Did Phila.’s 2018 Selective Tax Reassessment Violate the Uniformity Clause?

In Duffield House Associates v. City of Philadelphia, 2021 Pa. Commw. LEXIS 520 (July 29, 2021), the Pennsylvania Commonwealth Court recently analyzed whether the city of Philadelphia’s selective reassessment in tax year 2018 of only commercial properties at current market value violated the uniformity clause and the assessment law’s requirement that the city assess all properties annually at actual market value.

For the 2018 tax year, the city reassessed 41,730 commercial properties in the city at current market values, imposing more than $118 million in additional real estate taxes on those properties, the opinion said. However, the city did not reassess 538,380 residential properties in the city, leaving their assessments at 2017 tax year values and imposing no additional real estate taxes on those properties.

According to the opinion, Duffield House Associates filed a complaint alleging that the city selectively reassessed only commercial properties at fair market value for tax year 2018, in violation of the uniformity clause and Section 8565(b)(2) and (c) of the Consolidated First-Class County Assessment Law (Assessment Law), 53 Pa. C.S. Section 8565(b)(2) and (c), which requires annual reassessments of all city properties.

Months later, the owners and tenants of approximately 700 commercial properties in the city, filed 12 other complaints against the city asserting similar claims. Eventually, the Philadelphia Common Pleas Court consolidated the 13 actions into the one originally filed.

The trial court issued a decree in favor of these taxpayers and against the city.

Relying upon the Pennsylvania Supreme Court’s decision in Valley Forge Towers Apartments North v. Upper Merion Area School District and Keystone Realty Advisors, 163 A.3d 962 (Pa. 2017), the trial court concluded that the city deliberately targeted only commercial properties for reassessment in tax year 2018, thereby violating the uniformity clause.

Accordingly, the trial court struck the selective reassessment of the taxpayers’ properties, reinstated the prior tax year’s assessments, and ordered the city to refund the excess real estate taxes paid to the city.

On appeal, the city argued that the trial court erred in rejecting its ratio studies and mandating that only a method that revalues every property in the city would satisfy uniformity. The city claimed that uniformity does not require perfection; it only requires rough equalization.  According to the city, commercial properties were grossly under assessed for years. Thus, focusing only on the egregiously nonuniform properties constituted “rough equalization” as a matter of law and was not unconstitutional.

In response, the taxpayers argued that revaluing a small minority of properties in the city at current market value, while leaving the vast majority of properties at prior base-year values, violates the uniformity clause and Section 8565 of the Assessment Law, which requires the city to assess all properties annually at actual market value.

Prior to addressing the merits of the arguments, the Commonwealth Court in Duffield provided an overview of the uniformity clause.

The Commonwealth Court in Duffield noted that the uniformity clause precludes a taxing jurisdiction from treating similarly situated taxpayers differently.

According to the Commonwealth Court in Duffield, to establish the imposition of a tax violates the uniformity clause, a taxpayer must demonstrate that the administration of a tax deliberately and purposefully discriminates in the application of the tax.

The Commonwealth Court in Duffield further clarified that the term deliberate in this context “does not exclusively connote wrongful conduct, but also includes any intentional or systematic method of enforcement of the tax laws.”

In light of the trial court’s heavy reliance on the Supreme Court’s decision in Valley Forge, the Commonwealth Court in Duffield applied the principals of Valley Forge to the underlying appeal.

In Valley Forge, the taxpayers brought an action against a school district, as a taxing district, asserting that the school district violated the uniformity clause by systematically appealing only assessments of commercial properties. The trial court in in Valley Forge sustained the school district’s preliminary objections and dismissed the taxpayers’ complaint with prejudice. The Commonwealth Court in Valley Forge affirmed the trial court’s ruling.

On appeal, the Supreme Court in Valley Forge considered “whether the uniformity clause of the Pennsylvania Constitution permits a taxing authority to selectively appeal only the assessments of commercial properties, such as apartment complexes, while choosing not to appeal the assessments of other types of property—most notably, single-family residential homes—many of which are under-assessed by a greater percentage.”

The Supreme Court in Valley Forge commenced its uniformity analysis by stating two key principles of law, drawn from prior precedent: “all property in a taxing district is a single class, and, as a consequence, the uniformity clause does not permit the government, including taxing authorities, to treat different property sub-classifications in a disparate manner”; and “this prohibition applies to any intentional or systematic enforcement of the tax laws, and is not limited solely to wrongful conduct.”

