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Second COVID relief package clears Congress and offers more and significant small business relief

By Christopher P. FinneyDecember 21, 2020August 5, 2022

Tonight, a second historic COVID relief bill passed both Houses of Congress and awaits signature by President Trump.

The bill provides significant supplemental relief for small business in addition to direct payments to individuals. Here are some highlights of the bill’s business provisions:

Paycheck Protection Program funds distributed under the first relief bill this spring and summer already by law were not to be counted as income, but the IRS had ruled that businesses could not count their expenditure as deductions, which essentially reversed the “tax free” nature of the forgivable loans. Under this bill, for all businesses who received the PPP this spring or summer, Congress has clarified that the expenses are deductible, which results in a benefit of another 30% or more from the previously-granted funds for businesses that are profitable.
A second round of PPP funding will be handed out, but this time it is limited to businesses with documentable and demonstrable downturn of 30% or more as a result of the COVID pandemic. Other tight conditions will apply. Thus, the pool of eligible borrowers (grantees) is far more limited than under the first PPP program. Amounts of the loans (grants) are not yet available.
In a significant give and take for landlords, Congress extended the eviction moratorium until the end of January, but they added $25 billion in assistance to tenants in arrears on their rent, allowing landlords to make application for the funds. It is expected that the Biden administration will extend the moratorium further after he takes office January 20 of next year. The applications are allowed for tenants who meet eligibility requirements, including (i) earning less than 80% of median income, (ii) at least one person in their households has lost a job and (iii) are at risk of losing housing.
Making meals and drinks for business entertainment of clients and customers 100% deductible.

The bill is 5,593 pages in length, meaning there remains a lot of dissection of its intricacies. Attorney Rebecca L. Simpson of the Finney Law Firm will be leading another EmpowerU webinar in early January covering how businesses and individuals can fully take advantage of the deductions and subsidies the bill provides. We will announce that webinar shortly.

More on the bill is detailed here in today’s Wall Street Journal.

Advancing our objective of “Making a Difference” for our clients, Finney Law Firm has made a point of briefing the various COVID relief and legal developments for our clients throughout 2020, and that will continue on this blog into 2021. Stay tuned for updates.

How to properly terminate a residential real estate contract

By Christopher P. FinneyDecember 19, 2020August 5, 2022

This week, the Cincinnati Area Board of Realtors addressed a topic on which I have written previously: The proper form to use to terminate a real estate contract pursuant to the failure of a contingency such as inspection or financing contingency. Their blog entry and this one address termination of the form Cincinnati Area Board of Realtors residential purchase contract.

Cindy Henninger, director of Professional Services of the Board wrote this blog entry about the use of a “Notice of Termination,” which is a one-party notice from the buyer to the seller to exercise a contingency and terminate a contract. No seller signature is required for it to become effective. The other form available from the Board and commonly in use in the greater Cincinnati/Dayton marketplaces is a “Mutual Release,” which is not appropriate for use when the buyer is simply exercising his unilateral right to terminate.

Here’s why: The Release form requires the seller’s signature and therefor his consent. And if the seller refuses his consent, there could be an issue that the buyer did not in fact terminate (but simply rather proposed termination). Then, if the time period lapses for termination pursuant to a financing or inspection contingency while awaiting the seller’s signature, the seller then may say “too late.” I know because a seller tried this on me once.

I wrote on this topic previously, here.

Realtors would be advised to familiarize themselves with the proper form to use. Otherwise, you may find your self in a “what the heck?” moment of lawyerly interpretation over the use of the wrong form, even though everyone knows what you in fact intended.

For assistance with transactional matters, including contract disputes, feel free to contact attorneys Jennings Kleeman (513.797.2858) or Eli Kraft-Jacobs (513.797.2853)

Ohio Employment Law: Be Aware of Retaliation Claims!

By Stephen E. ImmDecember 15, 2020August 5, 2022

Those of us old enough to remember the Watergate scandal from the early 1970s will remember that what brought down Richard Nixon’s presidency was not the burglary of the Democratic National Headquarters in the Watergate Hotel, but rather the cover-up that followed the burglary. A similar principle can be seen in employment law. Often, it is not original act of alleged discrimination or harassment that brings down an employer, but rather a subsequent act of retaliation the employer engages in against the employee who accuses it of discrimination or harassment.

