EMINENT DOMAIN PROCEDURES IN MARYLAND

EMINENT DOMAIN PROCEDURES IN MARYLAND

Eminent domain occurs when the state takes an owner's real property for public use. The process is called condemnation. This seems unusual to many. Why, they ask, can the government take my property? It's not that simple and there are safeguards in place to protect an owner facing condemnation.

A brief history of this process is helpful. The U.S. Constitution provides safeguards against government taking our property.

• The Fifth Amendment states that the Federal Government cannot deprive individuals of "life, liberty, or property," without due process of law.
• The Fourteenth Amendment forbids states from denying any person "life, liberty or property, without due process of law."

Article 3, Section 40 of Maryland's Constitution also includes safeguards:

•   there is no taking of private property for public use without just compensation,
•   the private property must be appraised and the fair market value determined,
•  these matters may be submitted to a jury, and
•   there can be an immediate taking for certain needs such as roads and right of ways.

   With this brief overview, you can see how complicated eminent domain and condemnation cases are. Many questions arise. What is a "public use?" Who determines the "fair market value?" How does an "immediate taking" work? Should an owner contest a proposed condemnation? How much will it cost? Can the state take only part of the property? What if there is a lease in effect? What does "due process" require? Should an owner settle or fight a proposed condemnation? Will a displaced owner be paid relocation expenses or reimbursed for financial losses incurred because of a condemnation?

 Each case in unique and factually specific. This article does not attempt to and cannot provide absolute answers to the many possible scenarios. However, the following tips can be helpful for a property owner dealing with this situation.

  First, the state can establish the "public use" requirement, making this difficult to challenge. Nevertheless, a property owner in this situation should beware of the following potential issues, among others:

1.     A property owner must be given proper notice of the proposed condemnation. This includes advance notice (except in cases of immediate condemnation noted above).

2.     Except for immediate condemnation cases, an owner has a right to request a jury trial. For example, a jury trial may be requested on specific issues such as fair market value. Owners also have appeal rights.

3.     Once a property has been condemned, an owner is entitled to damages. Damages can be awarded for the taking of an entire tract of land or where part of a tract is taken, for the fair market value of the part taken.

4.     The value of condemned property is critical to an owner. The state must provide evidence, including a written appraisal of the fair market value of the property performed by a qualified impartial appraiser. An owner can also present appraisal evidence or can rely on the assessed value of the property as determined by the State Department of Assessment and Taxation.

5.     There are special considerations if the property being condemned is a dwelling. An owner or occupant of a dwelling may be entitled to additional compensation for the reasonable cost of a replacement dwelling, or other increased interest costs and other debt service costs a person is required to pay for financing any comparable replacement dwelling.  Also, moving and relocation expenses must be paid to a displaced person.

6.     If the property owner prevails, the state must pay courts costs in a condemnation proceeding, including an allowance for reasonable legal, appraisal, and engineering fees. In addition, the owner may be entitled to interest on damages at the rate of 6% per annum. An owner is also entitled to receive a credit for taxes paid before the property was condemned.

7.     An action for condemnation must be brought within 4 years of the authorization to administratively or legislatively acquire the property. This period can be renewed by a new authorization.

An owner facing condemnation is wise to retain an attorney at the inception of the proceeding to help with the complicated issues along the way. Experienced counsel can untangle the complicated issues and focus on maximizing an owner's damages. This can make the whole process, which is understandably something most people would rather not face, more successful.

RECORDING A FOREIGN JUDGMENT IN A MARYLAND COURT

RECORDING A FOREIGN JUDGMENT IN MARYLAND

                Did you know that you can record a judgment from another state in Maryland? Through a simple procedure a recorded out of state judgment becomes legally enforceable in Maryland, increasing your options for collection and satisfaction of a judgment.

                To record a final judgment from another state, you need a  certified copy of the judgment from the jurisdiction where it was entered. You can then file the certified copy in any county in Maryland, after giving proper notice to the debtor, and it becomes a valid judgment ripe for collection here. A final judgment can be recorded in any county. Each county charges a filing/recording fee.

                So, if you have a foreign judgment from another state when should you think about recording it in Maryland and in which county? It makes sense to record the judgment in a county where the debtor lives, works, or has any property or assets, because you can move to attach them.

