USA Law and Practice Contributed by: Richard L. Rosen, Leonard S. Salis and Dennison Marzocco, Rosen Karol Salis PLLC
4. Planning and Zoning 4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning Local governments create zoning codes to regu - late property use and building construction. For example, “Bulk Provisions” set height, setback requirements and lot coverage limitations for buildings on individual parcels of land. Some localities have formal processes in which the public’s input is included in the decision-making process with respect to proposed zoning chang - es, disposition of government owned real estate, and site selection for capital projects (sanitation garages, fire houses, libraries, etc). Additionally, localities sometimes enact development plans to achieve specific purposes, such as enhancing public access to parkland or limiting the proxim - ity of certain types of businesses (eg, bars) to schools or religious institutions. 4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction Many states and local governments use mod - el building codes from the International Code Council to establish minimum construction- related standards and procedures. Local juris - dictions may adopt regulations that are stricter than model building codes to protect against known environmental hazards, such as earth - quakes or hurricanes, or to meet stricter energy efficiency goals. Local governments frequently also designate landmarks and historic districts to regulate building design and appearance. 4.3 Regulatory Authorities Local governments typically enact zoning codes that regulate the use and bulk of individual par - cels of real estate. Additionally, jurisdictions typically have independent review boards or
3.9 Effects of a Borrower Becoming Insolvent A borrower’s insolvency does not affect the valid - ity of a mortgage granted to secure an obliga - tion. However, the filing of a bankruptcy petition has the immediate effect of staying the foreclo - sure process. A lender can seek relief from the automatic stay to enforce its security interest, if it shows “cause” , such as the debtor having no equity or uninsured property. If granted, the lender can proceed outside the bankruptcy. 3.10 Taxes on Loans States and municipalities typically leverage taxes on newly recorded mortgages. See 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security for an example of the recording taxes imposed by New York State and the City of New York. Mezzanine loans, unlike traditional mortgages, are secured by a pledge of equity interests in the entity owning the real estate rather than by a direct lien on the prop - erty. As a result, they are generally not subject to traditional mortgage recording taxes in most jurisdictions. In January 2023, the Mezzanine Debt Bill, intro - duced in the New York State senate, imposed a tax on the creation of mezzanine debt and pre - ferred equity on borrowers owning real estate. If passed, the bill (currently in committee) would require a secured party to pay a mortgage recording tax prior to having the right to enforce the security interest. As of April 2025, this bill remains pending in the New York State Assem - bly and Senate.
1104 CHAMBERS.COM
Powered by FlippingBook