On September 16, 2016, Governor Jerry Brown signed Assembly Bill 2093, which amended California Civil Code Section 1938 placing increased burden on commercial property owners when leasing their property. Those who ignore or who are unaware of the amended statute are exposed to substantial financial risk for their non-compliance.
The law requires every rental agreement, signed on or after January 1, 2017 to advise the tenant in advance as to whether the subject premises has undergone an inspection by a Certified Access Specialist (CASp). A CASp inspector inspects buildings and sites for compliance with applicable state and federal construction-related accessibility standards under the ADA and state equivalents.
Where property has undergone a CASp inspection and received a disability access inspection certificate, it is advisable to provide the appropriate notices and reports to the tenant within the specified timelines. In the event the subject premises has not been issued a disability access inspection certificate, the commercial property owner is required to state the following on the lease form or rental agreement:
“A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”
Failure to comply with Civil Code Section 1938 may allow a commercial tenant to rescind the lease agreement. Of greater concern may be the question of who must pay for the improvements required by the CASp inspection report. Unless otherwise specifically agreed between the landlord and tenant, the presumption is that the commercial property owner shall pay for both the report and any required repairs set forth in the report.
The law requires different notices be provided from landlord to tenant based on whether there has been a CASp inspection and whether a disability access inspection certificate has been granted. Additionally, if a CASp inspection or certificate has not been issued, landlords may wish to consider including specific in the lease agreement with regard to payment of costs regarding the inspection if one has not already taken place as well as the costs of bringing the property in compliance if it turns out not to be in compliance.
If you need more information or have any questions regarding how the new law may affect your business, do not hesitate to contact Incline Law Group, LLP for some clarity on the subject.
The City of Reno is proposing an amendment to its business license ordinance.
If approved, the proposed change would be that business license fees would be assessed based on the business’s gross receipts for goods sold/services performed within the City of Reno only (verses all sales anywhere).
In addition, two new business categories have been created: (1) manufacturing facility, and (2) warehousing/distribution center. Businesses in those categories would also be charged a fee of 10 cents per square foot of “total business footprint.”
A public workshop is being held Thursday, January 19, 2017 at 3:30 p.m. in the Council Chambers at Reno City Hall. At the workshop, City staff will review the proposed ordinance and collect comments. Please attend the workshop to learn more and to voice your opinion about the ordinance.
Additionally, you may submit written comments, data or arguments in writing about the ordinance until January 25, 2017 at 5:00 p.m.
Comments should be submitted to:
Reno City Hall
Business License Division-2nd Floor
1 East First Street, Reno, Nevada, 89501
Mail to: P.O. Box 1900, Reno, NV 89505
Email to: BusinessLic@reno.gov
Learn more in this recent Northern Nevada Business Weekly article.
Andrew N. Wolf (Andy) was selected by the State Bar of Nevada Publications Committee to contribute a chapter in the new Sixth Edition of the Nevada Civil Practice Manual, published November 2016, by Matthew Bender/Lexis-Nexis in partnership with the State Bar of Nevada.
Andy has completely rewritten Chapter 27: Fees, Costs and Interest which details the recovery of attorney’s fees, litigation costs and interest by the successful party in a lawsuit. This important resource explains the intricacies of how and when attorney’s fees, costs and interest can be recovered in Nevada courts, whether it be through an attorney’s fee clause in a contract, as damages in a lawsuit, or as sanctions for frivolous or vexatious litigation conduct.
The Nevada Civil Practice Manual guides attorneys in Nevada through virtually every civil procedure and practice with expert analysis and comprehensive discussion of the Nevada Rules of Civil Procedure as well as many statutory provisions relating to civil cases. Andy, a partner at Incline Law Group in Incline Village Nevada (Lake Tahoe), says, “Attorneys and judges across Nevada use this important practice guide for reference on a daily basis, and it is a real honor to have been selected as a contributor.”
This article originally appeared in the Sierra Sun/Tahoe Bonanza.
