Kelsch Law Firm, P.A.Kelsch Law Firm, P.A.2023-11-29T23:02:22Zhttps://www.kelschlawfirm.com/feed/atom/WordPress/wp-content/uploads/sites/1401361/2020/10/cropped-site-icon-32x32.pngOn Behalf of Kelsch Law Firm, P.A.https://www.kelschlawfirm.com/?p=462392023-11-09T17:24:46Z2015-07-14T10:02:55Z
a detailed summary of the services to be performed;
a description of the specific materials to be used or a list of standard features to be included; and
the total contract price or a description of the basis on which the price will be calculated. § 326B.809.809, Minn. Stat.
This written requirement applies not only to change orders, but to proposals, estimates, bids, quotations, contracts, and purchase orders. Both the licensee and customer are required to sign and date the change order, and the licensee must provide the customer with a copy of the signed document at the time the document is signed.
It bears noting that the written requirement for change orders only applies to residential construction. Documents in a commercial construction context, typically based on standard American Institute of Architect forms, almost uniformly have detailed provisions addressing change order/constructive directive procedures.
Even with this governing law in place, owners and contractors entering into residential projects should have change order procedures clearly spelled out in a written contract. This will minimize tremendous headaches should a project fall apart. Chad A. Kelsch at Kelsch Law can create a written contract that will fit your unique needs.
This site is educational information based on construction legal principles in the state of Minnesota. Specific facts can and often do drastically affect legal advice provided. You should not rely on this information except as a trigger to contact an attorney and obtain advice specific to your circumstances. Read our full disclaimer.
If you’re looking for a qualified and trusted Minneapolis/St. Paul construction law attorney, please call Mr. Kelsch at [nap_phone id="LOCAL-REGULAR-NUMBER-2"] or fill out this quick form to schedule a consultation.
Change can be difficult. This can be especially true in residential construction where projects can veer off course when a contractor encounters an unforeseen obstacle that may cut into his profit margin, or when an owner requests an oral change and later refuses to pay for the extra work, claiming that it fell within the parameters of the original contract. This type of unfortunate scenario can be extremely difficult to sort out because of the “contractor said, owner said” nature of the conflict.]]>On Behalf of Kelsch Law Firm, P.A.https://www.kelschlawfirm.com/?p=462412023-11-09T17:24:55Z2015-06-22T10:05:48Z
Uncle Sam, of the U.S. Treasury, is a pesky and persistent “family member” who inserts himself into every conceivable financial affair. Impossible to shake, his needs must be satisfied. If not, he can make life extremely difficult. Understanding tax treatment in Chapter 11 Bankruptcy is critical because of the stringent tax debt payback requirements imposed by Uncle Sam.
Why Is Tax Treatment Important in Chapter 11 Bankruptcy?
More often than not, persons (individuals, partnerships, and corporations) who are considering Chapter 11 bankruptcy relief have significant issues with Uncle Sam. Tax obligations are typically the most tempting not to pay because neglecting to do so usually does not result in immediate shutdown of business operations, unlike non-payment of trade debt where creditors can disrupt or bring a screeching halt to business affairs. Those contemplating Chapter 11 must understand how tax debt is treated in the bankruptcy case because failing to account for this debt treatment could derail the entire reorganization effort before it even gets a solid footing on the track.
Certain categories of tax debt are given preferred (“priority” in bankruptcy lingo) treatment in Chapter 11 bankruptcy. These include, in part, the last three years of income tax, property taxes assessed “and last payable without penalty” in the year before the bankruptcy filing, a tax required to be collected or withheld (typically encompassing withholding/sales/use tax), employment tax on wages, and excise tax. There are intricate nuances on whether a particular tax falls within a given priority category under the Bankruptcy Code that exceed the scope of this discussion, so consultation on this topic with an experienced bankruptcy attorney is highly encouraged.
