In the past, one of the options available to someone selling real estate in Pennsylvania was to take back a private mortgage if, for some reason, a mortgage from a bank was not an option. However, a 2009 change in Pennsylvania law prohibits this practice unless the person taking back the mortgage is a licensed mortgage broker.
One key exception to this new rule is if the property is being sold to a family member (i.e., a parent sells a house to a son or daughter).
However, if there is no familial relationship and a bank mortgage is not an option, the alternatives include a lease-purchase agreement, or an installment sale. Before deciding to proceed with either of these options, however, you should discuss the advantages and disadvantages with someone qualified to help you understand the issues.
Thursday, January 9, 2014
Wednesday, July 10, 2013
The deadline for appealing your 2014 real estate taxes is approaching
Many counties in Pennsylvania, including Delaware, Bucks, Chester and Montgomery counties, have established August 1 as the deadline for you to appeal the following year's real estate assessment. The assessment is what is used to calculate your property tax bills; if the assessment is too high, you will pay too much.
Accordingly, August 1, 2013 is the deadline for filing an appeal of your 2014 taxes in many counties.
As I have mentioned before, you should not appeal your taxes unless you are confident that your assessment is too high. In many cases, properties are actually underassessed. Often, it is new construction, or houses built in the last few years, that are overassessed.
Since you probably just received your school tax bill, take a look at the assessed value that is listed on that bill. Multiply the assessment by the common level ratio for your county. (For 2014, it is 9.09 for Bucks County, 1.66 for Chester County, 1.35 for Delaware County and 1.58 for Montgomery County). If the number seems to be more than you could get if you were to sell your property, you should consider an assessment appeal - either contact an attorney who handles assessment appeals, or else go the the Board of Assessment Appeals for your county for the forms and further details.
Accordingly, August 1, 2013 is the deadline for filing an appeal of your 2014 taxes in many counties.
As I have mentioned before, you should not appeal your taxes unless you are confident that your assessment is too high. In many cases, properties are actually underassessed. Often, it is new construction, or houses built in the last few years, that are overassessed.
Since you probably just received your school tax bill, take a look at the assessed value that is listed on that bill. Multiply the assessment by the common level ratio for your county. (For 2014, it is 9.09 for Bucks County, 1.66 for Chester County, 1.35 for Delaware County and 1.58 for Montgomery County). If the number seems to be more than you could get if you were to sell your property, you should consider an assessment appeal - either contact an attorney who handles assessment appeals, or else go the the Board of Assessment Appeals for your county for the forms and further details.
Monday, April 8, 2013
The sudden medical emergency doctrine as a defense to liability
In Pennsylvania, if you get sued for negligence (for example, if you are driving a car and hit someone), two potential arguments against liability are the sudden emergency doctrine, and the sudden medical emergency doctrine. In a recent decision, the Pennsylvania Superior Court clarified the difference between these two defenses while reversing the trial court's decision that found in favor of the defendant.
In Shiner v. Ralston, Mr. Ralston was driving a pickup truck for his employer. The accident occurred when he drove across two rumble strips and a grassy median before hitting Mr. Shiners' car head-on. Mr. Ralston was pronounced dead following the accident. An autopsy concluded that he had lost consciousness while driving due to a cardiac dysrhythmia.
After the Shiners filed suit, the trial court granted summary judgment in favor of the defendants, Mr. Ralston's estate and his employe. It concluded that because the accident was the result of a sudden and unforseeable medical emergency, the defendants could not be held liable under the sudden emergency doctrine.
The Superior Court found that the trial court had erred by conflating the sudden emergency doctrine and the sudden medical emergency doctrine.
The sudden emergency doctrine is a standard of conduct, and applies when a person who is driving prudently has little or no time to see and react to an emergency - for example, someone running into the street from behind a car that is parked at the side of the road..
The sudden medical emergency doctrine is an affirmative defense that may apply when there is a sudden loss of consciousness or the defendant suddenly becomes incapacitated.
The Superior Court held that for the purpose of summary judgment, the defendants had the burden of establishing that no reasonable jury could find that Mr. Ralston was negligent. It concluded that neither the lack of any mention of cardiac symptoms in Mr. Ralston's medical records nor the testimony of his family that he had never previously had heart problems was enough to support summary judgment. Further, the Shiners had presented a medical report that concluded that Mr. Ralston had sufficient time to respond to his symptoms and avoid the accident.
The take away lesson is that, while the sudden medical emergency doctrine is a viable defense, for the purpose of summary judgment (winning a case without a trial), the defendant cannot simply rely on an absence of medical records documenting a preexisting a condition. Accordingly, it must conduct an exhaustive investigation for any evidence from any source that reinforces its argument that the defendant's loss of consciousness was not forseeable.
