Aaron S. Marines

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This is a classic story of a divided association Board. Two Board Members think one way while the third Board Member disagrees. In this case, the two new Board Members made some criticisms of prior Boards. The single Board Member, who happened to be the Board President, was on the previous Boards being complained about. This is (unfortunately) not a unique story. The twist in this case is that the solo Board Member filed a defamation suit against the Association. I have had lots of people related to Associations – Board Members, property managers, contractors – ask me about defamation or libel law suits. This is one of the few times I have seen a case make it to Court.

The solo Board Member claimed that the other two Board Members made defamatory statements about him. He alleged that the statements lowered his esteem and reputation among the Board Members and the vendors who work with or for the Association. He said that the two Board Members’ statements caused people in the neighborhood not to associate with him and to “discount his authority as a Board Member.” …
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The Right to Farm Act protects farmers from being sued by their neighbors.  The RTFA says that a person cannot sue an agricultural operation for a nuisance arising out of a normal agricultural operation more than one year after the operation started or was substantially expanded or altered.  This one year limitation is a “statute of repose.”  That means that neighbors have no more than one year to bring a complaint, even if an injury or problem occurred after the year expired.  A recent case (Burlingame, et al. v. Dagostin) provided another victory for farmers.

In this case, a group of neighbors complained when a farmer began spreading liquefied swine manure (LSM) from its finishing operation onto their farm.  When I say “group of neighbors” I mean a big group.  I counted 83 Plaintiffs in the caption.  The Dagostins operated Will-O-Bet Farm since 1955.  In 2011, they switched from a beef farm to a swine finishing operation.  They received their CAFO permit and nutrient management plan approval in 2012.  They began spreading LSM in June 2013.  In May of 2014, a large group of the neighbors brought a suit for nuisance because of the odors of the manure.  Both the Trial Court and the Superior Court held that the Right to Farm Act did not allow neighbors to bring this action because the action was started more than one year after the agricultural operation started.…
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One of the questions I am asked most frequently from condominium and homeowner Association boards (and managers) is whether the Association is liable for injuries that occur on the common elements? The answer that I always give is that an Association is only liable for an accident on the common areas if they knew of the problem and failed to take reasonable care to make the common area safe. The recent case of Hackett v. Indian King Residents Association reinforced this answer.

In this case, a resident of the Association slipped and fell on some branches on a common area sidewalk. The branches fell only hours before she slipped on them. It was dark when the resident fell, so she could not see the branches that caused the accident. …
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This is a post about reasonable accommodations that does not involve an emotional support animal. I cannot remember the last time I did not write about dogs. Recently, the Pennsylvania Federal Courts ruled that an Association does not need to provide the exact accommodation requested, if the Association offers accommodations that achieve the same function.

In this case, a resident needed a walker to get around. She would use the walker to get from her condominium unit to the lobby of the building. From there, she would leave the walker in the lobby of the building and use her cane to get to her car. The resident insisted that she needed to leave her walker in the lobby of the building.

The Association was not happy leaving the walker in the lobby. It offered a handful of possible solutions. The Association offered to store the walker at the concierge’s desk and retrieve it anytime she asked. They offered to have someone bring the walker to her parking space so she could use it to get out of the car. This building has valet parking, so the Association offered to allow her to use the valet parking (presumably free of charge). The resident rejected all of these solutions. She insisted that she needed to store her walker in the lobby.

The resident sued the Association under the Fair Housing Act, claiming that they did not provide a reasonable accommodation for her disability. The District Court and the Third Circuit Court of Appeals both sided with the Association. In doing so, the Court made two extremely important points that help guide Associations.…
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Last week, a new law was passed that allows municipalities to prohibit Video Gaming Terminals (VGT) in truck stops. If a municipality wants to opt out of allowing VGTs, it must pass a Resolution that prohibits VGTs before September 1, 2019. This new law reverses the 2017 gaming law that forced many municipalities to permit VGTs, provided certain conditions were met. This bill was sponsored by two Pennsylvania Senators from Lancaster County, Scott Martin and Ryan Aument.

In 2017, Pennsylvania amended its gaming laws to permit “mini casinos” and VGT arcades. The law gave different rights to counties depending on whether a casino was located in the county. If the county had a casino, the municipalities in that county could prohibit VGTs. If the county did not have a casino already, the municipalities could opt out of mini casinos, but were not allowed to prohibit VGT arcades in “truck stops.” A truck stop was given a very broad definition in this new gaming law. Practically, many convenience stores could be built or converted to meet this definition.…
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Up until April 26, 2019, short-term vacation rentals (like Airbnb, VRBO, HomeAway, etc.) were probably allowed in zoning districts where single family homes are permitted. In April, the Pennsylvania Supreme Court decided that a short-term vacation rentals are not permitted as a single family use.

What do municipalities do now?

First, we should review how the Courts got to this point. It is an interesting development. The first case (Marchenko) dealt with a homeowner who rented her home for less than 25% of the year. The second case (Shvekh) had homeowners who rented their home for about half the year. The third case (Slice of Life) has an owner who bought the property solely as an investment, and never lived there at all. The Commonwealth Court said the first was OK, and then the next two cases built on that decision. …
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Wrestlemania was this past weekend, and Linda McMahon is rumored to be stepping down as the head of the Small Business Administration.  I have a rule that when those two things happen in the same week, it is time to link back to my favorite blog post: How Your Small Business is Like Professional Wrestling.

My son and I are still watching wrestling.  And there are even more lessons you can learn from wrestling.  Here are more to add to the list:…
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I recently presented a national webinar explaining interest rate swaps, caps and floors.  I had the pleasure of presenting with Chrys A. Carey, counsel with Morrison and Foerster in Washington D.C. I have written before on the growing interest in these hedge agreements.  Chrys and I and a number of the “attendees” of the webinar agreed that hedge agreements such as interest rate swaps and forward swaps are becoming more a part of commercial real estate transactions.

Chrys and I brought different perspectives to our presentation.  While I am involved with the borrower or lender, Chrys has much more knowledge with the regulatory side of hedge providers  and traders under the Commodity Exchange Act and the Dodd-Frank Act Regulations.  Despite these different perspectives, our  overlap in experience brought up some interesting discussions.  Some of those are:

  • What happens after LIBOR? Most hedge agreements use LIBOR as the standard for interest rates.  Luckily, most of the variable interest rate loans that are involved in these transactions also use LIBOR as the standard interest rate.  As you may know, LIBOR is set to be discontinued sometime in the next few years.  Chrys believes the hedge providers and exchanges will settle on one single benchmark interest rate (such as the Wall Street Journal Prime Rate).

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Associations and Unit Owners frequently disagree over who is responsible to pay for repairs to certain items.  Sometimes it is easy to figure out.  The Association needs to pay for repairs to the community swimming pool, and the Unit Owner needs to fix the stove.  Whenever the item to be repaired gets close to the boundary of the Unit, however, the answer to this question becomes more difficult.  I came across an interesting case, Winchester Condominium Association v. Auria, where the question was who is responsible to pay for re-wiring a wall outlet: the Unit Owner or the Association?

In this case, the Association required all of the Unit Owners to replace aluminum wiring in the outlets of their Units.  The Unit Owners were informed that the replacement was required for safety reasons and for the Association to maintain property insurance. [Note:  I have done this a few times for dryer vents, pans under hot water heaters and fireplace insulation.]  Every Unit Owner made arrangements to have the wiring in their outlets replaced.  Every Unit Owner, that is, except for one. …
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