New York, the Empire State, is home to nearly 20 million people. It’s the fourth most populous state in the US and has been an attractive place to live since the nation’s early days.
Whether it’s the iconic energy of New York City, a global hub of commerce and culture, or the charm of countless vibrant towns, New York offers an unparalleled lifestyle.
From world-class museums and landmarks to a thriving job market and diverse neighborhoods, the dream of planting roots in New York is powerful. But before you secure your dream residential or commercial property in New York, one crucial step is understanding title searches.
Title Searches in New York
A thorough title search ensures you’re getting a clear property title. This means no hidden ownership claims, liens, or restrictions that could block the sale or cause future headaches. It’s like getting a clean bill of health for your dream property.
A standard New York title search typically lasts at least 30 years. This time frame ensures the title examiner can identify the most recent transfer of ownership and verify a transparent chain of titles leading back to that point. However, there are situations where the search may delve deeper.
For example, if the ownership history contains gaps or ambiguities, the examiner may need to conduct further research to establish a clear lineage. For ancient properties or those with historical significance, a more in-depth search might be necessary to uncover potential liens, easements, or restrictions placed on the property.
Liens to be Aware of in Your New York City Title Search
Liens are legal claims on property used as security against debts or obligations owed by the property owner. For example, if the previous owner failed to pay property taxes, a tax lien could be placed on the property, requiring you to settle these debts before gaining clear title.
Knowing potential liens is essential to ensure a smooth transaction and secure investment. Here’s a quick guide to the various types of liens you might encounter during your NYC property title search.
Some typical liens exist across New York state. These include judgments, mortgages, tax liens (federal, state, and local), mechanics liens (for unpaid work on the property), and homeowner association (HOA) liens. These exist across most states. However, there are some liens specific to the five boroughs of New York City that you should know about if you want to buy property in the area.
These include:
- Parking Violation Liens (PVB): These can linger for eight years and add up quickly. Be sure to factor potential PVBs into your closing costs.
- Environmental Control Board Liens (ECB): Similar to PVBs, these liens arise from violations issued by the ECB and can last for eight years. They typically address environmental concerns on the property.
- Transit Adjudication Bureau Liens (TAB): Issued for violations related to the city’s transit system, these liens can last for ten years.
- Sidewalk Violation Liens: These are unique in that they may only have a monetary value if the city has already repaired the sidewalk. However, they can only prevent you from selling the property once an inspection confirms the sidewalk is up to code.
Reducing Mortgage Recording Taxes in New York with CEMA Agreements
Understanding the mortgage recording tax in New York State is essential to the property-buying process. This tax is imposed whenever a mortgage is recorded and is calculated as a percentage of the mortgage amount. The exact rate varies by county, potentially adding a significant cost to acquiring a property.
To mitigate this expense, lenders and buyers can utilize a financial instrument known as a Consolidation, Extension, and Modification Agreement (CEMA). This agreement allows the parties to consolidate multiple mortgages into a single lien, extend the mortgage term, or modify the mortgage’s terms.
The primary advantage of a CEMA is the potential reduction in mortgage recording taxes. Instead of taxing the entire amount of a new mortgage, the tax applies only to the new money being borrowed, if any.
For a CEMA to be executed, the lender involved with the refinancing must be the same as the original lender or the original lender must agree to assign the mortgage to the new lender.
This requirement can limit the applicability of CEMAs but can offer substantial savings when conditions allow. In other words, CEMAs save money on refinancing, but only if you use the same lender or convince your old one to play ball.
It sounds complicated, but understanding the implications of the mortgage recording tax and using CEMAs is crucial for someone considering purchasing a property. These taxes affect how much you pay upfront, and CEMAs can help lower those costs even further. Knowing about them can also help you negotiate a better deal and plan your finances for buying a property.
For example, you could use this knowledge to see if existing mortgages on a property you like qualify for a CEMA, saving you money upfront.
Let’s Talk
You can only buy property in New York with a clean title. Luckily, we can help. We offer a nationwide title search experience that’s seamless and satisfying, powered by advanced technology and exceptional service.
Whether you need a fast residential title search, comprehensive support for complex commercial projects, or specialized green title searches, Pippin has you covered.
We handle everything from current owner searches to foreclosures, and our dedicated Commercial team brings extensive experience to navigate even the most intricate deals.
For decades, title searches have been a burden. Fragmented information, varying report formats, and manual legwork added unnecessary complexity. We found a better way. Our proprietary technology streamlines searches, while our nationwide network of top-tier title searchers ensures accuracy.
We care for every detail so you can focus on what matters most.
