SBA Guidance on Borrower Certification for PPP Loans (Updated)

If your business received a Paycheck Protection Program (PPP) loan, now may be a good time to look at the new guidance from the Small Business Administration (SBA) to see whether the business should consider returning the money if the business did not really “need” it.  If, after considering the guidance, the business determines it does indeed need the loan, the business should ensure it has documentation demonstrating such need.

Background

On April 24, 2020, President Trump signed the Paycheck Protection Program and Health Care Enhancement Act.  This refilled the PPP with $320 billion.  The PPP is a forgivable loan program for “small” businesses.  The Small Business Administration (SBA) administers the PPP.  Earlier in April, a deluge of applications exhausted the PPP’s initial pool of $349 billion.

PPP loan applicants are required to certify that current “economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”  Civil and criminal penalties attach to such certifications if they are not accurate.  Many PPP loan applicants were therefore concerned about making such “necessity” certification.  The SBA has published PPP Frequently Asked Questions, which it is updating on a regular basis.  FAQ 31 addresses the “necessity” certification.  FAQ 39, following up on public comments by Treasury Secretary Steven Mnuchin, states that the SBA “will review all loans in excess of $2 million, in addition to other loans as appropriate, following the lender’s submission of the borrower’s loan forgiveness application.”

SBA Guidance

FAQ 31, published on April 23, provides guidance from the SBA regarding the “necessity” certification.

One of the most important things to take away from this guidance is that existing PPP borrowers that made the certification before FAQ 31 became available will be deemed to have made the necessity certification in good faith IF the borrower repays the PPP loan in full by May 18, 2020.*  In other words, if your business borrowed money under the PPP and you now determine in light of the new guidance that the “necessity” certification was questionable, the business can protect itself by paying back the loan before May 18.

How can a borrower determine whether it can make the “necessity” certification in good faith?  FAQ 31 essentially tells borrowers to ask themselves whether, in light of “their current business activity and their ability to access other sources of liquidity,” they can access enough liquidity “to support their ongoing operations in a manner that is not significantly detrimental to the business.”  FAQ 31 says that, for example, “it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification.”  The preceding example does two things: (1) puts public companies on notice that they will be subject to scrutiny (for example, Shake Shack, which said it will return its PPP loan), and (2) highlights that documentation will be important in a borrower’s ability to justify its “necessity” certification.

Conclusion

FAQ 31 raises questions that are difficult for borrowers to answer without further clarification from the SBA or other authorities.  Exactly how much pain would a borrower need to sustain from getting non-PPP funding before it reaches the “significantly detrimental” threshold that justifies a PPP loan?  There is no bright-line or one-size-fits-all answer.

If a PPP borrower did not consider alternative sources of liquidity when submitting their PPP application, the borrower should now do so.  If funding is available from sources other than the PPP in a manner that is not significantly detrimental to the business, the business should consider returning all PPP loan proceeds before May 18 to avoid facing penalties based on an inaccurate “necessity” certification.  If the borrower concludes that the PPP loan was necessary, the borrower should have documentation supporting the business’s reasonable determination that accessing funding from such alternative sources would be significantly detrimental to the business.

Please note

*In FAQ 47, published May 13, 2020, the SBA stated that this deadline was being extended from May 14, 2020 (which was an extension of the original May 7 deadline) to May 18, 2020. The original post of this article contained the May 7 date.

Shall We Check His Text Messages? The Growing Trend of Creating Wills in the Digital Age

Co-Authors: Thomas W. Shaver, Esq., John M. Andersen, Esq., and Agnieszka K. Adams

California Trusts and Estates Quarterly

This article was first published in Volume 26, Issue 1, 2020 of the California Trusts and Estates Quarterly, reprinted by permission.

In 2018, the Michigan Court of Appeals determined that an electronic note a decedent typed into his cell phone qualified as his last will and testament under Michigan law. The Tennessee Court of Appeals ruled that a will where the decedent affixed an electronic image of his signature in the presence of two witnesses and died approximately one week after the will was witnessed had been executed in conformity with the law. With the growing trend toward recognizing electronically prepared and signed documents in other areas of the law, California is poised to join several states that allow a testator to prepare a will in digital format. California Assemblymember Miguel Santiago (D – District 53) introduced Assembly Bill 1667 to amend Probate Code section 6113, and to add Chapter 2.5 to Part 1 of Division 6 of the Probate Code, to provide that a will created electronically is a valid last will of a decedent. This article discusses the current state of California law governing the execution of a will, proposed legislation as drafted and adopted by the Uniform Law Commission, the nuances of the legislation of other states that currently authorize electronic wills, and the experience and concerns of trusts and estates practitioners that should inform the recognition of electronic wills in California.

