Home Equity Theft Prevention Act -
Relationship to Home Purchases

The Home Equity Theft Prevention Act, signed into law in July 2006, became effective on February 1, 2007. Codified at Real Property Law Section 265-A, the act protects the equity built up in a person’s primary residence improved by a one to four family dwelling against what the Legislature has identified as unscrupulous business practices where aggressive “equity purchasers” induce homeowners to sell homes for a small fraction of the fair market value in cases where the “equity seller-homeowner” has fallen on hard times and is behind on their mortgage.

The law allows equity sellers to rescind a sale within two years of the date of recording of the conveyance to the equity purchaser where there has been deemed a “material violation” of RPL Section 265-A.

This law is meant to protect equity sellers where their primary residence is in foreclosure or where the equity seller is in “default” on their mortgage, defined as two or more months behind on mortgage payments.  Further, where the equity purchaser and the equity seller have agreed to convey the property and its equity back to the seller; such contractual arrangements are also under the purview of this new statute.

In order to protect the interests of equity sellers in these circumstances, the law now requires that the equity seller be afforded a full 5 day right to cancel the contract.  Now elderly, unsophisticated or poor homeowners in financial distress are protected from carnivorous equity purchasers who would attempt to strong arm them to sell their property without giving them time to seek legal advice or merely to think things over.

RPL Section 265-A solves this problem by requiring the right to cancel and the ability for equity sellers of their primary residence to recoup their losses in these situations.  

We invite any who read this to contact Jay A. Smith, Esq. with any questions or comments. 

Workers’ Compensation Offset

Holding: Where an injured plaintiff receives from the Workers’ Compensation Board something other than an award for death benefits, permanent total disability or scheduled loss of use, the value of future benefits is speculative and an apportionment of counsel fees based on such speculative future benefits is not feasible.

Facts: The plaintiff was injured within the scope of his employment. He received a permanent partial disability and was receiving a weekly sum of $400.00. Plaintiff settled his negligence claim against the defendant in the amount of $300,000.00. The Workers’ Compensation carrier consented to the settlement and reserved its right to take a credit for payment of future compensation against plaintiff’s net recovery and to seek satisfaction of its existing lien for benefits it had paid, after deduction of its pro rata share of counsel fees. The Workers’ Compensation carrier had paid a total lien of approximately $46,000.00. The injured plaintiff moved for an order directing the Workers’ Compensation carrier to pay plaintiff fresh money for litigation expenses incurred in the personal injury action based on the “savings” to the carrier for not having to pay future benefits.

Rationale: A Workers’ Compensation carrier is entitled to recover its lien on settlement proceeds in a third party action. Similarly, pursuant to Section 29(4) of the Workers’ Compensation Law, the carrier is given a credit, or offset, which is a holiday from payment of future benefits to claimant until the proceeds recovered by the claimant in the personal injury action are exhausted. As the Workers’ Compensation carrier is receiving a benefit by not having to pay the future costs, then, generally, a carrier must pay its equitable share of the costs as a percentage of the total involved as past benefits paid (the lien), and the present value of the estimated future benefits which the carrier will not have to pay.

However, the Third Department determined that only in the event of an award for death benefits, permanent total disability or a scheduled loss of use can that future benefit be ascertainable sufficiently to be reduced to present value. If an injured plaintiff receives a permanent partial disability, neither the duration nor the amount of the award is readily predictable as the award may or may not continue for the rest of the claimant’s life and the weekly benefit can change based upon the claimant’s actual earnings. Since that number can vary, it cannot be reduced to present value. Therefore, the Workers’ Compensation carrier has no obligation to pay for the holiday.

Lead Exposure Cases - Relationship to ADHD

A new article from the National Institute of Environmental Health Sciences concludes that exposure to prenatal tobacco and environmental lead are risk factors for ADHD in children. The article is Exposure to Environmental Toxicants and Attention Deficit Hyperactivity Disorder in US Children, by Braun, Kahn, Froelich, Auinger and Lanphear. The article can be found on the web site, ehponline.org.

Plaintiffs’ attorneys have been arguing, through their experts, that this relationship exists. This is the first government released article that supports the connection.

This finding contradicts the March 2002, CDC publication Managing Elevated Blood Lead Levels Among Young Children. In Chapter 5., Developmental Assessment and Interventions, the CDC concluded that: “At present, there is no compelling evidence that an EBLL increases a child’s risk for attention deficit hyperactivity disorder (ADHD).”