Understanding the repayment rules for priority tax creditors is therefore critical before plunging into a Chapter 11 bankruptcy. Reorganization of debt through Chapter 11 is ultimately not feasible for many would-be-filers because they cannot satisfy through adequate cash-flow these stringent payback requirements.
If you’re looking for a qualified and trusted Minneapolis/St. Paul bankruptcy lawyer, please call Mr. Kelsch at [nap_phone id="LOCAL-REGULAR-NUMBER-2"] or fill out this quick form to schedule a consultation.
This website features educational information based on general legal principles in Minnesota. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation. Read our full disclaimer.]]>On Behalf of Kelsch Law Firm, P.A.https://www.kelschlawfirm.com/?p=462442023-02-21T07:31:42Z2015-05-14T10:11:39Z
WHAT IS A PURCHASE AGREEMENT DISCLOSURE?
To disclose means to make information known, and a real estate purchase agreement disclosure does exactly that; it apprises potential buyers of the condition of the property. These statements are typically given once a buyer has accepted an offer. In Minnesota and most other States, disclosure statements are not required for commercial property, or when acquiring a foreclosed property at sheriff’s sale or via a deed in lieu of foreclosure.
WHY IS A PURCHASE AGREEMENT DISCLOSURE IMPORTANT?
In Minnesota, sellers are required under the law to disclose all material facts of which they are aware that could adversely and significantly affect an ordinary buyer’s use or enjoyment of the property or any intended use of the property. (Codified at Minn.Stat., §§ 513-52-513.60). However, this does not extend to the duty on the part of a seller to acquire knowledge or discover matters that are not in fact known by the seller. For example, although a seller would be required to disclose a potential issue with the roofing due to a leaking ceiling, he would have no obligation to perform an inspection of the roof in the absence of any water intrusion. The key with disclosure laws is to protect buyers from fraudulent non-disclosures. That objective isn’t met if sellers are held accountable for defects of which they are unaware.
The duty to disclose exists irrespective of whether one of the parties has procured a third-party inspection. To avoid liability, sellers must disclose material facts of personal knowledge that contradict or are not included in the inspection report. Using an inspection report as a front to conceal known defects will result in fraud exposure, a scenario that should be avoided at all cost.
Sellers should understand that no property is completely perfect, and that revealing flaws in an objective manner will allow both buyer and seller to close the transaction with all eyes wide open, reducing the likelihood that a buyer will later attempt to unwind the deal on fraud grounds.
This website features educational information based on general legal principles. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation. Read our full disclaimer.
If you’re looking for a qualified and trusted Minneapolis/St. Paul real estate attorney, please call Mr. Kelsch at 763-398-1676 or fill out this quick form to schedule a consultation.
This website features educational information based on general legal principles in Minnesota. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation. Read our full disclaimer.]]>On Behalf of Kelsch Law Firm, P.A.https://www.kelschlawfirm.com/?p=462482023-02-21T07:31:59Z2015-04-30T10:16:28Z
In Monopoly, prospective properties on Park Place and Illinois Avenue are purchased “as is.” The money used to purchase them isn’t real. There are no negotiated purchase agreements. The highest negative stake is losing face to fellow competitors by going belly-up in debt and forfeiting conquered properties.
“But here in the real world,” to borrow a line from Country-Western singer Alan Jackson, buying real estate is “not that easy at all.” Buyers, when making what in most cases will be the single most important purchase of their lives, need to have a solid handle on the ins-and-outs of the transaction to avoid headaches down the road. The terms of a real estate deal are set forth in a written purchase agreement.
If you plan on buying residential real estate, here are three key things that you should understand about purchase agreements:
(1) Property Condition Disclosure
Sellers of residential property are required under Minnesota law to disclose all material facts of which they are aware that could adversely and significantly affect an ordinary buyer’s use or enjoyment of the property or any intended use of the property. A buyer can waive this requirement, but it would be foolhardy in most cases to do so given the risk of exposure from potentially serious defects. Buyers should understand that sellers are only required to disclose defects of which they have personal knowledge, so if mold is discovered in the attic after the purchase, a seller isn’t on the hook financially unless he/she knew about the fungal infestation and chose not to disclose it. Therefore, it is still critical to have an independent professional inspection performed, in conjunction with seller disclosure, to catch these hidden condition.
