News

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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Legislative Update - Pace Picks Up at General Assembly

Legislative activity continued to increase last week, with full committee calendars that included both bills and budget presentations of executive branch agencies. Additionally, some committees already have their projected end dates in sight as leadership continues to target an early May adjournment. The overall level of legislative activity will increase even more next week, as the bulk of legislation for 2019 will have its fate determined in the next four weeks. 
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Construction Law Forum Programming Available Online

New videos from this year’s Construction Law Forum are now available to purchase on the Tennessee Bar Association website. Topics for these videos include: 
These online programs offer an opportunity for you to brush up on essential issues related to the practice while allowing the flexibility to work around your busy schedule in the pursual of CLE credit. You can view other upcoming programs and online video options on our CLE webpage.
 
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New York Considers Tax on Second Homes

Lawmakers in New York are considering a singular solution to funding future NYC projects — a tax hike on multi-million-dollar second homes, The New York Times reports. The so-called “pied-à-terre tax” would institute an annual tariff on homes worth $5 million or more that do not serve as the buyer’s primary residence. The proposed hike would feature a sliding scale, with properties valued between $5 million and $6 million subject to a 0.5 percent surcharge on any valuation over $5 million, incrementally topping out at four percent for homes valued at over $25 million. Though unclear how much money the tax would raise, the New York City Comptroller's office estimated the tax would bring in a minimum of $650 million annually if enacted today and could raise $9 billion in state bonds based on expected revenue.

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Trailer Parks are Booming Business for Some Investors

A Smyrna trailer park recently made headlines because of its association with a controversial billion-dollar real estate empire, drawing attention to the practice of private-equity funding of affordable housing communities. The Washington Post featured a story last month on the Florence Commons community, comprised of about 300 mobile homes and owned by private-equity firm Stockbridge Capital. While the company has raked in tens of millions in profits for investors, residents claim it is at their expense — through increased rents, lack of maintenance and draconian fees. The paper alludes to a 2016 decision by Fannie Mae that may have emboldened the practice by providing loans to investors for the development of mobile home communities, without limiting rent hikes for the mostly low-income residents, often with poor credit, who reside in them. 

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Nashville Mayor Briley Expected to Announce Major Public Housing Initiative

Nashville Mayor David Briley is expected to announce plans later this month for the allocation of millions in city funds to support redevelopment of aged public housing, The Tennessean reports. If approved, Briley’s plan will take a three-pronged approach —a ten-year commitment to pay for redevelopment projects, city-funded infrastructure at those sites and earmarks for the Barnes Fund for Affordable Housing Innovation, which provides grants to affordable housing developers. The city recently took ownership of its public housing stock from the federal government, to facilitate private borrowing for new construction and upgrades.

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Nashville Government Found in Contempt Over Airbnb Move

Metro Nashville government was found guilty of contempt of court on Wednesday for continuing to send violation notices to short-term rental operators who are appealing the city's revocation of their permits, the Tennessean reports. Chancellor Ellen Hobbs Lyle ruled in favor of seven plaintiffs fighting the city in Chancery Court to hold onto their Airbnb permits on Wednesday. She said the city should not have continued to try to stop them from operating until the court decided whether they have the right to rent their properties. The city was ordered to pay attorney fees and costs to the plaintiffs.
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AirBnB Hosts Say City of Nashville Violated Court Order

A group of Airbnb hosts suing the city of Nashville say Mayor David Briley's administration violated a court order by trying to stop them from renting their homes out online, The Tennessean reports. During a hearing today, attorneys for some of the hosts said the city should be held in contempt of court. Dozens of hosts sued in January after the city tried to revoke their short-term rental permits, which were issued by mistake. On Feb. 11, a judge signed an agreed order saying Metro must allow the hosts to continue renting their homes until the legal matter was settled. But on Feb. 15, Metro sent the hosts letters saying their permits were revoked, and that "the law requires you to immediately cease operations as a short-term rental."
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Next Thursday: Business Law Forum

Register now for the TBA Business Law Forum 2019.
 
