04.2020 03:17 Town & Country's Hal Zwick on Adapting the Real Estate Market to a New Normal

News & Features

Town & Country's Hal Zwick on Adapting the Real Estate Market to a New Normal
April 02, 2020
How do you buy and sell in the age of social distancing? Town & Country Real Estate's Director of Commercial Real Estate and Licensed Real Estate Salesperson Hal Zwick talks about the current state of the market and how buyers and sellers can still make it work in this ever-changing time. What is your history with the Hamptons? I am a New York City native who moved out to East Hampton 22 years ago. I raised my son here and totally take advantage of the outdoor activities and many of the locally owned food and specialty establishments. I was involved in businesses and commercial investments initially and eventually evolved into a full service commercial real estate and business specialist. How are you adapting selling real estate during this challenging time? Being respectful, not doing any cold calling, realizing what people are going through. I'm taking all calls and offering any guidance I can. I am a commercial specialist--therefore I am involved with tenants and landlords mediating rent issues while businesses cannot be open. The overwhelming majority of the building owners are being very sympathetic to their tenant situations and offering rent rebates during this unusual time. What is your advice to a prospective buyer during the quarantine? Work with your broker to obtain all the information available. Be cognizant that the building and planning groups are working--but in-person meetings are not available at this time. However, they are being very cooperative in delivering documentation in a timely manner. They are also available via email and telephone to answer specific questions. Buyers should realize that on-site visits for most commercial listings are still not permitted--only office units. They can enter into an agreement subject to inspections. Commercial buyers need to analyze the lease's of potential investment properties--and determine the income security if the tenant were to vacate the site at the end of their lease term. Owners/operators looking at sites for their specific businesses need to determine if their profit levels will cover the overhead for the prospective acquisition. A good commercial broker can assist with this process. Conversely, what is your advice to a prospective seller right now? Be realistic. Realize that buyers expect deals during this uncertain economic period. Do not overprice, but if you don't have to sell, wait until there is more confidence in the overall marketplace. Also realize that the process might take longer than usual due to the current circumstances, for example, obtaining town data, inspections, appraisals, financing. Why is the East End such a special real estate market? The environment--the open spaces, the beaches, the special downtown areas and the the character of the year round residents especially. From a commercial real estate perspective, seasonality is a real life factor that we need to work around, especially when it comes to the pricing of retail and food service rent levels. We are all working on finding the financial balance--one that works for both building owners and tenants. What are some properties you're excited about right now? Through our speciality unit, Hamptons Commercial RE, I've partnered with Jeff Sztorc and we have some special sites we're currently listing. Some are confidential, but among the public ones are the Stuart's Seafood business and Real Estate Amagansett, the sale of the former Pier One site in Southampton, a newly renovated commercial site in the parking lot in Sag Harbor village and the former M&T Bank site in East Hampton--a beautiful mixed use building available for sale or lease. Find more commercial properties listed by Hal Zwick at hamptonscommercialre.com.
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Master Craftsman: Jean-Michel Andriot, Fine Backgammon Boards, Studio Jean-Michel
April 01, 2020
Home is the place where we rest our heads, store our belongings and cook our meals, but the most elevated abodes are also gathering places for family and friends, full of laughter, joy and bonding. Whether it's with a simple deck of cards, grand rooftop tennis courts or a backyard putting green, games have long been part of recreation on the East End. Such contest and carousal take many forms, but when it comes to games, discerning Hamptons homeowners want something more sophisticated and recherché than paper, plastic and cardboard. To fill this need, Westhampton Beach woodworker Jean-Michel Andriot found inspiration in one of the world's oldest and most beloved board games--backgammon. [caption id="attachment_73608" align="aligncenter" width="750"] Studio Jean-Michel backgammon board, Photo: Oliver Peterson[/caption] "This started like a hobby, totally randomly," Andriot says in his thick French accent, explaining how he went from custom furniture and restoration to crafting fine backgammon boards and tables. "Now it takes a lot of my time, which I really like." A native of Antibes, between Nice and Cannes on France's Côte d'Azur, Andriot was exposed to European craftsmanship through his woodworker grandfather and architect father. He learned to work with and love wood before eventually meeting the American who would become his wife, Tracy, and following her back to New York in 2004. After nearly a decade making and restoring furniture for French restaurants in the city, Andriot and his wife moved to Westhampton Beach, where he launched Studio Jean-Michel. "We were just out here a lot," Tracy says, pointing out that Andriot was frequently in the Hamptons seeing friends or working for clients, and it offered them a chance to open the studio and be closer to nature, especially the water--something he missed since leaving France. "It made sense to move here." [caption id="attachment_73609" align="aligncenter" width="750"] Studio Jean-Michel backgammon board, Photo: Oliver Peterson[/caption] Andriot's skill for complex furniture restoration and building custom pieces to client specifications drives his bread-and-butter business, but his passion has clearly turned toward backgammon, an enduringly popular, 5,000-year-old game he knew very little about. Oddly, it's not so much the game itself--Andriot still hasn't learned to play--but the beautifully symmetrical boards that captured his imagination. "I like the object," he says, noting that he watched some friends playing and couldn't stop thinking about how he might improve and embellish the board. The artisan has since delved deep into a rabbit hole of ideas and experimentation with results dazzling enough to attract both Quogue Gallery and Noted Gallery in Southampton to represent him. First, Andriot replaced the 24 slender triangles, called points, with alternating surfboards, sometimes leaving classic points in between. These new shapes are set against rare wood backgrounds in tasteful colors, and then sealed under a thick layer of pourable epoxy. "I'm trying to give it a third dimension, with the water," he says, describing how his small surfboards appear to float beneath the clear resin. As the work evolved, Andriot began adding uncommon materials, like rare quilted maple veneer, which presents the illusion of textured beach sand in its natural state, or a choppy ocean surface when stained blue or green. "To find the right piece can take a week," he says of the scarce wood. "It's very difficult to source." But Andriot gets his thrills from exotic materials, especially when assembled in surprising combinations. While he continues the surfboard series, Andriot's penchant for innovation has led to new backgammon boards with delicate, hand-poured pewter points, copper teardrop points with gorgeous green patinas, and slightly more traditional boards with points in a variety of enticing woods. [caption id="attachment_73610" align="aligncenter" width="750"] Studio Jean-Michel backgammon board, Photo: Oliver Peterson[/caption] He's already delivered a number of commissioned boards made according to his clients' desires, matching the colors and materials in their home, adding their names or initials to boards or personalized chip and dice caddies and boxes, along