A bizarre job advertisement for a property inspector has been shared online, with many questioning its legitimacy.
The advertisement, for a rental property inspector position with National Rental Inspections (NRI) in Victoria, was posted on Seek last week and lists requirements such as owning “a car that works 96 per cent of the time” and being “able to pay to put fuel in it”.
A sense of humour was also listed as a requirement, alongside owning an iPad “that works” and having a “minor interest in real estate.
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Applicants were also advised they must “be able to alphabet, sentance, punctuate and grammar way better than me, i dont need to, i have staff….(sic)”.
No experience is required for the job, with training provided.
While the advertisement said hours could be built around your family life, “this is not school hours”.
“We can work around your family, but you cannot have three months off over Christmas and two weeks off every other month for school holidays,” the listing said.
“We are actually very awesome to work with/for and have an amazing team but we are just growing and need more inspectors.”
Social media users were unsure about the advertisement’s legitimacy, with one user saying: “This has to be satire, surely?”
Others said they thought such a role would usually be filled by real estate agents.
“I note there is no requirement to know and understand tenancy laws,” one person said.
“This is like a ‘comedy’ sketch, but where nothing is funny,” another person said.
Amid a national housing crisis, many raised concerns about the outsourcing of this role to a third-party provider and about a contractor unknowingly entering their home.
While real estate agents must have a real estate licence, they are permitted to bring a third party onto the property for a purpose such as photography or valuation, according to a Consumer Affairs Victoria spokesperson.
No licence required
An agent’s representative can perform any of the legal functions of that estate agent in Victoria with written authority.
The representative does not need to apply for a licence, but their employer must verify they are eligible to be an agent’s representative.
The education requirements to work as an agent’s representative vary depending on the person’s experience in the industry, but can include up to 15 units of study towards a certificate in Real Estate Practice.
To be an agent’s representative, a police check is also required and being found guilty of fraud, dishonesty, drug trafficking or violent offences may impact eligibility.
An agent’s representative must be at least 18 years old and must not be insolvent under administration, not be the cause of a successful claim against the Victorian Property Fund or a corresponding fund and not be a represented person under the Guardianship and Administration Act 1986.
They also must not be subject to a Victorian Civil and Administrative Tribunal declaration making them ineligible, and not the subject of an order by any regulatory body in or outside Victoria that would disqualify them.
NRI is an independent property inspection service, operating across the country.
A spokesperson for the NRI confirmed the job’s legitimacy, and also that it had previously been posted.
When asked how many agencies the organisation worked for and how many properties were inspected, the NRI spokesperson said that information was “privileged”.
The listing said NRI completed more than 50,000 inspections last year.
The kind of training provided to staff was also “privileged”.
According to a recent report by real estate marketplace Zillow, Florida has surpassed New York as the second most valuable housing market in the United States.
While California still takes the lead with a total residential housing market value of $10.243 billion, Florida comes in second at $3.810 billion, followed by New York at $3.650 billion.
Overall, the U.S. housing market has experienced a significant resurgence, surpassing its pre-pandemic value by 49%, the report found. Leading the growth are the major metropolitan areas of New York, Los Angeles, San Francisco, Boston, and Miami, which have emerged as the most valuable housing markets.
Florida is now the second most valuable housing market in the U.S., and Miami is the fifth most valuable metropolitan housing market. Alexander Spatari | Getty Images.
Florida’s second-place spot was also driven by the fact that four of the six housing markets that have gained the most value since the pandemic are all in the state: Tampa (+88.9%), Miami (+86.6%), Jacksonville (+82.4%), and Orlando (+72.3%).
Another factor driving the increase is the population surge, Zillow noted in the report, sparking both new construction of real estate and increased competition for existing properties. While the four most valuable metropolitan housing markets in the country (New York, Los Angeles, San Francisco, and Boston) have held steady over the past five years, according to Zillow, Miami has emerged in fifth place — taking Washington D.C.’s former spot, and also jumping from its ninth place rank in 2021.
The appeal of warm weather, low taxes, and remote work flexibility has contributed to the population growth in Florida.
“Where is the population growing? Florida, Texas, the other kind of warm weather, low-cost, low-tax states,” Craig Lazzara, managing director at S&P Dow Jones Indices, told Yahoo Finance in June.
The data checks out, as Florida experienced a 4.3% increase in housing market value over the past year, and Texas a 1.5% jump, while high-tax states like California and New York experienced 3.3% and 0.2% declines respectively, according to the Zillow report.
Related: In 20 U.S. Cities, Buying a Single Family Home Is Cheaper Than a Condo
Collin Madden, founding partner of GEM Real Estate Partners, walks through empty office space in a building they own that is up for sale in the South Lake Union neighborhood in Seattle, Washington, May 14, 2021.
Karen Ducey | Reuters
Banks are facing mounting uncertainty as the commercial real estate (CRE) sector continues to struggle. But, tailwinds in our financial names should help safeguard their bottom lines.
Long Island millennials are struggling to buy their first homes at the age their parents and grandparents were already settled into their first or second ones.
Faced with high prices and demand, low inventory, COVID-19 pandemic setbacks and student debt, some millennials — those born between 1981 and 1996 — say they have few options.