                What can you do with a recorded final judgment? It automatically becomes a lien from the date of entry on the debtor's interest in land located in that county. In addition, it enables you to do various forms of "discovery," such as Interrogatories in Aid of Execution or a Deposition, to learn specifics about a debtor's finances, including attachable assets. It also opens up a variety of potential collection avenues, including bank account and wage garnishment, and attachment and sale of property.

                The procedure to record a foreign judgment may be a cost effective option to obtain payment on a judgment. 

HELP - I RECEIVED A HOWARD COUNTY ZONING VIOLATION NOTICE!

HOWARD COUNTY ZONING VIOLATIONS

            What should you do if you get a zoning violation notice in Howard County?  First, some background on the Howard County Department of Planning and Zoning ("DPZ") is useful. DPZ's stated mission is: "To create collaborative, innovative plans and implement strategies that effectively address growth and redevelopment challenges. DPZ seeks to enhance Howard County's high quality of life, prosperity and stewardship of natural and cultural resources." As part of this mission, DPZ issues various zoning regulations contained in the Code of Ordinances and Municipal Code. These can be found online at  www.howardcounty.gov.  The Howard County Planning Commission, Board of Zoning Appeals and their delegates are designated to enforce these zoning regulations.  If you received a zoning violation notice, the complaint could have been made by these zoning  authorities or by a private citizen, even anonymously.

            Once a complaint is made, it will be investigated by county zoning authorities. Action

may or may not be taken, depending on what the investigation shows. Investigations can

result in inspections of property, emergency remedies, and denial of access to property. The 

DPZ, upon becoming aware of a zoning violation, may institute an injunction, mandamus (court

order to correct a public record or title), abatement, or any other action to prevent or stop the

violation.  A notice may be issued ordering a stop to the violation within 10 days or within a

reasonable time specified. Such notice must be served personally or by registered mail. If the

violation is not timely remedied, DPZ can take whatever action is necessary to end the violation.

DPZ may enforce zoning regulations by issuing citations. These citations can be heard in court or

in administrative proceedings.

            If a violation notice is not issued, an aggrieved person may request that DPZ issue

a written notice, fairly describing the property and alleged violation. This must be done within

60 days of receiving the written request. If no notice is issued during this time period, it means

DPZ has decided that the violation does not exist. Thereafter, the complainant has appeal rights.

If an appeal is taken, DPZ must send a copy of the appeal to the owner and occupant of the

premises where the alleged violation exists.  

            

            If a violation is found, failure to remedy the violation is a misdemeanor with a monetary

fine of up to $500 per day that the violation continues. There are also other civil penalties and

enforcement remedies available to DPZ under the Howard County Code.

            There are many types of potential zoning violations including for example prohibited

placement of a structure, sign, improvement, or change of land use; failure to obtain a permit for

improvements or land use; or prohibited use of land. Zoning violations and hearings are often

complicated and time consuming. An attorney can be help a person facing an alleged zoning 

violation navigate this process. Katherine Taylor and Andrea LeWinter have assisted many clients who have received zoning violation notices, and those who sought to ensure that violation notices were issued to other landowners who were violating the zoning regulations. 

ABLE or SNT? How Can I Save for My Child with Special Needs?

While many parents are very responsible and do their best to provide for their kids, many families also depend on government benefits which can be very helpful to a family – even a family with adequate resources – especially where there are other children, and when the parents have retirement and college accounts to fund. Most of the time when a child with special needs is in the family, parents (very responsibly) fund UTMA accounts for all of their kids, including the child with special needs.

Many parents, however, actually end up doing their child a disservice, because funds in the name of a child who is seeking government benefits can prevent a child from qualifying for certain government aid. Accounts in the name of the child (UTMA funds become the property of the child when the child reaches the age of either 18 or 21 – depending on how the account is set up) are considered to be owned by the child, even if the parent funded the account (the funds are deemed to be gifts to the child).  In some cases, when a child turns 18, (s)he may be eligible for SSI (Social Security Income and other benefits such as Medicare) as a result of a disability. However, for many programs he or she will NOT be considered fully eligible until all of his or her other assets are exhausted. If the potential recipient has funds in his or her name, the potential recipient may have to “spend down” those funds before becoming eligible to receive benefits.