Winter is a great time to buy in the Truckee/Tahoe area. Whether you are looking to purchase a new primary residence or just a vacation home, there are a number of legal issues that you will want to consider.
1. TRPA/BUILDING RESTRICTIONS
The Tahoe Basin is under the jurisdiction of a bi-state federal agency known as the Tahoe Regional Planning Agency (TRPA). TRPA’s mission is, primarily, to preserve the environmental health and sustainability of the Lake Tahoe region.
TRPA has the authority to establish and enforce land use planning, building and development restrictions. The TRPA code may limit a homeowner’s ability to build, remodel, landscape and otherwise improve their property.
If you are purchasing within the jurisdiction of TRPA, it is important that you understand what you can and cannot do with your property with regard to improvements and the timelines for permitting and/or building within the Tahoe Basin.
Certain activities like grading and digging are generally prohibited October 15 through April 30. If your property is within a scenic corridor or within a sensitive zone (like a stream zone), you may be subject to additional TRPA oversight.
TRPA does not make redevelopment, remodeling or improvement impossible, but it is important that you be aware that TRPA restrictions may impact your intended use of your new property. There is a great deal of information available on the TRPA website.
2. HOMEOWNERS’ ASSOCIATIONS
If you are looking at purchasing a condominium or townhome that is within a homeowners’ association, you should carefully review any applicable Covenants, Conditions and Restrictions (CCRs).
The CCRs will dictate any use restrictions on your property. For many second-home buyers in Tahoe, rental restrictions are very important.
Some associations may limit the length of rentals or prohibit them entirely. If you are intending to rent out your new house as a vacation rental or on a longer-term basis, you should carefully review the CCRs for provisions relating to rentals.
It is also important that you understand if you will be required to pay monthly assessments, whether there are any planned or pending special assessments and the general financial health of the association, which should be evident in the operating and reserve budgets and financial reports.
3. TITLE REPORT/TITLE INSURANCE
An often-overlooked document in the mountain of paperwork that you wade through when purchasing a home is the preliminary title report issued by the title company in preparation for the issuance of title insurance at the close of escrow.
The title report provides a list of recorded documents that will be excluded from title insurance coverage. It is very important to review this list of exceptions and exclusions.
Often you will see easements affecting the property or any recorded use restrictions (like CCRs), and sometimes you may see issues relating to TRPA building covenants or restrictions.
The title insurance policy that you obtain will not insure against loss resulting from a claim that is related to a title condition that was listed on the exceptions list.
More importantly, certain title conditions can impact your intended use of the property (for example, if there is a public easement for beach access that goes right by your new master bedroom window … you may want to know about that).
It may be possible to remove some title exceptions and/or to insure around others. You may want to seek legal counsel to understand the impact and possible removal of certain types of exceptions.
Your Realtor should be able to guide you on when it is advisable to seek legal counsel to assist with title issues.
4. CALIFORNIA VERSUS NEVADA?
While the Tahoe Basin is one big beautiful region, there is one major tax difference that should be pointed out in case you are not already aware: The State of California has individual and corporate state income tax, while the State of Nevada does not.
When buying a second home that is intended for your personal vacation use, this may not be an important issue. However, if you are intending your new Tahoe home to be your new primary residence, it is worthy of consideration.
Additionally, if you intend to rent out your property, thereby generating income, the rental income is likely to be subject to income tax — not such a big deal if you are already a California state taxpayer, but if you are a Nevada resident, you may be subjecting yourself to California income tax on that rental income.
It’s all food for thought, and depending on circumstances, a reason to get in touch with your tax professional for guidance.
5. REAL ESTATE AGENTS
As with any community, the Truckee/Tahoe area has many excellent Realtors … and a few that may not be quite so excellent. Choose an agent/broker by asking questions of both the Realtor and people who you may know in the community.
