Feb 23

Call your favorite federal representative or senator and tell them to support the following:

On February 17, the House Ways and Means Committee approved H.R. 705, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011.

This bill will remove the requirements to give 1099 to suppliers of goods and to corporate service providers.  It also will remove the requirement for SMALL landlords to submit 1099’s

Also on February 17, the Senate voted to pass the FFA bill S 223 that also removes the 1099 requirements for suppliers of goods and to corporate service providers.

What are changes to  the 1099 rules and why they need to be changes?  Read my prior post here:

Much more paperwork for landlords in 2011

With or without changes the issue of having your contractors reclassified as statutory employees is a real risk:

Your handyman – cheap contractor or $60,000 mistake?

Feb 22

It is a sad reality that many communities use code enforcement to promote an illegal racially motivated agenda.  The ACLU outlines their view of the problem in an article, Renting While Black.

We see it here in Milwaukee where at least one Alderman appears to use Aldermanic Service Requests in a way that only the ku klux klan would be proud of.

Even if so called community leaders are not actively involved in the racially motivated inspections, a complaint based code enforcement  that permits anonymous exterior complaints opens the door for neighbors to promote their biases through code enforcement

There have been a number of federal lawsuits over the years alleging racially motivated code enforcement.  A list of some of those cases can be found here.

Typically if a case gets to the point that the  property owners may win the municipality quickly and quietly settles.  Usually not for the full compensation for the harm caused by the racially motivated enforcement.  But lets face it, it takes a lot of financial and mental tenacity for a small landlord to slug it out against cities with seemingly endless resources to defend their bad behavior.

However there is one such case that the landlords have held on for something like eight years now.  After the Federal Eighth CIrcuit Court of Appeals issued an opinion favorable to the landlords, the city of St Paul has petitioned the US Supreme Court for review (link to petition for review).  You can read the amended original complaint that started this case here.

If the Supreme Court hears this case it will have a huge impact on all landlords who follow fair housing practices, i.e. don’t reject tenants tenants simply because they are a different color, nationality, religion, etc than their neighbors.  One must really respect these property owners for the amount of sacrifice they have made to get this far.

The case alleges that St Paul housing inspection programs were used in a racially motivated manner to force racial minorities out of St Paul and that such actions violated the Fair Housing rights of the occupants.  A very interesting point is a number of city employees including inspectors are on the hook personally in this suit.  From a legal perspective they must defend themselves as they and their employer have disparate interest; for the city to win if the allegations are proven true they must claim rogue employees acting outside of the law.  For the inspectors to win they must argue that they were following instructions that they believed were legal. The inspectors may have a hard time claiming ignorance however as the owners had provided the inspectors with documentation that the inspectors’ acts were contrary to Fair Housing, yet the inspectors continued with their agenda.  At some point the inspectors will have to name their union as third party defendants as the union failed to stop management from allowing/forcing them to violate the rights of the tenants and owners

From my conversations with two of the plaintiffs over the past six or seven years they seem to be just a handful of hard working landlords who independently found themselves on the losing end of government behaving badly.  The current case is a consolidation of three or four cases that started independent of each other, but the claims were so similar that the federal court combined them.

Most of the cases claimed RICO (racketeering) on the part of the city employees. The RICO elements were dismissed due to procedural errors.  I’m certain that some future case will go to trial on that issue, whether in St Paul or somewhere else.

Feb 06

Wells Fargo v. Sandra A. Ford is a NJ case that started as a pro se defense to a foreclosure. It ends with Wells Fargo getting spanked by the NJ court of Appeals in what will be a published decision..  At appeal the defendant was represented by Legal Services of NJ, which is similar to Legal Action of WI.

My great interest in foreclose defense cases is twofold.

First I see some of these cases holding the potential of unraveling the entire real estate market by creating hundreds of thousands of “free” homes across the nation. I fear this will cause a second and more dramatic drop in housing prices as once the mortgages are wiped people can sell for practically nothing and make a profit.

Secondly, on a personal level, absent this new legal trend I feel that we are nearing the time to buy again in the two markets I’m interested in  (Milwaukee and Miami)  I am very concerned that these cases could proceed to a point that properties previously foreclosed upon could revert to the original owner if cases are allowed to be reopened on the basis of fraud on Court by the banks and/or MERS.  Wisconsin §806.07(1)(c) or 806.07(1)(g) would appear to allow cases to be reopened if there were to be a major Wisconsin, Florida or Federal ruling on this in the future.  (Florida is one of the states that has a high number of foreclosure cases being lost by the banks)

While title insurance would should cover the cost of the property, would you be able to recover the cost of repairs and improvements?

Feb 05

Accounting Today has a good article on the Senate bill to amend the 1099 filing requirements

It looks like if this is signed into law we won’t have to send 1099s to the Home Depot.

However this does not appear to repeal the new 1099 requirements under the Small Business Jobs Act for landlords

As you recall the Small Business Jobs Act expanded the1099 reporting to all landlords when they pay more than $600 to non-corporate service providers such as your local handyman.

preload preload preload