To read the full article please click here.

Coronavirus-Related Tax Relief for the Real Estate and Agricultural Industries

Through various mechanisms, the federal government has issued several forms of tax relief to real estate and agricultural businesses impacted by the current COVID-19 pandemic. The majority of the tax relief was included in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). However, the Internal Revenue Service has also issued guidance providing additional relief. This discussion is intended to serve as a high-level summary for professionals in the real estate and agricultural industries seeking tax relief.

a. Net Operating Loss Carrybacks. When a taxpayer’s total deductions exceed its gross income for a given year, the taxpayer has a net operating loss (or NOL). Taxpayers who incurred NOLs in tax years 2018 and 2019 were not permitted to carryback those losses to generate a refund of taxes paid during previous tax years. Now, under the CARES Act, taxpayers will have a 5-year carryback of NOLs incurred in 2018, 2019 or 2020. Accordingly, if your business generated an NOL in 2018 or 2019 and had earned taxable income in prior years, you may be able to amend your tax returns and receive an immediate tax refund. Similarly, any 2020 NOL can be used to generate a refund of prior year taxes when tax returns are filed next year. Note that, by separate guidance, the IRS is permitting amended returns for certain partnerships which were previously precluded from filing amended returns.

b. Retail Glitch / Qualified Improvement Property Fix. “Qualified Improvement Property” is essentially any improvement made to an existing non-residential building. The 2017 Tax Cuts and Jobs Act (“TCJA”) inadvertently eliminated bonus depreciation for Qualified Improvement Property. To remedy this, the CARES Act includes a technical correction reinstating the bonus depreciation deduction for taxpayers effective as of tax year 2018. Taxpayers can immediately amend their 2018 and/or file 2019 tax returns and claim these additional deductions to produce a tax refund.

c. Modification of Limitation on Business Interest. Current tax law limits taxpayers’ net interest expense deduction to 30% of adjusted taxable income. “Electing real property trade or businesses” (“ERTBs”) are exempt from this 30% limitation. However, electing ERTB status decreases the amount of depreciation available to such business for income tax purposes.

The CARES Act modified the 30% limitation for tax years 2019 and 2020. For partnerships, the 30% limitation continues to apply for the 2019 tax year. However, partners of the partnership may deduct 50% of the 2019 disallowed excess business interest expense on their 2020 returns without regard to the applicable percentage limitations. Additionally, the partnership’s 2020 limitation is increased from 30% of adjusted taxable income to 50% of adjusted taxable income. For taxpayers other than partnerships, the 30% limitation is increased to 50% for tax years 2019 and 2020.

Additionally, the IRS has issued guidance allowing businesses to withdraw a previous election to be treated as a real property trade or business, thereby allowing the business to potentially optimize the amount of interest expense deductions and depreciation deductions.

d. Extensions of Time-Sensitive Actions (Section 1031 Exchanges and Qualified Opportunity Zones). As you may be aware, the deadline to file and pay 2019 federal income taxes has been extended to July 15, 2020. Additionally, in recent guidance, the IRS is permitting certain taxpayers engaged in active section 1031 exchanges to extend the 45-day identification period or the 180-day period to complete the exchange until July 15, 2020. If you are engaged in an exchange and either the 45-day period or the 180-day period falls between April 1 and July 14, 2020, the applicable period is automatically extended to July 15, 2020.

Similarly, the Qualified Opportunity Zone tax incentive program permits taxpayers to reinvest capital gains within 180 days of realizing such gains into a Qualified Opportunity Fund and thereby defer recognition of the realized gains. If your 180-day investment period falls between April 1, 2020 and July 14, 2020, you have until July 15, 2020, to invest any realized capital gains into a Qualified Opportunity Fund and realize the full benefits of the Qualified Opportunity Zone tax incentive program.

e. Losses incurred by Owners of Pass-through Entities. The TCJA imposed limits on the amount of business losses non-corporate taxpayers could use to offset non-business income for tax years starting in 2018. The CARES Act has withdrawn these limits, allowing owners of businesses conducted through pass-through entities generating large losses to offset unlimited amounts of personal non-business income through 2020. Taxpayers who incurred significant business losses in 2018 or 2019 which exceeded the permitted limits should file amended returns to claim refunds. This provision may be of particular importance to individuals with large real estate portfolios.