“The opportunities our parents or grandparents had, buying homes for $75,000 — now with houses going for $700,000, that opportunity does not exist in present-day Long Island,” said real estate agent and Long Island native Yvette Hallman, 30, whose own house hunt has taken her as far as Poughkeepsie and Albany.
According to recent data from the National Association of Realtors (NAR), the typical age of a first-time homebuyer in the United States is 36, as of last year — an all-time high throughout the time NAR started conducting the survey in 1981.
This increase is notable when looking at the history of the report. According to the NAR’s 2022 Profile of Home Buyers and Sellers, the median age of first-time homebuyers was 29 in 1981, then 32 in 1993. From 1995 to 2018, it lingered around the 30 to 32 range.
With patience and advocates in their corner, some young Long Islanders have been successful in becoming first-time homebuyers. Others have resorted to continuing to rent, settling for starter homes or leaving Long Island altogether.
What millennial homebuyers want vs. what they can afford
Real estate agent Yvette Hallman, 30, has taken her own house hunt off her native Long Island. Credit: Takida Joseph
The opportunities our parents or grandparents had, buying homes for $75,000 — now with houses going for $700,000, that opportunity does not exist in present-day Long Island.
Yvette Hallman, 30, real estate agent
Millennial real estate agent Kevin Iglesias grew up in Nassau County. The Signature Premier Properties broker (with his office based in Miller Place) has helped clients in his age group look into communities like Lake Grove, Selden and Port Jefferson Station.
But sometimes their expectations cannot be met within their price range.
“I get a lot of people that come to me and want the whole nine yards,” he said. Four bedrooms, two bathrooms, an in-ground pool and a two-car garage are some of the most frequent desires he finds in his millennial clients.
“I see a lot of millennials settling for starter homes until that forever home comes to fruition,” said Iglesias, 33.
Real estate agent Kevin Iglesias said he’s seeing his millennial clients lower their expectations. Credit: Thomas A. Ferrara
I see a lot of millennials settling for starter homes until that forever home comes to fruition.
Kevin Iglesias, 33, real estate agent
Shaughnessy Dusling of EXP Realty, based in Hauppauge, works with first-time homebuyers in Suffolk County every day, and they are mostly millennials. Those clients, in her experience, have also become “a little more willing to settle,” she said.
“Because they understand the longer they wait, the less affordable homeownership is,” said Dusling, 37.
Dusling said that after finding a home, many of her millennial clients experience a rude awakening near the end of the purchasing process.
“They’re surprised by the closing costs being so much money,” she said. “A lot of people work really hard to save their down payment, and are thrown through a loop when they realize closing costs are a lot higher than they anticipated.”
For example, a $500,000 house with a typical 5% downpayment would be $25,000, but closing costs can be an additional $20,000 to $25,000 depending on property taxes and loan terms, she said.
In January 2020, Dusling purchased her own 2,200-square-foot home in Stony Brook for $635,000. It contains four bedrooms and two bathrooms. She said the pandemic that followed shifted the mindsets of many millennials on Long Island: After being in lockdown, this age group is finding the value of privacy within their living space, and they want their own outdoor area, too.
Real estate agent Shaughnessy Dusling, 37, said she works with first-time homebuyers throughout Suffolk County. Credit: Ashleigh Malangone
COVID really disrupted everyone, obviously. A lot of people lost their jobs, and a lot of people had to use their savings, so that kind of pushed families’ plans back.
Shaughnessy Dusling, 37, real estate agent
“They’re just enjoying the lifestyle that Long Island provides to them,” she said.
At the same time, the pandemic altered millennials’ paths toward homeownership, which could be one reason the typical age of a first-time buyer is higher than ever, Dusling said.
“People have pursued higher education, and it’s taken this long to get to the point where they had their student loans paid off, so they could afford and qualify to get a mortgage,” she said. “And COVID really disrupted everyone, obviously. A lot of people lost their jobs, and a lot of people had to use their savings, so that kind of pushed families’ plans back.”
Iglesias bought his home, located on the north shore of Suffolk County, in 2019. “It was a different market when I bought it,” he said. “I was able to negotiate off the purchase price instead of negotiating up.”
But because of setbacks millennials face today, Iglesias sees why attaining homeownership may take longer than before.
“I can understand why people are waiting now,” he said. “Saving up more money, living in an apartment or with family. They’re trying to make the right financial decision.”
Cost of living, student loans make it harder to set down roots on Long Island
Tneisha Greene, 29, of West Babylon, feels tied to Long Island because of her business, Miss Empanada. Credit: Tonya Simpson Photography
If the opportunity presents itself to move out of New York, I probably would.
Tneisha Greene, 29, of West Babylon
As an entrepreneur, Tneisha Greene feels tied to Long Island — even as the cost of living tries to push her away.
She’s been running her business, Miss Empanada, for 10 years, and had it officially incorporated in 2020. Greene, 29, offers catering services for events and shipped frozen menu selections throughout New York State during the pandemic.
Her family inspired her to turn her passion into a business.
“I grew up in a cooking household,” said Greene, who was raised in Central Islip. “My dad actually was a cook years ago, in a restaurant. So I used to just watch my parents and I always loved their creativity in the kitchen.”