Let’s say you are an employer, and one of your employees claims that they are being paid less than their co-workers because of their sex or race. You, as the employer, happen to know that is not true. You have legitimate, non-discriminatory reasons for paying this particular worker less. Perhaps he is less productive than his co-workers, or perhaps he has less experience. Nevertheless, you find yourself being falsely accused of race or sex discrimination.

You understandably are angry, right? You have been falsely accused of a really bad act. Essentially, you have been accused of being a racist or sexist. Can’t you fire the employee who has made this false accusation against you?

No, you can’t. At least not legally.

Retaliation is a normal human response. That is why it happens so often. When any of us is attacked, regardless of whether the attack is physical or verbal or otherwise, our immediate impulse is to retaliate. It is almost a reflex. We instinctively act to defend ourselves from the attacker. That is why retaliation claims are so common, and why they get so many employers into trouble. When we retaliate, we are just doing what comes naturally.

Despite retaliation being a normal and natural human response, in this context the law says the employer CANNOT legally do it. As long as the employee has a reasonable belief that his allegation is true – even if he turns out to be completely wrong – the employer is prohibited from retaliating against him in any form for making the accusation. This principle not only applies when the accusation is made as part of a formal legal action, such as filing a charge with a government agency, but also when an accusation is made informally, such as in a conversation with a supervisor or human resources employee.

The prohibition against retaliation is very broad. Prohibited retaliation includes not just obvious actions like firing the employee, but also more subtle actions, such as harassment, excluding the employee from opportunities for overtime, or denying the employee a promotion.

If you have questions about your rights as an employer or an employee when it comes to retaliation, it is wise to seek the advice of an experienced employment attorney before you act. Just remember what happened to Richard Nixon!

The eviction moratorium, the ghosts of regulations past, present and future

By Christopher P. FinneyDecember 14, 2020November 19, 2023

Entertain us, if you will, as we serve as Jacob Marley to landlords in visiting the ghosts of eviction moratoriums, past, present and future.

After months of experience with the eviction moratorium imposed by the Centers for Disease Control, we now know that most residential evictions — even those for non-payment of rent — can proceed per normal procedures, at least until new regulations are issued and the moratorium never applied to eviction for issues other than non-payment (e.g., criminal activity and damaging the premises,)

The past

As reported here, the Centers for Disease Control on Friday, September 4, 2020 imposed a residential eviction moratorium for non-payment of rent in certain limited circumstances through the end of the year due to the impact of COVID-19. That relief required the tenant to certify that 1) the individual has used best efforts to obtain government assistance for the payment of rent, 2) the individual falls below the above-income thresholds ($99,000 for individuals and $198,000 for those filing jointly), 3) the individual can’t pay rent due to loss of income or medical expenses, 4) the individual is using best efforts to pay the rent or as much of it as he can, and 5) eviction would render the individual homeless.

And as we report here, the CDC clarified that Order, allowing for more vigorous actions by landlords pursuing eviction: Cross examination of a tenant who claims he has met the criteria, allowing commencement and pursuit of an eviction action even if the set out is not until after the first of the year, and imposing criminal penalties upon tenants making false certifications.

The present

Our experience in recent evictions is that many tenants cannot stand up under cross examination as to the CDC certifications: They usually have paid no rent at all, which hardly ever complies with the CDC “best efforts” criteria, and it is unlikely the eviction will result in homelessness for the vast majority of tenants.

In Hamilton County, before conducting the forcible entry and detainer hearing, the Magistrate has a separate evidentiary hearing on whether the CDC criteria are met — including allowing a landlord to cross examine a tenant — and then, when the tenant fails to meet this burden, allows the eviction hearing to proceed. In all, the takes an extra 5-10 minutes to try an eviction case and we have not yet failed to exceed the CDC standards.

The future

Add to all of this the fact that an eviction commenced today won’t result in a set out until well into January. Thus, the moratorium no longer has any application to new evictions being filed.

