NYLE - New York Law Exam NY Real Property Law 1 — Questions and Answers
Question 1: Under New York's Statute of Frauds (General Obligations Law § 5-703), which of the following agreements concerning real property is unenforceable if made only orally?
- A month-to-month residential lease
- A contract for the sale of real property (Correct answer)
- An oral license to use a neighbor's driveway temporarily
- A verbal agreement to allow a guest to stay for two weeks
Correct answer: A contract for the sale of real property
GOL § 5-703 requires that contracts for the sale, purchase, or exchange of real property — as well as leases exceeding one year — be in writing and signed by the party to be charged. An oral contract to sell real property is unenforceable under New York's Statute of Frauds.
Question 2: Under New York General Obligations Law § 7-108, a landlord of a residential building with six or more units who collects a security deposit must:
- Deposit the funds in a non-interest-bearing account in the landlord's own name
- Deposit the funds in an interest-bearing account and annually pay or credit the net interest to the tenant (Correct answer)
- Apply the deposit toward the last month's rent immediately upon collection
- Hold the deposit in escrow with the county clerk's office
Correct answer: Deposit the funds in an interest-bearing account and annually pay or credit the net interest to the tenant
GOL § 7-108 requires landlords of buildings with six or more units to place security deposits in interest-bearing bank accounts, keeping them separate from personal funds, and to pay or credit the net interest annually to the tenant. The landlord may retain 1% per year as an administrative fee.
Question 3: Under New York Real Property Law, which form of co-ownership is available exclusively to married spouses and prevents either party from unilaterally conveying or encumbering their interest without the other's consent?
- Tenancy in common
- Joint tenancy with right of survivorship
- Tenancy by the entirety (Correct answer)
- Community property tenancy
Correct answer: Tenancy by the entirety
Tenancy by the entirety is a form of co-ownership reserved for married couples under New York law. Because the spouses are treated as a single legal unit, neither can convey, mortgage, or encumber the property without the other's joinder, and creditors of one spouse generally cannot reach the property.
Question 4: Under New York law, mortgage foreclosure actions on residential property are conducted as:
- Non-judicial trustee's sales administered by the lender
- Judicial proceedings requiring a court action, order of reference, and judicial sale (Correct answer)
- Administrative hearings before the NY Department of Financial Services
- Binding arbitration initiated by the mortgage servicer
Correct answer: Judicial proceedings requiring a court action, order of reference, and judicial sale
New York is a judicial foreclosure state. A lender must commence a court action, obtain a judgment of foreclosure and sale, and proceed through an order of reference and judicial sale overseen by a referee. This process provides significant procedural protections for borrowers and typically takes considerably longer than non-judicial states.
Question 5: Under New York Real Property Law § 223-b, a landlord is prohibited from retaliating against a residential tenant by commencing eviction proceedings, raising rent, or reducing services when the tenant has:
- Failed to pay rent for more than 30 days
- Complained in good faith to a governmental authority about a housing code violation (Correct answer)
- Sublet the apartment without the landlord's written consent
- Refused to allow the landlord to enter for non-emergency repairs
Correct answer: Complained in good faith to a governmental authority about a housing code violation
RPL § 223-b protects tenants who in good faith complain to a governmental authority about health, safety, or housing code violations, or who join or organize a tenants' union, from retaliatory evictions, rent increases, or service reductions. A landlord who retaliates within one year of such protected activity bears the burden of proving a non-retaliatory motive.
Question 6: Under New York Real Property Law § 240-b, a deed that purports to create a fee simple determinable or fee on condition subsequent (a 'defeasible fee') is subject to which limitation?
- Such estates are completely void under New York law and cannot be created
- The condition or limitation must vest or fail within the period set by the Rule Against Perpetuities (Correct answer)
- The grantor must record a notice of the condition with the county clerk within 30 days of delivery
- Defeasible fees automatically convert to absolute fee simple after five years
Correct answer: The condition or limitation must vest or fail within the period set by the Rule Against Perpetuities
New York applies the Rule Against Perpetuities to future interests, including possibilities of reverter and rights of re-entry retained in defeasible fee grants. Under RPL § 240-b and related case law, conditions and limitations must comply with the perpetuities period (a life in being plus 21 years), preventing potentially infinite encumbrances on title.
NYLE - New York Law Exam NY Real Property Law 1
Under New York's Statute of Frauds (General Obligations Law § 5-703), which of the following agreements concerning real property is unenforceable if made only orally?