Lancaster Law Blog : Lancaster PA Lawyer & Attorney : Russell Krafft & Gruber Law Firm : Pennsylvania : Lancaster's Legal Link

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A few years ago, Dateline NBC ran a piece with several horror stories from victims of unlicensed and unscrupulous home contractors. In some cases, unwary consumers shelled out more than $100,000 and faced foreclosure without work being performed. Because the contractors in question were typically not licensed, their victims could not track them down and obtain refunds. 

Such news is not just disconcerting to consumers. The majority of contractors who run their businesses in a conscientious and professional manner can be just as frustrated with such reports because it reflects poorly on them. 

The Pennsylvania Legislature has recently addressed this issue in enacting the new Pennsylvania Home Improvement Consumer Protection Act (the "Act"), which takes effect July 1, 2009. The Act requires home improvement contractors to register with the Attorney General and provide detailed information on the identities of their principals and the location of their offices. Such information in intended to be used to keep track of consumer complaints against individual contractors and to help consumers locate contractors to properly enforce contractual agreements.

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Keeping accurate and updated records are essential for the health of your business. The following questions are provided as guidance when assessing the health of your business entity:

• Have initial filings been made?

Fictitious Name Registration, Articles of Incorporation, EIN/TIN Application, LLP Registration, LLC Certificate of Organization, Subchapter “S” Election

• Are all required filings up-to-date?

Fictitious Name Registration, Decennial Filing, Amendments to Articles of Incorporation, Annual LLP Registration, Change of Registered Address

• Do you have / do you need to update:

Fictitious Name Registration, Bylaws, Corporate/Shareholder Buy-Sell Agreements, Partnership Agreements, LLC Operating Agreements  

•  Are corporate records up-to-date?

Annual Shareholder Meeting Minutes, Directors Meeting Minutes

• Are your record keeping procedures accurate and adequate?         

Corporate Records, Business Records, Tax Records

• When was your last Shareholders meeting? Directors meeting?

• Are your legal and financial advisors aware of personal matters that could affect business concerns or visa versa?

• Are your bookkeeping procedures and records accurate, complete, consistent and reviewed?

• Do you have a Business Succession Plan? If yes, is it up to date?

• Are your Estate Planning Documents up-to-date? Adequate for your business and personal needs?

Remember an ounce of prevention is worth a pound of cure. Make sure your business is in good health.

Download: Business Wellness Checklist

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One advantage of falling real estate values may be the opportunity for property owners to obtain a lower assessment which results in lower property taxes. Property assessments are based on fair market value. When a factor known as the common level ratio is applied to the assessment amount, the resulting dollar amount should be the fair market value. 

In Lancaster County, the common level ratio for the period July 1, 2008 to July 1, 2009 is 1.36. Accordingly, an assessment of $100,000 means that the fair market value of the property should be $136,000. If the property has a fair market value of less than the assessment with the common level ratio applied, the property owner may petition the County Assessment Office for a reduction in assessment. Generally, it is necessary to have an appraisal or some documentation in support of the fair market value. 

Last summer my husband and I bought a home for a price that was approximately $20,000 less than the value calculated by applying the common level ratio to the assessed value. We were able to get our appeal in before the August 1, 2008 deadline, and in November, our assessment was reduced by $20,000 based on our purchase price. In the world of property assessment and taxes, this is not earth shattering, but it will save us close to $500 a year in taxes. 

Assessment appeals must be filed on August 1 of the year preceding the tax year on appeal. If the fair market value of your property is significantly less than your assessed value with the common level ratio applied, and you can establish your fair market value in some way, it may be worthwhile to file an appeal with the Assessment Office. We would be happy to help you with that process, and you should contact our real estate paralegal, Sharon Friesen, or me. 

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In tough economic times, businesses tend to focus on larger issues such as their bottom lines, falling profit projections, and the streamlining of production. However a key component in the health of a business is often overlooked – the effects that economically stressed employees can have on their employers. Such effects include personal bankruptcies, wage attachments, theft and a decline in productivity caused by the psychological stress. Thus it is essential for employers to understand the key factors at play and implement sound policies to minimize damage.

• Stress and Loss of Productivity   Like many other types of psychological stress, anxiety caused by economic problems prevents employees from focusing on their work. Simply put, employers are getting less production per dollar of wages or salary paid. While identifying those in need of psychological counseling will help, many businesses have had success providing economic counseling and education as well to make their employees more financially literate. Please click here for more detailed information from the Partnership for Workplace Mental Health on combating the effects of such stress.

Other issues that will arise more frequently in the coming months include:

• Garnishment/Attachment of Wages
• Employee Bankruptcy
• Worries about Temptation for Theft

We addressed these issues in a blog post in April 2008, when we still referred to the condition of our economy as only an “economic downturn” but the general principles still apply. Please review this post to learn more about legal limitations placed on employer actions with regard to an employee’s financial problems.