On December 28, 2020, New York Governor Andrew Cuomo signed into law the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (the “Act”), which, among other things, implements certain requirements and restrictions on residential foreclosures in New York.  The Act does not apply to certain commercial foreclosures or to vacant and abandoned properties that were listed on the statewide vacant and abandoned property electronic registry before March 7, 2020, and remain on the registry.

The Act applies in “any action to foreclose a mortgage relating to residential real property, provided the owner or mortgagor of such property is a natural person, regardless of how title is held, and owns ten or fewer dwelling units whether directly or indirectly.”  The units may be in more than one building, but must include the primary residence of the mortgagor/owner and the remaining units must be currently occupied by a tenant or available for rent.

The Act immediately stayed all pending residential foreclosure actions for a period of sixty days (through February 27, 2021), and allows for the submission of a hardship declaration by a mortgagor/owner attesting to hardship due to the Covid-19 pandemic. If a mortgagor/owner submits a hardship declaration, any pending foreclosure proceeding or the initiation of a new foreclosure proceeding, will be stayed until May 1, 2021.

The Act contains the form of the hardship declaration that is to be used and requires that the Office of Court Administration translate the hardship declaration into Spanish and the six most common languages in the city of New York, after Spanish.  The Act directs the courts to mail copies of the hardship declaration to mortgagors in all pending residential foreclosure matters.  The Act also directs that a hardship declaration form be sent by the mortgagee with every notice sent pursuant to New York Real Property Actions and Proceedings Law Sections 1303 (Help for Homeowners in Foreclosure) and 1304 (90-Day Pre-Foreclosure Notice) in the mortgagor/owner’s primary language.

When a new residential foreclosure proceeding is initiated, the court will require both an affidavit of service of a hardship declaration and an affidavit from the foreclosing party or agent of the foreclosing party stating that no hardship declaration has been received from the mortgagor/owner.  Further, the Act requires that upon the commencement of a new action, the court must seek confirmation, on the record or in writing, that the mortgagor/owner has received the blank hardship declaration and has not submitted a completed hardship declaration.

On December 31, 2020, New York State Chief Administrative Judge Lawrence Marks issued a memorandum regarding the requirements of the Act and the implementation of the Act by the courts.

The Unified Court System has published the hardship declaration in English, Spanish, Arabic, Bengali, Chinese (simplified and traditional), Haitian-Creole, Polish and Russian on its website.  The website also states that the Unified Court System is in the process of updating various web pages to reflect the requirements of the Act.

As previously discussed here, LIBOR (the London Inter-Bank Offered Rate) is an interest rate benchmark that is used as a reference rate for a wide range of financial transactions. It is typically offered as a floating rate interest option for corporate borrowers in the US loan market. Corporate borrowers may pay interest on their loans based on LIBOR (typically, LIBOR plus a spread, or applicable margin).

ICE Benchmark Administration (IBA), the administrator of LIBOR, announced on November 30, 2020 that it expects to consult on its intention to cease publication of one-week and two-month LIBOR on December 31, 2021, and the remaining USD LIBOR settings on June 30, 2023 (IBA later clarified that this was not an announcement that IBA will cease the publication of LIBOR). See our blog article here for a discussion of the potential effects of the COVID-19 pandemic on cessation of the LIBOR publication. As the likely end of the most commonly used LIBOR periods remains approximately two and a half years away, most existing agreements utilizing USD LIBOR will mature prior to the expected end date.

Notwithstanding the future termination of LIBOR, several United States regulatory authorities, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, issued a joint statement supporting a transition away from using LIBOR “without delay” regardless of the unclear end date. These authorities further advised that successor language be included in financial agreements to preemptively provide an alternate interest rate after discontinuance of the existing reference rate.

Attorneys drafting new loan agreements and amendments to existing loan agreements utilizing LIBOR have taken two approaches to establish a successor interest rate following the cessation of LIBOR, namely the “amendment approach” and the “hardwired fallback language approach.” Under the amendment approach, the loan document provides the parties will cooperate to amend the applicable interest rate provisions to incorporate a new interest rate. This approach requires the parties to reach agreement on the terms of the new rate and to execute amendments to reflect this agreement. Under the hardwired fallback language approach, the fallback language provides for the successor rate within the original agreement and generally removes the need for a future amendment.

Both approaches provide for several triggers to transition from LIBOR to the successor reference rate including notice of the cessation of LIBOR, agreement among the parties to transition to the successor rate, or both. For the LIBOR cessation notice language, the agreement may provide that successor rate provisions will become effective if certain sources announce the termination of publication of LIBOR, regardless of whether those provisions provide for the amendment approach or the hardwired fallback language approach. For the election language, certain specified parties to the agreement (whether that be one, some or all of the parties) can elect to transition to the successor rate as provided for in the agreement.

The Alternative Reference Rates Committee (ARRC), a committee created by the Federal Reserve, released recommended USD LIBOR fallback contract language for syndicated loans to deal with the transition, in which it recommended either approach. For the hardwired option, the successor rate proposed by ARRC was Term SOFR plus a spread adjustment, or if that does not exist Compounded SOFR plus a spread adjustment, if neither exist, the hardwired approach reverts to an amendment approach, giving due consideration to relevant governmental body recommendations or evolving or then prevailing market conventions. The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities.

In 2019, the International Swaps and Derivatives Association (ISDA®) determined that the fallback for LIBOR in their documentation would be Compounded SOFR in arrears together with a spread adjustment based on a historical median approach.

