Association News Rochester Chapter

LEGAL ALERT FROM HARRIS BEACH PLLC: Department of Environmental Conservation Proposes Regulations Addressing Generators Used For Back-Up Power

On November 1, 2016, the New York State Department of Environmental Conservation (DEC) announced proposed regulations setting limits on distributed generation (DG) sources, such as diesel generators and natural gas-fired engines used generally to provide back-up power at large buildings and institutions such as hospitals and office buildings. The proposed regulation will not address larger units that qualify as major sources under the DEC's regulations at 6 NYCRR Subpart 227-2 or smaller units typically found in homes and other smaller buildings. 
The regulation will be promulgated as Part 222 and may be viewed online at http://www.dec.ny.gov/regulations/104274.htmlContinue Reading

New Education Requirements
Effective January 1, 2017

Any real estate licensee who renews their license must have completed 22.5 hours of approved continuing education, three hours of which must include Fair Housing and/or discrimination in the sale or rental of real property or an interest in real property along with the new required Agency-related coursework. Licensees making their first renewal are required to complete two hours of Agency-related coursework while all other licensees are required to complete one hour of Agency-related coursework. This change does not apply to those Brokers that are exempt from continuing education requirements.
The law of Agency is one of the most important duties for a real estate licensee. Many Department of State enforcement actions against licensees relate to violations of Agency law. This new education requirement will help you serve your customers and clients better, and reduce your risk for prosecution by the DOS.
Specifically, the coursework will help better your understanding of the relationships created between buyers/sellers, landlords/tenants and the real estate professional representing them during the real estate transaction. Understanding what fiduciary duties are owed, the proper use of the Agency disclosure form, and the ability to properly represent clients in various forms of Agency are critical for all individuals involved in the transaction.
View a list of approved courses which meet the Agency requirement. Any approved course that contains the topic of Agency within the coursework will satisfy either the one or two hour requirement.
Real estate licensees have the option to renew their licenses up to 90 days prior to expiration. Therefore, if your license expires between January 1 and March 30, 2017 and you renew prior to January 1, 2017, this CE requirement will not apply until your next two-year license period.

LEGAL ALERT FROM HARRIS BEACH PLLC:  New York State Department of Environmental Conservation  Amends Brownfield Cleanup Program

The New York State Department of Environmental Conservation ("DEC") recently amended the regulations pertaining to the New York State Brownfield Cleanup Program (the "BCP"). In a previous Legal Alert -"New York State Department of Environmental Conservation Announces Proposed Rulemaking to Brownfield Cleanup Program" - we provided an overview of the proposed amendments. The finalized amendments are codified at 6 NYCRR Part 375 and became effective on August 12, 2016. Following the state's 2015 amendments to the program in relation to the state's budget, DEC was required to amend the BCP regulations including defining and redefining certain terms. As enacted, the amendments revise the definition of "brownfield site," which is now defined as "any real property where a contaminant is present at levels exceeding the soil cleanup objectives or other health-based or environmental standards, criteria or guidance adopted by the [DEC] that are applicable based on the reasonably anticipated use of the property, in accordance with applicable regulations."  Continue Reading

LEGAL ALERT FROM HARRIS BEACH PLLC:  Proposed Affordable Housing Legislation Would Expand the Low-Income Housing Tax Credit

Proposed affordable housing legislation in the United States Senate would expand the Low-Income Housing Tax Credit (LIHTC), America's main tool for creating and preserving affordable rental housing.  America is facing what many believe is a housing affordability crisis, leaving lower-income households in every state struggling to afford stable places to live. At the same time, many federal, state and local affordable housing resources remain stagnate or are in decline. The proposed legislation Continue Reading

LEGAL ALERT FROM HARRIS BEACH PLLC:   Can Architects, Engineers and Construction Companies be "Lobbyists"?

