August 29, 2011

If the house is a rockin'...

As the entire world knows by now, on 23 August 2011, a 5.8 earthquake occurred in the Central Virginia Seismic Zone . I was working from my home-based Taylor Legal http://www.taylorlegal.com/ office in Howard County, Maryland when the vibrations hit at around 1:55 pm, EST. I didn't even realize I was experiencing an earthquake until the shaking stopped.

While I grew up on Maryland's Eastern Shore, I lived in Kansas for almost a decade before settling in Howard County. In Kansas I became accustomed to tornadoes, having gone storm spotting (a major departure from my normal tornado mode of hiding in the basement with the local weather on the TV). I've seen hail the size of softballs, and lived through a micro-burst. I'm even okay with hurricanes, as advance warnings are sufficient to take cover and batten down (as I am doing now in preparation for hurricane Irene's approach). I can honestly say that I am not comfortable with earthquakes. What started as a small rumble evolved into a very loud shaking, and I felt like I was surfing in my office chair. The whole thing lasted about 30 seconds and was over so quickly, it didn't even occur to me to evacuate. Fortunately, we didn't sustain any damage to our current home – just a few pictures became cockeyed, and a candle migrated across the table.

The events made Katherine Taylor and me wonder -- as we were later discussing contract language for a couple of upcoming residential real estate settlements in which we represent the buyers -- what disclosures concerning earthquake damage, earthquake soundness or seismic activity must be made by a residential home seller to a buyer? I flipped through the most recent three-page Maryland Residential Property Disclosure and Disclaimer Statement, and there is no direct mention of seismic activities. If a building had suffered damage to any of the covered areas (i.e., foundation, heating system, etc.) of which the seller has knowledge, then would it have to be disclosed on the form? What if a buyer has moved from out of state and, not knowing that Maryland has had seismic activity, does not ask whether there have been any earthquakes? Does the seller have to disclose that there was an earthquake (even if the seller is not aware of any actual damage to the seller's home)? As Maryland building codes do not specifically address seismic engineering, there could be damage which is not apparent. Granted, earthquakes are rare events here. Allview Estates and Columbia were the sites of a series of small earthquakes in 1993 and again in 1996, but these were of a magnitude no greater than 2.0.

I looked at California's requirements, as that state experiences frequent seismic activity. The California Department of Real Estate offers a 79 page booklet called Disclosures in Real Property Transactions (link opens a .pdf), which requires sellers to disclose the absence of foundation anchor bolts; unbraced or inappropriately braced perimeter cripple walls and first-story walls; unreinforced masonry perimeter foundation and dwelling walls; habitable room or rooms above a garage; and water heaters that are not anchored, strapped, or braced. Additionally, the California Seismic Safety Commission has developed a Homeowner’s Guide to Earthquake Safety (link opens a .pdf) for further clarification and guidelines about earthquake safety.

Who would have thought that earthquake activity could become a question for a buyer in a real estate transaction in Maryland?

Feel free to contact our office if you need any further information.

August 22, 2011

B Corps in Maryland


Benefit Corporations (also known as B Corps) are corporations formed with the intent to create a beneficial public good. B Corps are held to a higher standard than traditional corporations in that they must create social, environmental and community benefits. The first official B Corp was created in 2007, when Method, a manufacturer of green cleaning products, amended their corporate documents to reflect their intention of benefitting the public good through their business practices. Maryland became the first state to create a separate legal entity for B Corps in April 2010.

B Labs, is a non-profit which provides certification as a B Corp to qualified business applicants. The goal of B Labs is to prevent corporations from “greenwashing”, by providing a third-party stamp-of-approval for businesses that are actually fulfilling their claims. Certification is a stringent process, which requires passing B Labs B Impact Rating System. Applicants fill out a 220 question survey with questions delving into things such as recycling practices, employee demographics, community involvement, and employment benefits. B Labs compiles the results, and after tallying the points, grants certification to companies that have met the minimum passing rate.