In June 2020, ARRC revisited and revised its position regarding LIBOR transition. Consistent with the ISDA® documentation, only the hardwired approach is now recommended, with the amendment approach being deleted. In addition, contrary to both its prior position and the ISDA documentation, rather than using Compounded SOFR in the second level of the waterfall of alternative benchmark replacements, ARRC now recommends Daily Simple SOFR.

Initially, the amendment approach was more commonly used; however, in light of the ARRC and ISDA® documentation and recommendations, the hardwired fallback language approach has become more prevalent in recent months.

David Paseltiner is chair of the firm’s corporate and commercial transactions practice group and a member of its banking and financial services practice group. He represents businesses in a wide variety of industries, ranging in size from small start-ups to well established firms with national and international operations. He also represents individuals in connection with employment agreements, shareholders agreements and operating agreements. David can be reached at 516-393-8223 or dpaseltiner@jaspanllp.com. Rose C. Egan, an associate in the corporate and commercial transactions practice group, assisted in the drafting of this article.

Parties regularly enter into contracts for the purpose of achieving a desired result. Sometimes there is an absolute requirement to achieve the result; sometimes merely an agreement to try to achieve the result. Included in this spectrum of commitment is a trio of phrases that are commonly used but not so commonly understood: “best efforts”, “reasonable efforts”, and “commercially reasonable efforts.” What do these terms require of a party that agrees to use such efforts? Does one of them require something more than the others?  In this article, we will explain why and when such terms are used, look at how New York courts interpret them, and offer some advice on how to reduce the uncertainties that accompany their use.

When Are These Terms Used?

Efforts clauses are most likely to be used where a party is unable to control an outcome, the parties are unable to predict if an outcome can be achieved, or a party simply is unwilling to guarantee an outcome. For example, a party selling its business may require a third party’s consent to an assignment of a contract between the selling party and the third party. The purchase agreement could require the seller to obtain the consent, failing which it would be in breach of the agreement, or provide for one of the “efforts” standards. So long as the seller used the required efforts, it would not be in breach of the contract if the third party refused to consent to the assignment of its contract.

What Are Efforts Clauses?

An efforts clause requires a party to take some level of effort to achieve the desired result. Failure to use such efforts would be a breach of the clause; failure to achieve the desired result would not be a breach, so long as the required effort was used.

The three most common used efforts clauses are “best efforts”, “reasonable efforts”, and “commercially reasonable efforts.” Attorneys and contracting parties generally view best efforts as the most demanding of the efforts clauses, commercially reasonable efforts as the least, and reasonable efforts as a middle ground. As discussed below, what attorneys and parties believe is not necessarily what the case law dictates.

Does Best (or Any Other) Efforts Require a Party to Do Anything Necessary?

The obligation to use reasonable efforts, commercially reasonable efforts, or even best efforts does not generally mean that the promising party must be successful or take exhaustive measures to fulfill the obligation. Under New York law, these efforts terms do not require a party to act against its own business interests.  Courts in other states have frequently held that even “best efforts” does not require a party to take every conceivable effort, take unreasonable actions, or incur substantial losses to perform an obligation. By agreeing to use best efforts, a party is not agreeing to take every possible action, to incur unlimited costs, or take unlimited time to achieve the desired result.

What’s the Difference Among the Efforts Clauses? Is There Even a Difference?

Parties rarely bother to define what they mean by “best”, “commercially reasonable” or “reasonable” efforts, meaning that in a dispute they are leaving it to a court to determine not only whether the effort has been made but what the effort required in the first place. Courts have wide latitude in determining what the parties may have intended to be required, and attempting to reconcile the efforts clause with other provisions of the contract so that the provisions of the contract work in harmony. Judges will often look to the contract’s surrounding facts and circumstances, if such facts and circumstances will enable them to determine the meaning of the efforts clause with a reasonable degree of certainty.

“Best Efforts” and “Reasonable Efforts”

New York courts have taken inconsistent positions with regard to the interpretation of efforts clauses. Some courts view “best efforts” and “reasonable efforts” as equivalent and interchangeable, while other courts find a distinction between them. One decision interpreted “commercially reasonable efforts” as requiring at the very least some conscious exertion to accomplish the agreed goal, but something less than a degree of efforts that jeopardizes a party’s business interests. As one federal court noted, New York has been “anything but a model of clarity” when it comes to interpreting efforts clauses[1].

In particular, there is a series of cases holding that both best efforts and reasonable efforts (the two more stringent standards in the view of most attorneys) impose an obligation on the promising party to act with good faith in light of its own capabilities; allow such parties the right to give reasonable consideration to their own interests; and permit such parties to rely on their good faith business judgment.

On the other hand, there is also case law in New York supporting the proposition that a best efforts standard is more onerous than a reasonable-efforts standard. Following this line of cases, courts often define the standard by using the implied covenant of good faith and fair dealing (as the base standard expected in all New York contracts) to explain that a best-efforts clause requires (i) a higher standard than mere good faith and (ii) a party to pursue all reasonable methods to achieve the result in question.

Finally, some courts analogize a best-efforts provision to a contractual obligation to perform promptly or diligently.

Most New York courts agree on one issue (not that it is helpful to litigants): the determination of whether a party used best efforts or reasonable efforts is a fact-intensive inquiry. Unfortunately, due to the lack of a decision by the New York Court of Appeals, New York case law is divided as to whether (a) there must be objective criteria or clear guidelines against which a party’s efforts to meet the required standard can be measured to be enforceable, or (b) best efforts is an enforceable obligation, even when objective criteria are unavailable if external standards or circumstances impart a reasonable degree of certainty to the meaning of the phrase.