Ultimately, the Supreme Court in Valley Forge held that “a taxing authority is not permitted to implement a program of only appealing the assessment of one sub-classification of properties, where that sub-classification is drawn according to property type—that is, its use as a commercial, apartment complex, single-family residential, industrial or the like.”

In an effort to distinguish the pending appeal in Duffield from the factual circumstances set forth in Valley Forge, the city asserted that it did not target nonresidential properties for reassessment in tax year 2018. Instead, the city claimed that it chose to reassess the taxpayers’ properties not because of their commercial nature, but because of the city’s ratio studies revealed that commercial properties were the “most underassessed” properties in the city and had been “grossly underassessed” for several years.

The Commonwealth Court in Duffield rejected the city’s argument based on the overwhelming evidence demonstrating that the city specifically targeted commercial properties for reassessment in tax year 2018.

In doing so, the Commonwealth Court in Duffield highlighted the testimony of the taxpayers’ economic expert, Kevin Gillen, Ph.D. and the city’s expert, Robert Gloudemans.

At trial, Gillen’s testified that his studies found that residential properties were underassessed as compared to their market value for tax year 2018 by approximately $20 billion, the opinion said.

In addition, Gillen found that the housing market in Philadelphia grew from the years 2014 to 2018 by 31.5%, however, assessed values of residential properties during that same time period only increased only by 3.2%, the opinion said.

According to the opinion, Gillen went on to demonstrate the unreliable nature of the city’s ratio studies, opining that they were based on a “flawed” sales validation process.

Similarly, Robert Gloudemans, the city’s expert, testified that the city’s ratio studies were “unreliable” and had to be “taken with a grain of salt,” the opinion said.

The Commonwealth Court in Duffield also took into consideration that representatives of the city repeatedly stated, on numerous occasions, that, for the tax year 2018, the city was reassessing only commercial properties and that, for the tax year 2019, the city would conduct the first countywide reassessment since 2014.

For example, Michael Piper, the city’s chief assessment officer at the time, made reference to a “commercial reassessment” in tax year 2018 and a “citywide reassessment” in tax year 2019 during a senior staff meeting, according to the opinion.

By singling out the taxpayers’ properties for reassessment based solely upon their commercial nature, the Commonwealth Court in Duffield noted that the city engaged in disparate treatment of sub-classes of properties within a taxing district.

Ultimately, the Commonwealth Court in Duffield held that, under the Supreme Court’s holding in Valley Forge, the taxpayers established that the city’s selective reassessment in the tax year 2018 of only commercial properties violated the uniformity clause of the Pennsylvania Constitution and, as such, the trial court’s remedy of issuing tax refunds to the taxpayers was appropriate under the circumstances.

— Clementa Amazan, an associate at Nochumson P.C., is the co-author of this article.

Reprinted with permission from The Legal Intelligencer © 2021 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.

Post Excerpt The Pennsylvania Commonwealth Court recently analyzed whether the city of Philadelphia’s selective reassessment in tax year 2018 of only commercial properties at current market value violated the uniformity clause and the assessment law’s requirement that the city assesses all properties annually at actual market value.

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Clementa Amazan appointed as the Young Lawyers Division Liaison of the Pennsylvania Bar Association

In this role, Clementa will serve as an intermediary between the Young Lawyers Division and the Pennsylvania Bar Association, as well as collaborate with other sections on topics of interest and legislative matters in furtherance of the Bar’s Action Plan.

About Clementa Amazan

Clementa Amazan is an Associate Attorney at Nochumson P.C., where she has a knack for providing thorough and creative solutions to a variety of legal issues as well as communicating with people – the easygoing and the difficult alike – which makes her a valuable asset for her clients.

Her ability to speak conversational Spanish and her fluency in Haitian Kreyol also allow her to effectively serve as legal counsel to a broad cross-section of communities and on behalf of her clients.

Clementa is also a leader within the legal community. This past year, she served as a co-chair of the Dr. Martin Luther King Jr. Memorial Breakfast, which was sponsored by the Barristers’ Association of Philadelphia. In addition to being actively involved with the Barristers’ Association of Philadelphia, she also participates in activities with the Pennsylvania Bar Association Women’s Law Division.

