A little reminder that Pennsylvania isn’t as builder friendly as some other states, at least in regards to insurance coverage. In late 2010, the Indiana courts looked at the issue of whether damage to a home caused by a subcontractor was covered under the general contractor’s standard liability insurance policy. Indiana ruled in favor of builders and determined that if the subs workmanship was unintentional, then the resulting damage would be unforeseeable and could be deemed an accident, thus falling within the policy’s definition of an “occurrence”.

Today I was reminded that PA is one of only 5 states that have ruled the other way-in favor of the insurance companies. See the article here.

Denise Werkley

Denise Werkley is a partner at Unruh, Turner, Burke and Frees, Denise practices in the areas of Pennsylvania Commercial Transactions and Business Organizations, Pennsylvania Real Estate, and Pennsylvania Trademarks and Copyright Law. The firm maintains law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Main Line, and many surrounding communities such as Devon, Exton, West Chester, Ardmore and others.

Fannie Mae and Freddie Mac announced that they are raising risk fees that they charge to lenders. Lenders in turn typically pass those fees on to borrowers. The first time in 12 years risk fees will jump and the impact will be felt by all, even those with excellent credit. Persons with great credit (typically a FICO score of 740 or higher) were previously excluded from risk fees. Now, to avoid the fees a borrower with that score would likely have to put down at least 25% of the value of the house being purchased. The issue is whether this fee really impacts affordability for homebuyers, or whether it is simply looked at as just another fee and cost of obtaining a mortgage. The National Association of Home Builders does not appear to have responded publicly about the increase or its effect on home sales.

See Builder Magazine’s full article on the fees here.

Denise Werkley

Denise Werkley is a partner at Unruh, Turner, Burke and Frees, Denise practices in the areas of Pennsylvania Commercial Transactions and Business Organizations, Pennsylvania Real Estate, and Pennsylvania Trademarks and Copyright Law. The firm maintains law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Main Line, and many surrounding communities such as Devon, Exton, West Chester, Ardmore and others.

The National Association of Realtors is reporting that December’s existing home sales rose 12.3 percent over November 2010, perhaps signifying a continuing trend toward a recovery of the real estate market. For the northeast specifically, the rise was 13.0 percent.The northeast sale numbers are still 5.4 percent below December 2009 but the median price was $237,300, which is only 1.4 percent below a year ago. You can see National Association of Realtors article here.

One local economist believes the housing market is definitely getting better and notes that investors are a large part of that trend. He reported that investors bought about 20 percent of the properties in December 2010 which is a large part of the recovery process. See the full article on the December housing trend here.

If you are a real estate investor or have questions about real estate investing, please contact Denise Werkley in our West Chester office at dwerkley@utbf.com or 610-692-1371.

The Chester County Department of Community Development has announced that, effective as of October 7, 2010, areas eligible for Recovery Zone Bond financing have been expanded to include a 1-mile radius surrounding Chester County’s 15 Boroughs and the City of Coatesville. Recovery Zone Bonds can be used for private or municipal purposes of promoting development or other economic activity in a Recovery Zone.

For information on Recovery Zone Bond financing, please contact Theodore F. Claypoole at 610-692-1371 or tclaypoole@utbf.com.

Theodore F. Claypoole

Theodore F. Claypoole is a partner at Unruh, Turner, Burke and Frees, Theodore practices in the areas of Pennsylvania Commercial Transactions and Business Organizations, Pennsylvania Land Use and Construction, Pennsylvania Real Estate, and Tax-Exempt Organizations. The firm maintain law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Main Line, and many surrounding communities such as Devon, Exton, West Chester, Ardmore and others.

CNN provides a summary of the proposed $42 billion bill aimed at helping small businesses, which has been sent to the President for his signature.

For more information contact Theodore F. Claypoole.

Are you thinking about starting a business? Want to buy real estate? If you are moving forward with any business or real estate plans, you might consider starting a limited liability company (LLC). The New York Times posted a quirky story reminding us all not to take business names too seriously. What name will you chose?