After moving out when she was 18, Greene lived in rentals across Long Island: Hauppauge, Massapequa, Copiague and now, West Babylon. She moved into her latest apartment at the end of the summer. Her priorities while apartment-hunting: Safety, diversity and price point.
After living on her own for a decade, Greene changed her plans this time.
“I decided to go with a roommate after I tried to do it on my own,” she said. “I was already in the moving process and I wouldn’t have been able to do this by myself. I needed someone else to split the cost to live comfortably.”
Greene was tempted to leave New York, and spoke with her family about it. She believes the only options for renters on Long Island are to “get a roommate, get married or leave.”
“I don’t know where I would purchase a home at this present moment,” she said. “My life is here; I kind of have to build my future here, and that’s the part that makes it frustrating. But you never know what the future may hold. If the opportunity presents itself to move out of New York, I probably would.”
But in the meantime, Greene’s business is reaching new heights on Long Island: She will be moving into her first brick-and- mortar location in West Babylon in October.
She also hopes to someday use her business to address an important issue.
“One of the main reasons I’ve wanted a food truck is to be a primary source for feeding the homeless here on Long Island,” she said.
The debt is really something that keeps coming up to the point where one client partnered with her mom to buy a property.
Yvette Hallman, 30, real estate agent
Yvette Hallman, a real estate agent with Pagano Properties in Jericho, usually works with clients older than her, in the 33 to 35 age bracket. When it comes to first-time homebuyers, she’s found a common struggle among her millennial clients: student loans.
“The debt is really something that keeps coming up to the point where one client partnered with her mom to buy a property,” she said. “She said with her student loans, she wouldn’t qualify by herself.”
Hallman, who rents a house in Queens, advises her clients to consider buying property with someone else while house-hunting.
“Don’t think you have to do it alone,” she said. “If you have a friend, sister, brother, people you can trust, you can be like, ‘Hey, let’s partner up and do this.’ Together, you’re stronger.”
Her other main advice to millennials is to expand horizons while searching. “I’m not even looking in Long Island myself,” she said. “So the advice I’m giving, is the advice I’m taking.”
How to land your first home
Justin Lamothe, left, Katie Lamothe stand outside their new home in Smithtown with dog, Mocha. Credit: Morgan Campbell
Not all realtors listen. They can kind of parent you too much, if they’re much older than you.
Katie Lamothe, 33
Katie Lamothe, 33, and her husband Justin, 38, became homeowners in Smithtown this September. The couple plans to live with Katie’s parents for six months during a renovation on their new house. They looked for homes throughout northern Suffolk County, with a focus on Smithtown, Setauket and Stony Brook.
“It’s a full renovation,” said Lamothe. “We have to redo all the bathrooms, kitchen, insulation, roofing. And every house we looked at, unless you have a million dollars, they’re pretty much all fixer-uppers.”
But Lamothe, who owns an interior design company, is looking forward to the transformation. “Anything can be beautiful. I’m a sucker for an old home with good bones, and the ability to make it your own.”
The Lamothes bought the house, which sits on a 0.42-acre lot, for $630,000. The four-bedroom, 2½-bathroom house was built in 1966.
As business owners (Justin runs an auto detailing company), they had flexibility to view houses quickly when they went on the market, but it still took two years to find the right one. They started working with Dusling after putting offers on 15 other houses, Lamothe said.
She felt that as a millennial, Dusling better understood their needs.
“Not all realtors listen,” Lamothe said. “They can kind of parent you too much, if they’re much older than you.”
During the closing process, Lamothe learned that the previous owners bought the house in 1967 when they were in their early 20s.
“It was super nice because only one family has ever lived there,” she said. “They brought it all full circle because the place was so loved and had so many wonderful memories. For people just starting the journey, hearing that makes you feel good.”
What I would say is don’t get discouraged. Homeownership is attainable, especially with the right resources.
Jamie Sanchez, 27, director of housing counseling at LIHP
Jamie Sanchez, 27, helps people take steps toward purchasing a home in her role at the Long Island Housing Partnership (LIHP). As director of housing counseling, she offers a first-time homebuyers orientation every month.
Sanchez, who has been with LIHP for four years, said the orientation has been a longtime offering, gaining even more popularity since switching from in-person gatherings to Zoom. Recently, the orientation hosted 78 participants, after initially holding the event in a conference room that had a capacity of 35, she said.
“It’s really nice to see that even though times are tough, people are still looking for education on aspects of the home-buying process,” said Sanchez, who lives in Brentwood and is currently looking to become a first-time homebuyer, too. “People are just looking to get informed.”
the orientation has seen Long Islanders of all ages, from recent college graduates to senior citizens, Sanchez said. The stages of commitment range as well: From people just starting the process, to those ready to commit to a house. Sanchez also offers the orientation in Spanish.
Mostly, Long Islanders attend the orientation looking for general information, grant opportunities and other qualifications they may need to become homebuyers.
“It’s definitely a tough market,” Sanchez said. “What I would say is don’t get discouraged. Homeownership is attainable, especially with the right resources.”
Total foreign investments by Canada and the US in 2022 stood at $1.6 billion in 2022, accounting for 52 percent of the total foreign inflows.