On B Labs website, the organization features highlights of some corporations which have passed certification. Emphasized areas include employee demographics, sustainable environmental practices, and community involvement. For example, B Corporation says Method has “>50% women” as employees, has “>50% facilities LEED certified”, and that “>50% employees participate in company-wide service days”.

B Labs certification is not required for a Maryland company to register as a B Corp, but it certainly helps for the business to prove that the requirements of the Maryland law are being met. Additionally, certified B Corps can obtain discounted goods and services from other certified B Corps.

There are currently no tax incentives for B Corps at either the federal or state level. Philadelphia recently instituted a tax break for B Corps, a move that is expected to inspire other municipalities to offer similar incentives. Additionally, it is not unreasonable to assume that state and federal tax law will eventually be amended to reflect the unique nature of B Corps.

If you have any further questions about how becoming a B Corp can benefit your business, please feel free to contact our office.

August 15, 2011

FastTrack for Business Development


On June 30, 2011, Maryland Governor Martin O'Malley held a press conference about his initiative, FastTrack, part of the Maryland Made Easy program. Under Executive Order 01.01.2011.12, also known as the Governor's Economic Development and Job Creation Fast Track, O'Malley seeks to create jobs through expediting the review of business and economic development projects that will have significant impact on their respective communities.

FastTrack coordinates the review process by state agencies, such as the Department of Business and Economic Development and the Environmental, Planning, Housing and Community Development. FastTrack complements the Central Business Licensing Initiative already in use under the Department of Business and Economic Development and the Department of Information Technology by providing “a one-stop shop to complete and submit various applications and permits regardless of agency or type of business.” For a project to be eligible for FastTrack review, it must meet certain criteria. First, the project must expect to produce jobs or economic development that will significantly impact Maryland, the region, county or municipality. Second, the project requires that Maryland issue at least one permit. Lastly, the project must either be in a Priority Funding Area, or meet the criteria for an exception. A priority funding area is usually a Protected Forest Area, Transit Oriented Development, an Enterprise Zone, or a Critical Area. A project developer can easily check if his project falls within a Priority Funding Area through an interactive map on the Maryland Made Easy website, www.easy.maryland.gov.

Not all projects will receive FastTrack review. Applications for FastTracking must be submitted to the FastTrack Coordinating Committee. Projects will be evaluated under eight criteria. First, the committee will consider the significance of the potential economic, job and business development of the project of the project in relation to the size of the jurisdiction that the project will benefit. Secondly, the committee will consider whether the project is designated a priority project by local government. Third, the committee will look at whether the project involves either infill development or redevelopment. Fourth, the committee will consider whether the project conflicts with an important state policy of goal, such as whether the project is located in a targeted ecological area. Fifth, the committee will determine whether the project furthers an important state policy or goal. Sixth, the committee will look at how quickly the project will proceed after receiving the necessary permits and approvals. Seventh, the project's environmental impacts will be considered. Lastly, the committee will consider it's own capacity to manage projects accepted for review.

Projects that are recommended by the FastTrack Coordinating Committee must then be brought before the Chair, who will then decide whether to accept a project for review. The Lieutenant Governor will Chair the FastTrack Coordinating Committee. Current Lieutenant Governor Brown said “Governor O'Malley and I believe that state government has a responsibility to lay the foundation for job creation and economic growth in Maryland, and making it easier for companies to do business in our state is a key part of that effort. Our new fast track initiative will help expedite the business development process while maintaining standards for smart growth and environmental protection. I am honored to lead this effort on behalf of Governor O'Malley and I look forward to working closely with Maryland's business community to make the FastTrack program a success.”

For more information, please feel free to contact our office.

August 9, 2011

Welcome!

Consider this blog a forum to discuss legal issues for Howard County and the State of Maryland. Our practice at Taylor Legal™ focuses on land use and zoning, small business and corporate law, local and state government law, alcoholic beverage licensing, contract drafting, and succession planning. I will be posting to this blog as noteworthy topics arise which affect our clients.

For more information regarding our firm, I encourage you to take a look at our website: www.taylorlegal.com. We are in the process of revamping the site, but you should expect new and exciting changes in September 2011.