Finally, we don’t know either how the Trump administration will address the regulations after their year-end expiration until his term ends on January 19th, or how the new Biden administration will address the issue thereafter. For both Presidents, the issues are difficult: Millions of tenants are facing severe financial hardship as a result of the COVID-19 crisis, but on the other hand, landlords have to pay bank loans, real estate taxes, building repairs, and for insurance. Many can’t meet their obligations if tenants are not paying their rent. Then, if they start en masse to default on mortgage loans, it could destabilizing banks as in 2007-08. These are not easy issues for anyone.

So, the next few weeks and months will determine a new course for landlord-tenant legal relationships. Stay tuned for more updates, and contact Chris Finney (513.943.6655) with any Ohio or Kentucky eviction issues you may have.

Do Realtors need to maintain commercial general liability insurance?

By Christopher P. FinneyDecember 14, 2020August 5, 2022

A Realtor recently posed this question to me:

How often are the agents getting sued when/if a client falls at someone’s house during a showing? To me it seems unlikely but recently in a CE course they tried to scare us.

My answer follows:

Liability generally is fault-based: Did you do something negligent to endanger a client? The standard is the normal “standard of care” a buyer expects from his Realtor. If the Realtor has that duty, fails to adhere to it, and someone is injured as a result, then liability may ensue.

Does a Realtor have a duty to-pre-inspect for hazards on and about a property? To turn on lights, to check for loose floor boards, to smooth edges of carpet that have curled? To make sure a buyer does not stick their hand in the electrical panel?

I never have heard of a scenario in which the Realtor was accused of negligence of this type, but I assure you if someone is seriously hurt, the Plaintiff’s attorney will sue everyone involved and attempt to say you “fell below the expected standard of care.”

So, prudence would call for everyone (Realtors, lawyers, appraisers, contractors, investors) to each have commercial general liability insurance against these types of risks. For Ohio real estate salesmen, this insurance would typically be maintained by his broker, and that coverage would extend to the agent. Each agent should not need to obtain his own coverage.

It is generally not expensive, but it is helpful to have.

Beyond that, there are certain special coverages that are advisable: Errors and omission insurance (sort of malpractice insurance for real estate brokers and agents), fiduciary coverage in case your employees steal from you or steal client funds (or property), and auto liability coverage, which is auto insurance for those engaged in commerce on your behalf (driving to and from appointments, getting signatures on contracts or delivering contracts, delivering keys, etc.).

For every business owner and individual, we recommend selecting a qualified insurance agent, and sit with him as the business is created, and as it grows over time, to discuss the amounts, deductibles, and types of insurance to maintain. Someday, you may be very happy that you did.

Congratulations to Jennings Kleeman, Ohio’s newest attorney

By Christopher P. FinneyDecember 14, 2020August 5, 2022

Finney Law Firm just added a new attorney, Ohio’s newest attorney, when Jennings Kleeman was sworn in to the Ohio Bar by Ohio Supreme Court Chief Justice Maureen O’Connor today.

Jennings has joined our firm’s transactional group, which focuses on real estate, corporate and estate planning as our latest attorney. His initial focus will be on real estate and real estate title, both commercial and residential. Jennings served as a law clerk with Finney Law Firm before joining us an an associate. Read more about Jennings here.

Warm congratulations to Jennings Kleeman!

Tips on real estate title and debt in divorce proceedings

By Christopher P. FinneyDecember 11, 2020August 5, 2022

Over my years of practice, I have seen countless (and needless) debt and real estate title problems arising from divorce proceedings, some arising many years after the divorce decree goes on. In this blog entry, I address several of these.

For anyone going through a divorce, or who has already been through a divorce, I’d recommend “checking all the boxes” in this blog entry to avoid costly problems arising from a divorce. (Just because your divorce was years ago does not mean some of these problems won’t still raise their ugly head.)

