All Forum Posts by: Ryan Seib

Yes.

The HOA rules and regulations come from Condo rules which is a creature of state law. So as to the AZ angle here you need to speak to an AZ attorney. But in general the HOA gets to enforce its rules as it wishes. The whole association is owned by the members. And a majority of those members elect a group of unit owners who are now in charge of enforcing the rules. When the people in charge changes, the level of enforcement may change. That is just how they all tend to work. You may have defenses such as arguing laches (unreasonable delay) in enforcement, or estoppel (similar--based on actions taken though). But generally I do not think you want to fight about it if possible to avoid it. The HOA will start assessing you for money to pay for an attorney to quibble with you. There was a recent case decided here where a woman fought her HOA for I think 5 years over a $300 fee. In the end it cost her about $40,000 when she lost in court. Also beware that HOAs can file liens against your unit which are pretty hard to get out of. And once they have a lien on you for fines, etc, they can start adding costs exponentially by hiring an attorney to squabble with you about the lien and payment, etc. They get to just keep adding the attorneys bills into the lien. And eventually they can even foreclose on the lien and take over your unit. So not pretty. I would find a way to appease the HOA or get out of this association if I were you. I hope this helps though the picture is not maybe what you wanted to hear!

Contribute property to a private partnership and then let the other partner buy it out over time while still receiving distributions...? Not saying this is a good option just answering the question. Or funding the buyout using a split dollar program? (Highly unlikely this would be cost effective for your numbers though...)

Hi Brandon, the easy button would be knowing the mayor or something along political lines. But as I take it that is not one of your current likely options, for what it is worth I would analyze this problem along the following lines: (1) list out all the steps the government people are suggesting you need to go through to get this done, (2) evaluate each step for cost, likelihood of success, etc. (3) obtain as much information as you can about each step including estimates from professionals where possible, (4) evaluate the entire process for cost and chance of success based on your limited information, (5) compare the cost evaluation you have determined, with the potential gains to be realized from your development (6) determine whether the risks/costs outweigh the benefits (with your limited information, including a conservative fudge factor in the numbers). Once you have completed (6) you can then go back and evaluate each step again to determine if there is a shortcut to avoid or lower costs of that step, or increase chance of success. From there, shorten your list of steps as much as possible, look to lower costs, and increase chance of success. When you get back to (6) in the process you should hopefully be able to tell when it is worth it for you to pull the trigger on approach to solving this problem. Now that is just my two cents on how to look at it. Regarding your specific concerns, I would suggest putting together a presentation of your plans and to keep working on the zoning people to approve your variance, conditional use, or re-zone. As you pointed out this is just common sense at some level so all you really need to do is make it easy for them to say yes by doing all the work yourself. That is why they are telling you to hire attorneys, surveyors, etc. Because then at the end of they day all they have to do is push their easy button and be done. They really do not care how much it costs you to get that easy button in front of them so if you can figure out a cost effective way to do it they will do it. Or as I mentioned, get in touch with the mayor or other important politicians who can push your thing through. I hope that helps and best wishes!

Hi Jonathan. Are you talking about FIRPTA? Then yes most likely (though not enough details to know for sure what the ownership of the foreign national is in the disposed property).

By the way this may be a good time for a historical comment. LLCs are just a recent form of the expression of common sense in business dealings that arose in response to the idea of an outside investor. That is why Robert Kiyosaki in I think it was Rich Dads Guide to Investing starts by talking about renaissance-age Italian and English shipping investments and how people would ban together to fund a merchant ship sailing to Asia to bring back spices and haul in a great return. At the time it became clear that these shipping operations came with risks for investors who could be sued buy families of sailors lost or others. But they were not directly involved but only lent money to the enterprise they said! So yes things like corporations arose. And LLCs are a recent invention of state sponsored corporate forms to oversee and regulate the process of limited liability. As an attorney I can tell you that I have been involved in lawsuits where the LLC provided a barrier to personal liability for the owner of the LLC. Even if you get few published decisions on "piercing the corporate veil" and other such matters--way before it gets to that point in litigation the plaintiffs lawyers understand they do not have a good argument for piercing so they waive the argument so they do not irritate the judge, or settle the case on other grounds with a mere gesture at going for personal liability if the settlement does not work. But everyone knows it is all a frivolous sham because the LLC is indefatigable in the average case. Plus just look at any [any] corporate bankruptcy and you will realize if you think about it that none of the owners, managers, investors, board members, etc are named in that bankruptcy and will not owe any money to the corporations creditors as a result of bankruptcy. A case was literally just decided by the Wisconsin Court of Appeals a few weeks ago, Nash Finch v. Gordy's Foods, where the creditors were out about $40M on the insolvency of Gordy's Foods. Did those creditors go after the former owners of Gordy's? Of course not! They would get nothing but legal sanctions if they started suing investors/owners of a corporation who were not liable in any way.

Hi Rick S, Ah sorry I did not see your question and was not notified of it. But better late than never usually! Yes my comments about the RA (ie Registered Agent) were simply that an LLC is required to have an RA by state law. This is the address at which your LLC accepts services of lawsuits, state notices, etc. The regulations do not allow you to have a PO box as your RA, but some people do that. I do not recommend it. My comment about the checking account is that any amount of business entities and/or persons can "share" a checking account if they decide to. There is no law and no regulator who will stop you from doing so. The only constraint is what the bank will allow. And of course if you run all your business and personal cash through a single checking account, you do not even have to tell your bank. And many small business owners do this. At the same time, do not do this, for financial, liability, and common sense reasons. Best practice is to have at least 1 bank account for each entity and keep the cash flow separate (ie do not commingle and transfer funds in and out frequently). I hope that helps!

That is very odd that the contract itself says nothing about it! I would have to assume, given the statutes of frauds, that if there is not specified prepayment penalty in the document(s), then there can be no prepayment penalty. In other words an agreement for liens/land is only what is written and signed. Anything too vague or unspecified is not part of the contract. That is why it is very important to correctly describe real estate in the purchase contract/deeds. If the description is off--that is what you are buying, not necessarily what you thought you were buying. 

So with the caveat that I do not know CA law, and, knowing CA there very well could be a random law that imputes prepayment penalties on seller notes (though I cannot imagine a good reason for such a law), I would start with the premise that there is no prepayment penalty and go from there. Probably consult a lawyer on that issue. Then talk to the note holder and let them know you are going to refinance and (though there is no prepayment specified so you believe you do not owe one) you are willing to pay a token amount so there is no argument about it. 

Those would be my thoughts for what it is worth. I hope it goes well!

Just run the numbers if you can make enough money on a $100k raise according to the analysis then the rules of thumb do not affect you.

Yes tax lien generally first though it can depend on the taxing authority of the municipality in rare instances. construction liens are usually at the same priority as mortgages it just depends on when the work was started. But it sounds like none of these are construction liens. The first bank to file almost certainly still has priority since it simply refinanced its own interest. I doubt it would subordinate unless it was getting paid. But you can read the refinancing note to see. I will assume the note is a lien not just a nonrecourse document accidentally filed in the chain of title.