Clementa is admitted to practice law in the Commonwealth of Pennsylvania. She holds a B.A. degree in English Literature from Villanova University and a J.D. degree from the Temple University James E. Beasley School of Law.

Post Excerpt We are so excited to announce Clementa Amazan was elected as the Young Lawyers Division Liaison to the Real Property, Probate and Trust Law Section of the Pennsylvania Bar Association.

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Adverse Possession in Philadelphia

What is Adverse Possession?

Adverse possession, often referred to in non-legalese as “squatter’s rights”, is a phrase used to describe one method of acquiring ownership rights over a piece of property.  Adverse possession is a legal mechanism whereby one’s physical possession of the land of another is converted into the actual legal title to the land. In general, adverse possessors desiring to acquire title to the land of another must satisfy the common law elements of the claim.  In Pennsylvania, it used to take 21 years of “actual, continuous, exclusive, visible, notorious, distinct and hostile possession” before someone could legally claim a property as their own and quiet the title.  The Clear Title Act, which was signed into law in 2019, has now shortened that waiting period to just 10 years in certain cases. The change to the law marks a departure from a distinct legal concept within the jurisprudence of adverse possession, and many landowners, including municipalities, may now have cause to reevaluate the status of their ownership of certain lands.

What are the pros and cons of pursuing adverse possession?

While adverse possession can be a helpful tactic for individuals or groups using otherwise vacant land for many years, it is a complicated process usually requiring a lawyer.

Pros

  • Clear and defined path to land tenure
  • It may be less expensive than buying property
  • A solution in cities with abundant vacant land, where no policy has prevented the land from continuing to exist unused

Cons

  • Adverse possession claims, or “quiet title actions” take time and resources
  • Gaining title through adverse possession does not rid you of the burden of unpaid debt, such as taxes or liens on the property that may have existed for decades on the property
  • The user must garden without the permission of the landowner for the statutory period to start, so short-term agreements with the owner do not help an adverse possession claim
  • Users must fulfill many elements for a long period of time

The Clear Title Act is designed to help long-term occupants of residential homes that have no legal owners and it is a situation that’s not nearly as rare as you may think.  Usually, it happens when a landlord abandons a property without notice or when the owner of a property dies without making any arrangements for the property to pass to another.

At Nochumson P.C., we are more than legal counsel. We are people serving our neighbors and community in Pennsylvania and New Jersey. Knowing that real communication between real people can help lead to real positive results, our team of attorneys is available 24/7 to help answer your legal questions and to fight for you with skill and fortitude, whatever the case may be. When you hire us, you can expect a sensible and cost-effective approach to legal counsel. We think fast, think ahead, and get things done. Contact us today or call us at (215) 399-1346 to see how we can represent you.

Post Excerpt Within Philadelphia, it is a familiar story. A homeowner, fed up with overgrown weeds and accumulation of various junk, decides to clean up a neighboring lot that belongs to an absentee owner. Once the lot is cleared, the homeowner decides maybe to park their car on the lot, or plant trees and gardens, and continue to take great care of the parcel of land. Neighbors have not seen the absentee owner in years. Eventually, the homeowner realizes that they have now acquired a legal interest in the abandoned parcel via adverse possession.

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In the Zone with Clementa Amazan – Episode 3

On May 20, 2021, District Council Members Maria Quinones-Sanchez and Jamie Gauthier introduced bill number 210474, which was amended on June 24, 2021. As we discussed prior, sections 14-702-2 through 14-702-4 of the Philadelphia Zoning Code established a Mixed-Income Housing Bonus that provides bonuses for gross floor area, building height, and housing unit density if the property owner designates a certain portion of dwelling units as affordable under the Philadelphia zoning code.

Under the law, property owners can instead make a payment to the city of Philadelphia’s Housing Trust Fund to receive the Mixed-Income Housing Bonus rather than including affordable units. To do so, the property owner must sign an agreement with the city’s Department of Planning and Development, also known as CPD, and make the payment before the building permit may be issued. Payments are generally calculated based upon the zoning district, the category of the bonus, and the level of affordable housing that is being offered.

