The Honorable Lawrence Stengel has been named as the Chief Judge of the United States District Court for the Eastern District of Pennsylvania. Lots of other people are more qualified than I to comment on Judge Stengel’s work, his judgment and his interaction with thousands of people that have appeared before him. But I have one story about Judge Stengel that demonstrates his quality on the bench.

Now attorneys don’t always tell the best stories.  There is often a lot of detail that we cannot put into our stories because of confidentiality.  Unfortunately, this is one of those times so some details are omitted to “protect the innocent” as they say.

I was a new lawyer, maybe one or two years out of law school.  I inherited a zoning enforcement case from one of the senior partners.  It was one of those cases that literally went on for decades.  The land owner would violate zoning and the municipality would get an order to enforce its zoning ordinance.  The owner would refuse, and one of the Judges in the Court of Common Pleas would issue an order to the land owner.  The land owner would still refuse to comply, and the Court would issue a citation for contempt of court.  The citation for contempt would keep the land owner on the straight and narrow for a little while.  But after a few years, the whole process would repeat itself. Continue Reading A Day in Judge Stengel’s Courtroom

I had the great pleasure of attending the Ephrata Area Chamber of Commerce Fall Dinner. The speaker for the evening was Rebekah Gregory. Rebekah is a survivor of the Boston Marathon bombings from April 2013. Even though the attack cost her left leg, it gave her such a thankfulness for her life, and a mission to live going forward. She said a number of times during her message that she wanted to make sure that she did all the things on one leg that she had never gotten around to doing on two.

Rebekah’s optimism is a gift. This is especially true when terrible events seem to happen one after another in the world. I want to thank the Ephrata Area Chamber of Commerce for a great time to connect with other business leaders in the area, for a wonderful dinner and for an important inspirational message.

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.

I recently discussed an important victory for farmers in the case of Branton v. Nicholas Meat, LLC. The Branton case also had another interesting discussion that should help all agricultural operations, even those that do not generate or use food processing waste (“FPW”).

One of the requirements to be protected under the Right to Farm Act is that an operation must be “lawfully” in operation for more than one year. During the operation of the farms that spread FPW, the DEP issued a couple of notices of violation (“NOV”) to the farmers. The NOVs complained of spreading FPW without an approved Nutrient Management Plan, spreading FPW during winter months and spreading within 150 feet of a stream.  Continue Reading A Legal Victory for Farmers (Part 2)

Lancaster CountyPennsylvania Courts just announced an important victory for farmers in the case of Branton v. Nicholas Meat, LLC. This case helps farmers that generate and use food processing waste (“FPW”).  It also helps any agricultural use that is subject to any sort of state or federal permit.  In the case, the farmers operated a slaughterhouse which generates FPW.  The farmers applied the FPW to nearby farms.  They also constructed a new 2,400,000 gallon storage tank to hold the FPW. A number of neighboring property owners filed a lawsuit, saying that the spreading of FPW is a nuisance.  The farmers claimed that their operation was protected by the Right to Farm Act.

The Right to Farm Act provides that a neighbor cannot bring a nuisance action against a “normal agricultural operation.”  Most of the cases under the Right to Farm Act focus on whether a certain practice is a “normal agricultural operation.”  In a previous case, Gilbert v. Synagro, the Pennsylvania Supreme Court decided that the Court, and not a jury, was able to decide whether a practice was a normal agricultural operation.  The Court in Gilbert determined that the application of bio-solids was a normal agricultural operation.  In Branton, the Court found that the application of FPW is a normal agricultural operation. This means that the spreading of FPW is protected by the Right to Farm Act for all agricultural operations across the state.

The way that the Superior Court arrived at this decision is just as important as the holding itself.  First of all, the Court noted that the DEP regulates the spreading and storage of FPW as an agricultural operation. The Court said “we conclude that DEP’s experience and expertise in dealing with the regulation of FPW use and enforcement of the Right to Farm Act also supports a finding that the spreading of FPW is an accepted, well-regulated farming practice.”  This is very helpful because DEP regulations include a number of substances that are not traditionally seen as “fertilizer” by non-farmers.  In this decision, the Superior Court is saying that Courts and other tribunals should defer to the DEP’s judgment on these matters. Continue Reading A Legal Victory for Farmers (Part 1)

Lancaster OnlineLancaster County recently discussed the property tax rates for the 2018-19 tax year for all Lancaster County school districts. Since your school tax is usually much larger than the municipal and county tax, the increase in the school tax rate is going to account for the majority of the increase in your property taxes. With this information, you can start to determine how your property tax reassessment will affect you.

If you live in the Hempfield School District, for example, the 2018-19 school tax millage will be 20.33.  Even if the municipal and county taxes remain the same, a change in the assessed value of your property will mean an increase in your property taxes.  For example, if the value of your property in the Hempfield School District was increased by $100,000.00, your taxes will increase at least $2,033.00 per year.  Because most school districts increase their tax rates every year (unless you live in the Manheim Central School District, anyway), the effect that your reassessment will have on taxes will get greater every year.

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.

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?