National REIA Applauds US District Court Ruling Upholding Fourth Amendment that Protects Property Owners from Unnecessary Gov’t Harassment
Cincinnati, Ohio)  The National Real Estate Investors Association (National REIA) issued a statement today applauding the U.S. District Court’s (Southern Ohio) recent decision stating that the city of Portsmouth’s (Ohio) occupational licensing requirements, which are imposed upon landlords violates the Fourth Amendment to the United State Constitution. 
 
Charles Tassell, Chief Operating Officer of National REIA said “Today’s ruling laid bare the excuses used by local governments to steal the freedoms of property owners.”
He further added that “The 4th Amendment is still alive and well, and citizens should NOT be forced to have their homes intrusively ‘inspected’ by warrantless searches.  Every local government should take note that warrantless searches are STILL illegal and unconstitutional.”
 
Regarding the ruling itself, Tassell said “The ruling won by the 1851 Center For Constitutional Law was a victory for freedom against a tyranny with which the Founding Fathers were all too familiar.  Citizens of the United States have an expectation to live without local, state or federal inspection of their home based on flimsy excuses disguised as law.”
 
Judge Susan Dlott, of the Western Division of the Southern District of Ohio, held as follows: “[T]he Court finds that the Portsmouth [Rental Dwelling Code] violates the Fourth Amendment insofar as it authorizes warrantless administrative inspections.  It is undisputed that the [Rental Dwelling Code] affords no warrant procedure or other mechanism for precompliance review . . . the owners and/or tenants of rental properties in Portsmouth are thus faced with the choice of consenting to the warrantless inspection or facing criminal charges, a result the Supreme Court has expressly disavowed under the Fourth Amendment.”
 
For more information and to read a copy of the the Court’s ruling visit www.realestateinvestingtoday.com.

September 3, 2015 4:49PMforeclosure_forsale_sign

 

In total, Fannie Mae increased the maximum number of allowable days for a foreclosure sale for 33 states, effective for foreclosure sales on or after Aug. 1.

Fannie Mae made the announcement Thursday in an email to its servicers.

According to the announcement, Fannie Mae increased the maximum number of allowable days for the following jurisdictions: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Nevada, New Mexico, New Hampshire, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

As part of its servicing guide, Fannie Mae establishes time frames under which it expects routine foreclosure proceedings to be completed.

According to Fannie Mae, the maximum number of allowable days takes represents the maximum allowable time lapse between the due date of the last paid installment and the completion of the foreclosure sale.

The allowable time frame also signifies the time typically required for what Fannie Mae calls a “routine, uncontested” foreclosure proceeding.

The allowable time frame reflects the legal requirements of the applicable jurisdiction, and takes into consideration delays that may occur outside of the control of the servicer, Fannie Mae said.

If the number of days to complete a foreclosure sale exceeds stated maximum number of allowable days and the servicer does not provide an adequate explanation to Fannie Mae as to the reasons for the delay, Fannie Mae requires the servicer to pay a “compensatory fee.”

According to Fannie Mae, the list of “reasonable explanations” includes:

  • Bankruptcy
  • Probate
  • Military indulgence
  • Contested foreclosure
  • The mortgage loan is currently in review for HAMP
  • The mortgage loan is in an active mortgage loan modification trial plan or unemployment forbearance
  • Recent legislative, administrative, or judicial changes to existing state foreclosure laws, provided that the servicer is diligently working toward resolution of the delay to the extent feasible

Fannie Mae noted in its announcement that there is currently a compensatory fee moratorium for Washington D.C., Massachusetts, New York and New Jersey and stated that the moratorium will last, “at a minimum,” until Dec. 31.

 
Hey Mike I hope you & your family are ready for the Holidays
I purchased you Landlord on Auto Pilot course great stuff & have used it on
all my rentals with much success.
 
​not sure how you did this John, but the date is Dec 14, 2014 – i guess it was hung up in cyber space somewhere

 

Ran across a new renter they are very interested in my new home.
He ask if I would consider corporate lease

​. 

He said his company would pay for his rent monthly or give him the money to

​ 

pay.

​ 

I looked through your course & did not see anything on how to handle

​ 

corporate leases?

ANSWER: ​I have done a boatload of these with companies and especially insurance companies when their victim needs housing from a fire, tree smashing, tornado or whatever.
 
​​All you do john, is put the company name as the TENANT, because they are the responsible party, and list the occupants as occupants.
 
#2 way to do it, is to list occupants as tenants and company as “Co-Signer”
 
either way will work
 
This is a single family rental house for residential use, not a commercial property.
Therefore, use the residential lease.​

 

 
Questions:

Can an S corporation own an interest in another business entity?


An S corporation may own an interest in another business entity.

An S corporation can be a member of an affiliated group by owning 80 percent or more of the stock of a C corporation. The group then can elect to file on a consolidated basis, if other affiliated group rules are met. But the S corporation itself cannot join the consolidated group.