The payment in lieu option will now only be available for real estate development projects with at least 10 residential dwelling units. Previously, real estate development projects with at least 4 rei units were eligible to take advantage of the payment in lieu option. 

In addition, the calculations have drastically increased. For example, if a developer has a 5,000 square foot CMX-2 property, which is permitted 10 dwelling units as of right, under the moderate-income, two additional units would be permitted and the estimated payment in lieu would be $163,000, about. Under low income, 5 additional units would be permitted and the estimated payment in lieu would be $265,500. However, under the current law, the estimated payment in lieu for the moderate-income level would be $100,000 and the estimated payment for the low-income level would be $150,000. As you can see, there have been drastic changes in both the properties that are eligible, as well as the payment that must be made for said properties. 

So, also there have been changes for the Mixed-Income Neighborhood Overlay District, which we will be discussing in our next episode.

At Nochumson P.C., we are more than legal counsel. We are people serving our neighbors and community in Pennsylvania and New Jersey. Knowing that real communication between real people can help lead to real positive results, our team of attorneys are available 24/7 to help answer your legal questions and to fight for you with skill and fortitude, whatever the case may be. When you hire us, you can expect a sensible and cost-effective approach to legal counsel. We think fast, think ahead, and get things done.

 

Post Excerpt ‘In the Zone with Clementa Amazan’ is a video series that discusses the bonuses provided by the city that allow for additional height, floor area, and density, a terrific option for developers trying to avoid the variance process. In episode 3, we will be covering changes for the Mixed-Income Housing Bonus.

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Alan Nochumson Named “Modern Man” by Philadelphia Style

Alan Nochumson is featured in Philadelphia Style’s October 2021 issue. In this issue, the magazine presents some of the most distinguished and outstanding industry leaders in the Greater Philadelphia area, who are shaping the future of their respective fields.

For Alan, his knowledge, creativity, and dedication in finding a solution to help his clients navigate through the maze of the development rules and regulations in the City of Philadelphia were a vital part of being one of the Modern Man selections. He thinks like a chess player, always anticipating what is next. He is compulsively early, unflappable under pressure, and tough but fair. He also loves to play matchmaker, introducing his clients to business partners and investors who can help them grow their businesses.

When he is not lawyering or teaching, you can find him spending time with his family at local eateries, walking his dog, Knox, where he lives in Fairmount, or rooting hard for our beloved Philadelphia sports teams.

Be sure to check out Philadelphia Style to see what set Alan and other selected individuals apart.

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How to Utilize the Philadelphia Homestead Exemption

The Philadelphia’s Homestead Exemption program was introduced to reduce Philadelphia homeowners’ assessed property value and the real estate tax bill. In 2019, the City of Philadelphia passed into law dramatic changes as to how some residential properties within city limits will be taxed. With this changed, the program is expected to give eligible homeowners a $45,000 reduction on their assessed property value, which will give an exemption of up to $629 a year on their Real Estate Tax Bill.

Who is eligible?

The requirements for this program are simple. As stated on the application, “A person must simply own the property and live in it as their primary residence. There are no other requirements.” There are no age or income requirements. However, you will not eligible for this program if your property is used as a business or for rent, or if your property is on the residential tax abatement program.

If you are eligible, the taxable portion of your property value is reduced. For the 2020 real estate tax bills, the property value was reduced by $45,000 when assessed for real estate tax purposes. Keep in mind, the exemption has changed from year to year.

How can you apply?

You can apply either online, over the phone, or by mail. Once your application is accepted, you don’t have to reapply for the exemption from year to year unless you purchase a new home or the name changes on the deed while you are living there. As long as you continue to own and live in the eligible property, the exemption will apply.

To learn more on how the Philadelphia Homestead Exemption can be applied to your home, contact the team at Nochumson P.C. At Nochumson P.C., we are more than legal counsel. We are people serving our neighbors and community in Pennsylvania and New Jersey. Knowing that real communication between real people can help lead to real positive results, our team of attorneys is available 24/7 to help answer your legal questions and to fight for you with skill and fortitude, whatever the case may be. When you hire us, you can expect a sensible and cost-effective approach to legal counsel. We think fast, think ahead, and get things done. Contact us today or call us at (215) 399-1346 to see how we can represent you.

