Looking Forward in 2019

Keith B. DunnaganAs we take in the time to ring in the New Year, we look forward to the market opportunities and legal changes ahead. There are several key

legal changes that will impact businesses, real estate and estate planning goals. Here are some that we are watching.

As always, if you have any questions about your real estate, business, estate planning, or any other legal issue, please let us know by e-mailing me at kbdunnagan@bpelaw.com.

Also, remember that we do legal presentations for business and community organizations. If your group would like to schedule a presentation related to estate planning, please contact me to setup a date and time.

Looking Forward in 2019

By: D. Keith B. Dunnagan, Esq.

BPE Law GroupAs we leave 2018 in the rear view mirror we look forward to what 2019 brings us. In doing so, this is the time to (a) look at where your business has been and where it is going; and (b) review the legal changes that will be of importance in this new year.

The new year sparks the “new years resolution” phenomena, wherein people and businesses set goals. Setting goals should be done every year to give your company and your team something to shoot for. A common end that you seek to achieve during the year. It is not uncommon for us to set multiple goals in a year. The idea is set them progressively further out and more complicated to achieve but yet still achievable and we build in incentives for reaching goals. In this process of creating goals, every year at our holiday party, we reflect on where the company has been and how it got to where it is now. We intentionally take the time to understand how the past has shaped our present. Because to understand where you have been and how that journey got you to where you are is the key to directing you on how to get to where you want to go.

Additionally, we need to take time to review some of the significant legal changes that we will be watching in 2019.

In September 2018, Assembly Bill No. 2164 was signed by Governor Brown; the law will allow local governments to eliminate the reasonable time standard, which is the standard used for building, plumbing, electrical, or other issues that need to be fixed without receiving a fine, to correct code violations in cases of cannabis cultivation. This means that if unlawful cannabis activity is occurring on a property, the property owner can be immediately fined, even if they did not know about the activity. However, the law does include a safe harbor if three conditions are met for the property: (1) a tenant is in possession of the property that is the subject of the administrative action, (2) the rental property owner or agent can provide evidence that the rental or lease agreement prohibits the cultivation of cannabis, and (3) the rental property owner or agent did not know the tenant was illegally cultivating cannabis and no complaint, property inspection, or other information caused the rental property owner or agent to have actual notice of the illegal cannabis cultivation. Compliance with each element is required for the safe harbor protection.

The other new laws being implemented in 2019 involve the estate planning world. The Federal Estate Tax Exemption will raise from $11,180,000 to $11,400,000. This follows the general trend for inflation. For California, the Uniform Trust Decanting Act (UTDA) will also be implemented. The UTDA effects those who have irrevocable trusts; generally, with an irrevocable trust, trustees need permission from either all beneficiaries or the court to change the terms to a trust. With the UTDA, the irrevocable trust has the opportunity, if conditions are met, to be changed without invoking court approval. This will make amending irrevocable trusts more cost and time effective.

Another change that should be watched for is the new test related to the independent contractor vs. employee analysis that arose from the Dynamex case. As decided in April of 2018, the California Supreme Court laid out a three-part test to determine whether a person was an independent contractor or an employee. Over the recent years there have been attacks on the real estate industry’s use of the independent contractor model. Should those challenges continue, does that mean the real estate industry is forced to move to an employee-based model? We will have to continue to monitor the legal challenges to the independent contractor model.

The last trend to watch for is the rise of the use of team models in real estate. Although team models can be effective, teams will invariably end for various reasons. When creating a team, thought needs to go into how the team will dissolve and the measures needed to be taken. This consideration will increase the likelihood of an easy separation and amicable relationships and reduce litigation.

There are several other legal changes but these are some of the ones we are closely watching.

The attorneys of BPE Law Group, PC. have been advising our clients on real estate, business and estate planning issues for over 20 years and have assisted numerous clients in business and real estate matters and have represented and advised brokers on their professional obligations as well as consumers on their rights. If you have questions concerning legal matters, give us a call at (916) 966-2260 or e-mail Keith at kbdunnagan@bpelaw.com. Our flat fee consult for new clients may get you the answers you need for the questions you have.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.