“Commercially Reasonable Efforts”

Until recently, few New York courts had dealt with interpreting and applying a commercially-reasonable-efforts standard. The developing consensus is that the standard for satisfying commercial reasonability under New York is fairly lenient, with a balance between some conscious exertion to accomplish the agreed goal and something less than a degree of effort that jeopardizes the party’s business interests, as judged objectively based on industry standards.

With regard to “commercially reasonable efforts”, New York courts generally evaluate a party’s performance in light of an objective standard of reasonableness as opposed to a party’s subjective belief of what the contract requires.

What Can Be Done to Reduce Uncertainty?

There are some actions that can be considered if a party desires to reduce, to the extent possible, the uncertainty of a judicial interpretation of an efforts clause.

First, if at all possible, simply avoid using an efforts clause — make the desired result an express obligation of the other party. In this case, the inquiry is simply whether the result was achieved, not whether a party used sufficient efforts to try to achieve the result.

Second, define what is meant by “best”, “reasonable” or “commercially reasonable” efforts. This gives the court an ascertainable standard to determine whether the required effort was made, with the less subjectivity the better in this regard. For example, efforts could include sending a notice, incurring up to a certain amount of expense, engaging a specialist with expertise in the given subject matter,  appealing an adverse administrative decision, and so on, tailored, of course, to the applicable result being sought. An efforts clause can also be defined to state what efforts are not required, such as commencing litigation, incurring excess costs, taking actions that are illegal, or taking action that would reasonably be likely to expose the party to liability.

Third, use objective criteria. For example, if a party is required to give a notice or take other action as part of an efforts clause, state the date by which the notice must be given or the action taken, and avoid phrases such as “within a reasonable period of time.”

In Summary

While there is much ambiguity in the use of efforts clauses, with some (best/reasonable/commercially reasonable) effort, the following conclusions can be drawn:

  • unless specifically agreed to, none of the “efforts” clauses requires a party to do everything possible (such as bankrupting itself or take other unreasonable actions) to achieve the desired result;
  • depending on what court you end up in, “best” and “reasonable” efforts may, despite what may appear from the respective terms, mean the same level of effort; and
  • if achieving a desired result is important, and the counterparty is unwilling to commit to an absolute obligation to accomplish it, then consider including objective details as to what that party is expected to do as part of its efforts so that a court can more readily determine whether that effort has been made if the result is not achieved.

[1] Holland Loader Co. v. FLSmidth A/S, 313 F. Supp. 3d 447 (S.D.N.Y. 2018)

Governor Cuomo recently announced the creation of New York’s Green Energy Program aimed at building New York’s green economy. Urging that the program will combat global climate change while stimulating New York’s COVID-19 stressed economy, the Governor’s proposal includes the development of the largest offshore wind program in the nation, upgrades to five dedicated port facilities (in Albany, Coeymans, South Brooklyn, Port Jefferson and Port of Montauk Harbor), and the construction of a “green energy transmission superhighway” to transport clean energy generated upstate to under-serviced downstate areas (with projects in Western New York, Mid-Hudson and the Capital Region). He estimates that the green energy program will “… create a total 12,400 megawatts of green energy to power 6 million homes, directly create more than 50,000 jobs, and spur $29 billion in private investment all across the state.”

The cornerstone of the Governor’s proposal is his call for the acceleration of renewable energy development programs.  Indeed, the New York State Legislature recently enacted the Accelerated Renewable Energy Growth and Community Benefit Act (the Act) to facilitate siting and construction of clean energy projects. The Act establishes a new Office of Renewable Energy Siting (the “ORES”) to review siting applications for renewable energy facilities whose capacities exceed 25 megawatts, and those between 20-25 megawatts who opt into the new process. According to ORES’ website, it will “… implement the timely consolidated review and permitting of major renewable energy facilities in a single forum that takes into consideration local laws, public health and safety, environmental, social and economic factors pertinent to the decision to permit such facilities.” Notably, under certain circumstances, the Act permits ORES to disregard local laws and regulations when approving siting applications. ORES issued draft regulations, and uniform standards and conditions for public comment on September 16, 2020.

It remains to be seen how (or whether) ORES will balance the State’s interests in developing New York’s wind program against impacted municipalities’ interests, in particular, those articulated  in local land use and zoning regulations, as well as siting and permitting processes. Even if ORES does manage to streamline the process for certain projects, it is unlikely that local municipalities will simply go quietly into the night when a project hits home. After all, isn’t that precisely why municipalities maintain local siting control over land use and zoning matters?

Should you have questions or inquiries regarding renewable energy siting and procurement processes, please contact Simone M. Freeman in our Zoning and Land Use and Municipal Law Groups at 516-746-8000 or sfreeman@jaspanllp.com.

On December 15, 2020, Governor Andrew Cuomo signed into law sweeping changes to New York’s General Obligations Law governing powers of attorney (“POA”). The new law is effective on June 14, 2021.

The new law is intended to: 1) simplify the current POA form, which is prone to improper execution; 2) allow for the execution of a POA containing language that substantially conforms to the law, because the current law’s exact wording requirement is unduly burdensome and may be a trap for the unwary; 3) provide safe-harbor provisions for those who, in good faith, accept an acknowledged POA without actual knowledge that the signature is not genuine; 4) allow damages to be recovered from those who unreasonably refuse to accept a valid POA.