Already simmering tensions flared following Canadian Prime Minister Justin Trudeau’s allegation of the “potential” involvement of Indian agents in the killing of pro-Khalistan extremist Hardeep Singh Nijjar, 45, on his country’s soil on June 18 in British Columbia.
This has led to fears of a knock-on effect on various spheres of business where the two countries intersect. When it comes to the real estate sector, experts say that while the distinct chill in bilateral relations is unlikely to dent the domestic market, there could be an impact if the situation is prolonged.
Sankey Prasad, chairman and managing director of Colliers India, the local arm of the Toronto-based property consultancy, explained that foreign direct investments (FDI) in Indian real estate is about 4 percent of the total inflow, with domestic investors playing a significantly larger role. However, he noted that over the past few years, Indian and Canadian companies have closed several real estate deals.
Canadian funds boost Indian real estate
Canadian funds, particularly its huge retirement planning body, continue to partner with Indian companies to develop large office parks across multiple cities. According to data from Colliers, over $1.1 billion of joint ventures were closed in 2022.
These include the Canada Pension Plan Investment Board, a Canadian crown corporation, investing $0.35 billion and $0.32 billion, respectively, in domestic real estate companies RMZ and Tata Realty. Additionally, the Toronto-based real estate subsidiary of alternative investment management giant Brookfield put $0.32 billion into Bharti Realty, a division of the telecom-focused but diversified Bharti Enterprises.
“Investments from the US and Canada continued to remain significant during 2022 and in the first half of 2023 as well, accounting for over half of the total foreign inflows during the period,” Prasad added.,
The majority of the funds were allocated towards office assets, followed a long way behind by alternative assets.
Total foreign investments by Canada and the US in 2022 stood at $1.6 billion in 2022, accounting for 52 percent of the total foreign inflows. In H1 2022, India saw $1.4 billion of foreign inflows from both nations, accounting for 60 percent of total foreign funds.
However, the data also pointed out that of the total inflow in 2022, Canada accounted for 34 percent of the total funds while the share of the US stood at 18 percent.
Despite global headwinds, investments remain robust
Prasad added that apart from North America, there is increased investor interest from other Asia-Pacific (APAC) countries such as Singapore and Hong Kong, which are also exploring options and infusing funds into Indian real estate.
Institutional investment inflows into the Indian real estate sector saw a 43 percent surge yearly, reaching $3.7 billion in the first half of 2023, with the office segment leading the way with $1.9 billion.
“Interestingly, compared to last year, we see investors eyeing flex office spaces for the first time. While in 2022 the gross office space witnessed 57 msf (million square feet) of absorption in India, in FY24, may go up to about 45 msf,” Prasad said.
In total office absorption, India saw 7 msf of flex office space being launched. The share of flex office space is likely to increase to at least 12 msf this year, the highest ever till now, he added.
In the first two quarters of CY2023, global headwinds following the collapse of Silicon Valley Bank in the US dented the commercial real estate market in India. The Grade A office space segment showed skewed signs of slowdown due to investors delaying their decisions or the high capex involved.
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65283 Two Bunch Palms Building LLC v. Coastal Harvest II, LLC
Facts: A landlord and a commercial tenant enter into an oral month-to-month occupancy agreement while attempting to negotiate a written lease agreement for use of a commercial property. The commercial tenant takes possession of the property to operate a business selling agricultural produce grown in above-ground pots. Unable to agree to a written lease agreement and with rent paid current, the landlord serves the tenant with a 30-day notice to quit. The tenant refuses to vacate. The landlord files an unlawful detainer (UD) action to recover possession.
Claim: The tenant claims the landlord may not maintain a UD action on a notice to quit since the tenant operates an agricultural business which bars a UD action due to a one-year holdover exemption.
Counterclaim: The landlord claims the tenant is not protected by holdover exemptions for agricultural businesses since the tenant was not in default on their payment of rent.