In Shiner v. Ralston, Mr. Ralston was driving a pickup truck for his employer. The accident occurred when he drove across two rumble strips and a grassy median before hitting Mr. Shiners' car head-on. Mr. Ralston was pronounced dead following the accident. An autopsy concluded that he had lost consciousness while driving due to a cardiac dysrhythmia.
After the Shiners filed suit, the trial court granted summary judgment in favor of the defendants, Mr. Ralston's estate and his employe. It concluded that because the accident was the result of a sudden and unforseeable medical emergency, the defendants could not be held liable under the sudden emergency doctrine.
The Superior Court found that the trial court had erred by conflating the sudden emergency doctrine and the sudden medical emergency doctrine.
The sudden emergency doctrine is a standard of conduct, and applies when a person who is driving prudently has little or no time to see and react to an emergency - for example, someone running into the street from behind a car that is parked at the side of the road..
The sudden medical emergency doctrine is an affirmative defense that may apply when there is a sudden loss of consciousness or the defendant suddenly becomes incapacitated.
The Superior Court held that for the purpose of summary judgment, the defendants had the burden of establishing that no reasonable jury could find that Mr. Ralston was negligent. It concluded that neither the lack of any mention of cardiac symptoms in Mr. Ralston's medical records nor the testimony of his family that he had never previously had heart problems was enough to support summary judgment. Further, the Shiners had presented a medical report that concluded that Mr. Ralston had sufficient time to respond to his symptoms and avoid the accident.
The take away lesson is that, while the sudden medical emergency doctrine is a viable defense, for the purpose of summary judgment (winning a case without a trial), the defendant cannot simply rely on an absence of medical records documenting a preexisting a condition. Accordingly, it must conduct an exhaustive investigation for any evidence from any source that reinforces its argument that the defendant's loss of consciousness was not forseeable.
Thursday, March 14, 2013
2014 assessment appeals
Since we are now in mid-March, people who live in Pennsylvania and own their own homes or other real estate should do a reality check to see whether they are paying too much in real estate taxes because their property is overassessed.
In order to complete this check, you need the following:
1. A copy of one of this year's tax bills that includes the assessed value of your property.
2. At least a rough idea of what your house or property is worth.
3. The common level ratio factor that applies to the county in which your house or property is located.
The common level ratio factor is based on a ratio that is determined annually by Pennsylvania's State Tax Equalization Board. It is supposed to represent the ratio of the assessed value to the actual value of the property.
To check of your assessment, multiply the assessed value of your property by the common level ratio factor that applies to your county. Pennsylvania's common level ratio factors can be found at http://www.portal.state.pa.us/portal/server.pt/community/realty_transfer_tax/11417/common_level_ratios/580584.
For Delaware County, for 2014, it is 1.39; for Chester County, it is 1.70; for Montgomery County, it is 1.61; and for Bucks County it is 9.26.
If the math gives you a number that is significantly higher than the actual value of your house or property (what it would sell for), you should consider filing a tax appeal.
In many counties in Southeastern Pennsylvania, the deadline for filing a tax appeal of your 2014 assessment is August 1, 2013. If you miss this deadline, you will have to wait another year. You should check with your county's Board of Assessment Appeals to confirm the deadlines, or consult a lawyer who handles real estate tax appeals.
In order to complete this check, you need the following:
1. A copy of one of this year's tax bills that includes the assessed value of your property.
2. At least a rough idea of what your house or property is worth.
3. The common level ratio factor that applies to the county in which your house or property is located.
The common level ratio factor is based on a ratio that is determined annually by Pennsylvania's State Tax Equalization Board. It is supposed to represent the ratio of the assessed value to the actual value of the property.
To check of your assessment, multiply the assessed value of your property by the common level ratio factor that applies to your county. Pennsylvania's common level ratio factors can be found at http://www.portal.state.pa.us/portal/server.pt/community/realty_transfer_tax/11417/common_level_ratios/580584.
For Delaware County, for 2014, it is 1.39; for Chester County, it is 1.70; for Montgomery County, it is 1.61; and for Bucks County it is 9.26.
If the math gives you a number that is significantly higher than the actual value of your house or property (what it would sell for), you should consider filing a tax appeal.
In many counties in Southeastern Pennsylvania, the deadline for filing a tax appeal of your 2014 assessment is August 1, 2013. If you miss this deadline, you will have to wait another year. You should check with your county's Board of Assessment Appeals to confirm the deadlines, or consult a lawyer who handles real estate tax appeals.