Although in general only individuals can be shareholders in an S corporation, an S corporation can own an S corporation if the subsidiary corporation would otherwise qualify as an S corporation if the parent’s shareholders held the subsidiary’s shares directly, and the taxpayer elects qualified S corporation status for the subsidiary.

Generally, for federal tax purposes a corporation that is a qualified S corporation subsidiary is not treated as a separate corporation, and all assets, liabilities, and items of income, deduction, and credit of a qualified S corporation subsidiary are treated as assets, liabilities, and items of income, deduction, and credit of the S corporation.

An S corporation can also be a partner in a partnership or a member of an LLC.

 

J. Michael Grinnan, CPA.CITP
Certified Public Accountant
9900 Corporate Campus Drive
Suite 3000
Louisville, KY 40223
Main Number 1-502-657-6333
Email Mike@JMGCPA.com.

 

Bigger Pockets and Brandon Turner hit another home run!!  

Making the Bigger Pockets “7 Top Business Books To Help You Put Vital Systems In Place” is like winning an Oscar or an Emmy! Thank You again.

I want to share this award celebration with you  – the next 100 Investors who buy my book “Landlording On AutoPilot” will get two THREE FREE Bonuses:  (already got my book, then buy as a gift for special person)

BONUS 1: a brand new form, not in my book, named the “Animal Application Form” 

BONUS 2: “159 Point Rent Ready Checklist”

BONUS 3: “How I Bought 50 Houses in a Year While Working My Full Time Job” mp3 audio, (keep in mind, I started with less than $1,000 in my savings account and I have never gone to a bank to buy an investment property.)

To Redeem Your 7 Top Books Bonus, simply buy my book, then email a legible PDF or cell phone photo of your receipt to News@MikeButler.com 

To Your Continued $uccess,

SigMikeButler

 

P.S. you can call Eric at 502-655-1966 to order as well

 

A federal judge in Brooklyn explained in a court memo released on Wednesday why he rejected a landlord’s attempt to use a child’s Hispanic ethnicity to argue for reduced damages in a lead poisoning case.

Judge Jack B. Weinstein ruled that the attempt violated federal law governing the use of statistical generalizations based on race or ethnicity, and forbid experts on both sides to discuss them.

A lawyer for Mark Kimpson, the landlord, was seeking to reduce the $2 million in damages awarded to the child and his mother after she sued over lead poisoning.

A jury awarded the damages on July 10 after finding that the apartment the family rented from Mr. Kimpson contained lead-based paint that had not been properly removed or contained.

“Posed is the question,” Judge Weinstein wrote, “can statistics based on the ethnicity (in this case, ‘Hispanic’) of a child be relied upon to find a reduced likelihood of his obtaining higher education, resulting in reduced damages in a tort case? The answer is no.”

To contest the damages, Mr. Kimpson’s lawyer, Roger V. Archibold, needed to persuade the court that the boy’s prospects for attending college and earning a degree if he had not had lead poisoning were already low. Mr. Archibold argued that because Hispanics are less likely to attend college, the boy’s chances for doing so were improbable.

In a 52-page memo, Judge Weinstein wrote that he rejected the argument based on a case in which the use of race- and ethnicity-based statistics was found to be in violation of the Constitution’s equal protection and due process clauses.

The memo on Wednesday does not affect the jury verdict, which Mr. Archibold has appealed to the Court of Appeals for the Second Circuit.

Mr. Archibold said Judge Weinstein had “mischaracterized” the defense’s argument about the child’s ethnicity. Mr. Archibold said he was confronting an expert hired by the plaintiffs whose statements at the trial did not seem to line up with the study he was citing.

“The expert was confronted with the evidence of the study that he quoted,” he said. “He opined that the study gave him these statistics and it did not.”

Judge Weinstein added that Mr. Archibold was required to use specific characteristics of the child and his family, rather than the characterization of the child as a member of a particular ethnic group, in projecting damages. The boy’s father has a bachelor’s degree and his mother has a Master of Fine Arts. Both held responsible income-generating jobs, the family was stable, and the parents were caring, Judge Weinstein said.

“Based upon his specific family background, had the child not been injured, there was a high probability of superior educational attainment and corresponding high earnings,” Judge Weinstein wrote. “Treated by experts as a ‘Hispanic,’ his potential, based on the education and income of ‘average “Hispanics” in the United States,’ was relatively low.”

The boy’s mother, Niki Hernandez-Adams, rented a basement apartment from Mr. Kimpson in an old building at 490 MacDonough Street in Bedford-Stuyvesant, where she lived while pregnant and after the boy turned 1.

During a visit to the pediatrician after his first birthday, the boy was found to have elevated levels of lead in his blood. Ms. Hernandez-Adams claimed in her lawsuit that the lead poisoning had damaged the boy’s central nervous system.

Mr. Archibold argued that Mr. Kimpson had sufficiently contained the hazardous lead-based paint in the apartment. Before the family moved in, the landlord had covered the old paint with new paint and drywall, according to the judge’s memo.

Mr. Archibold blamed the family’s dog for severely scratching the walls and the moldings in the apartment, releasing lead dust. He also claimed that the infant’s cognitive and behavioral difficulties resulted from other medical conditions of his mother during her pregnancy.

