Articles by Our Attorneys

Especially in and Around Small Towns

The 2008 real estate bubble burst is suddenly seven years in our rear view mirror and much real estate activity lies ahead. Transfers have increased; so, too, has development and redevelopment. Civil engineers are struggling to get all their new projects completed and will be hiring soon. Many believe that the real estate market runs in seven year cycles, and there is some data to support that. Yet, there are some noticeable differences this time around.

Businesses and home buyers are gravitating to more urbanized locales such as cities, boroughs, and other downtown locations. Developers are following suit. Many dilapidated or underutilized downtown properties are undergoing redevelopment in favor of high end townhomes and apartments, retail businesses and, believe it or not, even some Class A office projects. Mixed-use projects are popular in the downtown locations as well, mixing retail and/or office with new residential units. As the urban bustle increases, hotels are being added in these locations as well. This is especially true in smaller towns that never before hosted hotels.

This need in smaller towns, particularly in boroughs, has been driven in part by the proliferation of new forms entertainment and other attractions. West Chester Borough, for example, has seen the arrival of the Uptown! Entertainment Alliance, Inc., a non-profit, community theatre for the performing arts. Roving about town with performances for the last few years, the organization is now seeking approval from the Borough of West Chester to redevelop the historic National Guard Armory as its permanent home. The addition of theatres like Uptown! and other attractions to already existing retail, restaurants, and galleries in small towns like West Chester is making them viable alternatives to Philadelphia. It’s attracting larger business, too. Victory Brewing Company recently opened a new location in Kennett Square, near Magnolia Place, a new townhome community. There are many other examples, and certainly, more to follow as small towns continue to flourish.

Brian L. Nagle has considerable experience in representing developers, entrepreneurs, institutions and individuals in land use, zoning, tax assessment appeals and related litigation. To learn more about Brian’s practice email him at [email protected], or call him at 610-840-0224. 

In family law cases, I often see clients make similar mistakes.  Most, if not all, family law issues—divorce, abuse, custody concerns—are stressful. And stress often makes people do things they otherwise wouldn’t.

Here are some of the 5 most common—and sometimes the most costly…

Moving out of the Home:
Moving out the home and allowing the other spouse to enjoy exclusive possession of your home during the divorce process is often a recipe to pay more in alimony/spousal support, child support, and to have limited contact with your children.  When one spouse moves out, household bills such as the mortgage and utilities still must be paid, which the Court will often consider when the spouse living in the home petitions for financial relief.  Thus, moving out can be a recipe for paying the expenses on two residences.  Additionally, if you move out without the children, you establish a precedent that the children primarily live with the other parent.

Thinking Temporary is Really Temporary:
It’s often not.  In custody cases especially, Courts want to know what the children are familiar with, and what their routine has been since the parents split up.  Thus, agreeing to a “temporary” order where the other parent has the children the majority of the time will often put you at a disadvantage at a final hearing, since your children’s school, extra-curricular, and homework routines will all revolve around living with the other parent.

Signing an Agreement without Speaking to an Attorney:
Agreements involving the distribution of property and alimony are final when signed, meaning that they usually cannot be amended.  Therefore, if you sign a bad agreement, you are stuck with it.  For child support and child custody, while agreements can be modified, Courts will always look to prior agreements for guidance in entering future orders.  Clients often make the mistake of signing an agreement before meeting with an attorney, when the attorney may not be able to offer any assistance.

Thinking Your Social Media Posts, Text Messages, and Emails  are Irrelevant:
In Family Court, social media posts can and often are shown to the judge.  Additionally, text messages and emails can also be shown to the judge.  Especially when communicating with the other party, clients, in the heat of the moment, can post, email, or text message the other party in a manner that will reflect poorly upon them when they get into Court.  Thus, if you are involved in domestic relations litigation, you should assume that your social media posts, as well as your texts and emails to the other party, can be viewed by the judge deciding your case.  Additionally, clients should discuss any relevant social media activity, text messages, and or emails with their attorney, as it is often compelling evidence.

Failing to Consult with an Attorney Early in the Process:
Some of the most critical events in a divorce or custody case occur at the outset.  Many clients make the mistake of waiting to consult with an attorney after something bad happens to them in their case.  In domestic relations cases, an ounce of prevention is worth a pound of cure, and clients are often well-served by seeing an attorney at the outset of the process.

In reading this, you should understand that each case is different, and your case may require a completely different course of action. Feel free to reach out to find out how you can avoid these common pitfalls. Contact Patrick Boyer at [email protected] or 302-504-7294

PACA: How the Law Supports Local Growers

Litigation frequently results when one business owes another business money and, for one reason or another, either refuses or is unable to pay the debt.