Realtors who live and work full time in the community, and have for some time, are going to understand the many unique aspects of home-ownership in Tahoe, such as why you want to think twice about a long, steep north-facing driveway or when you should investigate your grand remodel plans with TRPA.
Many of the communities around the lake and in the Truckee area have a local Board of Realtors. They can often be found online and may be a useful place to do a little research.
The Truckee/Tahoe Area is an amazing region rich with unparalleled beauty, outdoor adventure and close knit communities.
If Incline Law Group, LLP, can ever be of service to you in the purchase of your Tahoe home, or with other legal needs, please feel free to contact us. Until then, we will see you on the trails and the ski runs.
The IRS and Treasury department issued a new ruling on December 12, 2016, which is intended to create more financial transparency and reduce criminal activity (remember the “Panama Papers”?). The new regulations will create a mechanism whereby U.S. tax information will come to the attention of a foreign investor’s home country. This directly impacts reporting requirements for foreign owned single member LLCs.
For tax years beginning after January 1, 2017, domestic disregarded entities (e.g. single member LLCs) will be required to report and maintain records pursuant to Internal Revenue Code 6038A which previously only applied to 25% foreign owned domestic corporations.
Single member foreign owned entities will now be required to obtain a U.S. employer identification number (EIN) and to designate a “responsible party” (who is, in essence, the person that enables the “individual, directly or indirectly, to control, manage, or direct the entity and the disposition of its funds and assets”). The ruling also requires the filing of IRS Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, which reports certain transactions with related parties, including amounts paid or received in connection with the formation, dissolution, acquisition and disposition of the entity, including contributions to and distributions from the entity.
On November 21, 2016, the California Supreme Court issued a ruling in Horiike v. Coldwell Banker Residential Brokerage Company that is likely to have far reaching implications for California real estate brokers in terms of dual agency. As we have written about in the past many states, including Nevada and California, allow real estate brokers and sales persons to represent both a buyer and seller in a real estate transaction provided that proper disclosures are made to the parties.
While dual agency statutes generally impose fiduciary duties of care, integrity, honesty and loyalty in dealings with both parties, we have often raised the effectiveness of these duties to overcome the inherent conflict of interest presented by dual agency. In fact, when enacting the current dual agency statutes in California, the California Legislature noted that the proposed statute could not cure “the fundamental problem in dual agency relationships – potential and sometimes unavoidable conflicts of interest” but rather was “simply [a] ‘disclosure’ bill intended to inform the buyers and sellers in a real estate transaction of the possible agency relationships and duties owned by a realtor…” (Sen. Rules Com., Bill No. 3349 (1985-1986 Reg. Sess.)).
Often as one way to mitigate some dual agency conflicts, different agents working under the same broker will each represent one party in the transaction rather than having one agent represent both parties. This is the type of relationship that was at issue in the Horrike case.
Horiike, filed suit after discovering a significant discrepancy between the actual square footage of his new condominium and the square footage that was represented by the marketing materials. The Court, in deciding the very narrow question of whether the listing agent, working under the same broker as Horiike’s agent, owed Horiike a duty to learn and disclose all information that could materially affect the value or desirability of the property, concluded that he did.
The Court interpreted the statute to mean that an agent’s duties are equivalent to the duty of the broker for whom s/he functions. i.e. a real estate agent does not have an independent agency relationship with the client of the broker, rather the agency relationship with the client is derived from the agency relationship between the broker and the client. As a result, the relationship between broker and agent cannot be uncoupled.
Therefore, when the broker agrees to act as dual agent for both buyer and seller, both broker and the agents assume all of the duties of dual agency, including those statutory fiduciary duties to investigate and disclose material information.
It will be interesting to see if the California Legislature takes another look at dual agency in light of this case. We will be sure to inform you if they do.