The adoption of the bill does not affect the validity of any existing valid statutory short form POA, gift riders, or revocation of a POA that was delivered to an agent before the law’s effective date.

What Constitutes a Valid POA

The old law contained a statutory short form POA which had to be strictly completed in order to be accepted by a third party, such as a bank or credit union.  Under the new law any POA which “substantially conforms” to the statutory form must be accepted by third parties located or doing business in New York State unless such third party has reasonable cause not to honor it. Reasonable cause includes a belief that the POA was not  properly executed in accordance with the laws in effect at the time it was signed.

A POA will now be valid even if it contains: (a) an insignificant mistake in wording, spelling, punctuation or formatting; (b) bold or italic type; or (c) language that is not  identical  to the statutory form so long as it substantially conforms with the form. There may be “substantial conformity”  even if some clauses that appear in the statutory form are missing or if there is insubstantial variation in the wording of the “Caution to the Principal” and “Important Information for the Agent” provisions.

The new law also modifies the signature requirement for executing a POA. The POA no longer needs to be signed by the principal. A designee may sign the document at the principal’s direction while in his or her presence.

Procedure For Rejecting a POA

The new law prescribes a mechanism for rejecting a statutory short form POA.  Not later than the tenth business day after presentation of an original or attorney-certified copy of  a  statutory  short  form  POA that is properly executed, the recipient shall either: (a) honor the statutory short form  POA,  or (b) reject the statutory short form POA in a writing that sets forth the reasons for such rejection, or (c) request that  the  agent  execute  an  acknowledged affidavit stating that the POA  is  in  full  force and effect.

Reasons for rejection may include non-conforming form, missing or incorrect signature, invalid notarization, or unacceptable identification. In the event that the statutory  short form POA presented is not an original or attorney-certified copy, as part of the initial rejection, the third  party must also identify the other provisions of the short form POA, if any, which would otherwise constitute cause for rejection.  If the third party initially rejects the statutory short form POA in a writing that sets forth the reasons for such rejection, the third party shall within seven business days after receipt of a writing in response to the reasons for such rejection: (a) honor the  statutory  short  form  POA, or (b) finally reject the statutory short form POA in a writing which  sets forth the reasons for such rejection. If the third party requests the agent to execute an acknowledged affidavit, the third party must honor the statutory  short  form  POA  within seven business days after receipt by the third party of an acknowledged affidavit stating that the POA is in full force  and effect unless reasonable cause exists to decline to accept the POA.

The new law contains notice provisions which detail how and to whom the foregoing notices must be sent.

Damages For Rejecting a Valid POA

While the new law is intended to make it easier for a POA to be accepted, it may also create issues of fact which will have to be decided by a court in a special proceeding. Specifially, the new law provides that a court can award damages, including reasonable attorneys’ fees and costs, if it finds that the refusal to accept a properly executed POA was unreasonable.

Protections For Accepting POAs

The new law offers additional protection for third parties who in good faith act on an acknowledged POA. Unless the third party had “actual knowledge” that a signature was not genuine, it may rely on the presumption that an acknowledged signature (verified before a notary public) is genuine. Third parties are also protected against void, invalid, or terminated POAs unless they had actual knowledge of same.

A person who is asked to accept an acknowledged POA may request, and rely upon, without further investigation:

(1) an agent’s certification under penalty of perjury of any factual matter concerning the principal, agent or POA; and

(2) an opinion of counsel as to any matter of law concerning the POA if the person making the request provides in writing or other record the reason for the request. An opinion of counsel  must be provided at the principal’s expense unless the request is made more than ten business days after the POA is presented for acceptance. It should be noted that this new “safe harbor” provision is not included in the new section of the law which establishes the procedure for rejection of a POA.

A person who conducts activities through employees is without actual knowledge of a fact relating to a POA, a principal, or an agent if the employee conducting the transaction involving the POA is without actual knowledge of the fact after making reasonable inquiry with respect thereto.

If a third party conducts a transaction in reliance on a properly executed statutory short form POA, the third party shall be held harmless from liability for the transaction.

Elimination of Statutory Gift Rider

The new law eliminates the Statutory Gift Rider to the POA. This rider was needed in the past to, among other things, open, modify or terminate a joint account or an “in trust for” account.  Now, the principal can authorize transactions on these types of accounts by expressly stating the agent’s authority in the Modifications section of the POA.

Other Technical Amendments

The new law also contains several technical amendments which expand an agent’s power to make aggregate gifts in a calendar year from the current $500 limit to $5,000 without requiring a modification to the form; clarify an agent’s obligation to keep records or keep receipts; and clarify the agent’s authority with regard to financial matters related to health care.

While these amendments strive to simplify New York’s power of attorney law, the law remains complex and legal counsel should be consulted to assist in drafting, interpreting, accepting and rejecting powers of attorney.

I. Competitive Bidding – The Basics

The purpose of competitive bidding is to create an open and fair environment that encourages transparency and accountability, as well as competition.  Local Government Management Guide Seeking Competition in Procurement, NYS Office of the Comptroller, Division of Local Government and School Accountability (July 2014) at: Seeking Competition. Under General Municipal Law § 103, when a procurement meets certain monetary thresholds, local municipalities and school districts (collectively, hereinafter “municipalities”) are required to advertise for competitive bids.  For example, purchase contracts involving expenditures in excess of $20,000 and contracts for public work involving expenditures of $35,000 or higher are subject to public bidding under General Municipal Law § 103.  An exception to this rule are emergency procurements under General Municipal Law § 103(4) (discussed supra).

