Photo of Aaron S. Marines

We have written a series of blog articles dealing with property tax assessments.  Since the final reassessment notices have gone out in the past few weeks, I have talked with a number of people about appealing their assessments.  Two questions come up in every conversation. They are:

  1. Do I need to get an appraisal of my property?
  2. How much will this cost?

For a commercial or industrial property, you nearly always need an appraisal in order to reduce your assessment.  I have spoken with a number of commercial real estate appraisers, and even former members of assessment appeal boards. They (and I) believe that the Assessment Appeal Board will not even consider reducing the assessment of a commercial or industrial property without an appraisal report from a qualified commercial real estate appraiser. Continue Reading How Much Will a Property Tax Assessment Appeal Cost for Commercial Properties?

A recent Pennsylvania case has again confirmed that a unit owner in a condominium or homeowners’ association is required to pay their assessments, regardless of whether they think the association has failed to provide some service. In Logans’ Reserve Homeowners’ Association v. McCabe, some unit owners believed that the association was not adequately mowing the area behind their units.  They complained that the overgrown common areas caused snakes and ticks to plague the unit owners.  Because of this, the unit owners decided to stop paying their assessments until the association mowed the common areas the way they wanted them to.

The Commonwealth Court held that unit owners are required to pay assessments “regardless of any alleged inadequacies in the association’s performance.”  The Court said that any breach of the association’s duties does not allow a unit owner to withhold their payments.  Unit owners are required to pay all assessments when due and they have no right to withhold payment of assessments for an alleged non-provision of services.

This case is nothing new.  Pennsylvania Courts have made and upheld this decision since 1990.  It is a good reminder that unit owners cannot withhold payment of their assessments, even if they are dissatisfied with the job of the association.

Aaron Marines is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University and practices in a variety of areas including Commercial Real EstateLand Use, Land Planning and Zoning matters.

A recent case, Serota v. London-Towne Homeowners Association, dealt with an association trying to alter the voting rights of a unit owner.  More broadly, the case gives some instruction on how to amend the governing documents of a community that was created before the passage of the Pennsylvania Uniform Planned Communities Act (the “UPCA”).

The facts of the case are straightforward.  London-Towne Homeowners Association is a community with 70 townhouses.  Serota owned 12 of these.  The Declaration of Covenants, Conditions and Restrictions (the “CCR’s”) was recorded in 1979, before the UPCA was enacted.  The CCR’s provided that each unit received one vote.  This means Serota had 12 of the 70 votes of the Association.  The CCR’s provided that they could be amended with the vote of 75% of all unit owners.  The Executive Board of the Association amended the bylaws to provide that each unit owner receives only one vote, regardless of the number of units they own.  The UPCA provides that no amendment can change the ownership percentages or the voting strength of any unit owner without that unit owner’s approval.

Even though the CCR’s were recorded before the UPCA, some of its sections apply retroactively to communities created before the Act.  One of these sections deals with amendments to the declaration or CCR’s. Section 5102(d) of the UPCA provides that an amendment may be made either in accordance with the law at the time of the declaration, or be using procedures in the UPCA.  This means that if the old CCR’s do not have any way to be amended, then the Association can use the process in the UPCA. However, all amendments to a need to comply with the procedures and requirements in the document being amended, as well as the procedures and requirements of the UPCA.  Continue Reading Association Cannot Change Voting Rights of Unit Owner Without the Unit Owner’s Consent

It was my pleasure to attend the recent Lancaster Chamber of Commerce and Industry presentation of the “Changing Nature of Banking in Central PA.”  The presenters were Brian Bisignani of Post & Schell and Dave Hornberger and Andria Linn of Orrstown Bank.  They spoke about topics ranging from the effect of the recent bank acquisitions in central Pennsylvania, to the growth of community banks in Lancaster County, the challenges of marketing to millennials, the decline in retail sales, and cyber security and phishing attacks.

One of the things that struck me was that over thirty percent of all of the cash deposits in Lancaster County were affected by the recent bank acquisitions, or “roll ups” to use the term that Dave frequently called them.  In a very short amount of time there have been huge changes in local banking, affecting both banks and their customers.

Dave did a great job of summing up the concerns I have heard from many bankers over the past few months.  He noted that very big banks can be competitive because of their rates and lending base.  Smaller community banks gain customers by emphasizing their flexibility, with a faster speed to market and more personal customer service.  While these are all necessary, especially the personal level of service, they are not everything that our customers need.  Continue Reading Trends in the Banking Industry

I regularly work with both lenders and commercial borrowers.  In the last 12 months, I have noticed that interest rate swaps are becoming a part of more and more financing arrangements.  While I am not an economist, there are a handful of reasons why including swaps or derivatives in a financing arrangement should be part of more conversations between banks and commercial borrowers.

In this post, I am considering a “plain vanilla” interest rate swap.  A simple example of this would be a bank offering a 10 year fixed interest rate loan to a borrower.  The bank then swaps this fixed interest payment with someone (maybe another lending institution, swap bank, or even back to the borrower) in exchange for a variable rate payment – usually tied to LIBOR plus some amount of basis points.  At the end of the swap period, the difference in interest payments between the fixed and the variable interest rate is paid out to the appropriate party.

Increasing Competition Among Lenders

Many of my commercial clients complain that banks only want to lend money to people who don’t need it.  This is not entirely the decision of lenders.  Today’s regulatory environment has forced banks to tighten their risk tolerances.  The net result of this is that it seems there are more loan demand than there is loan supply.

