News

Nashville Council to Again Consider Banning Short-Term Rentals in Residential Zones

The Metro Nashville Council will again consider new restrictions on short-term rental properties — such as Airbnbs — in residential areas, The Tennessean reports. Nashville moved to issue a similar ban last year; however, the General Assembly nixed it because of concerns regarding the rights of property owners. The council will consider the bill in its July 2 meeting.

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Shadow Banks Back in the Forefront of Lending

“Shadow” banks have made a comeback and now surpass regulated banks as the leading source of credit for businesses and consumers, The Washington Post reports. Considered the catalyst for the real estate market collapse in 2008, the shadow system uses money from investors in lieu of depositors and heavily relies on hedge funds, investment banks and private equity funds. Loans from these sources are popular with consumers because of lower credit stipulations, faster approval and more flexible terms than loans from a traditional bank; however, they make the general economy more susceptible to busts.

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NAR asks Judge to Dismiss Antitrust Lawsuit

The National Association of REALTORS (NAR) has filed a motion to dismiss in the class-action lawsuit regarding antitrust concerns, Forbes reports. The suit, filed by Minnesota homeowner Christopher Moehrl, contends that NAR conspired with major real brokerages to inflate commissions using its Multiple Listing Services and compensation policies. NAR argues that the complaint violates Section 1 of the Sherman Act in connection with NAR rules related to the Multiple Listing Service and therefore should be dismissed. RE/MAX, Keller Williams, HomeServices of America and Realogy Holdings were also named as defendants in the case.

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Bar Foundation Awards Over $1.1 Million in Grants

The Tennessee Bar Foundation has awarded $1,122,735, from the Tennessee Legal Initiatives Fund (TLIF) intended to be used to "extend the capacity of organizations to break the cycle of poverty and the barriers to justice by using civil legal aid and education to increase productivity and success for vulnerable populations." Organizations receiving grants include the Choosing Justice Initiative, the Community Legal Center, Dismas House Inc., Legal Aid of East Tennessee, the Memphis Bar Foundation, the Nashville Conflict Resolution Center, the Tennessee Alliance for Legal Services, the Tennessee Justice Center, Tennessee Justice for Our Neighbors, The Justice Initiative, and the University of Tennessee College of Law's Legal Clinic.

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Nashville Metro Council Member Proposes 16% Property Tax Increase

Councilmen Bob Mendes proposed a 16% property tax increase in order to better fund Nashville schools, employee raises and make up for the budget revenue shortfall, the Tennessean reports. The proposal challenges Mayor David Briley’s proposed budget, which does not include an increase in property taxes. Budget talks will continue among the Metro Council, and Mendes’ alternative budget is slotted for a second reading on June 4. The Metro Council will vote on a final budget on June 18.

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Summit on Law and Innovation Planned for July 20 at Vanderbilt

The second annual Summit on Law and Innovation will be held on July 20 at Vanderbilt Law School. The annual summit brings together people who are passionate about innovating across the legal spectrum to make law better. This year’s theme is “#failurecamp,” examining how failure is inherent to the innovation process. The cost is $50 for a full day of workshops and conference sessions.
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Enjoy Everything Downtown Nashville Has to Offer at TBA Convention, June 12-15

You never know what could happen on a given night in Nashville! A mecca for music, food and fun, downtown Nashville is the site of the TBA’s Annual Convention, June 12-15. Participants will stay at the Renaissance Hotel in the heart of the action. Don’t miss your chance to enjoy everything downtown Nashville has to offer while networking with colleagues and earning valuable CLE credit.
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This Week: Real Estate Essentials

The annual Real Estate Essentials CLE on June 7 will focus on the intangibles every dirt lawyer should add to his or her practice. This year's topics will include: drafting a deed with consideration to will and probate issues, general probate considerations, irregular transactions and more. Don't sleep on this opportunity to learn from top players in the field with attorneys of a common focus.
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Is a Two-Sided Market Coming to Commercial Real Estate?

Forbes yesterday published a piece exploring a two-sided market approach to maintenance of commercial real and whether this may prove to soon be a reality. The essay expands on the practice of smart physical systems in buildings and predictive maintenance, detailing how this might be leveraged to create a new model for how vendors, overseers and the equipment itself intersect. You can view the article here

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Redfin to Introduce Direct Property Bids on Its Website

Redfin, a national real estate brokerage that allows homebuyers to purchase properties without representation, is launching a program to offer consumers the opportunity to bid on properties directly through its website, The New York Times reports. The initiative was recently tested in Boston with sellers paying a 2 percent commission fee, which is half the normal rate for the area. Out of 120 homes listed between late March and early May through Redfin with web-based offers accepted, five were bought with online bids.