I recently obtained a full dismissal of all charges brought by the Nevada Real Estate Division (NRED) against one of my clients for alleged violations of Nevada broker licensing laws. In my opinion, NRED was reaching on a number of issues, and was bowing to some uneducated political pressure by bringing the cases in the first place. My client was not the only broker or agent subjected to these charges and it bears noting that most of the cases were fully dismissed before hearings (including that of my client), two after a hearing and another two cases are pending judicial review. There were a number of important issues at stake in these cases. One of which was the propriety of dual agency.
Dual Agency refers to the situation in which the same real estate agent represents both the seller and the buyer in a real estate transaction. Dual Agency is legal in Nevada, however, under NRS 645.252, if an agent acts on behalf of more than one party to the transaction they must obtain written consent from each party which must include: (i) a description of the real estate transaction; (ii) a statement the agent is acting for two or more parties who have adverse interests and that in acting for those parties the agent has a conflict of interest; (iii) a statement that the agent will not disclose confidential information for 1 year after the transaction unless compelled by a court to do so or given written permission by the party to do so; (iv) a statement that the party is not required to consent to the dual agency and v) a statement that the party is not being coerced into consenting and understands the terms of the consent. NRED has prescribed forms for these disclosures.
Where a broker assigns two different agents, who both work under the same broker, to a single transaction, this is not referred to as dual agency and does not require the same disclosures as set forth above.
Dual Agency representation by realtors is a practice that may be questionable in, or outside of, the context of short sales because of the inherent conflicts of interest. The policy implications are significant to the protection of buyers and sellers.
Regardless, it is legal in the state of Nevada and neither our legislature nor the local realtor boards have sought to make changes to this practice. As with many aspects of contracts, and law in general, parties to a transaction or contract are advised to be aware of their rights and what they are contracting for.
Many people do not realize that there is a procedure available for the adoption of adults. There are several reasons that make adult adoption worth exploring.
During the child’s minority (e.g. up to age 18), it is not possible to adopt a child without the consent of the child’s natural parent, or grounds to terminate the relationship between the child and its natural parent.
Nevertheless, the de facto parent may establish very close bonds with a child and desire to legally solidify the nature of their relationship, even if it is after the child has grown. Once the child turns 18, the adult adoption process is a wonderful opportunity to do this.
Adult adoptions provide a means to legally recognize the relationship and to secure inheritance and other rights for the child from the stepparent. Even if a stepchild has been raised in a stepparent’s home for their entire life, the adult stepchild would not be eligible to inherit by intestacy from a deceased stepparent.
The adult adoption is the perfect remedy for this type of circumstance. It is important to note that the adult adoption does not have any impact on the relationship between the child and his natural parent and does not preclude the child from inheriting from his natural parent through the laws of intestacy as well.
Adult adoptions can also assist in aiding a young person to legally immigrate to the United States. It bears mentioning that the best time to accomplish the adoption would be before the child reaches the age of 16. However, even if the child has already reached the age of majority, the adult adoption is another factor that may assist the person’s ability to achieve legal immigration.
The adult adoption procedure is very simple and does not involve much in terms of time or money. There is rarely a home study or investigation by a social worker required and there is only a small amount of court filings necessary.
Only one court appearance (which can even be waived under certain circumstances) is required by statute. It is always important to be vigilant in reviewing your estate plan to determine areas which need improvement. If you have been part of a blended family, adult adoption may provide a component, which may be currently lacking in your estate plan.
Most importantly, it has the effect of not only enhancing and legitimizing the bonds of a blended family, but also providing for much needed security to stepchildren after they have grown.
Giving Tuesday is a global day of giving fueled by the power of social media and collaboration.
Celebrated on the Tuesday following Thanksgiving (in the U.S.) and the widely recognized shopping events Black Friday and Cyber Monday, #GivingTuesday kicks off the charitable season, when many focus on their holiday and end-of-year giving. Learn more at Giving Tuesday.
One of the best ways to get involved is in your own community. In this spirit, Incline Law Group is sharing the organizations that we support with you.
Editor’s note: we might have a thing for snow sports around this office.