f. Employee Retention Tax Credits. Eligible employers will receive a refundable credit against payroll taxes. To be eligible, the employer must have (i) had its business operations fully or partially suspended by governmental order or (ii) suffered a 50% reduction in year-over-year gross receipts (comparing calendar quarters). The credit can be as much as $5,000 per employee. This credit cannot be used by certain SBA loan recipients.

g. Deferral of Employer’s Share of Payroll Taxes. Employers and self-employed individuals will be permitted to defer payment of the employer share of social security taxes for the remainder of the year. One-half of deferred payroll taxes must be paid by the end of 2021 and the remainder must be paid by the end of 2022. Recipients of loan forgiveness under the SBA Paycheck Protection Program will not be permitted to defer payment of payroll taxes.

Federal Stimulus in Response to COVID-19

On Wednesday, March 25, the Senate and the White House reached a deal regarding a $2 trillion coronavirus economic stimulus package.

The Senate plans to vote on the legislation on March 25.  Then the House will need to pass it before it goes to the President to sign it into law.  For the House to pass it quickly on Wednesday, the vote would need to happen by a voice vote without any objections from any member of the House, otherwise the legislators will need to return to D.C. for a vote.  The House reconvenes on Thursday, March 26.

The text of the legislation has not been released.  Although details on the provisions are scant, sources indicate the legislation contains the following:

  • $500 billion for loans and assistance to companies, including $50 billion for loans to airlines and state and local governments
  • $350 billion in aid to small businesses, mostly in the form of loans through the Small Business Administration and banks; such loans used for payroll, mortgage, and rent expenses will be eligible for forgiveness
  • Direct payments to individuals in the amount of $1,200 for each adult, and $500 for each child under age 17 (subject to phase outs starting at the following amounts for the following types of taxpayers based on 2019 adjusted gross income (AGI): individuals with AGI of $75,000, couples filing jointly with AGI of $150,000, and heads of household with AGI of $112,500)
  • Unemployment insurance expanded to provide $600 per week for four months in addition to state benefits, and expanded eligibility to benefit more workers
  • Treasury oversight over who gets money and how they use it
  • Limits on companies receiving aid: prohibited stock buybacks during the term of the loan and the following year, limits on executive bonuses, required measures to protect workers
  • Required disclosure by Treasury Department regarding terms of loans or other aid to companies
  • Prohibitions on companies receiving aid where such companies are owned by certain politicians or government officials
  • $100 billion directly to hospitals and health care providers, $250 million in hospital grants, and payments for vaccines and test kits

We will be tracking these developments and providing updates.

Business and Tax Relief in Response to COVID-19

As COVID-19 imposes challenges on our communities, Weintraub is tracking developments to help you deal with the pandemic’s business and legal implications.

I.                 SBA Economic Injury Disaster Loans

A.                 Overview

The U.S. Small Business Administration (SBA) is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by COVID-19 in presidential and SBA-declared disaster areas.  Borrowers can use the loans to cover accounts payable, debts, payroll and other expenses where COVID-19 has affected the borrower’s ability to pay. These loans have an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Loan repayment terms vary by applicant, up to a maximum of 30 years.  SBA press release.[1]

B.                 Eligibility and How to Apply

State governors must request access to the Economic Injury Disaster Loan program for businesses located in their states. As of March 20, businesses in the following states can apply: Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington and West Virginia.  Apply online.[2]  See California-specific SBA fact sheet here.[3]

II.                 Federal Reserve Programs (forthcoming)

A.                Main Street Business Lending Program

The Federal Reserve expects to announce the establishment of a Main Street Business Lending Program to support lending to eligible small and medium-sized businesses, complementing efforts by the SBA.  See Federal Reserve press release.[4]

B.                 New Facilities

The Federal Reserve is establishing (i) two facilities to support credit to large employers – (A) the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and (B) the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds; and (ii) a third facility, the Term Asset-Backed Securities Loan Facility (TALF), to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the SBA, and certain other assets.  See Federal Reserve press release referenced above.