Therefore, the parent is between a rock and a hard place. Do the parents start saving now in the name of the child, or do the parents opt NOT to put funds in the name of the special needs child? If the parent opts to NOT put funds in the name of the child, they can put the funds in the name of a third person with instructions to use that money for the benefit of the special needs child, but many times the parents do not know someone who can be relied on to care for the child if the parents are no longer able to.

Until very recently, the only safe way for families to plan in advance to both (1) provide for their child, and (2) arrange the child’s finances so that the child upon becoming an adult (age 18) will be eligible to receive government benefits in addition to funds set aside by the parents, was to set up a Special Needs Trust, also called a Supplemental Needs Trust (SNT).   After the SNT is created, the parents (or others) can add money to the SNT as gifts to the child (up to the maximum amount per year that is exempt from gift tax). That trust would also be in existence throughout the life of the child to accept any death benefits payable to the child, should either of the parents or grandparents pass away and leave funds to the special needs child.

If set up properly, the funds in the Parent SNT do NOT disqualify the child for government benefits (because the trust, not the child, “owns” the funds and the funds are distributed by a trustee strictly in accordance with the terms of the trust). The main thrust of the SNT is that the trustee (the parents or any successor) can only use the funds in the trust to pay for any supplemental needs not covered by government benefits. Thus, the child gets the benefit of government help AND other supplemental needs met (such as recreation, education, etc.) from the funds set aside for the child’s benefit. While a SNT trust is a good idea, it cannot be funded with funds that are already considered to be owned by the child (UTMA account in existence), so it is important for parents to set up an SNT as soon as they realize the need for one.

Recently, Congress passed a law that will provide another alternative to parents wishing to save for special needs children, or for persons with disabilities to save for themselves.  In late 2014, the president signed the Achieving a Better Life Experience Act, or ABLE Act. This new law, which is modeled after 529 college savings plans, will allow people with disabilities (or others on their behalves) to open special accounts where they can save up to $100,000 without risking eligibility for Social Security and other government programs. While contributions to the accounts are not tax deductible, interest earned on savings will be tax-free. Funds accrued in the accounts can be used to pay for “qualified disability expenses” which is any expense related to the designated beneficiary as a result of living a life with disabilities and includes education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services education, health care, transportation, housing and other expenses. To be eligible, a person has to have a “significant disability” with an age of onset of disability before turning 26 years of age.

As of now, the total annual contributions to an ABLE account by all participating individuals, including family and friends, is $14,000. There are other limitations, including maximum amounts that can accrue in an ABLE account and limitations on the amount that is exempted from the resource limits for certain government benefits. For example, the first $100,000 in ABLE accounts would be exempted from the SSI $2,000 individual resource limit, but if the amount in an ABLE account exceeds $100,000, the beneficiary would be suspended from eligibility for SSI benefits and no longer receive that monthly income. However, the beneficiary would continue to be eligible for Medicaid, but states would be able to recoup some expenses through Medicaid upon the death of the beneficiary.

The US Treasury Department, through regulations that are likely in process of being written and that will hopefully be completed in 2015, will publish more details explaining what a “significant” disability is and how to set up and qualify for ABLE accounts. In addition, each state also put its own regulations in place — much as they have done for 529 plans — so that financial institutions can make the new accounts available.

While the addition of the ABLE account will provide more choice and control for the family of a person with disability, the ABLE account will not replace the SNT entirely. The cost of establishing an ABLE account will be considerably less than a Special Needs Trust, because an ABLE account will be able to be opened with a bank or financial advisor (a SNT can be costly to set up, as it generally requires the services of a lawyer). Further, with an ABLE account, account owners will have the ability to control their own funds (rather than having the trustee of a SNT control the funds) and, if circumstances change, the account owner will still have other options available to them.  However, the ABLE account can only be opened by someone with a “significant” disability (to be defined in regulations) and, because of the likely monetary and qualification limitations that will be imposed on ABLE accounts, a SNT may be more advantageous for some families. Determining which option is the best for any family or person will depend upon individual circumstances.

* “Special Needs” in this article refers to a condition or disability that will likely prevent a person from supporting himself or herself fully.

Do I need to create a Special Needs Trust for my child with a disability?

What is a Special Needs Trust?

A Special Needs Trust (also called a Supplemental Needs Trust) for a disabled child is a trust formed by the parent and funded with assets that normally would placed into a regular account for the child, and which "shields" those assets from being considered assets of the child for governmental benefit purposes.