with other, more creative requests. "People come with their own ideas and it's up to me to make it happen," he says. Andriot made a set with surfboards in two shades of blue for Westhampton's Dune Deck Beach Club, their name perfectly printed in the center, and it's attracted members, including some celebrities, to play regular games. "They have a drink and play," he says, recalling how surprised the club owners were at backgammon's popularity. "It's a conversation piece; it puts people together." Another client tasked Andriot with making every other point a tiny copy of a surfboard from her collection, and he didn't miss a detail. "It was a real challenge to do that," he says of the one-of-a-kind board, adding, "Art is a school of patience and humility; you never know where it's going." [caption id="attachment_73611" align="aligncenter" width="750"] Metal backgammon points and quilted maple on work in progress, Photo: Oliver Peterson[/caption] Moving forward, Andriot is continuing to try new things and enjoying the spirit of invention that got him this far. "I will work with new materials. That's what I like--there's so much to learn," he says. "Now I'm thinking about chess." Learn more about Jean-Michel Andriot and Studio Jean-Michel at studiojeanmichel.com.
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Always Be Closing: 129 and 133 Sayres Path, Wainscott
March 27, 2020
Considering this Wainscott compound was previously owned by the "Savior of Central Park," it's no wonder the grounds are so gorgeous. The seller, Elizabeth Barlow Rogers, is known for spearheading the preservation and revitalization of Central Park. She was the first person to hold the title of Central Park Administrator and the was the founding president of the Central Park Conservancy. Now, the property has been sold for $7.9 million. [caption id="attachment_73598" align="aligncenter" width="700"] 129 and 133 Sayres Path, Wainscott, Photo: Douglas Elliman Photography[/caption] Barlow Rogers was inspired by Central Park when designing the beautiful landscape. The property features mature landscaping, handcrafted gates, winding rock paths, handcrafted overpasses and benches, all of which lead to a scenic manmade pond and waterfall. The 3-acre compound consists of the two adjoining parcels, each single and separate. 133 Sayres Path is a 1-acre parcel and a home that can either be reinvented or rebuilt, while 129 Sayres Path is on 2 acres and can also be reworked. [caption id="attachment_73599" align="aligncenter" width="700"] 129 and 133 Sayres Path, Wainscott, Photo: Douglas Elliman Photography[/caption] "Elizabeth Barlow Rogers is an amazing women with a true love for nature," says listing Agent Angela Toscano of Douglas Elliman Real Estate. "Every tree, bush, flower and stone was hand-picked by her, which brought a little bit of Central Park to her beloved Wainscott home. I would describe it as a heavenly sanctuary. It was truly an honor to represent this masterpiece of a property." Stacy Cohen of Saunders brought the buyer.
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Master Craftsman: Metalsmith James DeMartis
March 26, 2020
Man's dominance over metal--the bending, shaping and forging of this seemingly rigid and impenetrable material--was established more than 6,000 years ago. And while tools and techniques improve, the noble craft remains, at its heart, much as it was when those ancient people first brought civilization into a new age. Springs metalsmith James DeMartis is keenly aware of this antediluvian legacy when he sets his forge ablaze and puts hammer to red-hot steel, but he also embraces the future and the now--the precise, the machined and the fabricated. It's an unusual gift and the reason he's sought after for everything from Hollywood period and fantasy props to space age kitchen designs in the Hamptons' finest luxury homes. [caption id="attachment_73590" align="aligncenter" width="700"] Working in James DeMartis' shop, Photo: Oliver Peterson[/caption] "You never know what comes through the door," DeMartis says, explaining that work is never dull at his studio on Springs Fireplace Road in East Hampton. Since opening his own shop there in 2001, DeMartis has earned a sterling reputation for his artistry and ability to make just about anything a client can imagine. Today he works with a long list of interior designers, architects, artists, and businesses on projects that truly test the scope of his mastery. And he always delivers. "My focus as a creative person morphed from purely sculpture to sculptural furniture," DeMartis says, pointing out that he learned to make all manner of functional metal objects along the way. Born in Brooklyn and raised in Westchester by artistic parents--his father was a painter and his mother is a passionate art lover and collector--DeMartis first came to the East End after answering an ad to work with artist Nova Mihai Popa. "I never heard of the Hamptons before," he says, recalling those early years creating alongside Popa, who was just starting to make sculptures at what eventually became Nova's Ark Project in Bridgehampton. In college, DeMartis learned to weld, cutting metal with a torch and putting pieces together, but he only began working with hot metal and a forge in the Hamptons. Following his time with Popa, DeMartis spent seven years assisting ironworker John Battle, before eventually starting his own operation. "It was fairly immediate, my enjoyment of the process and metalworking," DeMartis says, adding, "Art always came naturally...but I never thought of it as a career pursuit." [caption id="attachment_73591" align="aligncenter" width="700"] In James DeMartis' metalshop, Photo: Oliver Peterson[/caption] The metalworker makes plenty of time for creating sculpture and the artistic furniture he's passionate about, such as his melted iron and wood or cast glass "Stalactite" tables, but he also gets deep satisfaction from making a wide array of custom pieces and commissions. "I like both," DeMartis says. "I do like the collaborative process and working with other people--there's a challenge to that I enjoy." Repairs, commissioned projects, and personal designs change with great regularity in the shop, DeMartis explains, noting that he could have a nineteenth century cannon lined up next to a stainless steel mirror, a complicated wrought iron gate, and even some fanciful tool or weapon for a character in a film production. "That's what keeps it interesting for me," he says. Rattling off a list of highlights and recent projects, DeMartis describes making a laboratory for Prospero's cave in Julie Taymor's The Tempest, custom stainless steel kitchen cabinets, andirons and fireplace accessories, architectural hardware, decorative gates, indoor and outdoor railings, custom lighting, and a stove and weapons for Darren Aronofsky's epic film Noah, starring Russell Crowe (DeMartis even appeared in the film as a blacksmith). He's done work for several well-heeled restaurants, including Eleven Madison Park in Manhattan, and 1770 House, CittaNuova, Rowdy Hall and Nick & Toni's in East Hampton. DeMartis is also making items for world famous jeweler David Yurman's boutiques. "That's what separates me from other businesses and metal tradespeople," DeMartis says, referring to his ability to tackle so many different styles of metalwork, be it artistic, hand-hammered traditional, or precise, machined fabrications. One recent set of decorative gates featuring expressive dog figures was created using a host of techniques and processes, including 3-D scanning and printing, casting, welding, sandblasting, forge work and more. Of course DeMartis can't do it all by himself. More than 15 years after opening, he now employs assistants for creation and administration. "I'm very much a team now," he says. "It's just how the business evolved," DeMartis continues. "I never set out to be a small business owner--I just wanted to make things, but before you know it you have five employees and a nice client list." [caption id="attachment_73592" align="aligncenter" width="700"] Photo: Oliver Peterson[/caption] Call 631-329-2966 or visit jamesdemartis.com for more info.
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​Real Estate Insiders Share Insights for These Challenging Times
March 25, 2020