Last week, the regulatory body that oversees lobbying and ethics in New York State (the Joint Commission on Public Ethics or "JCOPE") announced it was extending an amnesty program that would allow for companies, firms, and individuals to register as "lobbyists" without a penalty. The program was set to expire on June 30, but has been extended through September 30, 2016. More importantly, legal counsel for JCOPE noted that the body had been "inundated" with calls from construction, architecture and engineering firms about whether the firms or employees within their firms needed to register as lobbyists. The extension is intended to provide such firms with additional time to conduct reviews and determine whether their activities constitute "lobbying" under state law. Continue Reading

The Financial Accounting Standards Board recently released the final version of its updated lease accounting standards. NAR has actively participated in the standards revision projects for several years, working with several coalition partners from the banking and real estate community. Realtor.org’s Lease Accounting topic page has all the latest resources for members.

LEGAL ALERT FROM HARRIS BEACH PLLC:  Proposed Federal Law Would Allow Tax-Free Treatment on State, Local Government Grants Made to Partnerships and LLCs

Section 118(a) of the Internal Revenue Code provides that, in the case of acorporation, gross income does not include any contribution to the capital of the taxpayer. The IRS guidance on this Section provides that grants to a corporate taxpayer are treated as non-shareholder contributions to the capital of the corporation and are excluded from the corporation's gross income under Section 61 and basis of the assets acquired by the corporation with the grants contributed bythe government is reduced does not include the amount of the grant. Continue Reading

What is the Foreign Investment in Real Property Tax Act?  In 1981, the Foreign Investment in Real Property Tax Act (FIRPTA) was enacted for the purpose of imposing tax on foreign persons selling real property interests in the United States. The buyer is required to withhold from the foreign seller a percentage of the amount realized on the sale of a real property interest. The tax withholding is considered a prepayment of anticipated taxes due from a foreign person selling any U.S. real property interest.

What is the withholding requirement?  Generally, the amount realized for the purpose of withholding is the sale or contract price. Effective February 16, 2016, IRS FIRPTA regulations will change the withholding rate from 10% to 15% for most closings, unless an exception applies. The withholding rate remains 10% if the total amount realized is between $300,000 not to exceed $1,000,000, and if the buyer will reside in the property.

Are there exceptions from FIRPTA withholding?  Yes. Exceptions are explained on the IRS website at www.irs.gov/Individuals/International-Taxpayers.

Who is responsible for withholding requirements under FIRPTA?  The Internal Revenue Service (IRS) regulations place the obligation to withhold required tax amounts on the buyer of the real property from a foreign person. The buyer is responsible for determining whether FIRPTA applies and for remitting the withheld taxes to the IRS. Any penalties for non-compliance with the regulations are also the responsibility of the buyer.

How and where is the withholding paid?  When FIRPTA applies, the buyer must prepare a check payable to the IRS for the correct percentage of the amount realized and remit it to the IRS within 20 days of closing. The payment must be accompanied by completed IRS Forms 8288 and 8288-A.

What should real estate agents know about FIRPTA?  Real estate agents representing buyers should advise those buyers that the ultimate obligation to withhold FIRPTA taxes is theirs when purchasing real property from a foreign seller. Also, to avoid surprises at closing, real estate agents representing foreign sellers should advise those sellers of withholding requirements when transferring a U.S. real property interest. The foreign sellers should be encouraged to apply for withholding certifications and taxpayer identification numbers (either "ITIN" or "EIN") as soon as possible. The IRS's 90-day application period should be considered when negotiating the closing date with the buyer.

Can a settlement agent give legal advice with regards to FIRPTA?  Stewart Title will help you through the FIRPTA withholding process. However, settlement agents are not qualified to provide legal or tax advice. If you require legal or tax advice on FIRPTA, please seek counsel from a professional.

Contributed by: Larry Mastrella, Stewart Title Insurance Company, RAC NYSCAR Affiliate

Source: Internal Revenue Service (www.irs.gov/Individuals/International-Taxpayers/FIRPTA-Withholding). The information and dates provided are for informational purposes and are subject to change without notice. Seek legal, tax or other professional advice before relying upon this information. © 2016 Stewart. All rights reserved

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