First, on Day #1, cancel all joint credit cards and terminate all joint lines of credit. Time and time again, I have seen one spouse run up credit card charges on joint accounts, and run up lines of credit — maybe secured by a lien on the house — to the max either as the divorce is proceeding or after the divorce. Worse, they have spent it on jewelry, trips, cars, flowers and candy for the new girlfriend (classy!). On Day #1, and I mean Day #1, stop the soon-to-be ex-spouse’s access to joint credit. Otherwise, when they go bankrupt or insolvent, you may be left holding the bag.
Terminate all accounts on which you are liable: The one that is most common is a cell phone account. But it might be a utility service (water, sewer, gas, electric), a joint account at a retailer, a business line of credit, etc. Close those accounts or take your name off of them. Do it in writing. Do it promptly as the divorce proceeds.
A common resolution of the division of the home (or other property) jointly owned by the divorcing husband and wife is that the divorce court orders one spouse to convey their 1/2 interest in such house or property to the other party. And associated with that that, the grantee then is ordered to refinance the mortgage on the house so that the grantor is released from the debt associated with the the-existing joint mortgage. That is fine as far as it goes, but countless times I have seen one or the other spouse not follow through on that. Here are some problems I have seen with this:
- The ex-spouse who is supposed to grant the real property delays interminably and fails to do so. The grantee ex-spouse ignores the failure, sometimes for years. This is a huge mistake. Get that deed.
- The grantee ex-spouse gets a deed, but tucks it into her dresser drawer and forgets about it. You have to record that deed immediately, otherwise intervening liens and bankruptcy of the grantor ex-spouse filings take priority! In the case I recall, the grantor spouse filed bankruptcy years later, and that 1/2 interest in the house went to the ex-spouse’s creditors rather than to the grantee. The problem was not fixable.
- The grantee ex-wife was the signer on a line of credit for the grantor ex-husband’s business. That line of credit was secured with a lien on their marital residence that was ordered by the Court to be granted to the ex-wife. The ex-husband did in fact give the deed to the ex-wife, but ex-wife did not refinance the house as the divorce decree required (which would have almost certainly revealed the second mortgage securing the line of credit that she forgot). Thus, the second mortgage securing the line of credit was never released. Thirteen years later, the ex-husband hit hard times financially, and ran up the line of credit — that was still secured with a mortgage against the ex-wife’s house. Ex-wife’s property is then subject to a six-figure second mortgage for the ex-husband’s post-decree debt, rather than free of that debt as it should have been. So, cancel all secured lines of credit immediately, and get a title exam on the granted house to assure title you are getting is clear.

These things are not automatically addressed by either a divorce filing or by the decree in a divorce. They have to be carefully implemented to conclusion. Everything bad that can go wrong in these steps does go wrong, time and time again. And while said ex-spouse may be on the hook for the breach of the divorce decree, that does not change the reality that the third party creditor has a right to get paid. And if the ex-spouse is flat busted, there will be no recovery from him or her. This is commonly the case.

At present Finney Law Firm does not handle most domestic matters. But, these are some tips to form a discussion with your divorce attorney to assure all “I’s” are dotted and all “T’s” are crossed in divorce proceedings.

Please share this with a friend going through a divorce. It may save them headaches and a lot of money.

Ohio Bankruptcy Solutions: Suspended driver’s license is a Catch-22

By Susan Cress BrowningNovember 25, 2020August 5, 2022

Many of my clients have issues with medical debt, credit card debt, student loans, repossessions, etc. These are the typical types of debt that I encounter. Occasionally I have a client who has none of those debt issues but has one particular area of concern: A suspended driver’s license due to driving without insurance.

This client has usually had an automobile accident and at the time they, knowingly or unknowingly, had no insurance coverage. The plaintiff in this scenario must get coverage for the accident from their own insurance carrier. In turn, the insurance carrier turns to the debtor to recoup that loss.

Most times the debtor cannot pay this debt due to low income and the insurance company for Plaintiff puts a hold on the debtor’s driver’s license. This is supposed to create such an inconvenience to the debtor that they will be encouraged to repay the debt. However, what I see happening is the debtor can no longer operate normally in their daily life, cannot get to work, puts others out in order to get rides, or lives in fear of being pulled over on a suspended license. This debtor could get caught in a Catch-22 where they cannot get to work due to the license suspension and therefore cannot make money to get their license back. To add insult to injury, the Bureau of Motor Vehicle (BMV) will require reinstatement fees to be paid in addition to satisfying the debt to the insurance company.