The East End real estate market is unique on many levels, but one thing it shares right now are challenges and questions in an ever-changing global, national and local landscape. Behind the Hedges turned to Hamptons and North Fork insiders and experts to share some observations they have been sharing with buyers, sellers and renters.

"[Everyone] should continue to remain informed and adhere to their government guidelines and recommendations, all while knowing their real estate professional is always there for them."--Todd Bourgard, Douglas Elliman Real Estate

"Everyone should remember that eventually the market will return to normal and no one should panic. If you're involved in a sale, then see it through. If you're looking for a rental, don't be intimidated by reports that inventory is gone. There are still houses to be rented."--Gary DePersia, The Corcoran Group

"The current situation is going to change things, but it will create new opportunities. Some sellers will be more motivated, landlords will have the ability to rent for spring months that would normally be vacant, and buyers will be able to invest with peace of mind. With all of the volatility in the stock market, it may be more important than ever to invest in the Hamptons real estate market."--Tim Morabito, Compass Real Estate

"The interest rates are at an all-time low. The stock market is uncertain. I am advising all of my client's and customers to invest in real estate. It's tangible. This too shall pass, and there are real opportunities to be had right now. I am taking advantage of the low interest rates, myself, and investing in another property. No more 'would've, should've, could've.'"--Mary Terry, Daniel Gale Sotheby's International Realty

"The market in the first part of the year was on fire. Sellers had become more realistic and buyers were taking advantage of the new price point. Whenever there is an event such as the coronavirus, it has a marked influence on our sales market. Our buyers are very sophisticated. They go to the sidelines until the future economic direction is clear. Models such as in China and South Korea have shown that this virus will diminish. I foresee that once it does, the market will resume its positive direction. For all people in this stressful time, it's important be civil to each other."--Alan Schnurman, Saunders & Associates

"The United States is the most resilient country on the planet. The underlying economics of the real estate market on the East End were good, personal debt was low and home equity was high unalike 2007 to 2009.  The economy was very strong prior to Corona Virus.  I anticipate that once this is under control, the economy, jobs and prosperity will come back quickly."--Thomas McCloskey, Douglas Elliman Real Estate

"It's critical that we all participate in curbing this pandemic over the next couple of weeks....I think it's important for everyone to keep in mind that we will all get through this together.  Everyone needs to exercise patience and compassion--stay focused on helping those around us that need it most. The Hamptons is and has always been a desired destination in the best and worst of times, as evidenced after the 2008 financial crisis and 9/11."--Lori Schiaffino, Compass Real Estate

