NJ Legislature – Senate Bill 2340

In an effort to curb the high volume of evictions and foreclosures caused by the COVID-19 pandemic, the NJ legislature has introduced Senate Bill 2340 to offer renters flexibility so they are not forced to pay four or more months of rent all at once when the moratorium is lifted.  The bill also allows homeowners who are temporarily unable to make their mortgage payments the necessary forbearance period to pay off what they owe at the end of their mortgage’s life, rather than during the crisis. The bill has already cleared the state Senate and the key Assembly Housing Committee and is just waiting for a final vote in the General Assembly before Gov. Murphy can sign it into law. 

Proponents of this bill are touting it not only as an economic issue but also an important civil rights issue that is essential for the housing security of Black New Jerseyans and immigrant families – many of whom don’t qualify for federal assistance.  Medical data indicates that Black people are more likely to contract and be hospitalized for COVID-19 and also more likely to have lost their jobs in the service and retail sectors, which provided the income needed to maintain their housing security.  Undocumented immigrants are often employed in similar service, retail and restaurant industries which have experienced devastating layoffs during the pandemic shutdown so therefore, this bill is also intended to protect their housing. 

We will continue to monitor the status of this legislation and its impact to our industry.

 

For additional information, please reach out to the below contact:

Senior Litigation AttorneySalvatore Carollo, Esquire

COVID-19 & Your College Age Student

Has your child turned 18? Have they started college, are they studying abroad or taking a gap year?

If the answer is YES, there are two important documents that your child should have in place that are vital in helping your child, and you, in the event of an emergency. The importance of these documents, especially in the current COVID-19 crisis, cannot be understated.

What are these documents?

  • A durable power of attorney for health care
  • A durable power of attorney for property

Many parents may not realize that in most states your child is an adult once they turn 18. Further, certain federal laws such as the privacy laws under the federal Health Insurance Portability and Accountability Act (HIPAA) and the Family Educational Rights and Privacy Act (FERPA) can prevent parents of children who have reached 18 years of age from accessing their children’s grades, bank accounts, disciplinary records, or even information about their healthcare. As such, a parent’s ability to discuss these matters with your child’s doctors, health care institutions, or school, in the event your child has a medical emergency may be limited or restricted, even if you are “paying the bills” or providing the health insurance for your child.

The durable power of attorney for healthcare allows your child to appoint someone, typically a parent, as the child’s health care agent to make medical decisions on their behalf if they are or become unable to make those decisions on their own. The durable power of attorney should include a HIPAA release to comply with the HIPAA privacy laws, and can also include “living will” provisions that would address end of life decisions. No-one likes to think about such matters for a young adult, but properly addressing these issues now can provide relief that can minimize the emotional issues that arise if a young adult faces a health crisis.

The durable power of attorney for property allows your child to appoint someone, again typically a parent, as the child’s agent to handle financial matters on their behalf. This may be important if your child is away at school, allowing their agent to deal with the child’s bank accounts, student loans, other bills, and even grades. You or your child can also check with their educational institution to see if they have any requirements in this regard, as many colleges and universities have their own suggested forms that they may require in addition to these documents.

These documents are not complicated and easy to prepare and can provide you and your child the peace of mind in knowing that you are there to support them when needed in a way that complies with the law. Please feel free to reach out to our Director of Estate Planning, Tom Shea, Esquire, to discuss. 

The SBA Procedural Notice 5000-20057: Entity Planning and the Ever Evolving Post PPP Landscape

Last week, the SBA issued Procedural Notice 5000-20057, which provides that unless a PPP note is fully satisfied (meaning that the SBA has remitted funds to the lender in full satisfaction of the PPP Note, or the borrower has repaid the PPP Note in full), lender approval is required for transfers of more than 20% of the entity ownership. Further, if the transfer of entity ownership, or entity assets, is more than 50%, then SBA approval is required (which could take months) unless an interest bearing escrow account equal to the outstanding PPP loan balance is established. While many PPP loan documents from lenders prohibit entity transfers without lender approval, not all do, and these new requirements appear to apply even if the PPP loan documents are silent as to, or permit, entity transfers without lender or SBA approval.

 

Of course, while the new rules imposed with SBA Notice 5000-20057 create additional burdens for business owners with outstanding PPP loans who are considering selling or otherwise transferring their business, they may also create planning opportunities to avoid the burden of seeking SBA approval. Partial sales or transfers combined with option agreements, licensing or management agreements, and entity recapitalizations, are all possible planning strategies to deal with the new planning burdens imposed by SBA Notice 5000-20057. For more information, contact Thomas E. Shea, Esquire.

Congratulations Steven K. Eisenberg, Esquire, MBA

Steven K. Eisenberg, Esquire, MBA

Chief Executive Officer and Founder of Stern & Eisenberg

At Stern & Eisenberg, we are always looking for ways to grow and enhance our ability to support all of our clients’ needs through our existing footprint. Part of our effort includes supporting our attorneys’ efforts to develop their abilities and knowledge in additional jurisdictions.