Project MANA – Cassell von Baeyer, Partner
Mission: To reduce the incidence of hunger and its detrimental effects upon individuals, families, the community and the region. In addition to providing hunger relief, we have developed programs designed to alleviate the causes of hunger and promote nutrition through education and awareness. Learn more at Project MANA.
Diamond Peak Ski Education Foundation – Andy Wolf, Partner
Mission: To offer season-long, affordable, challenging and fun training while fostering a life-long love for the sport of skiing. Training includes the mastery of ski techniques as well as focus in the areas of discipline, responsibility, goal setting, motivation and sportsmanship. Learn more at Diamond Peak Ski Education Foundation.
Far West Nordic Ski Education Association – Stacey Herhusky, Partner
Mission: We believe competitive cross-country skiing offers great benefits to the community and to individuals of all ages and abilities. As a division of the United States Ski Association (USSA), our mission is to promote, develop, and expand cross-country skiing within the USSA Far West Region (California, Nevada, Arizona and Hawaii). We accomplish this by working with ski clubs, ski areas, and directly with our membership of individuals and families. Learn more at Far West Nordic Ski Education Association.
High Fives Foundation – Jeremy Krenek, Associate Attorney
Mission: To support the dreams of mountain action sports athletes by raising injury prevention awareness while providing resources and inspiration to those who suffer life-altering injuries. Learn more at High Fives Foundation.
Tahoe Cross Country Ski Education Association – Heidi Shaughnessy
Mission: To promote the sport of cross country skiing through educational activities for children and adults. Learn more at Tahoe Cross Country Ski Education Association.
Tahoe Safe Alliance – Willow Cornelius, Senior Legal Assistant
Mission: To end the incidence and trauma of intimate partner/domestic violence, sexual violence, and child abuse in North Lake Tahoe and Truckee. Learn more at Tahoe Safe Alliance.
Kids in Need Foundation – Crystal Lyle, Legal Assistant
Mission: To ensure that every child is prepared to learn and succeed by providing free school supplies nationally to students most in need. Learn more at Kids in Need Foundation.
Lake Tahoe Wildlife Care – Julie Malkin-Manning, Director of Marketing
Mission: To give Mother Nature a helping hand by raising and rehabilitating orphaned and injured wildlife so they may be released back to the wild. Learn more at Lake Tahoe Wildlife Care.
Hard to believe that another new year is just around the corner. Whether you are thinking about end of year organization or New
Year’s business resolutions, here are seven tips for readying your business for 2017:
- Charitable Giving: Business or personal, charitable giving is not only a tax deductible event it is always better to give than to receive. There are many local non-profits that could especially use your help this time of year. Consider funding a Thanksgiving meal for a family, donating a warm coat or even volunteering some hours.
- Estate Planning: When is the last time you updated your estate plan? Do you need to accomplish any year end gifting? It is advisable to review you estate plan at least every 5 years and depending on your circumstances more often.
- Tax Planning: This is the time to call your CPA and discuss any over or under payments for 2016, year-end purchases and retirement account contributions.
- Business Registrations: Have you renewed all required registrations, licenses and filed all required tax returns? Business registration renewals of all types should be calendared. If Incline Law Group, LLP serves as your registered agent, we will track your annual business registration and state business license renewal for you.
- Insurance: As long as the Affordable Care Act (“Obamacare”) remains in place, there is an open enrollment period which runs November 1, 2016 through February 1, 2017. Your employee health insurance plan is now likely to have a year-end renewal date regardless of when you used to renew. Now is the time to renew or shop for new policies.
- Leases: Commercial leases often run for longer periods of time and new leases or renewals can often take some time to complete. If your lease is expiring in 2017, now is the time to start planning for that.
- Employment Policies: January 1 is a great time to put new policies in place for employees in place, especially ones that address newer issues like medical marijuana in the work place and privacy issues. You do want to be sure that your employment practices and policies are compliant with state and federal employment law. Please be sure to consult with your attorney before putting new employment policies in place.