General Municipal Law § 103(2) further requires that “[A]ll bids received shall be publicly opened and read at the time and place so specified and the identity of all offerers shall be publicly disclosed at the time and place so specified.” However, the COVID-19 pandemic has forced municipalities to consider whether it is smart, safe and/or permissible to hold in-person public bid openings. Particularly since Executive Order (“EO”) 202.10, as extended and amended by EOs 202.38, 202.42, 202.45, and 202.89 (“EO 202.10”) limits and/or prohibits certain non-essential gatherings. Therefore, municipalities are effectually prohibited from holding non-essential in-person bid openings where the number of persons in attendance (inclusive of on-site staff) exceeds the number permitted by EO 202.10.

II. Suspension of the Requirement to hold In-Person Bid Openings

In light of the foregoing concerns, on March 27, 2020 Governor Cuomo issued EO 202.11, which suspends the requirement that municipalities hold public (in-person) bid openings.  Instead, EO 202.11 permits municipalities, where practical, to hold non-public bid openings so long as the municipalities provide the public with a meaningful opportunity to view such bid openings by recording or live streaming them. On December 30, 2020, Governor Cuomo extended EO 202.11 until January 29, 2021 under EO 202.87.

Additionally, in order to ensure that the bidding process is fair and transparent, municipalities are encouraged to create a record of the bid opening, document each action taken during the process, and have one municipal official or employee present to witness the bid opening. See, New York State Conference of Mayors’ Coronavirus COVID-19: Resources For Local Government Officials – Public Bidding Openings at:  Resources for Local Government Officials.

III. Remember to Follow All the Other Rules!

All other requirements of General Municipal Law § 103 remain unchanged. Therefore, municipalities must continue to “… publish an advertisement for bids and offers in an official newspaper, if any, or otherwise, in a newspaper designated for such purpose.” General Municipal Law 103(2).  Pursuant to General Municipal Law § 103(2), the advertisement must provide (i) the time and place where the bids received will be “publically” opened and read, and (ii) identify where all bidders/offerors will be publically identified and disclosed. In addition, where the municipality has authorized the receipt of bids and offers in an electronic format, the designation of the receiving device must be provided. Id.

In the event that municipalities elect to hold a non-public bid opening pursuant to EO 202.11, it is important that the notice of advertisement include: (i) the date and time when all bids must be received, opened and read; (ii) that the bid opening will be held in accordance with EO 202.11; (iii) that in-person attendance will not be permitted; and (iv) the website address, public television broadcast channel, videoconference link or similar system, where the public may view or participate in a recording or live stream of the bid opening.

Municipalities should also post these notices on their websites.

IV. COVID-19 – It’s an Emergency, Right?

COVID-19 may be a declared state of emergency, but that does not mean that COVID-19 (in and of itself) automatically qualifies as an “emergency” for emergency procurement purposes under General Municipal Law § 103(4). Under General Municipal Law § 103(4), contracts for public work or the purchase of supplies, material or equipment may be let by the appropriate officer, board or agency of the political subdivision or district without the issuance of an advertisement for sealed bids where: (i) there is an accident, unforeseen occurrence or condition; (ii) that affects public buildings/property or the life, health, safety or property of residents; and (iii) the resulting situation requires immediate action which cannot wait for competitive bidding/offering.  As such, General Municipal Law § 103(4)’s application is strictly limited to procurements necessitated by an emergency that is designated by current and immediate circumstances.

Notwithstanding the forgoing, EO 202 permits school districts, to the extent necessary, to procure and use cleaning maintenance products without first advertising for bids and offers or complying with existing procurement policies and procedures as required under General Municipal Law §§ 103 and 104-b. Beware, however, that EO 202 is limited to procurements necessitated by the declared emergency (i.e. COVID-19). Therefore, a school district could not, for example, purchase a snow plow because of COVID-19. Further, it must be noted that EO 202 does not apply to local governments (i.e. cities, villages, Towns, Counties or other political subdivisions). Therefore, local governments should continue to evaluate all emergency contracts under the criteria set forth in General Municipal Law § 103(4).

V. Procurement Policy Updates

In light of the COVID-19 pandemic, and the transition to virtual government platforms, municipalities should review their procurement policies and consider changes that accommodate electronic and virtual competitive bidding platforms in accordance with EO 202.11 and General Municipal Law § 103(1).

Should you have questions or inquiries regarding General Municipal Law § 103 or procurement, please contact Simone M. Freeman in our Municipal Law Group at 516-746-8000 or sfreeman@jaspanllp.com.

 

With an existing budget shortfall worsened by the pandemic, lawmakers are again pressing to allow mobile sports betting as a means of generating State revenue.

As of today, sports betting is only legal in New York as long as the bettor is physically present on the grounds of certain in-state casinos. By contrast, a mobile sports bet would be placed on a website via an electronic device, such as a computer or cell phone. New Jersey has already passed legislation legalizing this form of betting and, as a result, New Yorkers have been crossing state lines to place bets via their smartphones (geolocation software is utilized to determine whether a mobile bet was placed in-state).

While the idea was proposed in years past, it was always met with staunch opposition from Governor Andrew Cuomo, who cited to the many social ills associated with gambling. The concept also met opposition from casinos, some of which expressed concern that online sports betting would detract from in-person business at brick-and-mortar casinos.