It is with great pleasure to announce that Steven K. Eisenberg has recently been sworn into the practice of law in the additional states of West Virginia and Maryland. He looks forward to working with the other Stern & Eisenberg attorneys licensed in those states. With the help of our Stern & Eisenberg attorneys, Steven soon will join the Federal Bars (District Courts and Bankruptcy Courts) in both states. Steven is also finalizing his admission to the New York State Bar.

The S&E family is dedicated to professional advocacy, creative solutions and legal services for our clients, partners, and community with determined integrity and intensity serving the State of Delaware, Pennsylvania, New Jersey, New York, Pennsylvania, West Virginia and (Maryland).

Steven K. Eisenberg, Chief Executive Office and Founder of Stern & Eisenberg has an extensive background in real estate and corporate matters including acquisition and sale of businesses and assets.  His practice also focuses on the representation of lenders and servicers in the enforcement and protection of their interests in the legal process, including foreclosure, bankruptcy, evictions, title claims, loan modifications, and litigation.  Having experience previously representing borrowers, Steven brings his unique perspective to the representation of his servicer, lender and business clients.  Steven is now licensed to practice law in New Jersey, Pennsylvania, West Virginia, Maryland, and the District of Columbia. He is Martindale-Hubbell AV rated.  

Congratulations Steven!

Pennsylvania Unemployment Assistance Programs & COVID-19. What you need to know!

If you are confused about the various Pennsylvania unemployment programs, which include several unemployment assistance programs that were part of the federal CARES pandemic relief legislation enacted back in March, you are not alone.

The federal CARES pandemic relief legislation created three unemployment benefits programs (administered through state unemployment offices): (1) the Pandemic Unemployment Assistance (“PUA”) program, providing unemployment benefits for certain individuals who are unemployed as a result of COVID-19 and who traditionally were ineligible for unemployment, such as gig-economy workers, independent contractors, and self-employed individuals otherwise ineligible for regular or traditional state unemployment benefits; (2) the Pandemic Emergency Unemployment Compensation (“PEUC”) program, providing 13 additional weeks of regular or traditional state unemployment benefits for individuals whose state unemployment benefits would otherwise expire; and (3) the Federal Pandemic Unemployment Compensation Program (“FPUC”) program, providing $600/week of additional unemployment benefits (if the individual received other unemployment benefits in that week.

Congress provided funding for the PUA and PEUC programs through the end of the year. Unfortunately for those receiving unemployment benefits, Congress and the President failed to agree on a replacement or extension of the $600/week FPUC program, and that program expired at the end of July. In response, on August 8, 2020, the President issued an executive memo establishing a new Lost Wages Assistance (“LWA”) program.

What is the LWA program? It is a program administered federally through the FEMA (Federal Emergency Management Agency) Disaster Relief Fund as a grant program to the states, with the funds to be paid to eligible individuals through their state unemployment programs. The LWA program was designed to provide a $400/week “lost wages” benefit, $300/week of which is to come from the federal government, with the remaining $100/week to come as a match from the states (at least, those states that elect to participate). Unlike the FPUC, it is only available to eligible individuals impacted by the coronavirus pandemic who are already receiving more than $100/week of unemployment benefits. Further guidance from the federal government appears to allow states to meet the state’s match with that state’s underlying spending on traditional unemployment programs. This LWA benefit is available for weeks of unemployment ending on or after August 1, 2020 and ending on or before December 27, 2020, although as it is a FEMA grant program, it could end earlier if FEMA exhausts the funds allocated to this program or if Congress enacts new unemployment relief legislation.

FEMA appears to have begun approving states for the LWA program to provide the $300/week federal benefit, including Pennsylvania according to a press release from FEMA issued on Monday 8/24/20. However, it is not clear how long it will take for this LWA Program to be implemented in Pennsylvania, with FEMA announcing in its press release that it “…will work with Pennsylvania Gov. Tom Wolf to implement a system to make this funding available to Pennsylvania residents.”

            If you are an unemployed Pennsylvania resident, regular or traditional state unemployment benefits, benefits from the PUA program, and extended benefits from the PEUC program may be available to you. In addition, the $300/week LWA benefit should become available to Pennsylvania residents when implemented. See the Pennsylvania state unemployment program website, www.uc.pa.gov for more information. We continue to monitor developments in this area and will post updates as they become available.

Payment Protection Program (PPP) & The Continued Debate Over The Deductibility of Qualified Expenses

While the IRS has taken the position (IRS Notice 2020-32) that qualified expenses paid using PPP loan proceeds are not deductible for federal income tax purposes, the issue is far from resolved and the subject of continued debate. Click here for more information.