III.             Federal Tax Relief

A.                 Reimbursement for Wages Paid to Employees on Leave

1.                  Background

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (Act) into law.  See full text here.[5]  The Act provides paid family and medical leave and sick leave to employees of employers with fewer than 500 employees, and provides tax credits to employers to reimburse them for providing such paid leave.  The Act imposes leave requirements on employers via two separate acts within the act: (1) the Emergency Paid Sick Leave Act (EPSLA), and (2) the Emergency Family and Medical Leave Expansion Act (EFMLEA).

2.                  Tax Credits to Reimburse Employers

The Act provides tax credits to employers to cover wages paid to employees while they are taking time off under the EPSLA and the EMFLEA. The credits have three components:

(i)  The EPSLA credit for each employee is equal to the lesser of the amount of the employee’s leave pay or either (1) $511 per day while the employee is receiving paid sick leave to care for themselves, or (2) $200 per day if the sick leave is to care for a family member or child whose school is closed (i.e., the same amounts at which the employer’s obligations to pay for leave are capped under the EPSLA).  An additional limit applies to the number of days taken into account for purposes of the caps described in the preceding sentence – the excess of 10 days over the aggregate number of days taken into account for all preceding calendar quarters.  The EMFLEA credit for each employee is the amount of the employee’s leave pay limited to $200 per day with a maximum of $10,000 (i.e., the same amounts at which the employer’s obligations to pay for leave are capped under the EFMLEA).

(ii)  The amount of the EPSLA and EMFLEA credits are increased by the portion of the employer’s “qualified health plan expenses” allocable to qualified sick leave wages or qualified family and medical leave wages. Qualified health plan expenses means amounts paid or incurred by the employer to provide and maintain a group health plan (defined in IRC Section 5000(b)(1)), but only to the extent that such amounts are excluded from the gross income of employees by reason of IRC Section 106(a).

(iii)  The credits allowed to employers for wages paid under the EPSLA and EMFLEA are increased by the amount of the tax imposed by Code Sec. 3111(b) (1.45% hospital insurance portion of FICA) on qualified sick leave wages, or qualified family leave wages, for which credit is allowed under Section 7001 or 7003 of the Act.

The credits are refundable to the extent they exceed the employer’s payroll tax.  Employers do not receive the credit if they are also receiving the credit for paid family and medical leave provided for in IRC Section 45S.  See IRS news release here.[6]

B.                 Tax Filing/Payment Extensions

IRS tax filings and payments now are not due until July 15, 2020.  See IRS guidance here.[7]  This applies to any taxpayer that is an individual, trust, estate, partnership, association, company, or corporation.  This relief applies to federal income tax payments (including payments of tax on self-employment income) and federal income tax returns that were originally due on April 15, 2020, in respect of the taxpayer’s 2019 taxable year.  This relief also applies to federal estimated income tax payments (including payments of tax on self-employment income) that were originally due on April 15, 2020 for the taxpayer’s 2020 taxable year.

C.                 High-Deductible Health Plans Can Cover Coronavirus Costs

Health plans that otherwise satisfy requirements to be a high deductible health plan (HDHP) under the Internal Revenue Code will not fail to be an HDHP merely because the health plan provides health benefits associated with testing for and treatment of COVID-19 without a deductible, or with a deductible below the minimum deductible (self only or family) for an HDHP. See IRS notice here.[8]

IV.              California Tax Relief

A.                 Tax Filing/Payment Extensions

California tax filings and payments now are not due until July 15, 2020, matching the new IRS deadline.  See California Franchise Tax Board information here.[9]  The new July 15 due date applies to individuals as well as entities, and applies to estimated annual fee payments for 2020 due from entities, and estimated fee payments due from individuals (for both the first quarter and the second quarter).  Regarding estimated tax payments due from C corporations, S corporations, and exempt organizations, if the estimated tax payment was originally due on or between March 15, 2020 and April 15, 2020, the new due date is July 15, 2020.