Post Excerpt If you own property in Philadelphia and it is your primary residence, the Homestead Exemption might save you a substantial amount on your real estate tax.

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New Philadelphia Law Aims to Increase Transparency in Rental Screening Process

On July 15, Mayor James Kenney signed into law Bill No. 210329 and Bill No. 210330, collectively known as The Renters’ Access Act (the act). The bills were introduced by Councilmember Kendra Brooks and co-sponsored by Councilmembers Bobby Henon, Jamie Gauthier, Helen Gym and Isaiah Thomas.

The new law is intended to increase transparency in the rental screening process and increase renters’ ability to access housing by regulating the criteria that landlords use when evaluating tenants and giving renters the ability to correct or clarify application information.

Bill No. 210329 amends Section 9-1108 of the Philadelphia Code titled “Fair Practices Ordinance: Protections Against Unlawful Discrimination.”

Section 9-1108(3) now requires landlords to provide a uniform written rental screening criteria before accepting applications for rental housing.

Under the new law, the uniform written rental screening must be provided in a manner that makes it readily available to all potential applicants, such as on a conspicuous place on a rental website or on the leased premises, if available.

The uniform written rental screening criteria must also specify all objective and subjective criteria that will be used to review rental applications, which may include the specific financial, criminal, rental history and any other criteria used in deciding whether to rent or lease to a prospective tenant.

The failure of landlords in Philadelphia to provide uniform written rental screening criteria may be considered evidence of an unlawful housing practice under the new law.

In addition, under the new law, landlords in Philadelphia may not reject an application for rental housing without providing the applicant a written or electronic document setting forth a plain statement of all reasons for the denial of the application, and which, to the extent permitted by the Fair Credit Reporting Act, 15 U.S.C. Section 1681, et. seq., includes a copy of any documents obtained from a third party for the purpose of establishing the applicant’s eligibility or otherwise deciding whether to rent the leased premises to the applicant, within three business days of the rejection. Failure to do so may be considered evidence of an unlawful housing practice under the new law.

However, the new law does provide some exceptions.

First, an application for rental housing will not be considered “rejected” under the new law unless the applicant was denied after consideration of the applicant’s specific eligibility and suitability for the rental housing or an applicable application fee was collected.

Second, any rental housing that is owned, operated, subsidized, or financed by a program of the federal, state, or local government, or which is otherwise governed by a deed restriction or indenture related to affordability of the rental housing, is exempt, provided that the rental of a particular rental housing unit will not be excluded from the new law because of a tenant-based subsidy.

Bill No. 210329 amends Chapter 9-800 of The Philadelphia Code, titled “Landlord and Tenant,” by adding a new Section 9-810, entitled “Prospective Tenant Screening Practices,” to regulate the application and selection process for rental housing and make technical changes to it.

Section 9-810(2) prohibits blanket eviction and credit exclusions.

Landlords in Philadelphia may not automatically decline to rent a housing unit to a prospective tenant solely because the prospective tenant has an eviction record or the prospective tenant’s credit score or tenant screening score derived, in whole or in part, from a tenant screening report falls below a specific numerical threshold.

In response to the detrimental impact of the pandemic on renters, the new law prohibits landlords in Philadelphia from denying an applicant based in whole, or in part, on credit information or credit report, tenant screening report, or any other consumer report demonstrating a failure to pay rent or utility bills during COVID-19 emergency periods.

In addition, landlords in Philadelphia are not permitted to reject an applicant as a result of the following events in an eviction history or eviction record:

  • any eviction proceeding pursuant to Pennsylvania law or other equivalents in other states, that did not result in a judgment in favor of the plaintiff; or
  • any sealed record of an eviction proceeding; or
  • any eviction judgment against the applicant that has been vacated or marked satisfied pursuant to Pennsylvania law; or
  • any eviction case filed, or eviction judgment that was entered, 4 or more years before the application to rent was submitted;
  • an eviction proceeding brought against the applicant during the Covid-19 emergency period, other than an eviction based on violent or dangerous criminal activity that resulted in a judgment against the tenant; or
  • any eviction proceeding where a judgment by agreement is currently in place, or where the judgment by agreement has been marked satisfied or vacated or is otherwise resolved.

The new law also provides eligible prospective tenants with the opportunity to dispute or request reconsideration of their application denial within 48 hours after receiving the denial.