Many times, parents (very responsibly) fund UTMA (Uniform Transfer to Minors Act) or other accounts for their kids. Those funds are considered to be owned by the kids as a result of gifts from the parents to the kids. When the kids are minors, they cannot take legal ownership of the funds – that only happens when they reach the age of majority (either 18 or 21, depending on the actual account set up). Once a child reaches that age, he or she can legally do anything they want with the money. (Yes, sometimes, children don’t really know that the accounts can be accessed by them, and they allow their parents to direct as to how the funds should be spent - such as when the child is in college, and the child “pays” college tuition or other expenses with the funds.)

In some cases, when a child turns 18, (s)he may be eligible for SSI (Social Security Income) and other benefits such as Medicare/Medicaid as a result of a disability. However, for many programs he or she will NOT be considered fully eligible until all of his or her other assets are exhausted. (The government does not pay social security income or Medicare/Medicaid if a recipient has other available funds, and requires the potential recipient to “spend down” those funds before becoming eligible to receive benefits.)

While many parents are very responsible and do their best to provide for their kids, government benefits can be very helpful to a family – even a family with adequate resources – especially where there are other children, retirement and college accounts to fund, etc. So, many families plan in advance to both (1) provide for their child, and (2) arrange the child’s finances so that the then-adult child (age 18) will be eligible to receive government benefits in addition to funds set aside by the parents (or others) as gifts to the child during the child’s younger years.

What a parent may want to do now is set up a Special Needs Trust (also called a Supplemental Needs Trust) (Parent SNT) that will be funded with future gifts from the parents and others (up to the maximum amount per year that is exempt from gift tax – now $13,000 per person per recipient - $26,000 per year from both parents and $13,000 per year from any other person). That trust would also be in existence throughout the life of the child to accept any death benefits payable should either parent or even a grandparent pass away. If set up properly, the funds in the Parent SNT do NOT disqualify the child for government benefits (because the trust, not the child, “owns” the funds and the funds are distributed by a trustee in accordance with the terms of the trust). The trustee (you or any successor) can use the funds in the trust to pay for any supplemental needs not covered by government benefits -- the funds cannot be used to pay for ordinary daily needs that would be covered by governmental benefits. Thus, the child gets the benefit of government help AND other supplemental needs met (such as recreation, education, etc.) from the funds set aside for the child’s benefit.

What if We Already Have UTMA Accounts in the Child's Name?

Here is the kicker. A parent cannot fund a Parent SNT with funds that are already considered to be the child’s (UTMA account in existence), and thereby convert those funds that are already in the name of the child to funds that are not considered the child’s for government benefit purposes. So, even if you set up a Parent SNT now, at age 21 when the UTMA funds legally vest in the child’s name, the UTMA funds may have to be used to  pay back government benefits (s)he had been receiving from the age of 18 and/or the existence of the UTMA accounts will disqualify her for benefits (even if (s)he was previously qualified) if the account still has a balance . So, while a child may have become eligible for and been receiving benefits from the age of 18, once the UTMA funds vest (s)he will become ineligible until those funds are spent to payback benefits already received. After the spend down, (s)he will then be eligible again for government benefits.

Again, when the child turns 18 years old, (s)he may become eligible for certain government benefits, and the UTMA funds vest in him/her when (s)he turns 21.  What some people do is use the UTMA funds already set aside for the benefit of the child with the intent that by the time (s)he turns 21 (s)he has no assets that (s)he owns and legally controls. During the period before the child turns 21, the funds in a UTMA account can be used to pay for supplemental expenses for the child –pay for school, pay for an apartment, pay for camp or a car, etc. If those funds are exhausted before (s)he turns 21, then she will not lose her benefits eligibility as a result of having available funds in her name when (s)he turns 21.

In the meantime, you can set up a Parent/Third Party SNT and fund that with future gifts to the child. That trust would be mentioned in the parents' wills as the trust that would receive any testamentary bequests from either or both parents, and would maintain eligibility for government benefits for a child who may be eligible.

For more information, consult: www.specialneedsalliance.org;

http://www.socialsecurity.gov/ssi/spotlights/spot-trusts.htm; and a lawyer experienced in handling special needs trusts in your State. 

Do I have a right to air my views about an environmental permit application?