In light of the massive deficit brought on in part by the COVID-19 pandemic, Governor Cuomo appears to have changed his tune. However, under his proposed structure, the casinos are unlikely to sing along. By way of explanation, most states that permit mobile sports betting, including New Jersey, essentially allow casinos to run the operations. By contrast, Governor Cuomo has proposed that the State lottery would be responsible for mobile sports betting.

Even with the backing of Governor Cuomo, mobile sports betting still faces an uphill battle. For one, there is existing gaming compact giving tribal casinos the exclusive right to certain types of gaming in exchange for a percentage of revenues. Moreover, there is a provision of the State Constitution prescribing that sports gambling take place “at no more than seven” casinos, and whether a mobile sports bet takes place “at” a casino has been the subject of debate.

It remains to be seen whether the Governor’s support will provide mobile sports betting the momentum it needs this time around. If so, proponents suggest it may prove a valuable revenue source for the State at a time when a multi-billion-dollar budget gap has the State and its businesses facing tough roads ahead.

 

 

 

 

Purchasing a new home is often one of the biggest moments of a person’s life, whether it is a first home or a “forever home.” Over the past year, restrictions imposed by virtue of the COVID-19 pandemic have interfered with this dream of many. Initially, stay-at-home orders prohibited home showings and in-person closings. Later, low home inventory resulted in weaker purchaser negotiating power given the low supply and great demand triggered by the pandemic.

Despite these uncertain times, governmental restrictions loosened; home viewings resumed; parties negotiated transactions and entered into contracts (with the help of attorneys, of course). And due to these uncertain times, purchasers/borrowers went through the mortgage approval process and found lenders altering their closing requirements based on conditions which arose as a result of the pandemic.  Title companies required sellers to execute additional affidavits and provide indemnities with respect to the lag in county office land departments’ ability to process documents and the title company’s ability to review and retrieve land and court records given reductions in office hours and of in-person staff.

Outside of New York, a closing in New York is generally referred to as a “New York style closing”, meaning a sit-down closing where all parties to the transaction are in a room to sign all documents and deliver all monies associated with completing a closing in accordance with the contract terms.  Given the necessity of social distancing and minimizing in-person contact, it would make sense for the parties to be able to close in a manner which would limit such contact.  However, not all parties to closings have been willing to embrace this concept.

Commercial transactions and out-of-state closings have long embraced the “escrow closing concept.”  The process is easy, reliable, cost-effective and much safer these days by virtue of avoiding physical contact.  There are several ways to conduct such closings but the general process is that required closing documents are signed by all parties and deposited with a trusted escrow agent, such as the title company, funds are wired and once all parties are satisfied, escrow is broken and documents are released to be recorded. There are many variations on this. Parties can be located in different locations and documents can be scanned, reviewed and approved with agreements (called undertakings) and requirements that original documents are delivered or all bets are off.  It is important to note that while electronic signatures can be viewed and approved by parties to the transaction, electronic filings are still not yet permitted or processed in all county offices, so it is imperative that the original documents are sent and make it to their ultimate destination.

Many lenders, attorneys and even individuals have insisted on sit-down closings during the past year, even with the extraordinary health concerns raised by such sit-down closings. Some lenders have insisted their borrowers need to be seen in person to alleviate forgery concerns; some practitioners have insisted that a sit-down closing is necessary because “that’s the way it’s always been done”; some clients have stated they must attend a closing to get the money.

But things are different today. Facetime and Zoom make it easy to physically interact in a socially distant manner which comports with all legal requirements. Wiring of funds alleviates the need for presentation of physical checks (and often results in faster fund availability). Governor Cuomo’s implementation and continuing extension of virtual notarization of documents is further validation that compliance with legal requirements can be completed in a safe manner which effectuates the same end result.  A key component at a closing is that parties present valid, non-expired photo identification, such as a driver’s license or passport. Given all the delays that have resulted in processing and receiving documents during the pandemic, Governor Cuomo’s Executive Order extends the expiration date of all NYS drivers’ licenses and permits so that any license which expired on or after March 1, 2020 remains valid at least through January 1, 2021.

Selling or purchasing any property is a huge endeavor under normal circumstances. It is important to have a trusted advisor who is familiar with current trends available to assist during such an important time. For assistance with your commercial and residential real estate transactions, please contact Leslie Feifer. Leslie is a member of the firm’s real estate practice group, representing individuals and businesses in a wide variety of commercial and residential real estate matters. Leslie can be reached at 516-393-8229 or lfeifer@jaspanllp.com.

 

 

 

 

 

 

 

 

 

 

With New York facing a tremendous budget deficit and business still reeling from the economic shutdown triggered by COVID-19, state and city lawmakers are looking everywhere they can for means to generate revenue, both for the government and for businesses directly.

As of October 2020, New York City restaurants and bars have been allowed to add a “COVID-19 recovery charge” to diners’ bills, excluding takeaway and delivery orders. The measure, which caps the potential surcharge at 10% of the consumer’s total bill, is available to restaurants from the law’s effective date until 90 days from when they can operate at maximum indoor capacity.

A restaurant adding a surcharge to the amount a paying customer owes must disclose the amount of such added surcharge before the food is ordered. The disclosure must be:

  • Written;
  • Explicit that the additional charge is a surcharge and not a gratuity;
  • Clear and conspicuous;
  • On any document, whether in paper or electronic format, that lists the prices for the customer, including but not limited to any paper or electronic menu, catering contract, final customer bill, or customer’s credit card receipt if a credit card is used;
  • In plain English, or in the same language as the rest of the menu, if applicable; and
  • In a font size similar to surrounding text.