"There are landlords gouging city tenants for short-term rentals, which is sad, because everyone is in this together. I am opening my own summer cottage in Sag Harbor Village and will offer it for a reduced price. Sales have picked up but prices are down, so there is no surprise on that front."--Christopher Burnside, Brown Harris Stevens

"For buyers, there are great opportunities in the marketplace and now is the time to capitalize, or they will be sorry in a year or so. For sellers, if you are not priced accordingly, nothing is going to happen. Today's buyers have a great amount of choice, and either the seller wants to sell or not. For renters, most properties are priced to rent, after a few slow summers. There is always some room in the asking price, but it is not huge drops."--Timothy O'Connor, Halstead Real Estate

"Home valuations will remain strong after we recover from this. The notion of having a place out here to retreat to from the city specifically will forever hold tremendous value."--Maria Cunneen, Compass Real Estate

"First and foremost, I'm available for all my customers and clients, simply to talk about the situation at hand and calmly discuss their options. This is a very confusing time. We've been trying to match up as many tenants and landlords as possible for immediate rental needs. On the sales front, we're negotiating a few deals that have come about 5% away and stalled as both sides have dug in. Our buyers are mostly taking a step back to evaluate though a small percentage have forged forward. Overall my advice is business as usual--for my sellers, let's consistently keep your property on the buyers' radar, and for the buyers, let's keep a keen view on what opportunities present themselves."--James Peyton, The Corcoran Group

"This coronavirus has tentacles--its full effect is yet to be determined and may only be evaluated once it's in the rearview mirror. Having been a broker here through the '87 Crash, 9-11 and the Great Recession, I can honestly say these are uncharted waters....We will get through this. Look forward and take a beach walk! To own--or rent, if you can't afford to own--a slice of heaven on earth is cheaper than therapy....Yes, this too shall pass."--Judi Desiderio, Town & Country Real Estate