NY Times Story:
http://www.nytimes.com/2010/09/05/realestate/05deal1.html?ref=realestate

Denise Werkley

Denise Werkley is a partner at Unruh, Turner, Burke and Frees, Denise practices in the areas of Pennsylvania Commercial Transactions and Business Organizations, Pennsylvania Real Estate, and Pennsylvania Trademarks and Copyright Law. The firm maintains law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Main Line, and many surrounding communities such as Devon, Exton, West Chester, Ardmore and others.

Tax-exempt organizations that do not satisfy annual filing requirements for three (3) consecutive years automatically lose their tax-exempt status. The Internal Revenue Service (the “IRS”) has published a list at http://www.irs.gov/pub/irs-tege/pa.pdf, which identifies those Pennsylvania organizations for which the IRS does not have a record of a required annual filing for 2007 and 2008, and whose 2009 return, due on or after May 17 and before October 15, 2010, has not yet been received. The IRS is offering a one-time relief program that will allow small tax-exempt organizations to come back into compliance and retain their tax-exempt status even though they failed to file for three (3) consecutive years.

Small organizations required to file Form 990-N need to go to the IRS website, supply the eight information items called for on the form, and electronically file it by October 15, 2010, while tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by October 15, 2010 and pay a compliance fee. Organizations required to file Form 990 or Form 990-PF are not eligible and are automatically revoked if they fail to file for three (3) consecutive years. Details about the one-time relief program are on the IRS website at http://www.irs.gov/charities/article/0,,id=225702,00.html.

For information on how to participate in the IRS’ one-time relief program or for questions on how to form or maintain a tax-exempt organization, please contact Theodore F. Claypoole at 610-692-1371 or tclaypoole@utbf.com.

Theodore F. Claypoole

Theodore F. Claypoole is a partner at Unruh, Turner, Burke and Frees, Theodore practices in the areas of Pennsylvania Commercial Transactions and Business Organizations, Pennsylvania Land Use and Construction, Pennsylvania Real Estate, and Tax-Exempt Organizations. The firm maintain law offices in Malvern, Phoenixville, and West Chester Pennsylvania which serve the Main Line, and many surrounding communities such as Devon, Exton, West Chester, Ardmore and others.

The Pennsylvania Department of Treasury is offering amnesty from penalties and interest to unclaimed property holders who voluntarily come into compliance with Pennsylvania’s Disposition of Abandoned and Unclaimed Property Law before October 31, 2010. Businesses and tax-exempt entities, which hold unclaimed property, are required to file an unclaimed property report with the Department of Treasury each year.

For information on how to participate in the Department of Treasury’s amnesty program, please contact Theodore F. Claypoole.

On July 22, 2010, Attorney General Tom Corbett announced legal action against various home improvement contractors for violations of Pennsylvania’s Home Improvement Consumer Protection Act. The Press Release can be found on the Attorney General’s website.

For information on how to comply with Pennsylvania’s Home Improvement Consumer Protection Act, please contact Theodore F. Claypoole.

If your business offers gift certificates or prepaid gift cards you need to be aware of a new law affecting those cards. In March 2009, the Credit Card Accountability Responsibility and Disclosure Act of 2009 was enacted setting out certain restrictions on gift certificates, store gift cards and general-use prepaid-cards. That law requires the Federal Reserve to implement related rules and regulations. The Act and the rules and regulations go into effect August 22, 2010.

This new law and associated rules restricts the ability to charge fees, namely dormancy, inactivity or service fees. It also prohibits the sale of prepaid products with an expiration date of less than five years and imposes additional disclosure requirements. The rules apply to gift certificates, store gift cards, and general-use prepaid cards sold to consumers; specifically, those that are sold largely for personal, family, or household purposes. As always, exceptions are noted, such as certain products issued in connection with a loyalty, award, or promotional program, or that are reloadable and not marketed or labeled as a gift card or gift certificate.

Since many of your businesses may offer prepaid gift cards through a third-party provider or card sponsor, we recommend that you speak to your provider and discuss the steps they are taking to comply with the regulations so there is no delay once August 22, 2010 rolls around.

For more information contact Denise C. Werkley.