California Governor Gavin Newsom issued an executive order on March 12 suspending for 60 days after such date the filing requirements applicable to the taxes and fees administered by the Department of Tax and Fee Administration (CDTFA).  This applies to individuals and businesses unable to file a tax return or make a payment on time as a result of a state or local public health official’s mandatory or recommended social distancing related to COVID-19. CDTFA administers a number of taxes, including sales and use taxes, fuel taxes, cigarette and cannabis taxes, and insurer taxes.  See executive order here.[10]

V.                 California Employment Development Department (EDD)

A.                 Work Sharing Program

Employers seeking to avoid layoffs can apply for the Work Sharing Program. This program aims to enable employers to retain employees by reducing hours and wages that can be partially offset with unemployment insurance benefits.  See Work Sharing Program web site here.[11]

B.                 Potential Closure or Layoffs

Employers planning a closure or layoffs as a result of COVID-19 can seek assistance from the EDD’s Rapid Response program, under which Rapid Response teams meet with employers to discuss needs, avoid layoffs, and provide services to workers facing job losses. See fact sheet here.[12]

C.                 Tax Assistance

Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. For questions, employers may call the EDD Taxpayer Assistance Center at (888) 745-3886.

VI.              Other California Resources.  The California Governor’s Office of Business and Economic Development has compiled information for employers, employees and all Californians as it relates to COVID-19.  See webpage here.[13]

VII.           Local Government

A.                 San Francisco

The City of San Francisco has established the San Francisco COVID-19 Small Business Resiliency Fund.  Businesses with 1 to 5 employees can apply for up to $10,000 in emergency funding to help cover rent and employee salaries.  To be eligible, the business must show that it lost at least 25% of revenue, that it has less than $2.5 million in gross receipts, and that it is properly licensed to operate in San Francisco.  See application materials here.[14]  San Francisco has also imposed a moratorium on evictions for small and medium-sized businesses (less than $25 million in annual gross receipts). It is effective for 30 days starting March 17, and the mayor can extend it for an additional 30 days.  See press release here.[15]

B.                 Los Angeles

The City of Los Angeles has established a Small Business Emergency Microloan Program.  Businesses and microenterprises in Los Angeles that are responsible for providing low-income jobs can get an emergency microloan of $5,000 to $20,000. The loans have repayment terms of 6 months to 5 years, and carry an interest rate of either (i) 0% for a term of 6 months to 1 year (Option 1) or (ii) 3% to 5% for a term of up to 5 years (Option 2).  To be eligible, the business must satisfy requirements including having principal business owners with “reasonable and responsible” credit histories, committing to use the loan for working capital only, and having its primary business operation located within the City of Los Angeles. If a business owner owns 20% or more of the business, such owner must guarantee the loan.  Apply online.[16]  Los Angeles has also imposed a moratorium on evictions of businesses impacted by COVID-19 through March 31.  See press release here.[17]

C.                 San Diego

San Diego Mayor Kevin L. Faulconer announced on March 18 an economic relief package worth approximately $4 million.  It aims to reduce fees, provide certainty, and offer support to local employers affected by COVID-19.

The new programs and measures that are part of the package include (i) a new San Diego Small Business Relief Fund (for microloans to small businesses, funded by the City of San Diego and other partners that the city will seek to increase the fund); (ii) Tax Certificate Deferral Program (to ensure business owners are not penalized for late renewal submissions for up to 120 days, and provide for a one-year forgiveness period for Business Tax Certificate penalties and surcharges when reestablishing delinquent accounts); (iii) Commercial Utility Deferral (to help business owners by suspending water billing fees, removing penalties for late payments, and ensuring no commercial account shut-offs); (iv) extension of all building permits (for 180 days, with further extensions available upon review).  See new release here.[18]

D.                Sacramento

The City of Sacramento has a Small Business Economic Emergency Relief Loan Program.  However, as of March 21, 2020, the city is no longer accepting new applications.  If additional funding becomes available, the city will reopen the portal for submitting applications.  See information regarding such loan program and other Sacramento area resources here.[19]


[1] https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-provide-disaster-assistance-loans-small-businesses-impacted-coronavirus-covid-19

[2] https://www.sba.gov/funding-programs/disaster-assistance

[3] https://www.yolocounty.org/home/showdocument?id=62346

[4] https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm

[5] https://www.congress.gov/bill/116th-congress/house-bill/6201/text

[6] https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

[7] https://www.irs.gov/pub/irs-drop/n-20-18.pdf

[8] https://www.irs.gov/pub/irs-drop/n-20-15.pdf

[9] https://www.ftb.ca.gov/about-ftb/newsroom/covid-19/extensions-to-file-pay.html

[10] https://src.bna.com/stxd/ca200313-UPD1370-D01

[11] https://www.edd.ca.gov/Unemployment/Work_Sharing_Program.htm

[12] https://www.edd.ca.gov/pdf_pub_ctr/de8714rrb.pdf

[13] https://business.ca.gov/coronavirus-2019/

[14] https://oewd.org/covid-19-small-business-resiliency-fund

[15] https://sfmayor.org/article/mayor-london-breed-announces-moratorium-commercial-evictions-small-and-medium-size