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Property of the Week: A Fabulous Rental on Sag Harbor Cove
March 20, 2020
Summer is but a few months away, and rentals are getting snapped up. For those planning to spend August in the Hamptons, there's a lovely property available in Sag Harbor, listed by Mitchell Brownstein at Douglas Elliman Real Estate. [caption id="attachment_73578" align="aligncenter" width="600"] Photo: Douglas Elliman Photography[/caption] Located on Sag Harbor Cove on .65 acres, the property features a compound with a pair of homes and two studio outbuildings, plush lush outdoor living space, complete with pool, decks and gardens. It also comes with paddle boards and kayaks for renters' use, plus a caretaker for assistance during your say. Located one block from Sag Harbor's Main Street, the renovated five-bedroom, four-and-two-half-bath home has lots of room to spread out. Special highlights include a chef's kitchen, dining room, library, writers study, and, of course, a screening room. The property is located near Long Beach and Ocean Beaches. [caption id="attachment_73579" align="aligncenter" width="600"] Photo: Douglas Elliman Photography[/caption] This classy home is owned by Susan Lacy, the creator and executive producer of the PBS Television series American Masters. Most recently, Lucy directed the HBO documentary Very Ralph, about American fashion designer and East Ender Ralph Lauren. [caption id="attachment_73580" align="aligncenter" width="600"] Photo: Douglas Elliman Photography[/caption] "This spectacular Sag Harbor home on the cove has breathtaking views and provides the perfect setting for alfresco living," says Brownstein. "There's always something fun to do here, inside and out."
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Rentals, Resilience and Reality for East End Real Estate Amid Coronavirus
March 19, 2020
"Our phones have been ringing off the hook." The statement from Alan Schnurman of Saunders & Associates may, at first glance, feel surprising amid other news about the impact of Covid-19. But East End real estate has been seeing a flurry of activity, particularly over the past week, as the Hamptons and the North Fork offer an escape and a sense of relative calm. "People are fearful. They are fleeing the city seeking safety for their families. The Hamptons has always been and will always be a safe and secure environment." With coronavirus news and restrictions changing multiple times a day at this point, people are coming to the Hamptons and the North Fork much earlier than would occur in a normal pre-summer season. Of course, things are anything but normal at this moment, and local real estate is providing something of a haven, with what many viewed as a strong start to the year not so much weakening, necessarily, as morphing in the moment. "Prior to recent events, we were having, in my opinion, it was an excellent sale and rental market," says Gary DePersia of The Corcoran Group. "Personally, I had a very good first quarter going in both sales and rentals and was looking forward to more of the same." For rentals in particular, he says, "things are at fever pitch with people looking to move in ASAP for a month or more, and there is continued strong interest in summer rentals and year-round." "Many people are looking for two-month rentals so they can get their families out of the city," says Lori Schiaffino of Compass Real Estate. "Many of the renters that were waiting on the sidelines for better Memorial Day to Labor Day pricing are now eager to sign leases. The Hamptons is going to be 'the place' to be this summer, as most families will not be traveling to Europe and other destinations. We are going to be very busy." As people increasingly look to depart for points east more quickly, the inventory for them to consider is rising as well. "There has been an uptick of homeowners making their homes available to rent off season for those who may want to be on the East End a little earlier than usual," says Douglas Elliman's Todd Bourgard, Senior Executive Regional Manager of Sales for the Hamptons. "We are seeing agents and homeowners acting very responsibly by not hosting open houses. Additionally, they are taking extra steps to enforce health precautions with private showings. Facetime and videos are also becoming popular." Indeed, the way homes are shown and viewed is evolving to keep up with implementations of social distancing and other approaches to ensure health and safety. Open houses being put on hold, brokers are doing in-person showings on a case-by-case basis and everyone is turning more and more to the digital realm. "We had our first virtual listing presentation through FaceTime last week," says Tim Morabito of Compass. "In addition, instead of hosting open houses, we are offering virtual open houses as well as virtual tours for inquiries on homes." "The biggest change I've seen in conducting business over the past two weeks has primarily been the social aspect of the real estate business," notes Christopher Burnside of Brown, Harris, Stevens. "I'm not driving customers in my car or shaking hands. I am keeping a distance that is safe for everyone. I have become quite efficient doing walk-through videos and Zoom meetings." Even before coronavirus, habits had been changing, so renters and buyers were already getting used to virtual interactions, as were brokers. "Half of the customers are not even coming out, they are using the photos on the site and my guidance to take one property over the other," says Halstead Real Estate's Timothy O'Connor, noting that the immediacy has become modus operandi. "Since last Wednesday after President Trump spoke on national TV, the short-term tenant with immediate occupancy has taken off.  Everyone wants to be in this week. It has and will continue to be great demand over the next few weeks." "Rentals are off the charts, and full-season or longer dominate for the first time in years," says Town & Country Real Estate CEO Judi Desiderio. "Sales are on a divided fork in the road--some buyers have now accelerated the process and their desire to own a piece of East End dirt, and others got caught with their money to buy a home in the stock market, so they may be pumping the breaks." "I have had limited interest in sales, though still am working with active buyers who are not afraid of the financial market, seeing this as a good time to buy," notes Maria Cunneen of Compass, who believes that people need to keep in mind "that home valuations will remain strong after we recover from this. The notion of having a place out here to retreat to from the city specifically will forever hold tremendous value." The East End market is not like other markets, in that the power of "location, location, location" always remains a factor, even during periods like this. A number of experts have in fact noted that this can be a smart time to look at buying property. "The interest rates are at an all-time low. The stock market is uncertain," says Mary Terry of Daniel Gale Sotheby's International Realty. "I am advising all of my client's and customers to invest in real estate. It's tangible. People will always need places to live and our market is solid." Thomas McCluskey of Douglas Elliman concurs. "The United States is the most resilient country on the planet. The underlying economics of the real estate market on the East End were good, personal debt was low and home equity was high, unlike 2007 to 2009.  The economy was very strong prior to coronavirus. I anticipate that once this is under control, the economy, jobs and prosperity will come back quickly."
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Legally Speaking: 5 Real Estate Laws to Know in These Times
March 18, 2020