Friday, February 1, 2013
Exception to workers' compensation subrogation in Pennsylvania
Subrogation on the part of an employer is a fundamental concept in Pennsylvania workers' compensation law. The underlying principle is that an employer should be entitled to be repaid for the workers' compensation benefits that it paid to an injured worker as a result of the negligence of a third party.
In Pennsylvania, an injured employee is entitled to workers' compensation benefits if he or she is hurt while engaged in an activity at work that promotes the employer's business interests. It does not matter if the injury was caused by a third party - for example, if your boss asks you to go buy something for the job at a nearby store, and you are hit by a car while going to make that purchase, you are entitled to workers' compensation.
In that scenario, however, if you then file a lawsuit against the person who hit you, you have repay your employer the workers' compensation benefits that it paid from any award or settlement that you receive as a result of that lawsuit. (It is not a dollar-for-dollar repayment; rather, there is an intricate formula).
The employer's right of subrogation has largely been found by the courts to be something that cannot be defeated. However, the Workers' Compensation Act provides that a governmental entity "is immune from claims of subrogation or reimbursement from a claimant's tort recovery."
In Frazier v. W.C.A.B. (Bayada Nurses, Inc.), 52 A.3d. 241 (Pa. 2012), a nurse was on a SEPTA bus while traveling for work. The bus was involved in an accident, and she broke her ankle. She subsequently settled her case against SEPTA for $75,000. As part of the settlement, SEPTA agreed that it would "defend, indemnify and hold Claimant harmless with respect to any claim, suit, petition or other action brought against Claimant ... for payment of [the] workers' compensation lien. . ."
Even though SEPTA qualifies as a governmental entity, Bayada Nurses filed for repayment of the workers' compensation benefits that it had paid. The workers' compensation judge found that Bayada was not entitled to subrogation, but the Workers' Compensation Appeal Board ("W.C.A.B.") reversed the judge. The Commonwealth Court affirmed the W.C.A.B. However, the Pennsylvania Supreme Court found that the workers' compensation judge was correct and reinstated the decision of the workers' compensation judge.
Accordingly, if an employee is paid workers' compensation benefits as a result of an accident caused by a governmental entity, the employer is not necessarily entitled to subrogate against a settlement or award between the employee and the governmental entity.
In Pennsylvania, an injured employee is entitled to workers' compensation benefits if he or she is hurt while engaged in an activity at work that promotes the employer's business interests. It does not matter if the injury was caused by a third party - for example, if your boss asks you to go buy something for the job at a nearby store, and you are hit by a car while going to make that purchase, you are entitled to workers' compensation.
In that scenario, however, if you then file a lawsuit against the person who hit you, you have repay your employer the workers' compensation benefits that it paid from any award or settlement that you receive as a result of that lawsuit. (It is not a dollar-for-dollar repayment; rather, there is an intricate formula).
The employer's right of subrogation has largely been found by the courts to be something that cannot be defeated. However, the Workers' Compensation Act provides that a governmental entity "is immune from claims of subrogation or reimbursement from a claimant's tort recovery."
In Frazier v. W.C.A.B. (Bayada Nurses, Inc.), 52 A.3d. 241 (Pa. 2012), a nurse was on a SEPTA bus while traveling for work. The bus was involved in an accident, and she broke her ankle. She subsequently settled her case against SEPTA for $75,000. As part of the settlement, SEPTA agreed that it would "defend, indemnify and hold Claimant harmless with respect to any claim, suit, petition or other action brought against Claimant ... for payment of [the] workers' compensation lien. . ."
Even though SEPTA qualifies as a governmental entity, Bayada Nurses filed for repayment of the workers' compensation benefits that it had paid. The workers' compensation judge found that Bayada was not entitled to subrogation, but the Workers' Compensation Appeal Board ("W.C.A.B.") reversed the judge. The Commonwealth Court affirmed the W.C.A.B. However, the Pennsylvania Supreme Court found that the workers' compensation judge was correct and reinstated the decision of the workers' compensation judge.
Accordingly, if an employee is paid workers' compensation benefits as a result of an accident caused by a governmental entity, the employer is not necessarily entitled to subrogate against a settlement or award between the employee and the governmental entity.
Property taxes on new construction may be too high
Recently, I have been called by a number of people who have just received their assessment after buying a newly built house. The assessments that they are receiving will often lead to high tax bills.
When a new house or other building is completed, the local Board of Assessment will issue what is called an "interim assessment" for that property. Depending upon the county in which the property is located, the assessment should represent a percentage of the combined value of the real estate and the building; the percentage is determined by that county's common level ratio. (The common level ratios for Pennsylvania counties can be found by clicking here).