(2) Earnest Money
Earnest money is a deposit made by the buyer to show a good-faith intention to purchase the property. Most purchase agreements will spell out what happens to this money should the transaction not go through. For example, the agreement may contain a financing contingency where the agreement is automatically cancelled, and the earnest money fully refunded, if the buyer cannot secure adequate financing to make the purchase. It is very important to understand this contingency and others, as well as what happens in the event of default under the purchase agreement, because this will impact who ultimately walks with the earnest money.
(3) Arbitration Provision
The majority of purchase agreements will give the buyer the option of resolving any disputes that might arise from the sale exclusively through arbitration. Both seller and buyer have to agree to this provision. Arbitration is a form of alternative dispute resolution where the conflict is conclusively resolved by a third-party neutral. Although arbitration has some advantages (i.e. sometimes cheaper and quicker than litigation), buyers need to understand that by binding themselves to this process they forfeit certain benefits of having the dispute heard in open court by a judge or jury. Every situation is unique and needs to be thoroughly thought through before signing on the dotted line.
Purchasing real property isn’t a game. Knowing the legal lay-of-the-land when it comes to the obligations of buyers and sellers under a purchase agreement is of paramount importance because an oversight or mistake can have long-lasting consequences. Whereas a “Get Out of Jail Free” card will get you out of a pinch in Monopoly, it will be of no use should your real estate transaction fall apart.
If you’re looking for a qualified and trusted Minneapolis/St. Paul real estate attorney, please call Mr. Kelsch at 763-398-1676 or fill out this quick form to schedule a consultation.
This website features educational information based on general legal principles in Minnesota. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation. Read our full disclaimer.]]>On Behalf of Kelsch Law Firm, P.A.https://www.kelschlawfirm.com/?p=462502023-02-21T07:32:14Z2013-08-26T10:19:51Z
Lien stripping is a process available to debtors in bankruptcy that can remove junior mortgage liens on residential property, freeing property from burdensome mortgages that exceed the value of the property. After a lien strip, a homeowner is only obligated on the first mortgage, i.e. the mortgage having the most senior priority, which typically is the mortgage that was taken out first. The junior mortgage debt is wiped out. Lien stripping is a great option for those homeowners who want to remain in their home, whose first mortgage balance is not too much higher than the home value, and who can afford payments on the first mortgage.
Lien stripping in Minnesota has been a hot topic for the last couple years. Up until a recent decision issued by the Bankruptcy Appellate Panel of the 8th Circuit in Fisette v. Keller (In re Fisette), lien stripping was for the most part denied in Chapter 13 bankruptcy cases. It was not even tested in Chapter 7 bankruptcy cases. As of the writing of this blog post, Minnesota bankruptcy judges have been allowing lien strips to go forward, and motions to strip liens have been granted when sufficient evidence is presented establishing that the junior mortgages sought to be stripped are wholly unsecured.
Three important points to note with respect to the current status of lien stripping in Minnesota:
1. Lien stripping is only available when the junior mortgages are wholly unsecured, meaning that the balance of first mortgage debt ties up completely the value of the property.
2. There is a chance that lien stripping in Minnesota may ultimately be struck down if the 8th Circuit Court of Appeals rules at some point in the future that lien stripping runs counter to applicable bankruptcy law. This would not affect any cases where lien stripping has already been approved.