This program will help business lawyers learn and refresh their knowledge about issues that may arise when drafting an LLC operating agreement. Topics will include an overview of the two extant Tennessee LLC acts and a comparison of those acts with the Delaware LLC Act; other distinctions of Tennessee law that impact the operating agreement; drafting key provisions, including distribution and allocation, employee and member compensation, and exit rights; and ethical considerations for lawyers drafting LLC operating agreements.
 
When: Thursday, May 9. Registration begins at 9 a.m.
Where: Tennessee Bar Center, 221 Fourth Ave. N., Nashville

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Memphis Anti-Blight Lawsuits List Addresses as Defendants

Some of the defendants in a new batch of anti-blight lawsuits filed by the City of Memphis Thursday are the addresses of the properties, The Daily Memphian reports. The University of Memphis Law School Neighborhood Preservation Clinic filed 29 lawsuits with the General Sessions Court Clerk’s office on behalf of the city. Since many of the lots are vacant, the owners of the property are not the defendants — "we are literally suing the property," said Daniel Schaffzin, co-director of the clinic. That allows a receiver to be appointed for the property while the sometimes arduous process of finding the owner is undertaken.
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Don't Blame Looming Recession on Slump in Residential Real Estate

The threat of a looming recession is not the fault of a sluggish real estate market, despite conflation by many economists, The New York Times reports. Though the United States has experienced 11 recessions since World War II, only two were precipitated by housing market decline. The sector often receives the brunt of the blame as it is more volatile than others, however, residential real estate accounts for only about 3 percent of economic output during recessions. Though the buying slump is a reality, this is likely a byproduct more than a driving factor — owing much to rising prices of existing homes in most markets, with the construction of new dwellings grinding to a screeching halt.

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Legislation Affecting Real Estate Practice

As the legislative session progresses, many bills of interest to dirt lawyers are on the move. Here is a list of notable legislation which has the potential to affect your practice area:
 
Rights of survivorship. Allows creation of a joint tenancy with right of survivorship and requires any share of a descended tenant to go to the surviving one.  

Taxation of residential property based on tree density. Requires that tree density is considered as a factor in determining residential property value and the respective taxation in Davidson and Shelby Counties.

Requires landlords provide email addresses. Requires a landlord to provide certain local governmental agencies responsible for enforcing building codes the landlord's email address, in addition to name, telephone number, and physical address. 

Notice landlord regarding change of tenant's email address. Requires a tenant to notify the landlord within ten days of a change of email address. 

Addresses tenant and landlord email notification. Allows a tenant to rescind the use of an email address provided in the rental agreement by written notice to the landlord. Broadly captioned.

Requires register of deeds send written notice to the property owner before recording a lien. Requires the register of deeds to send written notice to the property owner prior to recording a lien.

Removes certain state provisions regarding property tax. Eliminates certify valuation to local officials, authority to place liens, and issue distress warrants for state property tax.

Payment rights of contractors and subcontractors. Prohibits a written contract to have a condition precedent for payment clause where the prime contractor is not required to pay the remote contractor due to contract, or until they are paid by the construction owner. 

Requires baby changing station in new buildings. Adds at least one baby diaper changing station that is accessible to both men and women for new public bathrooms in any public building that is owned or operated by a public entity. 

Certification for electrical inspects contracted by local or state government. Requires electrical inspectors employed by a local or state government to be certified by the state fire marshal and for this certification to be completed every three years. 

Creates a registry of tenants evicted through writs of possession. Directs the housing development agency to create a registry of tenants who have been evicted through the execution of a writ of possession, which will be accessible to landlords in this state. 

The requirement of notice from the delinquent tax attorney relative to property tax. Requires the delinquent tax attorney to pose a copy of the proceeding and send a copy by first-class mail addressed to “occupant” at the last known municipal address of the parcel. 

Authority to impose a monitoring inspection fee on each manufactured home. Removes the authority to impose a monitoring inspection fee on each manufactured home produced in Tennessee from the commissioner of commerce and insurance.

An increase of the homestead exemption. Creates a homestead exemption for agricultural land, increases aggregate value of real property homestead exemptions while establishing that, in 3-year intervals, the fiscal review committee will recommend to the general assembly increases in the homestead exemption.

Service of process. Adds a private process server to the list of individuals authorized to personally serve a copy of a warrant or summons on behalf of a landlord in an action for forcible entry and detainer to regain possession of such landlord's real property.