You typically have 40 days to appeal an interim assessment; if you miss that deadline, you are stuck with that assessment until you can next file an appeal of the annual assessment.
In many cases, the interim assessment is correct since it is based on the purchase price contained in the deed that was filed when you bought the house. However, there are times that the ratio has not been correctly applied and the assessment is too high.
Where it can become difficult for the Board of Assessment to correctly the value the property is when the real estate is purchased, and there is a separate contract for the construction of the house. The construction contract is not filed as a public record, and the Board of Assessment thus does not know how much it cost to build. It thus may put too high a value on the house, inflating your assessment and, thereby, your property taxes.
I thus recommend that any time you get an interim assessment, you carefully review the assessed value to confirm whether it is appropriate.
When a new house or other building is completed, the local Board of Assessment will issue what is called an "interim assessment" for that property. Depending upon the county in which the property is located, the assessment should represent a percentage of the combined value of the real estate and the building; the percentage is determined by that county's common level ratio. (The common level ratios for Pennsylvania counties can be found by clicking here).
You typically have 40 days to appeal an interim assessment; if you miss that deadline, you are stuck with that assessment until you can next file an appeal of the annual assessment.
In many cases, the interim assessment is correct since it is based on the purchase price contained in the deed that was filed when you bought the house. However, there are times that the ratio has not been correctly applied and the assessment is too high.
Where it can become difficult for the Board of Assessment to correctly the value the property is when the real estate is purchased, and there is a separate contract for the construction of the house. The construction contract is not filed as a public record, and the Board of Assessment thus does not know how much it cost to build. It thus may put too high a value on the house, inflating your assessment and, thereby, your property taxes.
I thus recommend that any time you get an interim assessment, you carefully review the assessed value to confirm whether it is appropriate.
Tuesday, September 18, 2012
Impact of property sale on your assessment
As I noted in a prior post, the county's assessment of your property (which you can find on your tax bill) should be a percentage of its actual value. The percentage is determined by the common level ratio for the county in which the property is located. The common level ratios for Pennsylvania counties can be found by clicking here.
An ideal time to evaluate your assessment is immediately after you purchase a new home or other property. If the purchase was an arms-length transaction, the price you paid is probably the actual value of that property, or very close to it. If you multiply the assessed value by the applicable common level ratio (percentage), you should end up with a number around the purchase price.
If you multiply the assessed value by the common level ratio and get a result that is significantly higher than your purchase price, the property is likely over-assessed, which means that you are probably paying too much in real estate taxes. You should thus consider filing a tax appeal.
For example, let's say you just bought a house in Chester County for $520,000 that is assessed at $400,000. The present common level ratio for Chester County is 1.70. When the assessment of $400,000 is multiplied by 1.70, it yields a value $680,000 - far more than the $520,000 that you paid. The property would thus be overassessed.
Note that if you are appealing your annual assessment (in other words, if you are challenging an assessment that has been in place for a while, rather than one that was set following renovations or new construction), your appeal applies to the following calendar year. Thus, in 2012, you could appeal your assessment for the 2013 tax year.
If you think your property is overassessed, you may wish to contact an attorney experienced in handling real estate tax appeals. You always want to make certain that you are careful about filing an appeal since it opens up the assessment of the property to scrutiny and, in a worst case scenario, could result in your assessment (and thus your taxes) being increased.
An ideal time to evaluate your assessment is immediately after you purchase a new home or other property. If the purchase was an arms-length transaction, the price you paid is probably the actual value of that property, or very close to it. If you multiply the assessed value by the applicable common level ratio (percentage), you should end up with a number around the purchase price.
If you multiply the assessed value by the common level ratio and get a result that is significantly higher than your purchase price, the property is likely over-assessed, which means that you are probably paying too much in real estate taxes. You should thus consider filing a tax appeal.
For example, let's say you just bought a house in Chester County for $520,000 that is assessed at $400,000. The present common level ratio for Chester County is 1.70. When the assessment of $400,000 is multiplied by 1.70, it yields a value $680,000 - far more than the $520,000 that you paid. The property would thus be overassessed.
Note that if you are appealing your annual assessment (in other words, if you are challenging an assessment that has been in place for a while, rather than one that was set following renovations or new construction), your appeal applies to the following calendar year. Thus, in 2012, you could appeal your assessment for the 2013 tax year.
If you think your property is overassessed, you may wish to contact an attorney experienced in handling real estate tax appeals. You always want to make certain that you are careful about filing an appeal since it opens up the assessment of the property to scrutiny and, in a worst case scenario, could result in your assessment (and thus your taxes) being increased.
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