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Why should I get title insurance and pay extra for a market value rider?

When you buy your home you should spend the extra few thousand (?) dollars to get title insurance and a market value rider — even though you are not likely to ever file a title insurance claim.

Here’s why.

Title insurance is a great business — for the insurance company. It researches the history of ownership and liens on your property and then insures against any risks it doesn’t find and refuses to insure against any risks it does find. This way it will almost never have to pay any claims. Not bad, eh? Plus, if you get a mortgage, the lender will make you get another title insurance policy insuring the lender for the amount of its loan.

But why should you bother getting title insurance for yourself? Because almost never is not never. No matter how small the likelihood that you will have a claim, the only claim you might ever have is likely to threaten the ownership of your home.

And when or if that time ever comes, you want to have paid for the market value rider so that you get the fair market value of your home, not just what you paid for it. By the time you make a claim, if you ever do, it will be too late to buy the market value rider. So get it when you buy your home — and your title insurance.

When should my condominium get a public adjuster?

The short answer is, when you have a first-party claim and the insurance company is not offering you what you think it should. But not when you have a third-party claim.

But what are first-party and third-party claims, you ask? A first-party claim is a claim that will be paid to a party covered by the policy. The boiler leaks in the cellar of your condominium and damages the building. Your property insurance should pay to repair the damages. That’s a first-party claim. If a unit owner has a storage bin in the cellar and boiler leak also gets into the bin and damages his property, then your condominium’s liability policy may pay for his damages. That’s a third-party claim.

But what about a public adjuster? A licensed public adjuster can represent your condominium to negotiate with the insurance company to get it to pay more for the condominium’s first-party claim that it otherwise would have. The public adjuster can do this because he or she understands your insurance policy and the real cost of repairs better than you do. The public adjuster gets paid a percentage of the extra he or she gets from the insurance company. This doesn’t work for third-party claims because the condominium, through its insurer, is the one paying the claim to someone else. If the third-party won’t accept what the insurance company offers, the third-party can sue, in which case the insurance company hires a lawyer, not a public adjuster, to defend the condominium.

What good is a certificate of insurance?

Not much.

If you are an owner entering into a construction contract, the contract will normally require the contractor and the sub-contractors to produce certificates of insurance naming you, the owner, as an additional insured party. However, a certificate of insurance is issued by an agent and doesn’t bind the insurance company, at worst. And doesn’t adequately disclose the coverage and exclusions in the policy, at best. You would be better off getting a copy of the full policy, except that the insurance company won’t have compiled it yet. But you can ask for a sample policy form and forms of the various endorsements (i.e., amendments) because those should be available more quickly.

 

Why is the Dept. of Buildings after you about your 1099 workers?

The IRS is not after you to change your 1099 workers to W-2 employees. The state of New York is not after you to provide unemployment insurance. Why is the New York City Dept. of Buildings after you about using 1099 workers instead of W2 employees? Because you’re a licensed electrician. And the New York City Administrative Code bars licensed electricians from using independent contractors to perform work under the license. NYC Administrative Code § 27-3017(1) and § 27-3004. There’s your answer.

The sponsor is not your daddy.

The sponsor of your condominium is your business partner. He (and let’s be honest, most of them are men) is the developer who built or renovated the condominium building and sold you your unit. As long as he controls the board of managers, he controls the business decisions of the condominium. Even when he no longer controls the board of managers, so long as he owns any of the other units, such as a store on the ground floor or other residential units, you and he are business partners in the operation of the condominium. He is supposed to honor his promises to you, but he is not supposed to solve all the problems with the condominium. You are a building owner now — together with all the other unit owners, including the sponsor — and those problems have to be solved together.

Is a condominium a corporation?

No. It’s an unincorporated association. It can get an employer identification number, pay taxes, open bank accounts and enter into contracts. The condominium board of managers can sue “on behalf of two or more of the unit owners…with respect to any cause of action relating to the common elements or more than one unit.” NY Real Property Law § 339-dd.

Should I Go to Law School?

Andrew Weltchek, http://weltcheklaw.com/, discusses Should I Go to Law School?

{Time to Read: 3 minutes}

Don’t do it unless you think you’ll enjoy it, and then don’t do it unless you can afford it.

“Should I go to law school?” is a common question. When occasionally asked my opinion, I have a standard answer: “Not unless you’ve worked in a law office.”

I don’t care if that means you’re the copy boy or the girl who delivers papers to the courthouse. Work in a law office and see if you can stand it. See if you’re the least bit interested in what the people do there. Because if you go to law school, most of the time working in a small law office is what you’re going to end up doing.

Negotiations Commence upon Signing of the Contract

Andrew Weltchek, http://weltcheklaw.com/, discusses negotiations commence upon signing of the contract

An agreement depends more than anything upon the honor of the parties.

The title of this article expresses how some people approach contracts:

It’s more important to tie up the other party entering the agreement than it is to worry about whether, in fact, I have to honor the terms – because once I have them roped in, I can exploit that leverage to get further concessions later on.

This is particularly a problem if you have a very tight deadline. The imminent and irreversible deadline gives the parties perverse incentives to threaten to kill the deal if they didn’t get more concessions. It can be exhausting.

In the end, somebody has to blink and give up more money, rather than lose the deal altogether. It’s a very uncomfortable and very anxious way of doing business, but people do it to each other because they can. And the short-term and terminal deadline leaves no way to stop them.

What’s Wrong with a Special Interest Campaign?

Andrew Weltchek, http://weltcheklaw.com/, asks what's wrong with a special interest campaign?

The New York Times recently published an article about claims of wage theft. The article concluded with two quotes from employer representatives:

“This is a classic special interest campaign by the labor unions.”

“These are opportunist, opportunistic lawsuits.”

To which I say,“So what?

So what if these individuals are protesting and forming special interest campaigns? It is their right to protest. It is their right to receive what is owed to them. And it works. And don’t think for a second that those on the other side aren’t doing the same thing.

When Do the Rules Allow You to Think Outside the Box?

Andrew Weltchek, http://weltcheklaw.com/, explains Thinking Outside the Box

You want a lawyer who can figure out when the rules allow you to think outside the box.

There’s a public radio show called Radiolab. They did a feature on a game show in England called “Golden Balls,” which had an episode that was put on YouTube and went viral.

The long-running show is an amazing lesson in negotiation. The rules of the game are that contestants play the game for a while to determine the size of the final pot of prize money.