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Legal Resources

Cities are sued for dragging their feet on eminent domain

A landowner can sue a city for announcing that it was going to take some property by eminent domain, and then doing nothing else for a long time. That’s the result of two recent decisions by the highest courts in Nevada and Missouri. In the Nevada case, the city of North Las Vegas announced that it was going to condemn an acre of a business’s property for a flood control project. However, the city did nothing

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New rules for home mortgages will protect consumers

The Federal Reserve Board has issued a number of new rules for home mortgages that are designed to protect consumers. The rules apply to “subprime” mortgages and to some “Alt-A” mortgages (which are given to buyers whose credit is less than ideal but is better than subprime). The rules include: Lenders cannot offer a mortgage unless they first verify the borrower’s income.

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An equity line of credit could mean rethinking your estate plan

If you take out a second mortgage or a home equity line of credit, be aware that it could affect your estate plan. The reason: Many people plan to leave their house to one child, and the rest of their property to their other children (or other heirs). But their will doesn’t say specifically whether the child who inherits the house will receive it subject to any debts, or whether the debts must be paid off

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Congress makes ‘jumbo’ mortgages easier

Should you refinance now? Mortgages are often divided into two types, “conforming” and “jumbo.” For some time, a “conforming” mortgage has been any loan up to $417,000, and a “jumbo” mortgage has been any loan over that amount. The reason is that $417,000 was the largest loan that could be repurchased by Fannie Mae and Freddie Mac, the two quasi-governmental mortgage-buying agencies. Because lenders could not re-sell a loan over $417,000 to these agencies, they often

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Supreme Court limits out-of-state taxes

A new ruling from the U.S. Supreme Court is good tax news for companies that operate in multiple states. The case involved a packaging company that was based in Ohio and did business in Illinois. The company had a separate Ohio-based subsidiary with an unrelated information-technology business. When the company sold the subsidiary, it had a significant capital gain. Illinois wanted to impose a tax on a part of the capital gain. It said it should

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Your business loan could mess up your estate plan

If you own a business and you plan to leave it to one of your children when you die, be aware that taking out a business loan or line of credit could affect your estate plan. The reason: Many wills that provide that a child will inherit business assets don’t specify whether the child will inherit the assets subject to any debts, or whether the child will inherit the assets free and clear and any debts

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$100 million Starbucks verdict shows danger of ‘tip pools’

A recent $100 million verdict against Starbucks for the way it required employees to participate in “tip pools” should jolt employers with all the force of a Venti extra-shot Caramel Macchiato. Tip-pool lawsuits have been filed recently not only against restaurants, but also against hotels, transportation companies, delivery services, casinos and sports facilities. Recently, many companies have been tempted to expand the number of employees who participate in tip pools. This can seem like a good

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Meet the typical homebuyer

The typical homebuyer today is 39 years old, has a household income of $74,000, searches for eight weeks, sees 10 homes, and makes a down payment of 9%, according to research conducted by Married couples constitute 62% of homebuyers, with single women accounting for 20%, single men 9% and unmarried couples 7%. (The remaining 2% of buyers were classified as “other.”) Perhaps surprisingly, only 40% of homebuyers have children under 18 living at home. Some

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Why it’s not always smart to put your house in your child’s name

Some people decide to do some “homemade” estate planning and put their house in a child’s name. They figure this will avoid probate and get the house out of their estate for tax purposes. This might be a good idea in some cases. But remember, if you give your house to your child now, any appreciation in the value of the house between now and the time it’s eventually sold will be a capital gain for

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Down market prompts new types of sales for buyers

The down market in real estate has created a boomlet in two obscure types of property sales: the “short sale” and the “house swap.” A short sale is an alternative to foreclosure. If a property owner is unable to make mortgage payments, but the lender doesn’t want to go through the legal hassle of foreclosure, the owner and the lender may agree to a short sale. The property is sold, and if the sale price is

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