California usury law is addressed in multiple places: the California Constitution, statutes, case law, and initiative measures. Due to the patchwork nature of this body of law, differing interpretations and ambiguity are commonplace. In one recent case currently on appeal, the Ninth Circuit has asked the California Supreme Court to clarify California law in order to resolve a split in the federal district courts around the obligation of lenders that are otherwise exempt from California usury limitations to disclose compound interest terms as part of a lending transaction. The determinations of the California Supreme Court are likely to impact existing and future commercial loans governed by California law.
Enacted by Congress in 1930 and revised in 1984, the Perishable Agriculture Commodities Act (PACA) protects sellers of perishable agricultural commodities, defined as “fresh fruits and fresh vegetables of every kind and character whether or not frozen or packed in ice, and cherries in brine as defined by the Secretary of Agriculture” by subjecting a “merchant, dealer or broker” of perishable produce to a trust on the proceeds on the sale of perishable produce, and products derived from that produce, for the benefit of all unpaid suppliers and sellers (a “PACA Lien”).
The Financial Accounting Standards Board (FASB) is expected to finalize new lease accounting standards (“Standards”) within the coming months which will have very real consequences for owners and lessees alike. Under current accounting standards, a lease is classified as a “Capital Lease” or an “Operating Lease.” A capital lease is treated similarly to a loan; the asset is treated as being owned by the lessee and must be recorded as an asset on the lessee’s balance sheet. By contrast, an operating lease gives the lessee a right to use the owner’s asset without the requirement of including the lease on its balance sheet. The lessee never owns the asset and must return it to the owner after the lease ends. Most office building, retail, or other standard commercial leases are operating leases under the current standards.
The new Standards will, among other things, eliminate the above classification and instead classify most capital leases –including existing capital leases –as a “Type A Lease”, which will be accounted for in substantially the same manner as capital leases are accounted for under existing generally accepted accounting principals (GAAP), and most operating leases – including existing operating leases –as a “Type B Lease”, which will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will now be required to include lease obligations on their balance sheets increasing assets and liabilities. Shorter term leases, leases of 12 months or less, must also be included on balance sheet if, considering all relevant economic factors, the lessee is “reasonably certain” to exercise an option to extend the lease beyond 12 months. Continue Reading FASB Lease Accounting Changes
As a follow up to my colleague Allan Caggiano’s post here on the new 2016 ALTA/NSPS Land Title Survey Standards, the Planning & Zoning Resource Company (PZR) has recently circulated an important advisory on the practical effects of the new survey standards and the interaction between the surveyor and the zoning report that is typically provided by a third party like PZR. Continue Reading Important Changes Resulting from New ALTA/NSPS Land Title Survey Standards
Mintz Levin was a sponsor of IMN‘s 13th Annual Winter Forum on Real Estate Opportunity & Private Fund Investing held at the Montage resort in Laguna Beach. The IMN conference is the premier West Coast conference on real estate investing and is attended by the most influential voices in the real estate industry. Continue Reading Costs and Practicalities of Utilizing Alternative Sources of Capital for New Acquisitions, Refinancings & Development
On February 23, 2016, the 2016 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys will become effective (superseding the 2011 ALTA/ACSM standards).
An overview of the changes (courtesy of Chicago Title Insurance Company) can be found at this LINK, and include (among others): Continue Reading 2016 ALTA/NSPS (formerly ALTA/ACSM) Land Title Survey Standards
A sophisticated (and effective) wire-fraud scam targeting real estate (and other) transactions is on the rise, and mostly occurring in the United States.
Here’s a Wire Fraud Alert from Chicago Title explaining how the scam works.
The National Association of Realtors suggests following this guidance to avoid becoming a victim: Continue Reading Sophisticated Email Scams Targeting the Real Estate Industry