Author: Timothy M. Zieziula
Originally published October 2018
Copyright © 2018 Knox McLaughlin Gornall & Sennett, P.C.
Enterprises such as Airbnb have expanded the possible uses of single-family dwellings. It begs the question: Does rental of a single-family home for a period of less than 30 days make the use of the home “commercial” as opposed to a single-family residence?
Courts are grappling with outdated zoning ordinances that do not address the new “uses” that property owners are engaging in. Cases turn on definitions of words and phrases in zoning ordinances such as “family”, and “dwelling”, and tourist home”, and “transient use.” As a practical matter none of these terms or phrases were intended to regulate the short-term use of single family residences offered by enterprises such as Airbnb.
Municipalities need to enact new short term rental ordinances, providing a specific definition for “short term rentals” and that:
Developers rapidly overbuilt malls in the 1970s and 1980s. The United States has twice as much square footage in shopping centers per capita than the rest of the world and six times as much as countries in Europe.
As shopping trends have changed, enclosed malls continue to close at an alarming rate. Anchor brands such as JC Penney, Sears and Macy’s continue to close stores in malls. In many areas of the country developers are finding new uses for dead or dying malls:
Developers are also finding ways to rehabilitate or redevelop malls:
Retailers that are willing to adapt to changing times are enjoying a “Retail Renaissance” of sorts. Sprucing up stores, adding e-commerce delivery options and improving service with better-trained employees has had a very positive effect on large retailers. For example, in August 2018, Walmart posted its best quarterly sales in a decade as did Target. Nordstrom and Kohl’s also outpaced analysts’ projections.
Among other things, the ADA prohibits discrimination against individuals in any place of public accommodation. 42 U.S.C. §12182. A “public accommodation” is a privately owned facility whose operations fall into at least one of the following categories:
Removal of an architectural barrier is readily achievable if it is “easily accomplishable and able to be carried out without much difficulty or expense.” What is readily achievable is determined on a case by case basis in light of:
Examples of exterior barrier removal measures include the installation of ramps, marking curb cuts at sidewalks and entrances and restriping parking lots to provide for handicap parking spots.
To prevail on a discrimination claim, a plaintiff must prove:
Private individuals may only request injunctive relief in the form of remediation to stop discrimination and reasonable attorneys’ fees.
Mechanic’s liens are creatures of state law designed to give contractors and subcontractors assurances of payment on construction projects. A filed mechanic’s lien grants a contractor/subcontractor a lien on property for labor or materials furnished in the erection, construction, alteration or repair of an improvement.
Mechanic’s lien waivers were deemed to be void as against public policy.
Expansion of the definition of subcontractor to include sub-subcontractors.
Extension of the time to file mechanic’s liens from 4 to 6 months.
New mortgage lender protections that made mechanic’s liens subordinate to:
Purchase Money Mortgage: Taken by a mortgagee to secure repayment of money actually advanced by such person to mortgagor at the time mortgagor acquires title to the property and used by mortgagor to pay all or part of the purchase price. Must expressly state that the mortgage is a purchase money mortgage.
Open-End Mortgage: Secures advances up to a maximum amount of indebtedness outstanding at any time stated in the mortgage. Must be identified at the beginning of the mortgage as an “open-end mortgage” and must clearly state that it secures future advances.
PA Superior Court held that a mechanic’s lien took priority over an open-end mortgage because not all of the proceeds were used for the erection/construction of the mortgaged premises. Portions of the loan proceeds were used to pay for closing costs, satisfaction of an existing mortgage lien and other judgment s and liens. Of the roughly $256,000 in loan proceeds disbursed at the closing, approximately $95,000 was used to pay for things other than “erection or construction.”
Imposition of “60% Rule”: Open-end mortgage recorded after the commencement of construction will have priority over a mechanic’s lien id at least 60% of the loan proceeds are used to pay all or part of the costs of construction.
“Costs of construction” is broadly defined in the amendments to include all costs, expenses and reimbursements pertaining to construction, including off-site improvements and government impact fees, as well as other construction-related costs such as real estate taxes, insurance, bonding, inspections, surveys, testing, permits, legal fees, architect fees, engineering fees, consulting fees, accounting fees, management fees, utility fees, origination fees and commissions, finance costs, closing fees, recording fees, title insurance, escrow fees.
Certain changes affecting the impact of mechanic’s liens on residential property. Provides a means by which a mechanic’s lien can be discharged from residential property where an owner has paid the full contract price to the contractor, and provides that a subcontractor does not have a right to a claim with respect to residential property if the owner has paid in full the contract price to the contractor.
Mechanic's lien exception will be removed from lender's title insurance policy upon receipt of an affidavit from the owner/seller affirming that no construction has taken place.
Mechanic’s lien exception will be removed from lender’s title insurance policy if it is clearly a purchase money mortgage being given by the borrower even if construction has already commenced.
Mechanic's lien exception will be removed from lender's title insurance policy upon confirmation that:
60% Rule:
Eligible for projects over $1,500,000. Owners file a Notice of Commencement with a centralized internet-based State Construction Notices Directory. A copy of the Notice of Commencement must also be conspicuously posted at the project site before physical work commences at the site.
If an owner files a Notice of Commencement, any subcontractor must file a Notice of Furnishing with the directory within 45 days after first performing work or services at the job site in order to be eligible to file a later mechanic's lien claim. Any potential lien claimant that fails to file a Notice of Furnishing within the allotted time forfeits the right to file a mechanic's lien claim.
General contractors do NOT need to file a Notice of Furnishing to preserve lien rights.
Author: Timothy M. Zieziula
Originally published October 2018
Copyright © 2018 Knox McLaughlin Gornall & Sennett, P.C.