In the era of Coronavirus (COVID-19), we are living through both a health and a financial pandemic the likes of which we have never experienced before. Every aspect of everyone's lives has or will be impacted, including our real estate. Here are five real estate laws that you need to know to get through COVID-19 without being wiped out by this financial pandemic. Remote (Mail Away) Closings: The President has recommended gatherings to be limited to 10 people. Social distancing is now a regular term in our vocabulary. Closings don't coincide with this new norm. Imagine sitting in a conference room for hours for your real estate closings with Coronavirus in the air. To avoid catching Coronavirus while transferring your deed, you should insist that your closing be done remotely. Yes, a closing can and should be done remotely. Our law firm just did two remotely and they were great. All documents can be pre-signed and sent through UPS. In fact, the only reason to have physical contact with another human being, incident to your closing, is to have documents notarized because NYS law requires a notary to be in the presence of the signer. Yet, a solution is pending in the NYS Senate. Bill S4352B would permit video notarizations and everyone needs to voice their support for this bill. Contact your representative now and save the real estate industry and your life from Coronavirus. Real Estate Closing Date: If you are in contract to buy or sell real estate, don't worry about a quarantine preventing you from closing by the specific date specified in your contract of sale. You will likely be afforded as much time as you need to close the deal, regardless of that date, as a matter of law. Most real estate buy/sell sales contracts in NYS utilize an on or about closing date and that date is rarely, if ever, the actual closing date that the transaction closes. Instead, an on or about date is just used as an estimated date for the parties to be ready to close. However, that estimated can be unilaterally changed by a party to a date certain, called a law date, if their attorney serves a time of the essence notice. However, NYS law instructs that the law date must be set within a reasonable date from the on or about date and reasonableness is determined by the courts with reference to the facts and circumstances of the transaction. Therefore, should you be quarantined, it is extremely unlikely that a NYS judge would ever validate a time of the essence date against you because no time would ever be reasonable until you are excused from the quarantine. Lease Enforcement: Coronavirus likely won't get you out of your lease obligations. If a landlord locks the doors to commercial space because of a quarantine, the tenant can likely receive a rent abatement from the courts as the result of this partial eviction unless the lease has non-performance language (force majeure clause) specifically applicable to the situation. The same holds true if a commercial landlord doesn't provide essential services called for in the lease, like utilities, cleaning, and/or repair. In contrast, a non-paying tenant will likely be evicted and face a back-rent judgment regardless if their non-payment stems from a quarantine or business failure incident to Coronavirus unless their lease contains relevant non-performance language to relieve such tenant from their obligations. So, it all comes down to the lease and you need to know what your lease provides with respect to your rights and obligations before you act. Forbearance before Foreclosure: If a landlord doesn't receive rent and, as a result, can't pay their mortgage, foreclosure proceedings will likely commence upon two missed payments. The same holds true if a homeowner becomes unemployed and can't pay. Luckily, mortgagors who act quickly can often avoid foreclosure by negotiating a foreclosure workout called a forbearance with their lender. By having your attorney negotiate with your lender before the commencement of foreclosure proceedings, you can generally negotiate reduced or eliminated mortgage payments for several months to get back on your economic feet. After foreclosure proceedings are commenced, the cost/benefit analysis for the lender, who has then hired an attorney and paid court fees, changes drastically and their willingness to work with you is greatly reduced. So, act as soon as your financial issues are known so that you can avoid foreclosure. Chapter 7, 11 & 13 Bankruptcy: If you are a local restaurateur or merchant and you are suffering from Coronavirus quarantines, bankruptcy may be your only option. While Chapter 7 will eliminate your debts, there are caps on your amount of income to qualify. Additionally, the trustee will seize most of your assets and, as a result, your business will likely be closed for good. However, Chapter 11 or 13 offer options to restructure and stay in business. To qualify for a Chapter 13, you can't own your business in an LLC or corporation and there are caps on the amount of debt that you can have at the time that you file. Alternatively, a Chapter 11 is available for LLCs and corporations plus it has no cap on debt that qualifies for filing. For small business, sometimes your best way forward is through a fresh start that is offered by bankruptcy. Andrew M. Lieb, Esq., MPH, is the managing attorney of Lieb at Law P.C. and a contributing writer for Behind the Hedges.
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Always Be Closing: 7 Powell Avenue, Southampton
March 12, 2020
Built in 1884, who could predict that a former potato and grain barn would one day be the office space of an iconic Piano Man? [caption id="attachment_73560" align="aligncenter" width="700"] 7 Powell Avenue, Southampton, Photo: Courtesy Douglas Elliman Real Estate[/caption] The property at 7 Powell Avenue, Southampton, has closed. It was listed by Brenda Giufurta of Douglas Elliman Real Estate, and Joseph Savio, also of Douglas Elliman, brought the buyers. This interesting building was once used as office space for Hamptonite and superstar Billy Joel. Sited on .21 acres adjacent to the Southampton train station, the period building comes with more than 8,000 square feet, on three floors. Drenched in historic details and period touches, including intricate hand-laid brickwork, arched brick door details, hand hewn pine floors and beams, 1 1/2 -foot poured cement flooring, and a working antique freight elevator, this trophy building is a rare gem in a prime location. [caption id="attachment_73561" align="aligncenter" width="700"] 7 Powell Avenue, Southampton, Photo: Courtesy Douglas Elliman Real Estate[/caption] "It's truly a trophy building," says Giufurta. "Drenched in historical details, it presents a once-in-a-lifetime commercial opportunity." [caption id="attachment_73562" align="aligncenter" width="700"] 7 Powell Avenue, Southampton, Photo: Courtesy Douglas Elliman Real Estate[/caption]
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Legally Speaking: LLC Anonymity in Real Estate Transactions Is No More
March 12, 2020
On September 13, 2019, limited liability companies (LLCs) lost the ability to offer anonymity of their owners in residential real estate deals throughout the State of New York. Now, real property transfer tax returns, relating to residential property, sold or purchased by a limited liability company, must offer transparency by including ownership information about any LLC transacting in the deal. Residential property refers to one-to-four-family dwelling units. The ownership information required to be included on the return is the identification, by names and business addresses, of all of the members, managers, and any other authorized persons of the company. If there are no such members, managers and other authorized persons, the return should identify the shareholders, directors, officers, members, managers and partners of any other business entity that is a member, manager or authorized person of the limited liability company. Before sellers and buyers start freaking out that their identity will now become readily available, it's important to note that this practice has been successfully implemented in New York City since 2015 and the real estate market has remained vibrant ever since. Beyond the market's continued success, LLCs have remained an important tool in real estate transactions in the city. The reason that LLCs have remained an important tool in the city for real estate transactions goes to their true purpose, which is not anonymity. The true purpose of an LLC, as the name says, is to limit liability of the owners. An LLC limits the liability of its owners by capping liability at the LLC's asset level and does not expose the owner's other assets to such liability. To illustrate, imagine a rental house that is owned by an LLC, "Don't Sue Me, LLC," which, in turn, is owned by Wanda and Jake Smith. The rental house has a fair market value of $1 million and no mortgage. Wanda and Jake Smith have a combined net worth of $5 million ($4 million in assets outside of the house). The Smiths' tenant, Sally, has a wild party at the house and her friend Tom, sadly, is seriously injured when he falls off of the deck because the railing was not secure and it gave way when he leaned on it. The injury was so serious that Tom's back required a fusion surgery and he has been unable to return to work ever since, being rendered permanently disabled. In response to his injuries, Tom sues both Don't Sue Me, LLC and Wanda and Jake Smith seeking damages for their negligence (premises liability) in the amount of $5 million. In response, Wanda and Jake Smith move the court to dismiss Tom's case against them personally, because they are shielded from such