3. It is highly doubtful that Minnesota bankruptcy judges would approve lien stripping in Chapter 7 cases because unlike in Chapter 13 cases where “unsecured” mortgage creditors are receiving a portion of their investment back through payments made through a confirmed plan, these same creditors in Chapter 7 bankruptcies would often receive nothing. This is not to say, however, that lien stripping in Chapter 7 cases has not been successfully accomplished with the voluntary acquiescence of the creditor, but a debtor should not go into a Chapter 7 expecting this cooperation.
In a market where many home values have not recovered from the real estate crash in 2008, lien stripping is an attractive option. It allows homeowners to remain in their homes without the burden of suffocating unsecured mortgage debt.
This website features educational information based on general legal principles in Minnesota. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation. Read our full disclaimer.
If you’re looking for a qualified and trusted Minneapolis/St. Paul real estate attorney, please call Mr. Kelsch at 763-398-1676 or fill out this quick form to schedule a consultation.]]>On Behalf of Kelsch Law Firm, P.A.https://www.kelschlawfirm.com/?p=462532023-02-21T07:20:20Z2013-04-23T10:22:24Z
Disputes between owners and homeowners associations (HOA) are pretty common-place, and can become quite unpleasant and may quickly escalate to a frenzied state, especially when the relationship between the parties is already strained or the disagreement involves a significant amount of money.
The Role of Homeowner Associations
An HOA can be defined as a corporation or a body that has been incorporated/formed by a real estate developer to assist with the management, marketing, and sales of homes in a residential area. Being a part of an HOA is in many cases a condition of the home purchase, and new homeowners typically do not have the freedom to opt out of this arrangement. The rights and responsibilities of HOAs and its members are governed by contractual documents, typically in the form of declarations and by-laws. These rules are enacted and enforced by private boards, usually made up of residents of the community. The majority of HOAs enlist the help of a professional management company to assist them with administrative management, financials, vendor management, and construction consulting.
Unlike owning a stand-alone home (where the owner is responsible for repairs and maintenance), HOAs are typically responsible for handling repair and maintenance issues, funded through members’ periodic payment of association dues. Having an HOA on board to manage these tasks can be of great benefit to homeowners, but issues often arise when owners feel that upkeep costs are inflated, the cost of repairs/upkeep are not being fairly apportioned, or the board/management company is generally not performing as they should.
HOA Entanglements
Lawsuits often result when HOAs and owners cannot reach accord on disputed matters, and are generally brought under the following causes of action:
Breach of fiduciary duty: HOAs are responsible for managing the affairs of the owners in the given residential community. Owners can bring a lawsuit if the HOA is not performing its assigned tasks.
Negligent care and maintenance of common areas: Common property is often the responsibility of the HOA, and any injuries or conflicts that arise from these areas may result in litigation.
Violations of covenants, conditions, and restrictions: If an HOA violates or fails to follow rules set forth in governing documents, a homeowner may initiate a lawsuit.
At Kelsch Law Firm, we resolve real estate disputes involving HOAs and homeowners. If you as a board member of an HOA are faced with a challenging legal problem, or as a homeowner have an issue with your HOA, Mr. Kelsch will discuss your matter with you via an initial consultation.]]>On Behalf of Kelsch Law Firm, P.A.https://www.kelschlawfirm.com/?p=462632023-02-21T07:32:51Z2013-04-08T10:43:04Z
Perusing the Star Tribune this morning, I came across a short article listing several local business bankruptcies.
Consumers who are considering filing Chapter 7 or Chapter 13 bankruptcy often worry about the publicity of bankruptcy. Everyone is going to find out, they think.
Newspapers list business bankruptcies because those bankruptcies usually interest the public. Business bankruptcy often affects jobs and the economy in a certain area, depending on the size and influence of a company.
However, the article in today’s paper reminded me that the Star Tribune doesn’t list personal, consumer bankruptcies. Neither do most newspapers across the country. The papers simply don’t have enough space in their printed versions to devote to announcing citizen bankruptcy. Arguably, there’s plenty of space on their websites, but who’s going to read a list of unknown debtors online?