Businesses seeking to utilize this surcharge to stay afloat may, however, pay a cost at the other end of recovery. Notably, the surcharge is subject to sales tax, meaning those businesses that fail to charge sales tax at the correct rate on the surcharge may face a sales tax audit – a potential economic boon to government authorities looking to close budget shortfalls by generating tax assessments.

Until the passage of the new measure, the Rules of the City of New York § 5-59 prevented food and beverage businesses from adding surcharges to listed prices, with exceptions for bona fide service charges conspicuously disclosed to consumers before ordering, i.e. mandatory gratuity for large parties or minimum per customer charges.

Perhaps equally publicized are Governor Cuomo’s intentions to revisit the legalization of cannabis as a means of aiding the State’s financial recovery, which has surely gained traction in light of the success of New Jersey’s recent referendum. Cuomo has included legalization in his last two budget proposals, but negotiations fell through both times, with lawmakers unable to agree on how to allocate the tax revenue.

In line with that effort, earlier this year, Governor Cuomo launched a Cannabinoid Hemp Program, through which the State Department of Health filed proposed regulations for the manufacturing and retailing of hemp products in the State. His program is intended to organize and legitimize the cannabinoid market by creating a licensing framework for cannabinoid hemp processors and retailers, and applications for licenses may be available as early as 2021.

Whether any of these measures will suffice as either a means to narrow the budget gap or as a helping hand to businesses remains to be seen.

For further information, please contact David Paseltiner at  dpaseltiner@jaspanllp.com or Jessica Baquet at jbaquet@jaspanllp.com.

 

 

 

 

 

 

 

 

In these times of pandemic, many good people (like essential workers, first responders, and doers of random acts of kindness and charity) continue to help others.   Unfortunately, there are those that continue to prey upon others by casting snares to compromise confidential and sensitive information like social security numbers, credit card numbers, and passwords.

This is generally known as “phishing” and the ordinary citizen would be surprised at the sophistication of these attacks, the simplicity of these attacks, and the effectiveness of attacks on personal data (and $aving$).

Phishing is decades old and, as technology advances, phishing attacks grow exponentially due to the increased accessibility to people and businesses. This article briefly addresses some of the more common phishing attacks and countermeasures.

The Primordial Sea

The early days of phishing featured scams where subjects were approached via email by purportedly jailed African princes looking to reward others for helping “royalty” free their vast fortunes. It took a while for the most greedy prey to realize that they were being scammed. Although similarly themed scams still abound, these days phishing attacks can be much more sophisticated in their approach, look, and feel.

Phisherman’s Tools of the Trade

Yes, the phisherman’s bait box includes worms like malware, link manipulation, “spearphishing” , “spoofed” emails,  and “vishing” and other sophisticated techniques designed to ensnare your private and confidential information. I could author a separate article for each and every one of the numerous traps that can be laid for the unsuspecting person or business. However, this article will serve only as a brief and general description of more prevalent phishing hooks/bait and some common sense wake-up calls and protections to combat the unwanted trawler.

Common attacks include emails that can contain malware and other nasty “launchables”. Attacks can allow the cybercriminal to track your keystrokes, gain access to your data, and authorize your device to run other functions and programs. The criminal casters can “spoof” legitimate vendors. Did you get an email about tracking a surprise FedEx delivery, resetting a password, an “automatic response” from a vendor/email you did not contact, a failed log-in attempt, confirming a purchase, or renewing your virus protection software?  BE CAREFUL!  Also, some phishing emails can blindly extort you by notifying you that your private information or photos have been accessed, and then demand a ransom. For businesses, hackers gain access to key information systems via compromised passwords or other weak IT security protocols, and then cripple the business by shutting down information technology systems until a ransom is paid.  Similar to the old “send me money to help free my fortune” scams, beware general inquiries to your business “info@” email address.   Venture capitalists with millions to invest in your business don’t send general solicitations to “contact us”  email boxes. Although credit card companies and financial institutions greatly enhanced their fraud prevention programs, these programs result in email traffic confirming purchases which means you must increase your diligence to sort out the bona fide notifications.   Set your credit card and banking notifications to low dollar amounts.  Typically, your compromised data will be tested with a small purchase before the “Pretty Woman” shopping spree begins.

We all get unsolicited phone calls at home or on our cell phones.  These calls range from the completely bogus phish to the legitimate business call. Even the calls that are arguably legitimate typically try to sell you on a product or service that you don’t desire (or need) … not to mention automated Chinese language calls (which are typically an attempt to threaten Chinese foreign nationals with deportation unless they pay a fee by phone). The Internal Revenue Service or a criminal/enforcement division of a government agency rarely (if ever) calls first.

The Catch

So, what’s a phisherman desired catch?  Tasty hooked information includes: access to laptops and personal computers, passwords, Social Security numbers, access to bank accounts and credit card numbers, and the equity in your home (with your Social Security number, phisherman can remotely apply for a home equity loan on your house).  Many times, the phisherman sells your information on the dark web.  That’s how they make their money.  The buyer of that info, in turn, makes new credit cards and then sells those cards to the shoppers.  For an entertaining factual accounting of this kind of cybercrime, read Kingpin which chronicles the exploits of a computer hacker who stole access to nearly two million credit card accounts.

Shark Repellants

So, what are some very basic protections that we “phish“ can use to avoid the hook? Here’s a brief list of some anti-phishing tactics:

* Never provide your Social Security number or any private or confidential information if you have any doubts.