Holding: A California appeals court holds the landlord may maintain a UD action against the tenant for failure to vacate prior to expiration of a notice to quit since the tenant occupied the property under a month-to-month rental agreement and does not qualify for the agricultural business one-year holdover exemption as the tenant was not in default on their rent. [65283 Two Bunch Palms Building LLC v. Coastal Harvest II, LLC (2023) 91 CA5th 162]
65283 Two Bunch Palms Building LLC v. Coastal Harvest II, LLC
Related Form:
RPI Form 552-5 Commercial Rental Agreement — Month-to-Month Tenancy
Related Articles:
Rent collectible under a lease agreement
Related Reading:
Real Estate Principles: Chapter 34: The tenancies in real estate
Real Estate Principles: Chapter 81: Notices to vacate — Holdover tenancy
Legal Aspects of Real Estate: Chapter 39: Attorney fees reimbursed
Related Video:
A judge ruled Tuesday that Donald Trump committed fraud for years while building the real estate empire that catapulted him to fame and the White House.Judge Arthur Engoron, ruling in a civil lawsuit brought by New York’s attorney general, found that the former president and his company deceived banks, insurers and others by massively overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.Engoron ordered that some of Trump’s business licenses be rescinded as punishment, making it difficult or impossible for them to do business in New York, and said he would continue to have an independent monitor oversee the Trump Organization’s operations.A Trump spokesperson did not immediately respond to a request for comment on the ruling. Trump has long insisted he did nothing wrong.The decision, days before the start of a non-jury trial in Attorney General Letitia James’ lawsuit, is the strongest repudiation yet of Trump’s carefully coiffed image as a wealthy and shrewd real estate mogul turned political powerhouse.Beyond mere bragging about his riches, Trump, his company and key executives repeatedly lied about them on his annual financial statements, reaping rewards such as favorable loan terms and lower insurance premiums, Engoron found.Those tactics crossed a line and violated the law, the judge said, rejecting Trump’s contention that a disclaimer on the financial statements absolved him of any wrongdoing.“In defendants’ world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air; a disclaimer by one party casting responsibility on another party exonerates the other party’s lies,” Engoron wrote in his 35-page ruling. “That is a is a fantasy world, not the real world.”Manhattan prosecutors had looked into bringing a criminal case over the same conduct but declined to do so, leaving James to sue Trump and seek penalties that could disrupt his and his family’s ability to do business in the state.Engoron’s ruling, in a phase of the case known as summary judgment, resolves the key claim in James’ lawsuit, but six others remain.Engoron is slated to hold a non-jury trial starting Oct. 2 before deciding on those claims and any punishments he may impose. James is seeking $250 million in penalties and a ban on Trump doing business in New York, his home state. The trial could last into December, Engoron has said.Trump’s lawyers had asked the judge to throw out the case, which he denied. They contend that James wasn’t legally allowed to file the lawsuit because there isn’t any evidence that the public was harmed by Trump’s actions. They also argued that many of the allegations in the lawsuit were barred by the statute of limitations.Engoron, noting that he had “emphatically rejected” those arguments earlier in the case, equated them to the “time-loop in the film ‘Groundhog Day.'”Video below: As legal troubles mount for Trump, voters still see him as dominant in GOPJames, a Democrat, sued Trump and the Trump Organization a year ago, alleging a pattern of duplicity that she dubbed “the art of the steal,” a twist on the title of Trump’s 1987 business memoir “The Art of the Deal.”The lawsuit accused Trump and his company of routinely inflating the value of assets like skyscrapers, golf courses and his Mar-a-Lago estate in Florida, padding his bottom line by billions.Among the allegations were that Trump claimed his Trump Tower apartment in Manhattan — a three-story penthouse replete with gold-plated fixtures — was nearly three times its actual size and valued the property at $327 million. No apartment in New York City has ever sold for close to that amount, James said.Trump valued Mar-a-Lago as high as $739 million — more than 10 times a more reasonable estimate of its worth. Trump’s figure for the private club and residence was based on the idea that the property could be developed for residential use, but deed terms prohibit that, James said.Trump has denied wrongdoing, arguing in sworn testimony for the case that it didn’t matter what he put on his financial statements because they have a disclaimer that says they shouldn’t be trusted. He told James at the April deposition, “You don’t have a case and you should drop this case.”“Do you know the banks were fully paid? Do you know the banks made a lot of money?” Trump testified. “Do you know I don’t believe I ever got even a default notice, and even during COVID, the banks were all paid? And yet you’re suing on behalf of banks, I guess. It’s crazy. The whole case is crazy.”Engoron rejected that argument when the defense previously sought to have the case thrown out.The judge said the disclaimer on the financial statements “makes abundantly clear that Mr. Trump was fully responsible for the information contained within” them and that “allowing blanket disclaimers to insulate liars from liability would completely undercut” the “important function” that such statements serve “in the real world.”James’ lawsuit is one of several legal headaches for Trump as he campaigns for a return to the White House in 2024. He has been indicted four times in the last six months — accused in Georgia and Washington, D.C., of plotting to overturn his 2020 election loss, in Florida of hoarding classified documents, and in Manhattan of falsifying business records related to hush money paid on his behalf.The Trump Organization was convicted of tax fraud last year in an unrelated criminal case for helping executives dodge taxes on extravagant perks such as Manhattan apartments and luxury cars. The company was fined $1.6 million. One of the executives, Trump’s longtime finance chief Allen Weisselberg, pleaded guilty and served five months in jail. He is a defendant in James’ lawsuit and gave sworn deposition testimony for the case in May.James’ lawsuit does not carry the potential of prison time, but could complicate his ability to transact real estate deals. It could also stain his legacy as a developer.James has asked Engoron to ban Trump and his three eldest children from ever again running a company based New York. She also wants Trump and the Trump Organization barred from entering into commercial real estate acquisitions for five years, among other sanctions. The $250 million in penalties she is seeking is the estimated worth of benefits derived from the alleged fraud, she said.James, who campaigned for office as a Trump critic and watchdog, started scrutinizing his business practices in March 2019 after his former personal lawyer Michael Cohen testified to Congress that Trump exaggerated his wealth on financial statements provided to Deutsche Bank while trying to obtain financing to buy the NFL’s Buffalo Bills.James’ office previously sued Trump for misusing his own charitable foundation to further his political and business interests. Trump was ordered to pay $2 million to an array of charities as a fine and the charity, the Trump Foundation, was shut down.
A judge ruled Tuesday that Donald Trump committed fraud for years while building the real estate empire that catapulted him to fame and the White House.
Judge Arthur Engoron, ruling in a civil lawsuit brought by New York’s attorney general, found that the former president and his company deceived banks, insurers and others by massively overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.