Under the new law, if the prospective tenant provides timely notice of their intent to dispute or request reconsideration of the denial, the prospective tenant may provide within seven business days any evidence that information relied upon by the landlord was inaccurate or incorrectly attributed to the prospective tenant or was based on prohibited screening criteria.

Prospective tenants in Philadelphia may also provide any evidence of mitigating circumstances relating to the grounds for denial to establish whether the applicant shows a readiness to satisfy the obligations of tenancy.

For example, prospective tenants in Philadelphia may provide:

  • a history of on-time rental payments that otherwise may not appear in a background check;
  • that a prior eviction of the prospective tenant based on nonpayment of rent was based, in whole or in part, on rent not owed by the prospective tenant;
  • new or increased income of the prospective tenant that is reliable and sufficient to cover rental costs;
  • letters of recommendation provided on behalf of the prospective tenant by employers or former housing providers; and
  • changes in circumstances that would make prior lease violations by the prospective tenant less likely to reoccur.

Under the law, if a prospective tenant in Philadelphia disputes the information or seeks reconsideration but the prospective landlord already rented the housing unit to another tenant, the landlord must offer to rent the next available comparable housing unit to the rejected prospective tenant.

This opportunity is only available to a prospective tenant if the prospective landlord owns five or more dwelling units within the city of Philadelphia and the rental application demonstrates the qualifications and ability of the prospective tenant to satisfy the obligations of the tenancy.

— Clementa Amazan, an associate at Nochumson P.C., is the co-author of this article.

Reprinted with permission from The Legal Intelligencer © 2021 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.

Post Excerpt The new law is intended to increase transparency in the rental screening process and increase renters’ ability to access housing by regulating the criteria that landlords use when evaluating tenants and giving renters the ability to correct or clarify application information.

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Commercial Sublease: What You Need To Know

It goes without saying that many commercial landlords and tenants struggled over the past year and a half as the world struggled to confront the Coronavirus and the many ways it changed our daily lives. Within the business community, commercial landlords were some of the hardest hit and, in many cases, are still trying to recoup unpaid rent payments from tenants while also trying to avoid broken leases. For tenants, there are a few reasons why a business may choose to sublet their premises including to reduce cost, optimize space, or consolidate sites. This has left some landlords and tenants wondering if a commercial sublease could help.

What is a Commercial Sublease?

When it comes to terminating a commercial lease, business owners understand it is a very expensive process. In many instances, the landlord can terminate the lease, and seek all amounts still owed, minus whatever the landlord could receive in replacement rents at fair market value. Because this year has been wrought with financial strife for business owners, the “fair market value” is significantly lower than what was actually negotiated in the lease. Thus, terminating a commercial lease could cost commercial landlords much more in the long run. With this in mind, committing to a commercial sublease agreement with another tenant could provide a potential alternative that could help commercial landlords and tenants alike during this difficult time. A commercial sublease refers to the transfer of a portion of an existing tenant’s right to a third party. The tenant who subleases a rented space is known as the sublessor and the new tenant is known as the sublessee. The sublessee stays in the tenant’s rented space for the remainder of the tenant’s lease period or the duration of the agreed sublease term. Commercial subleasing often lasts for several years, and this commitment will ensure the landlord receives full and timely payments from the new subletting business.

Sublease Considerations

For sublessors planning to sublease, it is important to pay attention to the following points:

  • How much rent will the new tenant pay to the original tenant?
  • What are the existing lease provisions concerning subleasing and the landlord’s consent?
  • What happens when the sublease terminates?
  • Who pays utility expenses?
  • Do the parties have obligations to secure insurance?
  • What security (including bank guarantee, cash security, and/or personal guarantees) is the subtenant providing?
  • How are other costs (including rent, outgoings, levies, etc.) passed on?

Normally, the sublessor is still responsible for your lease payments, so it is important to have a system in place to collect monthly payments when due. It is also essential to be well acquainted with the terms in the existing commercial contract to avoid any legal issues with the landlord. Preferably, you may want to approach your landlord before subleasing your office space.