A collections action—as these lawsuits are frequently termed—can be frustrating for the business to which money is owed for a variety of reasons. They are lengthy and expensive, and, in Pennsylvania, attorneys’ fees are recoverable only in limited circumstances, such as where a contract specifically permits the recovery of attorneys’ fees or where a statute specifically authorizes a court to award them. Furthermore, collecting and enforcing a judgment once obtained can be as time-consuming as obtaining the judgment in the first place, since, as we all know, a failing business often owes money to more than one creditor.

Luckily for sellers of fruits and vegetables, the United States Congress has determined that their product is worthy of special treatment.  In consideration of the perishable nature of the product and the ripe environment for unscrupulous merchants and buyers, Congress enacted the Perishable Agricultural Commodities Act of 1930 (“PACA”), and has amended the Act several times to deal with (among other things), misbranding, misrepresentation, bankruptcy, and, perhaps most importantly, delayed payment or non-payment.

In short, PACA promotes fair trading practices in the fruit and vegetable industry by regulating commerce and promoting fair trade and prompt payment.

Brokers, growers’ agents, shippers, wholesale dealers, retailers, processors, and commissioned merchants must have a PACA license in order to take advantage of PACA protections. Growers dealing only  their own products are exempt from PACA licensing requirements.

PACA protections are not limited to “collections actions” within the fruit and vegetable industry; however, PACA provisions promoting prompt payment are among those most frequently invoked by fruit and vegetable merchants.

Under PACA, a fruit or vegetable merchant who has not been paid by a buyer may seek an administrative remedy by filing a “Reparation Complaint” with the United States Department of Agriculture (USDA) within nine months from the date that payment was due. Alternatively, PACA may be enforced through a court proceeding to enforce a statutory “trust” that PACA provides for produce sellers. The trust works by placing certain assets of the debtor business (namely, fruit and vegetable inventory, products derived from fruit and vegetables, and all proceeds from the sale of these fruits and vegetables) out of the reach, so to speak, of other creditors. Thus, the trust has the practical effect of giving a produce grower shorted by a buyer a priority over other creditors, making recovery more probable.  Recovery is also more likely because bankruptcy generally does not affect PACA trust rights and the owners of the debtor-business can be held personally liable for the debt.

In order to preserve PACA trust rights, a seller must strictly follow PACA notification requirements.  First, a seller must provide notification to the buyer of the intention to invoke PACA trust rights within 30 days. Secondly, payment terms other than 10 days must be in writing, and may not exceed 30 days or PACA trust rights are forfeited.

Produce growers and dealers should be cautioned, however, that PACA and the federal regulations enforcing PACA are highly technical, and the failure to follow all of PACA’s provisions and enforcement regulations could result in a waiver of trust rights.

For more information on PACA or other laws and regulations important to commerce and agriculture, contact Charles by email or  at 610-840-0265.

When leasing space for your business, it is important to pay close attention to the terms of the lease. The landlord will generally provide a prospective tenant with a lengthy written document that consists of both business terms – the rent, length, amount of space, etc. – and legal terms – termination, assignment, liability, etc. The terms of the written document produced by the landlord typically favor the landlord.

A prospective tenant in a commercial lease normally pays close attention to the business terms of the lease. It is also important, however, that a prospective tenant closely scrutinize the legal terms, as they set forth the various rights and duties of the landlord and the tenant. Although tenants to commercial leases do not receive the benefit of the many consumer protection laws that place certain limits on provisions in residential leases, commercial leases are much more open to negotiation with regard to the terms of the lease and flexibility with regard to the space and term of the lease.

In embarking on a lease relationship with a commercial landlord, a tenant must at all times keep in mind that the lease is generally governed solely by the terms of the written document. It is very important that the tenant make sure that all of the terms negotiated are reflected in the written document and that all terms are completed before the document is signed by the tenant. If any of the terms are changed during the term of the lease, the changes should be in writing and signed by both parties. Oral agreements between landlord and tenant, whether prior to the signing of the lease or during the term of the lease, may not be enforceable.

Another point to which a tenant must pay close attention is that the lease will generally require the tenant to maintain the premises and keep it in compliance with all laws. It is very important, in light of such a requirement, that the tenant take possession of the leased premises with a warranty from the landlord that, as of the lease commencement date, the premises is in compliance with all applicable laws, ordinances and regulations. For example, if the premises is not in compliance with the Americans With Disabilities Act on the date the lease commences and the landlord has not warranted that the premises is in compliance with all applicable laws, it would be the responsibility of the tenant, since it is charged with keeping the premises in compliance with all laws, to bring it in compliance during the term of the lease. In terms of the Americans with Disabilities Act and many other laws, such compliance can be costly.