Engoron ordered that some of Trump’s business licenses be rescinded as punishment, making it difficult or impossible for them to do business in New York, and said he would continue to have an independent monitor oversee the Trump Organization’s operations.
A Trump spokesperson did not immediately respond to a request for comment on the ruling. Trump has long insisted he did nothing wrong.
The decision, days before the start of a non-jury trial in Attorney General Letitia James’ lawsuit, is the strongest repudiation yet of Trump’s carefully coiffed image as a wealthy and shrewd real estate mogul turned political powerhouse.
Beyond mere bragging about his riches, Trump, his company and key executives repeatedly lied about them on his annual financial statements, reaping rewards such as favorable loan terms and lower insurance premiums, Engoron found.
Those tactics crossed a line and violated the law, the judge said, rejecting Trump’s contention that a disclaimer on the financial statements absolved him of any wrongdoing.
“In defendants’ world: rent regulated apartments are worth the same as unregulated apartments; restricted land is worth the same as unrestricted land; restrictions can evaporate into thin air; a disclaimer by one party casting responsibility on another party exonerates the other party’s lies,” Engoron wrote in his 35-page ruling. “That is a is a fantasy world, not the real world.”
Manhattan prosecutors had looked into bringing a criminal case over the same conduct but declined to do so, leaving James to sue Trump and seek penalties that could disrupt his and his family’s ability to do business in the state.
Engoron’s ruling, in a phase of the case known as summary judgment, resolves the key claim in James’ lawsuit, but six others remain.
Engoron is slated to hold a non-jury trial starting Oct. 2 before deciding on those claims and any punishments he may impose. James is seeking $250 million in penalties and a ban on Trump doing business in New York, his home state. The trial could last into December, Engoron has said.
Trump’s lawyers had asked the judge to throw out the case, which he denied. They contend that James wasn’t legally allowed to file the lawsuit because there isn’t any evidence that the public was harmed by Trump’s actions. They also argued that many of the allegations in the lawsuit were barred by the statute of limitations.
Engoron, noting that he had “emphatically rejected” those arguments earlier in the case, equated them to the “time-loop in the film ‘Groundhog Day.'”
Video below: As legal troubles mount for Trump, voters still see him as dominant in GOP
James, a Democrat, sued Trump and the Trump Organization a year ago, alleging a pattern of duplicity that she dubbed “the art of the steal,” a twist on the title of Trump’s 1987 business memoir “The Art of the Deal.”
The lawsuit accused Trump and his company of routinely inflating the value of assets like skyscrapers, golf courses and his Mar-a-Lago estate in Florida, padding his bottom line by billions.
Among the allegations were that Trump claimed his Trump Tower apartment in Manhattan — a three-story penthouse replete with gold-plated fixtures — was nearly three times its actual size and valued the property at $327 million. No apartment in New York City has ever sold for close to that amount, James said.
Trump valued Mar-a-Lago as high as $739 million — more than 10 times a more reasonable estimate of its worth. Trump’s figure for the private club and residence was based on the idea that the property could be developed for residential use, but deed terms prohibit that, James said.
Trump has denied wrongdoing, arguing in sworn testimony for the case that it didn’t matter what he put on his financial statements because they have a disclaimer that says they shouldn’t be trusted. He told James at the April deposition, “You don’t have a case and you should drop this case.”
“Do you know the banks were fully paid? Do you know the banks made a lot of money?” Trump testified. “Do you know I don’t believe I ever got even a default notice, and even during COVID, the banks were all paid? And yet you’re suing on behalf of banks, I guess. It’s crazy. The whole case is crazy.”
Engoron rejected that argument when the defense previously sought to have the case thrown out.
The judge said the disclaimer on the financial statements “makes abundantly clear that Mr. Trump was fully responsible for the information contained within” them and that “allowing blanket disclaimers to insulate liars from liability would completely undercut” the “important function” that such statements serve “in the real world.”
James’ lawsuit is one of several legal headaches for Trump as he campaigns for a return to the White House in 2024. He has been indicted four times in the last six months — accused in Georgia and Washington, D.C., of plotting to overturn his 2020 election loss, in Florida of hoarding classified documents, and in Manhattan of falsifying business records related to hush money paid on his behalf.
The Trump Organization was convicted of tax fraud last year in an unrelated criminal case for helping executives dodge taxes on extravagant perks such as Manhattan apartments and luxury cars. The company was fined $1.6 million. One of the executives, Trump’s longtime finance chief Allen Weisselberg, pleaded guilty and served five months in jail. He is a defendant in James’ lawsuit and gave sworn deposition testimony for the case in May.
James’ lawsuit does not carry the potential of prison time, but could complicate his ability to transact real estate deals. It could also stain his legacy as a developer.
James has asked Engoron to ban Trump and his three eldest children from ever again running a company based New York. She also wants Trump and the Trump Organization barred from entering into commercial real estate acquisitions for five years, among other sanctions. The $250 million in penalties she is seeking is the estimated worth of benefits derived from the alleged fraud, she said.
James, who campaigned for office as a Trump critic and watchdog, started scrutinizing his business practices in March 2019 after his former personal lawyer Michael Cohen testified to Congress that Trump exaggerated his wealth on financial statements provided to Deutsche Bank while trying to obtain financing to buy the NFL’s Buffalo Bills.
