HOA Disputes May be Submitted for Voluntary Community Mediations if House Bill 278 Becomes Law

Matters relating to real estate under the jurisdiction of a condominium or homeowners’ association (HOA) about which the condo association or the HOA and a member or members cannot agree or from which a dispute arises may have an opportunity to submit the dispute to a neutral mediator, for a nonbinding mediation session, before formal proceedings and litigation are commenced by the parties, if a recently introduced bill becomes law in the North Carolina General Assembly.

House Bill 278 was introduced March 12, 2013, by State Representatives Deborah Ross and Duane Hall, both of Wake County.  The bill proposes to establish a voluntary pre-litigation mediation process for resolution of HOA disputes by local community mediation centers.  Disputes covered by the bill include those arising under Chapter 47C of the General Statutes (the North Carolina Condominium Act) and under Chapter 47F of the General Statutes (the North Carolina Planned Community Act) or under an association’s declaration, bylaws, or rules and regulations.

The mediation would be initiated either by an HOA or a member/owner.  Certain disputes related solely to a member’s failure to pay timely an HOA assessment or any fines or fees associated with the levying or collection of an association assessment would not be eligible for mediation under the proposed law.

Start Up with an LLC? What Does Your Operating Agreement Say?

It’s fairly easy to start up and to organize your limited liability company (LLC) with the filing of articles of organization with the North Carolina Secretary of State’s office.  Many clients file the articles themselves.  The LLC has become one of the most popular forms of business entity among new businesses being formed.

Owners of an LLC are called members. Members may include individuals, corporations, other LLCs, and even foreign entities. There is no maximum number of members. Most states, including North Carolina also permit “single-member” LLCs, those having only one owner.  However, because of significant potential liabilities, and both legal and tax consequences, if your LLC has more than one member or owner, we advise our clients to think about and to write and agree on a clear and unambiguous operating agreement.  There are also securities law requirements and considerations if you have multiple members investing equity capital in your LLC.

The operating agreement works like a partnership agreement, as the owners/members are treated for tax purposes like partners, or like a shareholders’ agreement in a closely held corporation.  A written operating agreement is not required by North Carolina law, but the absence of a clear understanding and written agreement on key points of the business between the members leaves much to chance and may lead to potential disputes and headaches later.

What details should the operating agreement cover? Well, some fundamentals include the following questions you and your fellow members should discuss and agree on:

  • How much capital do we need for our start up?  How much is each member investing for a percentage ownership interest?
  • Will the LLC need to borrow money, from members or third parties?
  • Who is the manager, and who selects the manager?
  • When the LLC earns income, how will distributable cash be distributed, and when, or how will money earned be reinvested in the business?
  • How will major decisions of the LLC be made? Do we need the members to agree unanimously or by some supermajority vote requirement on the big issues?
  • What happens if the members can’t agree, or become deadlocked?  How are disputes resolved, or should we include a buy/sell provision if we can’t work out our differences?
  • Can the members compete with each other and with the business of the LLC?
  • Can the members bring a legal action or arbitration to resolve a dispute or to sue for breach of the operating agreement or a member’s failure to make a capital contribution?

These questions and other issues unique to your LLC’s business and your business plan should be discussed and agreed on by the members who are bringing their capital, their talents and labor to the new business, and memorialized in a writing prepared by your lawyer, along with advice about tax and accounting- related provisions from your accountant and tax advisor.

Ellinger & Carr Speaking on Social Media, Housing Authority Issues at PHADA National Conference, San Diego

PHADA logoSusan Ellinger and Steven Carr will be featured speakers and presenters on management and legal issues of concern to executive directors of public housing authorities at their upcoming national conference in San Diego in January 2013.

The social and cultural phenomenon of ubiquitous social media has prompted housing authorities and most employers to develop and adopt social media policies to address the use and effects of social media and networking on employee productivity and to mitigate the risks of the employers’ liability.  Ms. Ellinger and Mr. Carr will speak on the social networking session: “What’s Your ‘Status’?  Is Your Social Media Policy Working and Protecting You from Liability?”

A second session will focus on risks and liabilities of tax credit developments, and Ms. Ellinger and Mr. Carr will present a primer and update on low income housing tax credits issues, including an overview of housing authority affiliates, joint ventures and how to protect the Board and executive directors from liabilities and risks frequently encountered in these transactions.  The program is titled:  “Partnerships 101: Top 10 Tips for Successful Community Development Joint Ventures.”

The Ellinger Carr law firm represents housing authorities and their non-profit community development corporations and other non-profit and for-profit developers in affordable housing and mixed finance housing projects in the Southeast and elsewhere in the United States.

Ellinger Carr helps to build homes and communities

Ellinger & Carr LogoProviding safe, affordable housing for families, seniors and developmentally disabled persons has long been a part of the work of the Ellinger Carr law firm, in communities in the Carolinas, the Southeast and elsewhere in the United States.  Susan Ellinger, the firm’s founding member, announced that the firm’s lawyers have just concluded a closing in Canadian, Texas for the development and new construction of 64 affordable apartment units called the Oasis Cove Apartments.  The firm served as lender’s counsel for the closing of a debt and equity financing of $14 million.

Over the past year, Ellinger Carr has counseled and assisted with more than 20 transactions and closings for the investment of more than $150 million in financings of multifamily affordable housing apartment complexes and commercial real estate developments in communities in North and South Carolina, and in Arizona, California, Florida, Georgia, Louisiana, Michigan, Tennessee, Texas and Virginia.