While the IRS has taken the position (IRS Notice 2020-32) that qualified expenses paid using PPP loan proceeds are not deductible for federal income tax purposes, the issue is far from resolved and the subject of continued debate.

In a letter to Congress on August 4, 2020, copy available here, https://www.ada.org/~/media/ADA/Advocacy/Files/200804_Main_Street_Loan_Forgiveness.pdf?la=en, a consortium of some 170 business interests and lobbying groups (ranging from the Air Conditioner Contractors of America to the American Dental Association, and including the American Institute of CPAs) demanded that any new COVID-19 relief legislation affirm the deductibility of these qualified expenses (i.e. wages and rents paid using PPP loan proceeds).

Why is this issue crucial to small business PPP borrowers? Because any PPP loan forgiveness may be effectively negated if qualified expenses paid with forgiven PPP loan proceeds are not tax deductible. As their letter notes as an example, “If a business has $100,000 of PPP loans forgiven and excluded from its income, but then is required to add back $100,000 of denied business expenses, the result is the same as if the loan forgiveness was fully taxable.”  Proposals have been introduced in Congress to “reverse” the IRS position. However, currently all COVID-19 relief efforts are stalled. A real practical concern raised by those concerned with this issue is that with the extension of the time to use PPP loan proceeds to 24 weeks, a small business using PPP loan proceeds for qualified expenses in 2020 may not obtain forgiveness until sometime well into 2021. Without that forgiveness in hand, can that business deduct the qualified expenses paid using loan proceeds in 2020?

In the absence of further relief or guidance on this issue, small business taxpayers and their tax advisors will have to decide whether to take an aggressive approach, in light of IRS Notice 2020-32, or comply with the IRS’s position and face losing most or all of the benefits of PPP loan forgiveness. We continue to monitor developments in this area, and will provide updates on these critical issues as they become available.

Business Interruption Coverage Federal Court Order due to COVID-19

The US Judicial Panel on Multidistrict Litigation, in a much anticipated Order issued yesterday, rejected attempts by two groups of policyowners, one in Pennsylvania and the other in Illinois, to centralize hundreds of federal cases filed by business owners seeking insurance coverage for business interruption losses related to the COVID-19 pandemic. The Panel sided with insurance companies, and even some policyowners, who objected to consolidating these lawsuits into a single venue. While finding that consolidation may still be appropriate for cases against specific insurers, the Panel found that, generally, nationwide consolidation of cases involving many insurers (more than 100), who may have differing policy provisions, lack common elements that could complicate discovery efforts and slow down proceedings. The Panel, did, however, signal that it would consider “targeted” consolidation involving cases against a single insurer or group of affiliated insurers where common elements among policy provisions might be found. As there can be substantial variation in policy provisions for pandemic related business interruption coverage, it is important if you are a business owner to review your policy. If you have questions about your business insurance coverage, contact one of our experienced attorneys at Stern & Eisenberg, PC, Thomas E. Shea and Zachary Champion.

PA Liquor Control Board Clarification Regarding Food Requirement During Targeted Mitigation

On 7/22/2020, the PA Department of Health along with the PA Liquor Control Board have provided clarification regarding its requirement that all on-site consumption alcoholic beverages must be accompanied by the purchase of food. Going forward, patrons must  purchase a meal (breakfast, lunch, or dinner), not a snack. (It is unclear where Lunchables fall in this requirement due to its tiny serving size even though it has lunch right there in the name!) The guidance further provides that customers may purchase additional alcoholic beverages while they are consuming the meal, but that once they have finished the meal, they cannot purchase any additional beverages. This clarification would also seemingly eliminate the possibility of serving a moldy, Raines Law-style, ham sandwich.

Food trucks, or other food service providers, can fulfill the meal requirement, although compliance with the food requirement seemingly falls to the licensee. It will be important to work out a system to ensure that customers cannot purchase additional beverages unless they still eating their meal.

Additional clarification of note, bar service remains prohibited, indoor occupancy is limited to 25% capacity, indoor events/gatherings are limited to 25 people, and outdoor gatherings are limited to 250 people (each capacity requirement includes staff).

If you have any questions/concerns or are cited for this, or any other violation, please contact Daniel Jones at djones@sterneisenberg.com or call 215-572-8111.

Pennsylvania Annual Real Estate Tax Assessment Appeal Deadline Is August 1

The August 1 deadline is fast approaching if you want to appeal your annual Pennsylvania real estate tax bill. Your real estate tax bill is determined by multiplying the county assessed value of your property by the common level ratio factor, a number determined annually by the state. For the upcoming fiscal year, the average common level ratio factor in Southeastern Pennsylvania Counties (Phila, Bucks, Montco, Chester and Delco) increased anywhere from 5% to almost 13%, meaning that for real estate tax purposes the value of almost all properties in these counties increased by 5% to 13%, depending on the county where your property is located. Are you paying too much in real estate property tax? To learn how appeal your real estate tax bill, contact us today.