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Zillow Class-Action Suit Regarding RESPA Violations to Proceed

The class-action lawsuit filed against Zillow regarding its “co-marketing” program and whether it violated federal anti-kickback laws will proceed as planned, The Washington Post reports. The suit, filed in September 2017, alleges that the company ran afoul of the Real Estate Settlement Procedures Act (RESPA) by allowing lenders share advertising fees with real estate agents — up to 90 percent initially — effectually allowing the lenders to receive leads on active buyers. The Consumer Financial Protection Bureau (CFPB) in 2017 notified Zillow that it was being investigated regarding the alleged violations, to which the company attempted to negotiate with the bureau; however, the case was dropped when the Trump Administration appointed its new CFPB director. Judge John C. Coughenour of the U.S. District Court in Seattle denied Zillow’s motion to dismiss saying: “the court can draw a reasonable inference that Zillow designed the co-marketing program to allow agents to provide referrals to lenders in violation of RESPA.” A trial date has not been set.

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Metro Nashville Government Releases Report on Tax Incentive Funding

The Metro Government of Nashville & Davidson County released its Tax Increment Financing Study & Formulating Committee Report, which examines Metro’s Tax Incentive Funding (TIF) used to promote redevelopment in blighted areas. Mayor David Briley signed ordinance BL2018-1315 creating the committee to formulate recommendations on implementation of and ensure more transparency regarding the municipalities use of TIF. In its report, the committee compiled a number of observations and 17 recommendations, formally asking the Mayor’s Office to provide Metro Council with a description of agencies or departments that will address the recommendations, including cost estimates for implementation. The committee was scheduled to present its recommendations to the Metro Council last week. 

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Tennessee Justice Center Event Honors Organization's Heroes

The Tennessee Justice Center honored five of its supporters during its annual Mother's Day Luncheon yesterday in Nashville. Those honored for their strength and determination in support of vulnerable Tennessee families included David Manning, Manny Martins, Pamela Cardoso, the Rev. Henry Blaze III and Nancy Anness. See photos from the event.
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Next Week: Environmental Show of the South

The 48th annual Environmental Show of the South, the largest and most comprehensive environmental conference and trade show in the region, returns to the Chattanooga Convention Center May 15-17. This forum has proven to be a must-see, must-do event for environmental agencies and lawyers alike, featuring timely information on regulations, compliance and other hot topics relevant to your practice. Network with colleagues, learn about new developments and meet vendors offering a full spectrum of environmental goods and services, all while obtaining necessary CLE credits.
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Court Blocks Sale of East Memphis High Rise

A New York court has temporarily blocked the foreclosure sale of Memphis' Clark Tower, which was scheduled for noon today on the steps of the Shelby County Courthouse, the Daily Memphian reports. Judge Marcy S. Friedman of the Supreme Court of New York yesterday granted the preliminary injunction sought by Clark Tower LLC against the lenders of its $60.75 million mortgage loan. Florida-based In-Rel Properties is the public face of the Clark Tower ownership, but legally is only affiliated with owner Clark Tower LLC. Wells Fargo holds the mortgage as the trustee for JPMorgan Chase Commercial Mortgage Securities. Clark sued the lender claiming it “unreasonably withheld” its consent to allow a refinancing of its loan.
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U.S. Department of the Treasury Releases Updated Rules Regarding Opportunity Zones

The U.S. Department of the Treasury on Wednesday released its second set of proposed regulations regarding the Opportunity Zones tax incentive, The New York Times reports. Introduced in the 2017 Tax Cuts and Jobs Act, the initiative is intended to encourage development in economically distressed communities by allowing investors to defer, reduce or eliminate taxes on some capital gains when the investments are held for at least 10 years. Critics argue that the incentives, as introduced, would benefit real estate developers, not small businesses, and speed up the displacement of low-income residents in gentrifying areas. The new rules seek to quell some of these concerns, also allowing long-vacant properties to immediately qualify for the tax breaks and provides investors incentives even if the business focuses on exported goods or services to markets outside of the zone, pending the money is reinvested in another qualifying business or asset.

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NYC Imposes Regulations on Greenhouse Gas Emitted by Buildings

New York City is taking a new step in its effort to combat climate change by imposing stricter limits on greenhouse gasses emitted by buildings, The New York Times reports. The plan is staunchly opposed by real estate executives because of associated costs for compliance, with estimates exceeding $4 billion. Some buildings will be exempted from the caps, including apartment complexes with rent-controlled units, places of worship and affordable housing communities, however, those buildings will still be required to take other energy-saving measures. This legislation is part of a group of bills passed yesterday known as the Climate Mobilization Act, which seeks a 40% decrease in emissions by the year 2030.

