All Forum Posts by: Chris K.

In Pennsylvania, the Real Estate Seller Disclosure Law (RESDL) requires sellers to disclose any known defects in the property. Last time I checked, I believe the Pennsylvania Superior Court ruled that a a standard "as is" clause cannot waive this duty. 

Proving the seller knew about a defect is a challenge. But it happens once in a while. My client purchased a home infested with a specific type of vermin. We found an email between the seller and a contractor highlighting the issue, where the contractor explained how to fix it. The seller didn't and did a patch job. We just happened to find this email and secured a decent settlement. That does not happen every day.  

Another possibility is the seller's property insurance. Several factors need to align (e.g., you need to show that the damage occurred before the sale, the type of damage is covered, the damage wasn't readily observable beforehand, etc.). Again, I've had a client successfully recover from the seller's insurance. But that case involved damages in the millions and took over a year to reach a settlement. Probably not feasible for a $20k damage. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

It's hard to analyze these situations without the full picture. But generally, the way that the agent gets paid is by contracting with the buyer and have the buyer pay the agency fees. Under your hypo, the agent does not want to do so for some reason. If so, there is probably no contractual right. 

But a court may find that the agent is entitled to something based on equity principles. For example, I could see the agent arguing unjust enrichment. But the facts would have to support it. 

Just to be clear, are you asking about situations where you need to pay additional transfer taxes? The famous 2008 memo largely deals with situations where an assignment may constitute a taxable event.

Dealing with that issue really depends on the precise situation. But that is probably something to discuss with an attorney.

Either one would work. My general preference is to open a single-purpose LLC in the state where the property sits. But if you have a lot of entities, it might be administratively easier to pick a state and open all your LLCs there.

@Jonathan Faltot

If the tax claim bureau failed to notify the original owner, that tax sale is void as a matter of law. Pennsylvania tax sales are brutal to the buyer for constitutional reasons. 

Your attorney is correct that you can receive some compensation. It is typically things like taxes and other fees they would've paid as the owner. And then they would owe you the value of improvements you made to the house. The question becomes how you will prove the value. Hopefully you have good documentation on the condition of the property before you made all the improvements. 

Disclaimer: While I’m a licensed attorney, I am not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@David Krulac: not quite. I actually ended up becoming a General Counsel for a company that relocated its HQ to Nashville. So haven't spent much time on BP. :)

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Any reasonable attorney can help with forming an LLC. I would just note that forming an LLC --- especially a single member LLC --- is easy. But when working with true "beginning" investors, what typically takes time is: (1) gathering information from the client; and (2) answering questions that a more experienced client would already know.

All this to say --- the best way to not get ripped off is to learn more. Knowledge is power! 😇

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Jim Mal

There's a bunch. Feel free to PM me if you need recommendations. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Yacine Rimmo and @Todd Ashley

This is the verbatim excerpt from the said podcast:

Bryce Stewart:
So it was trying and difficult. And the number one point I walked away with was either you have to have somebody who has an insurance certificate that they’re sending to you. Or if you’re having somebody do side work on one of your properties and they’re not an insured contractor because the kind of work that they’re doing is not something that’s insured, you want to have somebody, and talk to your insurance agents about this, you want somebody who has what’s called a workers’ compensation waiver form. It’s them agreeing to not pursue a workers’ comp claim if they happen to be injured. They’re waiving their right to workers’ compensation. So talk to your insurance agent about a workers comp waiver form.
There’s probably some big investors out there right now who tomorrow are having people doing work in their properties who do not have a certificate or it’s somebody’s cousin helping them do demo because they’re doing demolition on a unit and the person doesn’t have adequate medical insurance. Guys, this is so important that I actually wrote a song that I’m going to play for.

Based on what he wrote, I believe he is making the contractors sign something like this: https://grubermotors.com/media...

Essentially the form makes contractors state that they: (1) are independent contractors; (2) don't have workers comp coverage for themselves on the basis that they are owners/sole proprietors; and (3) will not pursue (or acknowledge that they won't receive) workers comp benefit from the owner. 

These forms serve a few purposes. If you actually own a business and have workers comp insurance, your premiums can increase after an annual audit if you don't get the independent contractors to either: (1) provide a COI with workers comp; or (2) sign these waivers. It could also be a way to establish that the contractors in question is an independent contractors versus an employee. But having the contractor sign this form wouldn't be the dispositive issue for whether he or she is an independent contractor. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Yacine Rimmo

That's a separate issue. Your obligation to pay for WC policy and deal with WC claims is whether the person in question is an employee. Now you could try to prevent them being an employee but making them sign an independent contractor agreement of sorts. But ultimately the law doesn't care what the agreement says. The classification between an employee and an independent contractor is governed by Federal and State law. The agreement may nudge situation towards one direction. But what it says on the agreement doesn't actually control their classification. 

There are other kind of waiver forms that would allow the independent contractors from obtaining workers comp for themselves. But that's a different issue. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.