I think of it as Venn Diagram.  One circle is borrowers who need financing.  The other circle is businesses with acceptable risk.  Where those two circles intersect, banks and borrowers are doing business.  If your project falls into that middle part of the diagram, congratulations! You will have lots of banks competing over your business.

This competition is a problem for lenders.  I have seen banks offer extreme terms just to “win” some of these “good loans.” Many banks just cannot compete with lenders who are willing to cut deep into their profits just to secure a deal.  This is not good for banks, and when banks struggle or consolidate, it ultimately harms borrowers, too. Continue Reading A Perfect Storm: Why are Rate-Swaps or Commercial Loan Hedging Arrangements on the Rise?

This week is officially Small Business Week. The attorneys at Russell, Krafft & Gruber work with many small businesses every day.  Personally, I love to work with family–owned businesses, and get to know the family and what makes them and their business special.  In honor of the well-deserved recognition small business owners are receiving this week, I wanted to offer some advice and encouragement to the many small businesses in our community. I didn’t want to do the typical “here is a problem and here is how to fix it” post about the problems that small businesses face – taxes, employees, contracts, security, technology, and all of that stuff.  This post is a thank you to small businesses.

Many small businesses start because of a personal interest or expertise.  So rather than bore with you legalese  I thought I’d share , a link between my interests and small business that might not come to mind.

My son is a huge professional wrestling fan.  Because of him, I am also a professional wrestling fan.  It is a special bond that we share.  He started watching when he was probably 7 years old.  Now he’s almost 16, taller than me, with a handful of hairs sticking off of his chin. But we share wrestling.  When something happens on a Monday night show, it is the first thing he wants to talk about on Tuesday morning.  He and I have traveled to Giants Stadium to see Wrestlemania with 90,000 fans.  We have also been in the Palmer Center in Easton with 300 people in the stands, or the American Legion in Hellertown with maybe 75 people. We have watched the biggest movie star in the world – Dwayne “The Rock” Johnson — and we have seen someone wrestle dressed up as a Space Monkey.

What does this have to do with small business?  The head of the Small Business Administration is Linda McMahon.  She is the wife of Vince McMahon, the head of World Wrestling Entertainment.  She has been part of storylines and has appeared in the ring.  Linda McMahon has suffered a nervous breakdown, been committed to a “sanitarium” and lapsed into a coma.  She drank beer with “Stone Cold” Steve Austin.  She took a stunner from Austin, been slapped by her daughter numerous times, and ended a bunch of fights with well-placed kicks. (Don’t worry about me — I know it is not real. But for the sake of this post, go with me for a bit.)

It strikes me that every small business can take away some lessons from Linda McMahon. Continue Reading How Your Small Business is Like Professional Wrestling

I have written a number of times on this blog about providing reasonable accommodations for “service animals” and “emotional support animals.”  This legal battle continues to affect condominium and homeowner association communities.  A recent case shows a new way that a condominium association could get in trouble for refusing to provide a reasonable accommodation: because of a neighbor’s blog post.

Estate of Walters v. Cowpet Bay West Condominium Association, begins with the “usual” issue.  Two condominium unit owners sought to keep “emotional support dogs” in the condominium.  The condominium’s rules absolutely banned pets.  In this case, the Court determined that the unit owners were disabled, and that the support animals were necessary to allow them the use and enjoyment of the condominium unit.  Because of this, the condominium association was required to make a reasonable accommodation under the Fair Housing Act.

The concerning part of this case arises from the blog of some disgruntled neighbors.  The opinion from the United States Court of Appeals, Third Circuit, quoted a number of blog posts from residents of the community that opposed the emotional support dogs.  One neighbor replied on a blog post “isolate them [the unit owners] completely to their little “dog patch” on the beach and ignore them at every venue or occasion!” Continue Reading Could a Condominium Face Legal Trouble Because of Residents’ Blog Against Emotional Support Animals

It may be strange to think about slipping on ice now that the weather is finally warming up.  But a recent court ruling decided the question of who is responsible when a resident slips on an icy spot on a community walkway.  Is it the Builder who installed the walkway, or the Association who failed to treat the ice?

In Davis v. NVR, Inc. a homeowner attempted to sue the developer, builder, snow removal contractor and architect for a slip and fall injury. Davis was walking on the homeowners’ association walking path when she slipped on ice and injured herself.  The ice was present at a low spot in the walkway where the walkway crossed through a wetlands area in the homeowners’ association property. Apparently, many owners pointed out to the homeowners’ association that water puddled up at this spot on the walkway. It sounds like this icy spot was a pretty regular occurrence. Continue Reading Is the Builder Responsible When a Homeowners’ Association Doesn’t Treat Ice?

We have written a couple of posts about the Lancaster County-wide Property Tax Reassessment.  In this post, we want to focus specifically on commercial and industrial properties.  This includes any sort of income producing properties, including apartments and other rental properties.

As we explained before, the aim of the 2018 Reassessment is to make the assessed value of property equal to the actual fair market value of that property.  That is relatively easy to do with residential property – the County can see what properties of a similar size and location have sold for, and compare that to your residential property.  But for commercial property, that is much more difficult.  Your commercial property is different from most other properties.  Continue Reading Lancaster County Reassessment – Commercial and Industrial Property Assessment Appeals

If you own property in Lancaster County, you probably have heard a lot about the County-wide property reassessment.  You should have received your Preliminary Assessment Notice in the mail.  If you suffered from a bit of shell shock after opening the Notice, take a breath, there are things you can do if you feel the value attributed to your home is incorrect. Continue Reading So I Received My Preliminary Property Assessment Notice. Now What?