case through their ownership of the property in an LLC. As required, this motion is granted by the court and the Smiths are personally out of the lawsuit. After the dismissal against the Smiths, Tom persists in the case and ultimately prevails while obtaining a $3 million judgment against Don't Sue Me, LLC, which carried a $1 million general liability policy. Because the insurance policy fell short of the judgment amount, Tom is able to take ownership of the rental house. But, thanks to the LLC's protection, Wanda and Jake Smith maintain a net worth of $4 million. The Smiths owe a lot to their LLC ownership because without it, Wanda and Jake Smith would have been down to $3 million ([$5 million net worth + $1 million insurance] - $3 million judgment). This is why, irrespective of anonymity, an LLC is necessary when owning rental property. Would the situation have resulted differently if, even with owning the real estate in an LLC, Wanda Smith had personally, but negligently, constructed the deck and railing, which was the situs of the injury? Yes. An LLC does not protect an owner from personal acts of negligence. So an LLC should hire licensed and insured home improvement contractors and not play handyman if such LLC wants to enjoy the full protections of the ownership structuring. Would the situation have resulted differently if, even with owning the real estate in an LLC, Wanda and Jake Smith never filled out their corporate book, never drafted an operating agreement, never assigned the membership interests of the LLC, never established a corporate checking account, commingled assets with their other entities and personal accounts, and failed to observe all other corporate formalities like annual meetings, voting and the like? Yes. An LLC alone does almost nothing. To obtain protection from an LLC, an owner must observe many rules of the game rather than exercising complete dominion and control over the entity. Filing for ownership online does almost nothing for a real estate owner. Instead, being guided on corporate formalities is the name of the game when seeking counsel on business entities. Would the situation have resulted differently if rather than owning the real estate in an LLC, it was owned by a corporation? Nope. An LLC and a corporation are both viable ownership options to limit liability. However, an LLC doesn't have to file a Form 1120 for the business or report the profit and loss of the individuals on a K-1, so it's typically the preferred ownership structure where the owners aren't self-employed by the entity (LLCs, unlike S-Corporations, have to pay self-employment tax of 15.3%). In all, the LLC remains quite useful for real estate ownership and should continue to enjoy its day in the sun with respect to rental property ownership. However, anonymity is no longer one of those advantages and only through the maintenance of requisite corporate formalities does ownership in an LLC make sense. As you can see, it's a good thing to know a little something called the law. Andrew M. Lieb, Esq., MPH, is the managing attorney of Lieb at Law P.C. and a contributing writer for Behind the Hedges.
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Master Craftsman: Heather Dunn-Kostura Faux Finishes
March 11, 2020
It's a rare moment when one celebrates the artificial, but a well-considered and beautifully crafted fake can be absolutely essential for completing a room and, by extension, a home. Whether it's painting a wall, a window frame or fixing a piece of fine furniture, the art of faux finishing is indispensable in any luxury homebuilder or interior designer's toolbox. Think of it as design prosthesis. Since 1996, Heather Dunn-Kostura of East Hampton's Heather Dunn & Company has been applying masterful faux finishes to homes and businesses from Montauk to Manhattan. Working with her husband Richard Kostura, the duo has proven they can accomplish just about any task they're given--and that's no easy feat. [caption id="attachment_73549" align="aligncenter" width="700"] Faux mosaic electrical box covering, Courtesy Heather Dunn & Company[/caption] "I take things and make them look like something they're not," Dunn-Kostura says, describing her work in the simplest terms. From basic jobs--such as matching an outlet to a stone or wood wall--to intricately rendered murals and theme rooms, the local artisan says each project offers its own set of difficulties, even if she's done it 100 times before. "I'm always up for a challenge," Dunn-Kostura says, noting that location, humidity, individual surfaces and dozens of other factors can affect the way she achieves her final result. "You have to approach [a project] like it's brand new every single time," she explains. "A high level of humility is really, really important...the process is always different." Dunn-Kostura is a natural when it comes to faux finishing and the related work she does, but it took some time to find her niche. She painted houses and waitressed in college before becoming a business agent for a healthcare industry union. After a couple of years, Dunn-Kostura found herself in desperate need of a career change. "I wasn't happy," she says, explaining why she walked away from her job, went back to painting and waiting tables, and enrolled in school to learn the art of faux finishing. "I spent every penny I had to pay tuition," Dunn-Kostura recalls, but she quickly found her risky decision to be the right one. "I had a knack for it," she says, pointing out her surprise at the time. "I went through life with no idea I had an artistic bone in my body." In short order, Dunn-Kostura completed her training and went to work in 1996, first out of Huntington Village before eventually moving with her husband to East Hampton in 2005. These days, the woman who never saw herself as an artist even creates paintings on canvas--a far cry from the life she'd imagined during her days with the union. [caption id="attachment_73550" align="aligncenter" width="750"] Stenciling, Courtesy Heather Dunn & Company[/caption] "Now my husband and I do everything ourselves--I love it," Dunn-Kostura says, explaining that Heather Dunn & Co. has actually shrunk in terms of employees and manpower over the last two decades, but the business is flourishing. The small company has a loyal clientele, including celebrities, who provide them with an increasingly diverse array of projects. "I find you have to be about what the client wants, what the decorator wants," Dunn-Kostura says. Heather Dunn & Co. is in hot demand for all kinds of jobs and they've learned to deliver. "We'll paint anything," Dunn-Kostura says, listing a skull-and-crossbones patterned car hood among her more unusual commissions. It required a special type of paint that would look good and remain strong during the normal wear and tear a car experiences. Other endeavors include an electrical box made to look like the colorful mosaic surrounding it, doors, crown molding, stencil work, ceiling tiles, outdoor sculpture, sign and furniture restoration, lamps, boat lettering, fireplaces, mirror and picture frames, and just about anything one could imagine. She makes new things look old and old things look brand new. Dunn-Kostura is also an expert at Venetian plaster--a three-dimensional wall finish offering a classic European look and feel--and she recently added wallpaper installation to Heather Dunn & Co.'s list of services. They've created about a half-dozen available wallpaper designs so far. [caption id="attachment_73551" align="aligncenter" width="750"] Car hood, Courtesy Heather Dunn & Company[/caption] Or, for the wallpaper averse, Dunn-Kostura can use stencils and hand painting to make a wall appear covered in paper or fabric. "Some people just really hate wallpaper," she says. Painting comprises the bulk of her work, but Dunn-Kostura must be flexible in her approach, whether that means ripping apart an old deck to find well-worn wood, or shopping at "funky antique places" to acquire the right accouterment for an installation. It could take months to perfectly match a requested finish or design, painted or otherwise. She acknowledges that the work requires an inordinate amount of patience and a bit of a compulsive streak, but Dunn-Kostura is entirely suited for it. "I intuitively mix colors and match colors...I never know how I do it," she says, noting that her memory for such things is uncanny despite never keeping recipes. "If you set your mind to it, you can pretty much do anything," Dunn-Kostura points out. Besides, she adds later, "I found my passion--I love what I do." Learn more at heatherdunnandco.com.
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Real Estate Roundtable: Unforgettable Open Houses
March 06, 2020