 

Good Saturday Morning!,

this morning, I got an email with a link to a new article on the effects of the recent U.S. Supreme Court decision involving Fair Housing.

This is a fantastic follow up from this week’s POWER LUNCH Chalk Talk webinar on Tuesday
(Free Investor Training Weekly Webinars at noon)

Here’s a short part of the article and the link is below to see the full article.


Kiss Chinatown goodbye under Obama data-mined racial quota system?

 ‘After the recent Supreme Court ruling on “disparate impact” in housing, Amy predicted that social justice activists and lawyers had been given powerful precedent to use racial and ethnic data mining against developers who did not intentionally discriminate:

When the Supreme Court handed down its ruling in Texas Department of Housing v. Inclusive Communities Project last week, social justice activists claimed a major victory in the battle against segregated housing. The decision endorsed a “disparate impact” analysis as applied to a Texas program that plaintiffs claimed distributes federal low income housing credits disproportionately, awarding too many credits to inner-city, predominately black neighborhoods and too few to suburban, predominately white neighborhoods….

Kennedy and the majority endorsed a form of social engineering just as pernicious as those that disparate impact analyses aim to correct. Instead of creating “more equality,” these methods do nothing but invent controversies for social justice groups and the courts to work out, and, as Clarence Thomas says, presume that defendants are “guilty of discrimination until proved innocent.”


Here’s the link to view the entire article
http://legalinsurrection.com/2015/07/kiss-chinatown-goodbye-under-obama-data-mined-racial-quota-system/ 

Special Thanks to Bill Rafter for sharing!

 

PRIVITY OF CONTRACT:

Who Is Making Repairs For Your Buyer?

The #1 post closing question we get asked is this: “the sellers agreed to repair the (roof, electrical, plumbing, etc.) and now we’ve moved in and the (roof, electrical, plumbing, etc.) isn’t fixed.  Can we go back to the seller and make them do the work properly?”

Under MOST situations, the answer is NO!!!

Huh? You mean it’s ok the seller didn’t have the work properly done as they agreed they would do?  Yep, that’s exactly what we’re saying.  And here’s why.

In Kentucky there’s a legal concept called “privity of contract.” Privity of contract says if I didn’t enter into a contract with a contractor directly, and if the contractor does a crummy job, the contractor is not liable to me.

Therefore, when a buyer requests a seller to make certain repairs after the home inspection, the way most agents handle the situation, there would NOT be privity of contract because the seller picks the contractor, not the buyer.

In addition, when a buyer allows the seller to pick the contractor, we know the seller will likely pick World’s Cheapest Contractor, LLC to do the work.  This only increases the odds the buyer will have an issue after closing.

So, how do we fix this? 

We’d love to say “insist on your buyer picking the contractor,” but we don’t think that’s realistic.  Instead, as a selling agent, we’d suggest when you’re dealing with Big Ticket Items (roof, HVAC, basement, structural issues, electric, plumbing), you reach out to the listing agent BEFORE making a repair request and ask them who they are likely to use for this work. If you are comfortable the person doing the work is qualified, in the repair request specifically state the seller shall use [insert name of qualified contractor listing agent suggested] and state specifically “buyer’s name shall appear along side the seller’s name on the invoice.”  If you are NOT comfortable with the contractor they suggest, you need to write in the repair request the contractor your buyer would like to use for the work.  In this case, you will still need to add “buyer’s name shall appear along side the seller’s name on the invoice.”

When the buyer’s name appears on the invoice, we now have privity of contract.

If an issue pops up after closing, the buyer can now go back to the contractor to insist the contractor take care of the problem. And at the same time, we’re now using a contractor we feel good about.

Another alternative would be to have the seller give the money for all repairs directly to buyer, but this should NEVER happen without the buyer’s lender’s consent.  Of course, in a cash closing, it’s fine to give money directly to the buyer, but not if there’s a lender involved.

We hope your summer has been fun and productive and we hope to see you soon at a closing table!

Harry Borders

Borders & Borders Attorneys:
Borders & Sons
 
 
 
 
John, David, and Harry

Since the early 1970s, our firm has practiced primarily in the field of real estate law. We represent banks and mortgage companies, real estate investors, builders and individual buyers and sellers in a variety of transactions related to residential and commercial real estate in Kentucky and Indiana. Our primary area of practice is real estate closings.   However, our attorneys also practice in other areas of law as well.

Do You Carry Pepper Spray, Taser, or Uncle Smith & W when meeting dirtbags who act like they are interested in renting or buying real estate?

PROTECT Your family and warn them about all of the evil idiots in America.

CAUTION: Real Estate Investors and Agents are getting robbed and thumped.

Just last year, a Realtor was meeting a prospect and ended up dead.

Today in southern Florida, 2 more real estate professionals robbed when meeting folks at a vacant property. At minimum, give your family and loved ones a key chain pepper spray.

What Do You Carry? (pepper spray, taser, pistole’, or BFH)

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