[16] https://ewddlacity.com/index.php/microloan-program

[17] https://www.lamayor.org/mayor-garcetti-orders-moratorium-commercial-evictions-related-novel-coronavirus

[18] https://www.sandiego.gov/mayor/news/releases/mayor-faulconer-outlines-economic-relief-package-san-diego-businesses-affected-covid-19

[19] https://www.cityofsacramento.org/Economic-Development/Economic-Relief

Commercial Eviction Moratoriums in California and Other Real Estate Issues Arising From the COVID-19 Pandemic

As a result of the ongoing COVID-19 pandemic, on March 16, 2020, Governor Newsom issued an executive order authorizing local governments to halt evictions, slow foreclosures, and protect against utility shutoffs. In response, numerous California municipalities have passed emergency orders enacting moratoriums on evictions. These orders vary from entity to entity, with some protecting only residential tenants, and others including commercial tenants. The orders also vary from entity to entity to the extent that some constitute a blanket moratorium, while others require the tenant to demonstrate that inability to pay is related to the pandemic. However, all of the ordinances are clear, the moratoriums result in rent deferral, not rent forgiveness.

As of March 20, 2020, the governmental entities that have passed such moratoriums include, but are not limited to, the following:

  • City of Sacramento at least until March 31, 2020. Residential only.
  • City of West Sacramento through May 31, 2020.
  • City of San Francisco through April 30, 2020.
  • City of San Jose through April 17, 2020.
  • City of Fresno through April 19, 2020.
  • City of Los Angeles through March 31, 2020.
  • County of Los Angeles through May 31, 2020.
  • City of Santa Monica through April 30, 2020.
  • City of Pasadena through a date to be determined.
  • City of Glendale through March 31, 2020.
  • City of Long Beach through May 31, 2020.
  • City of San Diego through April 10, 2020.

The County of Sacramento and the City of Oakland are considering their own moratoriums and are expected to act at some point later this week.  Similarly, although most of the municipalities within Orange County have yet to take action, they are actively considering their own moratoriums. Interestingly, the City of Elk Grove considered a moratorium, but voted against it (4 to 1). On a related note, the federal government has suspended foreclosures on mortgages backed by Freddie Mac, Fannie Mae, and the Federal Housing Administration for 60 days.

In addition to these moratoriums, it is important to know that numerous courts throughout the state are not presently processing or adjudicating unlawful detainer (eviction) proceedings. The majority of the courts are presently closed to the public, with all jury and bench trials deferred. As such, even if these moratoriums were not in place, most courts are unavailable to provide relief.

This situation is constantly evolving, with the local governments, the state government, and the federal government continuously analyzing the situation and considering appropriate relief. We will continue to monitor the evolving landscape and will be prepared to provide any necessary legal assistance. It is important to analyze every situation on its own merit before taking action, as each moratorium varies from the others. It is equally important to understand that there may be post-moratorium, contractual ramifications. Accordingly, if you are impacted by these moratoriums, or believe that you have other COVID-19-related real estate issues, contact us.

How to Get Rid of a Dead Body

California Trusts and Estates Quarterly

This article was first published in Volume 25, Issue 3, 2019 of the California Trusts and Estates Quarterly, reprinted by permission.

Those of us who watched AMC’s hit drama “Breaking Bad” may recall the scene in the pilot episode where Walt and Jesse set out to dissolve a dead body in hydrofluoric acid. Jesse neglects to take Walt’s (the chemistry teacher’s) advice to dissolve the body in a plastic container and instead uses a bathtub, only to have the acid melt through the dead body and the tub, and come crashing through the floor supporting the tub, and the floor below that. Here, there is some truth in fiction. Pursuant to Assembly Bill 967, signed by Governor Brown in 2017, the liquification of human remains will be permitted soon, at least for professionals and entities operating a licensed hydrolysis facility where such processes may be carried out. The new law becomes operative on July 1, 2020.

Popular culture and criminal activity aside, this article sets out to summarize the basics of disposing of human remains, covering issues such as who has control over the remains, which laws and documents govern such control, the transportation and disposition of remains, and the removal of remains after burial.

To read the full article please click here.