Some Benefits of Subleasing Commercial Space

Subleasing a space has its benefits especially in a time like this when many employees work from home. Here are some advantages to subleasing commercial space as a tenant:

  • Subleasing unused space can be a great way to save money. Subleased spaces are usually more cost-efficient than a standard commercial lease.
  • Subleasing is a great alternative for small businesses who do need a big space especially when they are just starting.
  • Your rent can be paid as a flat monthly payment.
  • Since it is part of a larger property, you may not need to spend time and money in upgrading the space.
  • As a sublessee, you may not need to pay for some expenses such as security systems or Internet access.
  • Subleases may also not be responsible for the maintenance of the common areas (CAM).

At Nochumson P.C., we are more than legal counsel. We are people serving our neighbors and community in Pennsylvania and New Jersey. Knowing that real communication between real people can help lead to real positive results, our team of attorneys are available 24/7 to help answer your legal questions and to fight for you with skill and fortitude, whatever the case may be. When you hire us, you can expect a sensible and cost-effective approach to legal counsel. We think fast, think ahead, and get things done. Contact us today or call us at (215) 399-1346 to see how we can represent you.

Post Excerpt When it comes to terminating a commercial lease, business owners understand it is a very expensive process. In many instances, the landlord can terminate the lease, and seek all amounts still owed, minus whatever the landlord could receive in replacement rents at fair market value.

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Employment Best Practices Regarding COVID-19 Vaccination

An employer is allowed to mandate Covid-19 vaccination and many already have.  However, an employer is required to accommodate those who do not wish to be vaccinated on the basis of religious reasons or based on disability. 

The religious exception is the most complex of the three, due to the uncertain nature as to what constitutes a religious belief. Personal preference and social, political, or economic philosophies are NOT protected under Title VII of the Civil Rights Act of 1964 as a valid religious belief. 

An employer should have internal policies and procedures when it comes to dealing with this issue. If an employer has doubt, it has the right to make a limited inquiry and verification may be requested. Employees must provide information that addresses those doubts.  However, demanding excessive information may be challenged as harassment. Avoiding assumptions and stereotypes is very important when making this specific inquiry.

The ADA was enacted to protect the disabled from unlawful discrimination. Reasonable accommodations must be provided for the disabled unless it would impose an undue hardship on business operations. Undue hardship means that the accommodation would require significant difficulty or expense.

Medical exams and disability-related inquiries are prohibited unless they are either job-related or consistent with business necessity. Vaccinations are NOT considered a medical examination. It IS legal for an employer to ask an employee if they have been vaccinated and for proof, but inquiring beyond that can be tricky (example: “Why have you not gotten vaccinated?”). Asking follow-up questions like that can lead to an employee having to disclose information that an employer doesn’t necessarily have the right to obtain.

The following are best practices for an employer to consider when a mandatory vaccination policy is challenged by an employee. First, take the steps of performing a thorough analysis on why the mandate is being challenged. It’s important to ensure that there is an in-house policy that provides for exceptions to the vaccination mandate and to have a well-trained human resources staff and supervisors. Taking the steps to educate employees and providing incentives for vaccination should also be considered.

For more in-depth information on this subject, check out this webinar hosted by Nochumson P.C.’s own Natalie Klyashtorny.

At Nochumson P.C., we are more than legal counsel. We are people serving our neighbors and community in Pennsylvania and New Jersey. Knowing that real communication between real people can help lead to real positive results, our team of attorneys are available 24/7 to help answer your legal questions and to fight for you with skill and fortitude, whatever the case may be. When you hire us, you can expect a sensible and cost-effective approach to legal counsel. We think fast, think ahead, and get things done. Contact us today or call us at (215) 399-1346 to see how we can represent you.

Post Excerpt Prior to the COVID-19 pandemic, mandatory vaccinations in the workplace were fairly rare, with the exception of those who work in healthcare. Flu vaccinations have been commonly administered to healthcare workers in the past, and the legal findings from those cases can similarly be applied to Covid-19 vaccination best practices. With so much uncertainty, it’s best to know what rights employees and employers have concerning mandatory vaccination.

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A Landlord’s Guide to Tenant Utility Responsibility

Whether you are new to property rental or a seasoned landlord, deciding whether you are going to be responsible for utilities, or have your tenant put them in their name, is a big decision for every property owner. The type of rental property, state landlord-tenant laws, and the rental lease agreement can all determine whether a landlord or tenant pays for utilities such as electric, gas, and water. To avoid misunderstandings between you and the tenant, it is important to put everything in writing by using a landlord-tenant utility agreement and being clear about responsibilities and timelines. Below we offer a guide for landlords in regard to tenant utility responsibility.