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Study Finds Same-Sex Couples Encounter More Denials, Higher Interest Rates for Mortgages

A just-released study from the Proceedings of the National Academy of Sciences shows that mortgage lenders are more likely to deny loans, or charge more on approved loans for same-sex couples, the Washington Post reports. National mortgage data from 1990 to 2015 shows that these couples were 73 percent more likely to be denied, and on average paid 0.2 percent more in interest and fees than heterosexual couples with comparable financial standing. Since mortgage applicants cannot be asked about sexual orientation, the study identified same-sex couples as co-applicants of the same gender in its model. The researchers involved cite the probe as evidence that sexual orientation should be added a protected class under federal lending laws.

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Documentary Addresses Housing Problems Faced by Low-Income Residents of Memphis

Two Memphis-based documentarians on Monday presented the first chapter in a series of films highlighting housing concerns in the city, The Commercial Appeal reports. Jordan Danelz and Benjamin Rednour created the documentary to address common problems faced by Memphis’ low-income residents. The films will look at predatory lending, foreclosures, inability to afford necessary home repairs, absentee landlords and lack of transit. The series was created with assistance from Neighborhood Preservation Inc., an organization founded by Memphis community leaders who seek to promote revitalization of blighted parcels in the city and clear legal hurdles regarding development of these properties.

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Apply by June 1: Board of Governors to Fill Open Positions

Two open positions will be filled by the Tennessee Board of Governors at its meeting on June 15. In accordance with Article 47 of the TBA Bylaws, the board may fill the vacancies at its 2019 meeting. The West Grand Division Governor Position 1 seat represents Benton, Carroll, Chester, Crockett, Decatur, Dyer, Fayette, Gibson, Hardeman, Hardin, Haywood, Henderson, Henry, Lake, Lauderdale, Madison, McNairy, Obion, Shelby, Tipton and Weakley counties. The Fifth District Governor Position 1 seat is open because its current holder, Sherie Edwards, was elected to Vice President. The Fifth District represents Davidson County. If you would like to be considered for one of these positions, contact TBA Executive Director Joycelyn Stevenson in writing with your interest by June 1. Please include a resume with your submission.
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Tennessee AG Joins Coalition Pushing for Replacement of Obama-era Environmental Rule

Attorney General Herbert Slatery joined a 17-state coalition this week in urging the Trump administration to adopt a replacement of the Obama-era Waters of the United States rule. The rule extended the authority of the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers to regulate bodies of water. The Trump Administration proposal would restore jurisdiction to the states.
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5 New Job Postings on TBA’s Joblink

See who is hiring in Tennessee. Recent job postings this month offer opportunities in litigation, real estate, health law and more. See full listings or post positions in your firm on TBA’s Joblink.
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Step into the Wild Side at the 2019 Animal Law Forum's Zoo Experience

 
Register now for the TBA Animal Law Section's 2019 Annual Forum at the Nashville Zoo. This unique opportunity will provide updates on trends and advancements in animal law while allowing participants to network and enjoy all of the fun and activities the zoo offers. A midday lunch is included, with additional time to explore the zoo, the recently added Expedition Peru exhibit and new state-of-the-art veterinary medical space. Don't miss this chance to fulfill necessary CLE requirements while experiencing one of the top zoos in the nation. Here are the key details:
 
When: Friday, May 17, registration at 8 a.m., CDT
Where: Nashville Zoo, 3777 Nolensville Pike, Nashville
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TSC Rules Companies Cannot Depreciate Labor Costs in Insurance Payments for Property Damage

In addressing a certified question from the U.S. District Court for the Middle District of Tennessee, the Tennessee Supreme Court has ruled that insurance companies cannot depreciate labor costs in insurance payments for property damage. In Lammert et al. v. Auto-Owners (Mutual) Insurance Company, the court determined that the language of the insurance policies in question were susceptible to two or more reasonable interpretations on whether labor costs could be depreciated. Under Tennessee law, when an insurance policy is ambiguous, the policy is construed against the insurance company as the author of the policy.
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Registration Now Open for TBA Convention in Nashville, June 12-15

The TBA's annual Convention returns to downtown Nashville this summer! Mark your calendars for June 12-15 and prepare for four days of CLE, networking, entertainment and more at the Renaissance Hotel, 611 Commerce Street. Registration is officially open, with early bird rates available until April 30.
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