I recently wrote a blog post for the Top Finance Blog on the subject “If I file for bankruptcy, who will find out?” To boil the post down to a few key points:
Bankruptcy (consumer or commercial) is a matter of public record.
When credit bureaus find out about a bankruptcy, they notify all creditors and cite the bankruptcy on the debtor’s credit report.
Other than the credit bureaus and creditors, nobody has to know about a bankruptcy unless the debtor specifically tells them.
This may be oversimplifying a bit, but really, if you file bankruptcy, your credit bureau and your creditors are the only ones who know about it. And your lawyer, of course. Understandably, it will be difficult to keep the news of your bankruptcy quiet in your family and amongst close friends – but if it’s necessary, it can be done.
But with regards to the fear about making front page headlines of your local newspaper, worriers can sleep peacefully. Consumer bankruptcy is rarely publicized as a news item these days unless you’re a celebrity.
This website features educational information based on general legal principles in Minnesota. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation. Read our full disclaimer.
If you’re looking for a qualified and trusted Minneapolis/St. Paul bankruptcy attorney, please call Mr. Kelsch at 763-398-1676 or fill out this quick form to schedule a consultation.]]>On Behalf of Kelsch Law Firm, P.A.https://www.kelschlawfirm.com/?p=462672023-10-03T08:27:55Z2013-03-19T10:46:15Z
2013 is shaping up to be the year of the bulldozer. Construction is up in the U.S. for new single-family homes, and building permits are on the rise. This February, builders in the U.S. started work on more houses and apartments and obtained permits for future construction at a faster pace than we’ve seen since June 2008, according to an article in the Star Tribune from the Associated Press.
As the housing market recovers, legal disputes over construction will grow, too. According to the National Academics Press, approximately one in four projects in the construction industry has a claim. These often expensive disagreements can lead to workers filing mechanic’s liens against a homeowner, which can be very costly and even lead to foreclosure.
Before the bulldozers hit the site, make sure you take precautions in order to prevent construction disputes and mechanic’s liens. Whether you are a construction worker or a homeowner-to-be, contracts, communication, and records are key to ensuring that the process goes smoothly and meets the expectations of everyone involved.
Contracts
A written contract assigns responsibilities, outlines expectations, and legally binds parties. Contractors and homeowners should put everything in writing in order to prevent misunderstandings in the future. Homeowners should clearly describe and delineate everything they expect to be done in the construction job. Contractors should ensure that they understand all of the expectations.
The more clearly the contract is written (and easily understood), the smoother the project should progress. Also, if a construction dispute does arise, referring back to a well-written, well-drafted contract will help the judge and lawyers involved to understand the situation.
Communication
As construction begins, make sure the contract is being followed. Even if the builder and the homeowner have a friendly relationship, ensure that procedures and expectations are met so that the relationship will not sour by unexpected disputes.
Regular communication between the workers and the homeowner will give confidence to both that things are progressing in the expected time frame, and if changes have to be made to the original contract, this can be discussed and approved by both.
Records
The head contractor of a project should keep detailed records of the project from start to finish. It is often recommended that contractors take photographs and date them to show progress, as well as video footage of the project. They should also record notes from meetings, correspondence, drawings, site diaries from everyone involved in the project, information about subcontractors, information about deliveries, and cost information. These records can help protect the builders legally and provide reference should any disputes arise.
Taking steps to create a smooth construction experience for everyone is a good place to begin and will hopefully help you avoid any real estate lawsuits.
This website features educational information based on general legal principles in Minnesota. Specific legal advice is contingent upon the unique facts of each case. Therefore, you should not rely only on this information for your particular legal issue. Contact an attorney to obtain advice specific to your legal situation. Read our full disclaimer.
If you’re looking for a qualified and trusted Minneapolis/St. Paul construction law attorney, please call Mr. Kelsch at 763-398-1676 or fill out this quick form to schedule a consultation.]]>