James’ office previously sued Trump for misusing his own charitable foundation to further his political and business interests. Trump was ordered to pay $2 million to an array of charities as a fine and the charity, the Trump Foundation, was shut down.
Sumitomo Corporation had won the bid for the two neighbouring plots in 2019 but the deal has been finalised now.
Goisu Realty Private Limited, a subsidiary of Sumitomo Realty and Development Company Limited of Japan, has leased two adjoining plots of almost 3 acres in total in Mumbai’s prime business district Bandra-Kurla Complex (BKC) from the Mumbai Metropolitan Region Development Authority (MMRDA) for 80 years for over Rs 2,067 crore. This deal along with other transactions entered into by Goisu Realty in Mumbai strengthens the financial capital’s position as the country’s hub for global financial/banking services and private equity firms, said real estate consultants.
“This is an affirmation of Sumitomo’s commitment to India and the financial capital Mumbai. Sumitomo has clearly identified Mumbai as one of the prime destinations within their global office portfolio. Given the prominence of BKC, India’s top financial district, the Japanese firm sees Mumbai as a strategic investment. Overall, there are four commercial investments that the Japanese conglomerate has made in Mumbai—three plots in BKC from MMRDA and one in Worli (in a deal with Wadia Group flagship Bombay Dyeing). The BKC deal cumulatively will be around 2 million sq ft of Grade A office development across two towers (once the structures are complete) and the Worli site has the potential of over 6 million sq ft of commercial footprint,” Karan Singh Sodi, senior managing director at property consulting firm JLL India, told Moneycontrol.
These deals further strengthen Mumbai’s position as the financial capital and with planned infrastructure upgrades, attracting talent from other cities will be easier. Moreover, this deal will encourage other Japanese firms to take up commercial space in these locations, he added.
An email has been sent to Sumitomo Realty & Development.
The company paid Rs 111 crore as stamp duty for registering the deal that was sealed on September 3, documents accessed by CRE Matrix showed.
Sumitomo Corporation had won the bid for the two neighbouring plots in 2019 but the deal has been finalised now. It will be permitted to construct an area of 65,000 square metres on the 12,486-sq m plot (a little over 3 acres) at BKC.
Bombay Dyeing had on September 13 announced that its board of directors had approved a proposal to sell a land parcel of about 22 acres (along with the associated floor space Index, or FSI, which is the proportion of the land area to the permissible area of the building on it) in the Worli area of Mumbai to Goisu in two phases, for a total consideration of about Rs 5,200 crore.
In a statement, Bombay Dyeing had said the transaction is subject to the approval of its shareholders. “Upon approval of shareholders, BDMC (Bombay Dyeing and Manufacturing Company) will receive about Rs 4,675 crore from the buyer for Phase-I. The balance amount of about Rs 525 crore will be received upon completion of certain conditions by BDMC and execution & consummation of the definitive agreements thereto for Phase- II,” the company said in a statement.
“I am happy to inform that BDMC is entering into agreements with the Sumitomo Group for the sale of about 22 acres of land (along with the associated FSI) in Worli, Mumbai, for a total consideration of about Rs 5,200 crore,” Nusli Wadia, chairman of BDMC had said.
Last year, a report published in Nikkei had said that Japan’s Sumitomo Realty & Development will invest 500 billion yen ($3.58 billion) in office building projects in India, expanding in what is projected to become the world’s most populous nation mere months from now.
The real estate arm of Sumitomo Corporation, which had earlier acquired another BKC site, plans to construct two buildings with a total floor area of about 130,000 sq m each on the two sites. Completion is expected between fiscal 2025 and 2027, the report had said.
Sumitomo Corporation was established in 1919 and is spread across Asia, Europe, America and Africa. It deals in infrastructure, realty, media, metal products, transportation and construction systems, minerals, energy and chemicals.
A report by JLL India has said that real estate developers had acquired a record 2,181 acres of land between January 2022 and May 2023. This has an estimated development potential of around 209 million square feet. Valued at over Rs 26,000 crore, the acquisition comprised 104 separate land deals. About 84 percent of the 2,181 acres or around 1,822 acres was for proposed residential developments.
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Most homebuyers are now scrambling to make more prepayments. Jain, though, decided against it after doing some number crunching. Jain’s residential property earns him a handsome 7.36% rental yield. He claims a 30% deduction on this rental income. Separately, he can also claim the entire interest paid on the home loan as deduction (under section 24b) since the property is let out and is not occupied by him. To be sure, deduction on interest in a self-occupied property is capped at ₹2 lakh.
After claiming both tax deductions, Jain ’s effective interest paid on the loan comes to just 2.9%. “If I put the prepayment amount in a bank fixed deposit (FD), it will earn me 4.5-5%, post tax-return. That’s higher than the effective interest rate I’m paying on the loan due to the tax sops. I’ve decided to not make any further prepayments,” he said.
This is the leverage that tax breaks on real estate purchases give property owners. “People who buy property for rental income don’t have to prepay the loan,” said Nishant Batra, chief goal planner, Holistic Prime Wealth, and a mutual fund distributor. To be sure, this may not be suitable for all property owners servicing a home loan. “Some people see loans as a leverage, while others see it as an obligation that they need to get rid of. Those considering it an obligation should close the loan as early as they can,” Nishant added.
