Our Transactional Department recently represented the purchaser of a ten million dollar townhouse on the Upper East Side of Manhattan. The property, which was previously owned by a well-known graphic artist, was in high demand, given its prime location in one of Manhattan’s most exclusive and desirable neighborhoods.
Our attorneys faced significant headwinds throughout the transaction but were ultimately able to carefully navigate the deal to a successful conclusion. Despite the hurdles, our attorneys were also able to find significant savings in closing costs on behalf of the purchaser by taking advantage of a purchase Consolidation, Extension, and Modification (a/k/a “CEMA”), which is a well-known process among experienced real estate professionals that allows purchasers of real property to reduce their mortgage recording tax. New York State typically charges a mortgage recording tax of 0.5% of the loan, while purchasers in New York City pay a total of 1.8% on loans under $500,000 (NYS mortgage tax included), and 1.925% for those at or above $500,000 (NYS mortgage tax included). Here, we negotiated a CEMA as part of the final contract of sale which resulted in additional savings of approximately $160,000 in New York State Mortgage Recording Tax.
Our team of attorneys also reduced the total amount of “Mansion Tax” due by the purchaser by approximately $20,000 by allocating a portion of the purchase price to non-residential office space at the premises, which is not subject to “Mansion Tax.”
Our tactical approach to contract negotiations was crucial to achieving a successful outcome for our client.