Monday, April 26, 2010

BuilderFish: Construction to Your Scale

My friend Todd Hawkins and his business partner Jonathan Fishbeck may not be the first Class A contractor to find themselves focusing on retrofitting and modernizing homes in the current market, where virtually no new home starts are happening. But there is something original and refreshing about their approach to business, as demonstrated by their motto, "Recycle Your House." Their angle: many homes are in need of weatherization and energy efficiency upgrades that will not only improve functionality, but show up as huge true savings in energy costs. Todd is the "Director of Client Happiness" and Jonathan is "Captain of Construction," titles that show the refreshing BuilderFish approach to their business, as does their irresistible logo above. Find out more about BuilderFish at

Monday, April 19, 2010

Governor Signs 4 Major Real Property Bills Into Law

Last week, Governor McDonnell signed into law four (4) significant pieces of legislation affecting real property laws in Virginia:

Mechanics Lien laws (SB 105): Mechanics Lien Agents (MLA's) no longer need to consent to being designated as such. In addition, the law clarifies the requirements for the Notice required to be given to the MLA when a contractor or sub begins to perform labor or adds materials to the project. Notice now just needs to go to the MLA posted on the building permit when the contractor begins work, not, as the law previously required, the MLA noted when the building permit was originally issued. The law also allows building permits to be freely amended to add MLA's later on, bringing the law into conformity with the realities of construction work, where building permit are often pulled without an MLA named, or the MLA is changed at a later time.

Residential Landlord-Tenant Act (HB 407): Several new provisions are beneficial to landlords, but the two most important, in my view, are: 1) clarifying the ability of a landlord to place damage or renter's insurance and then bill the tenant for that premium as part of the rent cost; and 2) allowing the landlord to withhold returning the security deposit until the final utility bills are received, instead of being required to return the deposit or portion thereof to the tenant 45 days after the lease term ends, as the law currently requires.

Exchange Facilitators (HB 417): The "Exchange Facilitators Act." I call this the "Post-LandAmerica Debacle Statute." For the first time, any person or entity who serves as a qualified intermediary in a Section 1031 Deferred Like Kind Exchange will be regulated. Exchange Facilitators will be required to maintain the escrowed funds in separately identified accounts or in a qualified escrow or qualified trust; they will be required to maintain errors and omissions insurance; amounts escrowed with them will be deemed to be held in trust and must be deposited in a financial institution, with interest accruing to the parties or otherwise invested per a written agreement; they will be required to have a cash deposit or letters of credit equal to at least $250,000; they must account for all moneys and property; and they shall not commingle escrowed funds with other accounts nor lend such monies out. Sadly, this law codifies the code of conduct that some of us thought was always expected of qualified intermediaries, but which was violated by LandAmerica Exchange Services which essentially embezzled from their own exchange customers prior to filing bankruptcy. (See prior post on this Blog dated May 15. 2009.)

Expanding "Vested Rights" in Virginia (HB 1250): Virginia's "Vested Rights" Statute establishes when a landowner can know for sure that a decision of government affecting their land will "vest" certain rights in the property which cannot be altered by a subsequent governmental action. This new law expands the definition of a "significant affirmative governmental act" by adding written orders, decisions or determinations of a zoning or other administrative officer to the list. Previously, only the decision of a governing body, such as the Boards of Supervisors, Board of Zoning Appeals, or Planning Commission, could be considered to "vest" rights. Because so many government decisions are delegated to staff such as zoning administrators and planning managers, landowners had not previously been able to rely on the guidance or decisions of these powerful local government officers, whose decisions carry a lot of weight. Now they can. Critics of this legislation say that it is now possible that emails and casual correspondence with landowners may be deemed to be a governmental action. In my opinion, this legislation is very good law.

Thursday, April 15, 2010

18 Years Ago Today: Hawes Spencer Saves the Movie Palace, now the Jefferson Theater

Eighteen years ago today, Hook Editor in Chief Hawes Spencer was the successful purchaser at the foreclosure of what was then the Movie Palace, now The Jefferson Theater, here in Charlottesville. A very young Spencer emerged with the winning bid of $310,000, outbidding several local developers including Gabe Silverman who already owned several properties on the still-dormant Downtown Mall. Spencer's attorney wore a Mickey Mouse watch.

Thursday, April 1, 2010

Homebuyer Stimulus Tax Credits: Andele! Andele!

Under the extension of the first time homebuyer tax credit program, first time homebuyers are eligible for a tax credit (not just a tax deduction) if they are under contract by April 30th, 2010, and close on their purchase no later than June 30, 2010.

The tax credit is equal to ten percent (10%) of the purchase price for the home, with a maximum of $8,000.00.A first time homebuyer is defined as someone who has not owned a home within the last three (3) years, so the definition is fairly liberal.

The program was extended before its initial sunset date last fall. When it was extended, Congress added an additional tax credit for current homeowners who “move up.” Owners who already own a residence and buy a new home within the same time constraints may be eligible for a $6,500 tax credit, provided that they owned their current home for five (5) consecutive years during the last eight (8) years.

The bonus factor on the tax deduction is that it is not a “standard” deduction, but a dollar-for-dollar credit. If the taxpayer cannot use the entire credit, it is refundable, which means the taxpayer will receive a refund from the IRS for the unused portion of the credit. Now, that’s a nice bonus to spend at Lowe’s. Or better yet, at your neighborhood hardware or landscaping supply store!

The tax credit applies fully to taxpayers who earn $125,000 and below per year. Taxpayers who earn more than that but below $145,000 are eligible for a partial credit. For joint filers, the tax credit applies fully to a couple who earn $225,000 in combined income, with a partial credit up to a maximum of $245,000 in joint earnings.

The maximum purchase price that this credit can be used towards is $800,000.

But April 30th is coming soon.

Andelé! Andelé!