Time-share and vacation club property. Classifies time-share and vacation club property that includes an interest in real property as residential property. 

Increases time allotted for a home seller to refund a buyer. Increases from 10 days to 15 days the time frame which a buyer is required to refund payments to the buyer when a home solicitation sale has been canceled or an offer to purchase was revoked.
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Gov. Lee Provides Avenue for Public Feedback on Legislation

Gov. Bill Lee has taken an additional step in his commitment to “an open and transparent government,” creating a webpage for the public to view and provide feedback on legislation that has been submitted to him for consideration. Lee maintains that involving Tennesseans into the process more directly will increase accountability in how laws are made. The site will be updated regularly, as bills pass the Legislature and land on his desk.

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Why All Apartment Buildings in America Look the Same

Wood-framed balloon structures have become a ubiquitous part of our cityscapes, seemingly popping up overnight and changing the face of urban and suburban areas across America. No matter where you are, the buildings are ostensibly homogenous — blocky, colorful and three to seven stories tall. Bloomberg News examines the rise and controversy surrounding these ’stick framed’ structures, including why some municipalities seek to curb construction of the buildings in densely populated areas altogether.

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TBA to Introduce Legal Document Generation

The TBA will soon launch a new subscription-based product for Tennessee lawyers — automated legal forms. The initiative will use HotDocs, a custom documentation generator that creates form templates and speeds up the preparation process based on client and case data. In order to provide this valuable resource to our members, we hope to obtain your comments and ideas on forms you deem beneficial for replication. With across-the-board participation, we can comprise a substantive, comprehensive database where subscribers will have access to forms submitted by all TBA sections. Please send suggestions and comments to TBA Membership Director Mindy Fulks.

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1-Click CLE Packages

Gain fast and easy access to annual updates with TBA's 1-Click options. Each package is listed by practice area. Updates included best practices, legislation, ethical consideration and practice tips.
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TBA Weekly Legislative Update

The Tennessee Senate and House of Representatives are back in session and are referring newly introduced bills to the appropriate committees, which are primarily holding organizational meetings this week. The deadline for filing all legislation is Feb. 6, so there will be a flood of bills introduced over the next two weeks. The TBA Governmental Affairs Team will be reviewing all bills and begin the process of forwarding the legislation affecting the practice of law to the appropriate Section Executive Councils for review and feedback. Stay tuned for more info.
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Creditors File Motion Challenging Lampert’s Bid for Sears

Attorneys representing Sears’ unsecured creditors filed a motion last week challenging Sears Holdings chairman Eddie Lampert’s $5.2 billion bid to buy the company, USA Today reports. The creditors’ committee claims to have uncovered facts that demonstrate misconduct committed by Lampert and his hedge fund, ESL Investments, which contributed to the retailer’s downfall. The bid needs final approval from a bankruptcy judge at a hearing currently slated for Feb. 1. Sears maintains that the sale will prevent liquidation and preserve 45,000 jobs; however, the creditors allege that the deal is part of a pattern that enriches Lampert by acquiring the company at a discounted rate. The court filing claims Lampert engaged in two controversial and complex financial transactions in which he acted as both lender and borrower. One of those deals occurred in 2015; 235 of the most valuable Sears store properties were transferred to the real estate investment trust Seritage Growth Properties, where Lampert is the biggest shareholder and chairman. According to a public filing, in 2017, Sears paid Seritage $109 million in rent, $43 million in expenses and $35 million in lease termination fees. The creditors would like to recover the value of the properties transferred to Seritage. ESL stated that all business transactions involving Sears were done in good faith and on fair terms with the approval of the Sears Board of Directors.

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Sears Closures Add Millions of Square Feet to Commercial Real Estate Market

Beleaguered retail behemoth Sears is considering liquidation, which would add an estimated millions more square feet of unused commercial space nationwide, Forbes reports. Since it announced bankruptcy last October, Sears has either closed or plans to close 260 of its 700 retail locations. In 2015, Sears Chairman and former CEO Eddie Lampert created the real estate investment trust Seritage Growth Properties, seeking to capitalize on the real estate value of Sears’ holdings; however, there is no indication if this was done in light of bankruptcy considerations. 

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