There is light at the end of the tunnel for this debtor. With a few caveats, this is a type of debt that is dischargeable in bankruptcy. Not only is the debt to the insurance company dischargeable, but the reinstatement fees are also discharged.

Once a bankruptcy case is filed, the debtor is given a copy of portions of the bankruptcy petition as well as Notice of Bankruptcy filing. The client will take the paperwork to the BMV who will send the paperwork to Columbus. The BMV in Columbus will respond as to what will be required to reinstate the license in addition to the bankruptcy paperwork. The additional requirements usually entail procuring an SR-22 from an insurance company (this is proof of meeting the insurance requirements of the state) and depending on how long your license has been suspended, retaking the driver’s test. If you already have your SR-22 and do not have to take the test, you could have your license back same day.

There are, however, a few exceptions to the general rule of dischargeabiity. If the debtor was intoxicated at the time of the accident the debt may not be dischargeable. Also, if the conduct of the debtor was proven to be intentional, dischargeability could be called into question.

If you are experiencing an economic downturn and cannot make progress on paying the debt to reinstate your license, contact Susan Browning (513.797.2857) at Finney Law Firm for a FREE consultation.

Ohio and Kentucky property tax valuation challenges vexing in 2021

By Christopher P. FinneyNovember 22, 2020August 5, 2022

To appeal your taxes or not appeal your real property taxes, that is the question.

For some property investors, 2020 has been a difficult year: Many retail properties, hotels and office buildings have suffered from high vacancies, high rental defaults, and slow-to-no calls from new tenants. For these categories of income-producing properties, the enormous challenges presented by COVID-19 seem to have caused a significant reduction in property values.

Thus, it makes perfect sense to challenge those values in 2021, right?

Well, not so fast. Here are some considerations:

State of Ohio

Tax valuation challenges filed in Ohio in 2021 are for tax year 2020, and the “tax lien date,” the target date for valuation decisions is January 1, 2020.
That is, of course, months before the deleterious effects of COVID-19 impacted the USA real estate market.
Therefore, an Ohio property owner is likely to lose a valuation challenge brought in 2021 based primarily or solely upon a downturn starting in March of April of 2020.
Even worse, a property owner is entitled to bring tax valuation challenges only once in a “triennial,” the 3-year cycle which Ohio uses for Board of Revision cases.
Hamilton County, Clermont County, Butler County, Franklin County (Columbus) and Montgomery County (Dayton) all start new triennial cycles in tax year 2020. This means that if a property owner brings and loses a tax valuation challenge brought in calendar year 2021 in those counties, the valuation by law must stay in place through tax year 2022 (first challenged again in 2023).
On the other hand, if a property owner waits until first quarter of 2022 to file a challenge (for tax year 2021) in those counties, he will have a much stronger basis for valuation reduction (valuation target date is then January 1, 2021).
On the other hand, Warren County, Lucas County (Toledo), Stark County (Canton) and Cuyahoga County (Cleveland) (among others) are in their last year of the triennial in 2020, meaning a property owner can bring a complaint in 2021 (win or lose) and then turn around and bring a fresh challenge in 2022.

So, an Ohio property owner should carefully consider whether to bring a 2021 challenge. It could bring great rewards or lock in an articificllay high value for three years, potentially unnecessarily.

State of Kentucky

Kentucky is an entirely different matter. Challenges of value — which are started by PVA meetings the first two weeks of May — in 2021 are for tax year 2021. Thus, the full impact of COVID-19 on property values are at issue in challenges in 2021. It is much more straightforward.

Conclusion

For assistance with an Ohio or Kentucky property tax valuation matter, contact Casey Jones (513.943.5673) or Chris Finney (513.943-6655).

Hamilton County, Ohio jury trials indefinitely suspended

By Christopher P. FinneyNovember 15, 2020August 5, 2022

The COVID-19 pandemic crisis has spurred a second suspension of jury trials in Hamilton County, this one “until further notice.”

This applies to to both civil and criminal jury trials. As far as other proceedings (from conferences with the Judge to non-jury trials), it is “hit or miss” and each case and each Judge may have a different schedule. However, our experience is that things are proceeding, if slower than normal.