The lease document will also define the permitted use of the premises by tenant during the term. It is important that the use defined in the lease adequately describe the business and activities to be conducted by tenant at the premises. A use of the premises not defined in the lease, even if contemplated by the tenant, would constitute a default by tenant under the lease and would expose tenant to eviction by landlord and also monetary damages. Closely related to this “use” issue are restrictions in the lease on use of signs and the location of tenants in the same business. If a tenant’s business is heavily dependent on foot traffic, it will be necessary to ensure that the lease allows for a large and prominently displayed sign. If the tenant is occupying space in a retail center or strip mall, it will want to ensure that there is no tenant engaged in the same business in the same center or mall.

Commercial leases also contain provisions prohibiting assignment and subletting the lease without the prior written consent of the landlord. Many leases additionally provide that even in the case of an assignment or sublease that is permitted by the landlord, the tenant will remain fully liable under the lease. Assignment and subletting provisions need to be closely scrutinized and negotiated with the landlord to remove any continuing liability by tenant.

Commercial leases also often contain broad provisions limiting the liability of the landlord to instances of its gross negligence or intentional misconduct. The tenant should negotiate with the landlord to broaden the landlord’s liability to include its negligent acts and not just its grossly negligent acts. Additionally, a tenant must be adequately insured with liability, property and casualty insurance and business interruption insurance.

This article contains a few of the many issues that may arise and must be addressed by a tenant in negotiating a commercial lease. A tenant must carefully review the entire lease and negotiate with the landlord to remove or at least modify the onerous and unpalatable provisions of the lease document.

This article is informational only and not intended as legal advice. Speak with a licensed attorney about your own specific situation. To schedule a consultation with Leo Gibbons, please call 610-840-0227.

Pennsylvania’s Mechanics’ Lien Law has been changed once again.

In 2006, the Pennsylvania Mechanics’ Lien Law of 1963 was substantially modified for the first time in decades. One of the most significant changes restricted the enforceability of up-front waivers of the right to file a mechanics’ lien before work on a project commenced. The 2006 amendments resulted in broad restrictions on the use of such advance waivers of lien rights in commercial projects, and generally speaking, only permitted such up-front waivers in a residential project where the total contract price between the owner and the contractor was less than $1 million.

The 2009 amendments change this, and effective upon October 10, 2009, there will be different restrictions on advance waivers of lien rights for residential projects. Specifically, the 2009 amendments expand the ability to obtain advance waivers of mechanics’ liens for “residential property” projects. This means that in the residential context, whether up-front waivers are permissible will not depend on whether the amount of the contract governing the residential project, but rather depends on whether the project involves “residential property,” as defined by the amended law. When the amendments become effective, up-front waivers of the right to file a mechanics’ lien against “residential property” will be permissible. The amendments define “residential property” as: property on which there is or will be constructed a residential building not more than three stories in height, not including any basement level, regardless of whether any portion of that basement is at grade level, or which is zoned or otherwise approved for residential development on which there is or will be constructed a residential building not more than three stories in height, not including any basement level, regardless of whether any portion of that basement is at grade level, planned residential development or agricultural use, or for which a residential subdivision or land development plan or planned residential development plan has received preliminary, tentative or final approval on which there is or will be constructed a residential building not more than three stories in height, not including any basement level, regardless of whether any portion of that basement is at grade level, pursuant to the act of July 31, 1968 (P.L.805, No.247), known as the “Pennsylvania Municipalities Planning Code.” Accordingly, the 2009 amendments expand the ability to obtain advance waivers of mechanics’ liens for “residential property” projects, such as those involving residential buildings that are three stories or less. For such “residential property” projects, this represents a return to waiver procedures similar to the Mechanics’ Lien Law before the 2006 amendments.

This change, effective October 10, 2009, will subject more contractors and subcontractors to advance waivers of mechanics’ liens.

The following article is informational only and not intended as legal advice. Speak with a licensed attorney about your own specific situation. © Copyright 2011 MacElree Harvey, Ltd. All rights reserved.

Michael’s practice supports the needs of businesses and homeowners in a changing economic environment. He has extensive experience in mortgage foreclosures, collections and loan workouts, general counsel work and real estate litigation. Contact Michael G. Louis at 610.840.0228 or [email protected].