Q. Do I have a right to get involved in a situation where the state will be issuing an environmental permit for a property that borders mine?

A. You usually have a right to a notice of the impending permit as well as a right to publicly air your views regarding its impact. And in some cases, you may also have a right to challenge the permit. But first things first—how do you even find out that a permit is being requested? You must look for the public notice.

As a general rule, government agencies must give the community ample notice of an environmental action (e.g., permits/regulations) and an opportunity to comment on them.

Finding that notice, though, can be tricky. Oftentimes it’s buried in the legal-advertisement section of local newspapers; it can also be found in the Federal Register, located at public libraries and online. Since public notices make for some heavy reading, an effective way to keep track of an issue important to you is to contact—in writing—the permitting department of the responsible agency (for example, your state’s department of environmental issues if it’s a state matter; local government if it is a local issue) and ask to receive a copy of all public notices regarding the permit.

After the public has been notified, the community is given a period of time to “comment” on the issue—usually 30 to 45 days. Now’s the time to ask to review the permit and its application. Submit written comments questioning why it is being pursued and look at studies made by the agency showing why it’s necessary.

For interpretation of the documents, ask to speak to a representative of the agency issuing the permit. If you think it’s important that the community give input on the matter, request a public hearing with your state’s environmental agency. While public hearings are often held automatically, they are not always guaranteed. In some instances agencies will not schedule a hearing unless they deem there is enough public interest. Once the hearing is on the calendar, do your homework.

Besides the basics—lining up your questions, gathering information and rallying community support—contact the environmental agency about its ground rules for public hearings.

Are you allowed to present your case for 5 minutes or 10? How many people are allowed to speak? Do you have to sign up in advance? Get all your ducks in a row before you stand before the mike. And once the date comes, make sure you’re at the meeting.

It’s hard to later appeal a permitting decision in court if you didn’t bring up your concerns at the public hearing. What happens if the permit is issued despite strong community opposition? You can appeal the decision in a court of law, but remember, legal action carries a price tag and you should have very compelling evidence that the state’s environmental agency acted recklessly and unreasonably.

You might be wise to try to join forces with a community advocacy or advisory group or an environmental group who may have more money to spend and connections with experienced attorneys.

The Importance of Property Succession

Whether you decide to sell, retire, or leave your business due to health reasons, it is important that you plan for the day you will no longer be able to run your company. Succession planning is a very important part of business planning and is something that you should address when you first go into business. Small businesses have unique challenges if one of the owners or managing partners can no longer fulfill his or her duties running the business, and this is especially true for businesses that have only one owner (sole proprietors) who are responsible for making all business decisions. Simple transactions such as paying bills or payroll may not be able to be done without a court order.

 

Unfortunately, succession planning is not often a priority among small business owners. A survey conducted by Zen Wealth found that sixty percent of small business owners do not have a succession plan in place.

 

What this means for your business is that the details of how your business is run could be at risk at any time. Do you even know who will inherit the business? That’s the person who’ll be making all of the important decisions about how it operates—can you afford to leave that role open to chance?

 

A succession (or exit) plan outlines who will take over when the owner leaves, and also identifies the best way for the owner to exit the business. Creating a succession plan will help you implement factors far in advance that will future-proof your business for sale or transfer of ownership when the time comes.

 

Here are some typical problems that a succession plan can address:

§  the business owner “is” the business, leaving the company unable to function without the owner

§  the business is reliant on a few large clients with an undiversified revenue stream

§  there is a non-transferable lease on business properties

 

All these things are correctable if they are caught beforehand.

 

A succession plan also allows you and your successor time to prepare for the transfer of ownership. Your successor will need to go through certain training before they’ll be ready to take over your business. The time you’ll need for adequate training will depend on the complexity of your business. It’s best to achieve this training over a gradual period of time, so that you’re available to help your successor make the transition. You should not put off this preparation until the last minute.

 

 

Lastly, having a succession plan in place is important because you need to know how much your business is worth if you intend to sell your business, which means you have to identify the factors that determine your business’ fair value. You should be able to document the changes in your business’ revenue over time, thus showing past growth and profitability, which can then be used as estimates for future earnings. The U.S. Small Business Administration (SBA) offers resources to help with your succession planning. If in doubt, it never hurts to consult with an attorney during this planning process.