Celebrities, warring spouses, trampolines... Our panel of real estate experts tell all about their most memorable open house experiences.

I had sellers who were getting divorced. I scheduled an open house and they both decided to stay and have a fight while there were buyers walking through the house. Expletives were flying until ultimately one of them locked themselves in the master bedroom. I collected my signs and went home. The house did eventually sell. --Patrick McLaughlin, Douglas Elliman Real Estate

Open houses are interesting affairs, but they always remind me how small of a world it is out here. Recently, I was holding an open house at one of my exclusives in Sag Harbor and a nice couple from Ireland came in. They were just walking around the village for the day. After touring the property, we were making small talk and soon realized they were good friends of my aunt and uncle who live in New York City. It's a small world and only gets smaller by the day. --Doug Sabo, Nest Seekers International

I was hosting an open house in Bridgehampton and Joy Behar walked in. I was a bit starstruck, but we hit it off. The following year she called and asked if I could show her homes to purchase in East Hampton. We started looking and found her a great property. I know a lot of agents feel that open houses are a waste of time, but I love the homes I represent and enjoy hosting open houses. You just never know who will walk in when you're in the Hamptons! --Angela Boyer-Stump, Sotheby's International

About six years ago, I had an open house for a property in Sagaponack north, on a Sunday in August. A couple with three kids and three golden retrievers saw the open house sign and stopped by, and asked if they could bring their dogs in with them. They said that they--the dogs--were part of the family and they--the humans--wanted to see if they--the dogs--liked the house, because--they--the humans valued their dogs' opinion. Obviously, my BS meter peaked and I politely told them they could not bring the dogs in. While the people were getting in their car to leave, the owner happened to call regarding something totally unrelated. I told her the story of the folks who were about to leave, and she said to run out and get them and let them see the house with the dogs. Turns out, the owner had just lost her dog to cancer a few weeks earlier and thought it good karma. Well, the dogs must have approved, because we had an accepted offer from this family by noon the next day. They are all still alive and well at the same property today. --Bill Williams, Compass

I like holding open houses. You never know what is going to happen or who you are going to meet. From people running in from the beach and asking where the bathroom is, to families picking out the colors of their children's rooms. In my experience, neither group is ever the buyer you are hoping for. I have seen known billionaires drive up in small compact cars and teenagers driving Rolls-Royce convertibles. My favorite story is when a young man came on a bike, wearing torn shorts and flip-flops, and purchased my first listing for $15.5 million. Only in the Hamptons. --Alan Schnurman, Saunders & Associates

Years ago, I represented an incredible new house with a 1.5-acre property in Sagaponack south, which was built alongside a 34-acre reserve. In the finished lower level of this house was an incredible kids' amusement park that included pinball machines, an assortment of other games and adult toys including a kid-sized trampoline with side nets for protection. When the open house ended, I did a sweep of the house to make sure everyone had left. Lo and behold I found a very tall female broker jumping up and down on the trampoline, who was very reluctant to leave. The sight of that broker in the kid-sized trampoline is still with me today and still makes me smile. --Gary DePersia, The Corcoran Group

The strangest open house experience I had was when a couple of women came to preview a home. They said it was very nice, but not for them, and left. Sometime later, I happened to look out the window, and one of the women was digging up flowers in the flowerbed. I went outside and said, "Excuse me?" And she said, "Oh? These flowers are so unusual, I thought you wouldn't mind if I took some samples." --John Christopher, Sotheby's International

During a hot spell, I once hired an ice cream truck to come to my brokers' open house for free ice cream. I've found free food and great raffles bring brokers out in droves for a tour of my new exclusives. Then they can go back to their offices and tell their buyers how great the house is! --Aimee Martin, Saunders & Associates

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