Real Estate, Zoning & Land Use

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?

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?

I continue to talk to friends and neighbors and clients who are confused, concerned, annoyed or worried about the reassessment and what it means for their future tax bills.  I’ve heard a lot of people say that the assessors are off their rockers if they think their home’s value has increased as much as the reassessments show.  It’s obvious the property reassessments are still a hot topic and seem to be on every homeowner’s mind.  I anticipate I will continue to be involved in assessment discussion even after June 1 rolls around and the final notices land in our mailboxes.

If you’ve read my previous blogs, you already know how the reassessments work and have heard my tips to help you decide if an appeal may be your best option.  Hopefully, you’ve taken my advice and started to do some research of your own.

If you think you found something that will help you show that your assessment is off, start preparing for the appeal process now.  If any of the major facts in your assessment are incorrect, you may have a quick and easy challenge. Let’s face it, if your square footage has all of a sudden doubled, it’s an easy appeal.  But most other situations will require some more leg work on your end, and likely a lot more time to prepare.  Continue Reading More About the Lancaster County Reassessment – First Step

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

By now, all property owners have had some time to stew over the preliminary reassessments they have received.  You’ve read our recent post on the Lancaster County property reassessment, searched Google for more information and discussed it with friends and neighbors.  The good news is, you don’t have to do anything yet.  That doesn’t mean, however, that it’s not time for you to start considering your options and preparing for the inevitable.

Final assessments will be mailed to all property owners on June 1, 2017.  You have 40 days from the date of final notice to file your appeal if you don’t agree with your property’s assessed value or the value becomes final.  As is the case with everything else in life, that time will fly by.  And because the appeal process may in some cases require an appraisal of your property, your decision to begin the process should be made sooner rather than later. Continue Reading To Appeal, or not to Appeal – That is the question after you receive your property reassessment.

One of my coworkers (thanks Taylor!) recently shared an interesting article with me: YouTubers Face Fines, Possible Eviction For Making Videos From Their Home. Since I often help clients start new business ventures, many of whom begin operating out of their home, this story was particularly interesting to me.

In short, the article describes a situation where a group of friends lived together and professionally make YouTube gaming videos and vlogs – one of the residents has nearly a million subscribers on his Channel. The residents of the house received a visit from their county code enforcement official, who said that the group was allegedly in violation of a zoning restriction that prohibited a certain number of unrelated people living in the same residence.

In addition, the group was allegedly running a business out of their house without a license and if they didn’t either stop operating or obtain a business license, they could be subject to fines of up to $136 per day.

While the definitions of what constitutes “doing business” can vary from jurisdiction to jurisdiction, in Cobb County, Georgia, filming and uploading YouTube videos can constitute doing business and requires a business license.

So what lessons can be learned from the above situation? Continue Reading Legal Considerations of Doing Business at Home

What did you do on your snow day? I woke up, got a cup of coffee, and brushed up on the changes to Pennsylvania’s Mechanics’ Lien Law in my pajamas. Anything to put off several hours of snow shoveling and to stave off the regret of not investing in a snow blower.

Anyway, back to why you’re here: mechanics’ liens. What is a mechanics’ lien? It’s a legal claim, technically a security interest, against property that has been remodeled or improved, and is typically held by subcontractors and suppliers to ensure that they get paid for the work, services or supplies that they contributed to the project.

Pennsylvania’s Mechanics’ Lien Law recently underwent some fairly significant changes. Act 142 of 2014 modified Pennsylvania’s Mechanics’ Lien Law and required the creation of a standardized online directory called the State Construction Notices Directory. For projects over a certain dollar amount, Act 142 also provides property owners the ability to limit subcontractors’ mechanics’ lien claims if they don’t comply with certain requirements. Continue Reading Questions and Answers on Pennsylvania’s New Mechanics’ Lien Law and the State Construction Notices Directory

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?

Recently a property management company was charged with wire fraud for its actions in managing a San Diego, California association.  The property manager was directed to obtain bids for a construction project. According to the criminal indictment, the property manager concealed all of the lowest bids.  Because of this, his affiliated company turned out to have the lowest bid on the project.

According to the indictment, the property manager’s actions get worse.  During the construction, the property manager discovered asbestos that needed to be removed. He negotiated a change order from his Association Board – and an increased amount for the project – for this asbestos removal.  He then concealed the presence of asbestos from the people doing the job. That way, the property manager collected all of the extra asbestos removal fee, while the construction workers removed the asbestos without following the proper procedures.

The property management company and its principal have been charged with four counts of federal wire fraud.  This indictment carries a maximum penalty of twenty years in prison and a $250,000.00 fine.  In addition, the indictment seeks the recovery of $247,000.00, the cost of the construction project. Continue Reading Property Manager Charged with Wire Fraud in HOA Construction Project

Today on Facebook, a friend of mine posted about a nightmare experience she had with an Airbnb reservation. While traveling for business, she often relies on Airbnb short-term lodging rentals as an alternative to booking a hotel. “My host literally told me that there would be a string of guests with no one cleaning or changing sheets and towels between them. Also her landlord had just called her to tell her to stop Airbnbing her apartment.”

Airbnb and similar services such as HomeAway have become increasingly popular for providing short-term lodging in residential properties across the globe. These services don’t actually own property, they are marketplaces where “guests” search for various types of accommodations – for example, Airbnb offers entire houses or apartments, a private room, or even shared rooms with their “hosts.”

The above scenario is among the more tame examples of Airbnb horror stories that I’ve read. While the majority of my friends who have utilized the service have had great experiences, the Internet is rife with cautionary tales for hosts and guests alike, including guests trashing an apartment and these horror stories from Reddit.

Let’s get back to my friend’s situation above. Does the landlord have the right to prohibit their tenant from using Airbnb? Continue Reading Airbnb for Landlords