Despite the recent low interest rate environment, some projects just will not support market rate construction loans. What then is the developer to do? Over the last few years developers have begun to turn to the purchaser to finance construction of a project. This technique can be used for both residential and commercial development. Many … Continue Reading
This post was also written by Gerald S. Dickinson. Pennsylvania municipalities and potential developers interested in converting vacant, abandoned, tax delinquent or foreclosed properties into productive use should take note of legislation enacted in 2012 that permits a municipality with more than 10,000 residents to create a land bank.1 Land banks are governmental entities that … Continue Reading
Last week, the U.S. House of Representatives voted unanimously to approve H.R. 2600, which, if ultimately passed, would expressly exempt condominium developments from the Interstate Land Sales Full Disclosure Act (“ILSA”). If a developer fails to satisfy ILSA requirements, a contract purchaser may have revocation rights; so an exemption from ILSA would be a welcome … Continue Reading
A recent appellate court decision in Illinois emphasizes yet again the need for buyers to include any and all representations and covenants of sellers expressly in the real estate contract – if you expect to be able to rely on them and enforce them against the sellers later. In the case of Siegel Development, LLC … Continue Reading
The Pennsylvania legislature is considering amendments to the Guaranteed Minimum Royalty Act (GMRA) that would require oil and gas lessees to disclose to oil and gas lessors the post-production costs deducted from the sale of gas to calculate the royalty owner’s 12.5 percent minimum guaranteed royalty. House Bill 1414 would require oil and gas producers … Continue Reading
Pa. House Bill would end longstanding blanket conveyancing practice and increase transaction costs. The Pennsylvania House of Representatives is considering drastic changes to Pennsylvania recording and conveyancing laws that would significantly increase real property transactional costs. House Bill 942, introduced March 12, 2013, would prohibit the transfer of multiple properties with one instrument, except for … Continue Reading
The first quarter of 2013 showed steady activity of merger and acquisition transactions, and the year continues to excite business and transaction lawyers. Headlines in the business pages announce the latest target takeover on a weekly basis. This year, Berkshire Hathaway announced its desire to spend billions of dollars on large acquisitions, then landed the … Continue Reading
Last August, we reported that a Pennsylvania Superior Court decision (Butler v. Charles Powers Estate) threatened to undermine nearly 200 years of mineral-rights law in Pennsylvania by rejecting the “Dunham Rule” – a legal doctrine that presumes that in private deed transactions where there is a reservation or exception for “minerals,” without any specific mention … Continue Reading
According to the National Restaurant Association, the proliferation of food trucks has been one of the hottest trends in the food service industry the last few years. Such trucks have become technologically advanced and bear little resemblance to the “Good Humor” trucks and the so-called construction site “chuckwagons” that have previously dominated the mobile-food-truck sector. … Continue Reading
A recent opinion by New York’s highest court (J. D’Addario & Co. v. Embassy Indus., Inc. Slip Op 07850, Court of Appeals) held that a seller’s "sole remedy" of retaining the purchaser’s deposit as "liquidated damages" means just that – that’s all you get (i.e., no court-imposed interest unless you expressly say so). In the … Continue Reading
This post was written by Meredith Hartley and Robert Diamond. On January 14, 2013, the Fourth Circuit Court of Appeals held that liability under the anti-fraud provisions of the Interstate Land Sales Full Disclosure Act (“ILSA”) extends to an entity that engaged in advertising or marketing activities in the course of a transaction covered by … Continue Reading
Since the In re Crane decision was handed down by the Bankruptcy Court for the Central District of Illinois in April 2012, all eyes in the mortgage banking industry have been focused on the appeal of the decision pending in the U.S. District Court, in the hopes that the widely criticized ruling of the Bankruptcy … Continue Reading
Recent Developments in the Law Portend of Widespread Reconsideration of This Question This post was written by Dusty Elias Kirk with Contribution from Kyle Smith. Courts in a number of states are reconsidering how to determine whether a property owner, often a nonprofit entity, is entitled to a property tax exemption or other special property tax … Continue Reading
Pennsylvania’s transportation infrastructure needs far surpass the Commonwealth’s ability to fund them. According to a 2010 study by the State Transportation Advisory Committee, an additional $3.5 billion a year is needed to fully meet those needs. To close the funding gap and facilitate the development of new transportation facilities throughout the Commonwealth, Pennsylvania, on July … Continue Reading
Fannie Mae, Michigan, transfer tax, Oakland County v. Federal Housing Finance Agency, FHFA, Nevada v. Countrywide Home Loans, RealtyTrac.… Continue Reading
This posting was also written by Curt Heffler. Construction Ahead: In a recent Pennsylvania Superior Court case (Commerce Bank v. Kessler), the court held that an open-end mortgage recorded after commencement of construction on the mortgaged property does not have statutory priority over a subsequently recorded mechanic’s lien unless all of the proceeds of the loan … Continue Reading
Michigan Gov. Rick Snyder recently signed into law the Nonrecourse Mortgage Loan Act, MCL Sec. 445.1591, et seq., the purpose of which was to overturn the effect of two Michigan court decisions that interpreted and applied certain special purpose entity (SPE) and nonrecourse "carve-out" loan provisions in a way that seemed to favor lenders, and … Continue Reading
In In re Crane, the Bankruptcy Court for the Central District of Illinois recently held that a mortgage can be avoided in bankruptcy if it fails to include the maturity date and the interest rate of the underlying debt within the mortgage document. The court found that failing to include these loan terms on the … Continue Reading
While those with a sweet tooth may think of Fannie May as the Chicago-based chocolate company, Fannie Mae has only brought heartburn to Michigan as Fannie and Freddie Mac claimed a federal exemption from the Michigan real estate transfer tax as to the sale of foreclosed properties – costing Michigan millions of dollars in lost … Continue Reading
The City of Chicago has prevailed in the latest round of a "no holds barred" battle with local property owners over the constitutionality of The Chicago Landmarks Ordinance. In a decision dated May 2, 2012 by the Circuit Court of Cook County, the property owners' claims that the Landmarks Ordinance was unconstitutionally vague and violated due process were rejected, and the court upheld the Ordinance. Hanna and Mrowka v. City of Chicago. No. 06 CH 19422. The landowners had previously won a highly favorable ruling at the appellate court level (in 2009), which raised the prospect of the invalidation of the Ordinance (as reported in a previous Reed Smith Client Alert) - a result that would have sent shockwaves through the historic preservation community nationwide. With the case remanded to it for decision, the trial court considered the due process vagueness issue in detail, including as to the clarity of the Ordinance's criteria for landmark status; but it was not persuaded by the property owners' arguments, and found that they did not meet their burden of rebutting the presumption of the constitutionality of the legislation, thus upholding the Ordinance.… Continue Reading
In the world of securitized commercial mortgages, non-recourse carveout guaranties have long been a matter of standard practice. For CMBS lenders, they offer a critical backstop against fiscal mischief by borrowers, and for responsible borrowers they provide access to real estate financing without fear of personal ruin. Nevertheless, two recent court decisions have thrown the … Continue Reading