Besides, the benefits of tax breaks on real estate properties are not limited to the decision of whether one should prepay the loan or not. The tax sops offered by the government act as subsidies that considerably bring down the effective interest you pay on the loan taken for property purchase, making real estate an attractive investment for some people (see graphic).
Special treatment
Real estate is the only asset class that enjoys a standard deduction of 30% on the rental yield. The 30% standard deduction on rental income is given to cover maintenance and repairs costs borne by the property owner. However, the actual costs of maintenance are much lower, so the 30% deduction results in net savings for homeowners. That’s not all. Homeowners can also claim deduction on interest on the home loan taken to buy the asset. Both these tax sops are not available for any other asset class (see graphic). Dividends from stocks and interest from fixed deposits are both taxable at slab rates, with no deductions allowed.
So, why does real estate get this special treatment? “The government offers all these tax benefits on real estate as it wants everyone to own a house,” said Karan Batra, managing partner, Chartered Club. However, many people utilise the tax benefits to invest in multiple real estate properties, beyond the primary house they live in. Nishant pointed out that it’s a common practice among high net worth individuals (HNIs) to opt for a loan to finance the properties that they buy for the purpose of rental income even when they have a surplus to cover such purchases.
Even when you live in the house that you buy, you can deduct up to ₹2 lakh as loan interest while calculating ‘income from house property’ in the income tax return (ITR), under section 24 of the income tax Act. While this results in loss from house property, such loss can be set off against any other income of up to ₹2 lakh in a year. The remaining amount can be carried forward to up to eight years. “In your ITR, under ‘income from house property’ head, you can declare GAV (Gross Annual Value or rent earned) of the property you live in as zero and claim the interest paid on the loan as deduction. This results in a loss from the house property equivalent to the interest paid, capped at maximum ₹2 lakh in a year,” said Nitesh Buddhadev, founder, Nimit Consultancy.
For instance, let’s assume you are servicing a ₹50 lakh home loan taken at 9% interest rate with a 25-year loan tenure. The total interest component in the first year is ₹4.47 lakh. If you avail ₹2 lakh interest as deduction, you can save tax to the tune of ₹60,000, assuming you’re in the 30% tax bracket. So, instead of ₹4.47 lakh, you just need to pay ₹3.87 lakh interest, which brings down the effective interest rate to 7.8%. If the loan on the said property is jointly taken by a husband and wife, they can claim ₹2 lakh deduction each, which means the effective interest outgo further comes down to ₹3.27 lakh or 6.5%.
In the case of rented out properties, the reduction in interest rate highly depends on the rental yield, says Nishant.
“For residential properties where the yield is 1.5-3%, the net savings will not be much. Tax benefits translate into higher savings on properties let out to grade A commercial tenants as the yield is higher. For residential, the better option is that both husband and wife buy the property for their own use on a joint loan and claim a total of ₹4 lakh deduction on the interest. Low rental yields may not move the needle much on rented out properties,” he said.
Jain’s is a case in point who has rented out his property for professional activities and hence earns a higher yield of 7.3%, akin to commercial rental yields.
Take note that only two properties per person are allowed to be treated as self-occupied. Beyond these, the owner has to pay tax on rent that accrues from other properties. If the property is vacant, it is considered deemed to be let-out and tax is paid on the notional rent. Notional rent is derived by comparing standard rent, decided as per the Rent Control Act, municipal rent as decided by the local municipal authority, and fair rent, which is the actual rent being paid on similar properties in the same area. The higher of municipal rent and fair rent is compared with the standard rent, and the lower of these two is the notional rent.
Retail investors should not see these tax benefits as an opportunity to direct all their savings in acquiring multiple properties as real estate. As an investment, it lacks liquidity and buying property to get rental yields has several unquantifiable risks. For one, letting out property runs the risk of rent default and tenants not vacating the property on time or not vacating it at all, which leads to prolonged legal disputes. More importantly, you have to bear the stamp duty cost of 5-6% each time you buy a property. You can claim this under section 80C, subject to the ₹1.5 lakh cap, which will in most cases fall short.
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Updated: 25 Sep 2023, 10:20 PM IST
T
he capital’s commercial property sector today urged the Government to push on with its plans for a HS2 hub at Euston “at pace”, amid concerns that the huge railway project may never reach central London.
In an open letter to Transport Secretary Mark Harper, the London Property Alliance (LPA), which represents more than 400 companies involved in central London real estate including developers, landlords and planning consultants, said the high speed rail line’s terminus in zone one would bring massive social and economic regeneration.
The association’s chief executive, Charles Begley, wrote: “Leaving up to 60 acres of Euston in limbo for years or decades to come would be a retrograde step and a disservice to both the capital and country.”
The line will initially stop at Old Oak Common, six miles from Euston. In March, Mr Harper said the last section to Euston would be paused as predicted costs spiralled to £4.8 billion from an initial budget of £2.6 billion.
The LPA pointed to the success of the Elizabeth line, with almost 200,000 new office jobs created in the local authorities served by its stations since 2012, and a host of developers committing to build new shops and offices near stations.