Guidelines for Utilities

In Philadelphia, utilities in a rental property usually consist of electricity, gas, and water. Deciding who pays for utilities can affect the total rent the tenant pays, the number of bills you as a landlord need to pay, and the profitability of your rental property. Including utilities in the rent could be a creative marketing strategy to attract great tenants. However, there is also a risk that the tenant could waste a lot of water or electricity since they’re not paying the utility services bill, which reduces the profit you make from the property. To minimize the risk of paying for utilities, a landlord can set a monthly cap on the utility expense. For example, the lease might state that if the total utility bill exceeds $150 per month, any overage will be billed to the tenant the following month as additional rent.

Below are 2 examples of things to consider when deciding if you or your tenant will be responsible for utilities:

  • Listing Appeal: Including utilities in your rent can give you a competitive edge to find and keep the best possible tenants. Your rent will be higher than a landlord who doesn’t offer utilities, so be absolutely sure to stress the fact that utilities are included when you’re marketing your property for rent. Otherwise, prospective tenants will think that your home is overpriced.
  • Convenience: The convenience to a tenant of renting a property that includes utilities can be very attractive. Many may be willing to pay a higher rent in exchange for the perk of you handling all of the bills. Plus, you’ll be saving your tenant from the extra time and trouble of setting up utility accounts and having to pay an additional deposit.

Paying of Unpaid Bills

Let us play a game of what-if to demonstrate the importance of having a clearly defined agreement when it comes to the tenant utility responsibility. If you were to have a tenant who, by agreement, was responsible for paying all of the utilities and they moved out without paying all of the bills, you could simply use their security deposit and assume you will never hear from them again. A common question is if the landlord is responsible for paying any overdue costs and fees. It obviously depends on the original agreement between landlord and tenant. As examples,

  • If the utilities are in the tenant’s name: Chances are good that you cannot be held responsible for these fees. The utility companies have records showing that the tenant living on the property is responsible for paying the fees. This means that they are the ones who are legally bound to pay the company, and you are not. The utility company will be responsible for filing a lawsuit to get their money from the tenant if the tenant is unwilling to pay.
  • If the utilities are in your name: This situation is less likely to occur because you would have firsthand knowledge about whether or not your tenant has paid. If the utilities for the property are in your name and the tenants were paying you directly for the utilities, you are likely going to be held responsible for the cost. The reason being is that your name is the one that the utility companies have, not your tenants. Even if your tenants were supposed to pay you and didn’t, the utility company does not care about that. You will have to pay off the fees as written by the company. If the tenant skipped out on you and left behind huge bills that you had to handle, you may want to consider taking them to small claims court to get some of that money back. Other than doing this, there is really no way for you to get this money back. You will simply have to pay for it.
  • If the utilities are shared: If you are living in a situation where there is a shared metering system between multiple tenants or between you and your tenants, figuring out what to do with unpaid utility bills gets a lot more complicated. The basic fact is the person with the name on the contract with the utility company is responsible for ensuring that the bill gets paid. If someone else has signed an agreement to pay some portion of that money to the contracted person, any dispute about that payment must be handled in small claims court.

When it comes to tenant utility responsibility it is imperative to be as comprehensive and thorough as possible. And to be sure it is all in writing and communicated directly to your tenants. A landlord has a lot on their plates at all times and being comprehensive in terms of the payment of utilities can go a long way to ensuring fewer headaches down the road.

At Nochumson P.C., we are more than legal counsel. We are people serving our neighbors and community in Pennsylvania and New Jersey. Knowing that real communication between real people can help lead to real positive results, our team of attorneys are available 24/7 to help answer your legal questions and to fight for you with skill and fortitude, whatever the case may be. When you hire us, you can expect a sensible and cost-effective approach to legal counsel. We think fast, think ahead, and get things done. Contact us today or call us at (215) 399-1346 to see how we can represent you.

Post Excerpt To avoid misunderstandings between you and the tenant, it’s important to put everything in writing by using a landlord-tenant utility agreement and being clear about responsibilities and timelines.

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