Susan Ellinger noted that the pace of the firm’s affordable and historic rehabilitation closings continues in the fourth quarter of 2012, including complex, multi-million dollar transactions expected to close in Atlanta, Richmond, Charlotte, and in smaller communities like Clarksville, Tennessee and DeBary, Florida.

Ellinger Carr is a business law and commercial real estate law firm based in Raleigh, North Carolina.   Ellinger Carr lawyers are experienced and knowledgeable counselors, transaction specialists and business problem solvers, admitted to practice in North Carolina, South Carolina, Florida, Louisiana and New York.  For assistance in commercial real estate and corporate and business development matters, call 919-785-9998 or email Susan Ellinger or Steven Carr.

Ellinger & Carr is 4 years old . . . and growing

Ellinger & Carr PLLC TeamEllinger Carr is a business law and commercial real estate law firm based in Raleigh, North Carolina.  Ellinger Carr lawyers are experienced and knowledgeable counselors, transaction specialists and business problem solvers, admitted to practice in North Carolina, South Carolina, Florida, Louisiana and New York.

Founded four years ago, on October 1, 2008, Ellinger Carr was initially a two-lawyer firm.  Despite the economic difficulties and downturn of the Great Recession, the firm has thrived and continued to build on its reputation for making complex transactions simple and executing multi-million dollar equity and debt financings in a sophisticated and cost-effective manner.

“Since opening the doors four years ago, our business has grown, and we have added to our firm in order to keep pace with our clients and our clients’ expectations of smart, responsive and high quality legal services,” Susan Ellinger, the woman-owned firm’s founder said. “We have been honored to add very talented lawyers with broad corporate and governmental experience to complement our business law and our affordable housing and community development practice areas.”

Heather D. McDowellHeather McDowell, a native of New Jersey, joined Ellinger Carr in 2010.  Heather is a graduate of Tulane Law School and practiced in New Orleans early in her legal career, in the office of the Mayor of New Orleans, and a major part of her work was the recovery of New Orleans after Hurricanes Katrina and Rita.   As an associate with our firm she continues to counsel and execute transactions in Louisiana and advising and assisting with other sophisticated commercial transactions in the Carolinas and elsewhere in the Southeast and the Southwest.  [Link to bio]

Jennifer Lewis OxfordJennifer Lewis Oxford joined Ellinger Carr in March 2012.  A native of Durham, Jennifer is a 2011 graduate with distinction of Emory Law School in Atlanta.  Jennifer also holds a Bachelor’s of Science in civil engineering from the University of Virginia, where she graduated with distinction, and a Master’s of Regional Planning from the University of North Carolina at Chapel Hill. Before entering law school, she worked as an engineer and urban planner in the Research Triangle area in North Carolina.  Jennifer assists with the firm’s affordable housing and community development and commercial lending practice, and also with the firm’s commercial litigation, planned community and homeowners’ association legal matters.   [Link to bio]

Social Networking in the Workplace: Advice for Employers

How are your employees using Facebook, Twitter, blogs, posts, tweets, and emails in the workplace?  What are the legal impacts of social media and social networking for employers and employees?  Do I need a social media policy?  Susan Ellinger and Steven Carr will discuss these topics at the annual meeting of the North Carolina Public Housing Authorities directors Association September 26, 2011 in Wilmington, NC.  Their presentation addresses emerging legal issues and “breaking news” about how these important legal issues emphasize the need for an organizational social media policy.

When Medical Procedures Go Wrong… Collaborative Dispute Resolution of Healthcare and Medical Error Cases

Steven Carr is now participating as a collaborative lawyer, representing patients, physicians and other health care providers in a revolutionary new program designed as an alternative to medical malpractice lawsuits and to facilitate health care settlement agreements when medical errors occur or when a patient suffers an adverse outcome from a medical treatment or surgery, whether an error has occurred or not.

For more information about the IACT program, visit http://www.iactprogram.com and view the video describing the IACT program and how the program will be beneficial to all of the participants and will help to improve health care outcomes and to resolve cases without the cost and pain of litigation. Call Steven for more information.

Risk and Reward in Community Development: Protecting the PHA in Community Development Transactions

Susan Ellinger and Steven Carr will be featured speakers November 7th at the Southeastern Regional Council-National Association of Housing and Redevelopment Officials (SERC-NAHRO) in Point Clear, Alabama November 6 through November 8, 2011.  Assessing the risks and rewards, protecting the agency, the board of directors, and staff in community development transactions will be a topic of discussion and updates.  Other topics include the relationships between public housing authorities and nonprofits and their respective boards, as well as the executive director’s role during the transaction process.

March 18-20, 2011 – Myrtle Beach, SC – 2011 Commissioner’s Workshop

Annual meeting of the Carolinas Council of Housing Redevelopment and Codes Officials.  Susan Ellinger will speak on current issues relating to housing authorities.

April 1, 2011 – Cary – “An Ounce of Prevention is Worth a Pound of Cure.”

Continuing Legal Education program with Steven Carr as course planner and moderator.Experienced panel members discuss best practices in designing, implementing and administering Corporate Ethics and Compliance programs, an overview of recent changes in federal and state law and questions raised by these changes including the Dodd-Frank Wall Street Reform and Consumer Protection Act, the status of proposed incentives for corporate whistleblowers in a new Securities and Exchange Commission rulemaking, the key elements of an ethics program, and much more. Steven will be presenting this CLE program at the NC Bar Center in Cary on April 1, 2011.  You can find more information on the upcoming program at http://www.ncbar.org/cle/programs/810ETH.aspx