* Regularly change your passwords. Make your passwords somewhat complex by using numbers and symbols and a mix of both upper case letters and lower case letters. Never use the same password for different vendors, websites or financial institutions (otherwise one password breach will ripple through your pond of privacy and financial protection). Use a secure password keeper on your cell phone to track and keep all your relatively complex passwords. Try to have a backup for that password keeper just in case your phone fails. Don’t let anyone know what your passwords are or where you keep your passwords. All this is worth the risk of the outrage of your teenage children when they can’t instantaneously access Netflix.

* Don’t click on suspicious email embedded links.  This is not Storage Wars and the link won’t likely bring you to a storage locker full of goodies.

* Don’t store credit card numbers on websites.  Otherwise, you are trusting that vendor’s security protocols.

* If you think there is a remote chance that the request for information is for a legitimate reason, don’t reply to an email, don’t click on any embedded link, and (in the case of a phone call) hang up the phone first. Then, find out the legitimate contact information of the subject vendor, confirm that contact information, and then call them directly (or visit their website via your own direct search).

* In the case of apparent spoofed emails, run your cursor over the sender’s email address. If the email shows to be a gmail account or a strange looking email address with lots of numbers and/or a suffix not related to the vendor, delete the email. In fact, it’s probably good practice to permanently delete anything you suspect as being fraudulent. If you feel like a credit card alert could be legit, where possible, download the financing institution’s bona fide app to your phone and monitor your purchases via secure application.

* On your cell phone, each time you get one of these unsolicited phishing calls, block the number. For me, this reduced the number of anonymous Chinese calls and requests to extend car warranties by over half. You can block numbers both on your cell phone and, if your home phone number is supported by VOIP, you can also block numbers via your service provider’s website (I know that Optimum allows you to do this). Using the national Do Not Call Registry is a good idea (www.donotcall.gov).

* Add a credit monitoring app to your phone. Credit Karma is pretty good. If your information has already been compromised (for example if a large financial institution’s database was breached and your Social Security number is out there), upgrade to a monthly subscription service that’s more aggressive in its monitoring. In addition, by contacting any of the four major credit agencies (EquiFax, TransUnion, Innovis and Experian), you can put a personal “credit freeze” in place. With a credit freeze in place at any one of the major agencies (the agencies share freezes with each other), no third-party can pull credit on you without having the freeze lifted which can only be done by your action. The https://www.OptOutPrescreen.com service protects from unauthorized credit checks. Thus, you won’t get a surprise home equity loan on your house or a Best Buy credit card in your name for the purchase of an entirely new suite of kitchen appliances shipped elsewhere. Yes, it adds an extra level of diligence when you want to use new credit financing for your own situation (for example, a new car lease), but the protection is sound.  By the way, as a general rule, you are not responsible for fraudulent credit card purchases.

* Ignore general solicitations for investment in your business through people you don’t know. Share information only after vetting a third party, then seek out an attorney to draw an appropriate confidentiality agreement for your business which includes a no-solicit provision.  If a legitimate someone is truly interested in investing in your business, they will find you through more direct business introductions.

* Yes, we all want to increase our social networking profile. BUT, accepting a new friend or a new LinkedIn contact may come at a cost. Take the time to figure out truly whether you know this person or whether networking with them will be beneficial (after briefly vetting the background through publicly available tools).

* Don’t engage anonymous extortionists or blackmailers (unless they separately convince you that they do truly have the goods on you and, in which event, consider hiring a private detective, lawyer and reaching out to the police).

* I know this next one’s going to be a downer… BUT … resist the temptation of pranking back the anonymous caller or emailer. As much fun as it could be to spend a half hour on the phone messing with a  telemarketer or replying to unsolicited email with a “Get lost!” (or less nice words), why make yourself a target for a sophisticated hacker type?

* For businesses, train your employees and make them savvy about the items we discussed. They too should not click on any potential spoofing emails on business devices. Teach them to report any potential incursions to your IT department. Discourage (or prohibit) Internet browsing from company devices. Make sure that employees regularly change passwords.  Challenge your employees to safely store passwords (rather than on Post-its attached to computer monitors).

* Yes, all of our time is precious, but putting two factor authorization on websites and applications is great protection.

* SHRED, SHRED, and SHRED some more.  While reviewing your (snail) mail, sort it.  When done, SHRED all mail that contains personal information.  Credit card company flyers enticing you to apply for a new card typically no longer allow third parties to use that flyer/application to open credit in your name….but…SHRED THEM ANYWAY.  Using  https://www.OptOutPrescreen.com can also reduce your junk mail.

* There are websites (like www.scambusters.org)  that can help you debunk myths and check for phishes and scams. If you are presented with an email or phone call that’s suspicious, take the time and describe the suspicious request and add the word “scam“ or “phish“ to a Google search.  You can also Google the sender’s email or phone number (again, with the word “scam”).

* Listen to your “Little Voice”.  One of my favorite TV shows in the 80s was Magnum, P.I.  Solving mysteries, Thomas Magnum always listened to his “little voice”… which was his intuition barking at him.  If somethings seems suspicious or too good to be true, listen to your intuition and back it up with logical analysis.

*DON’T PANIC.  “Little Voice” or no “Little Voice”, slow down and think clearly.

Those are just some basic tactics that you can take to stay off the hook and protect your privacy and wallet. Remember, as we get smarter, phishermen get more creative.  Stay vigilant!

For more information, please contact Robert Londin.