Blog, Business, Real Estate
Update: Indiana’s New Witness Requirement on Recorded Documents
Change of an ‘Or’ to ‘And’ Cause Challenges The recent rewording of a law has caused quite a stir in the business and real estate communities. That’s because changes to Indiana Code 32-21-2-3(a), effective July 1, 2020, now require witness signatures on recorded documents. Senate Enrolled Act 340, passed by the Indiana Senate, merely changed an “or” to an “and” but by so doing, it changed this well-established law to require a common law “proof” of a disinterested party to the transaction serving as a witness to the execution of an instrument. This requirement caught many off guard, necessitating re-documenting transactions or hurriedly changing forms. The perceived requirement of having the witness swear that he or she is not a party to the real estate transaction (deed, mortgage, lease, etc.) disclosed by the instrument and does not “benefit” from the transaction adds a layer of complexity to closings. An additional person must now participate in the closing process and swear to an oath. Many financial institutions are reluctant to have their employees give an oath, which rules them out as witnesses. Furthermore, it’s unclear how “benefit” is to be defined in this scenario. Could a year-end bonus based on loan production technically constitute receiving a benefit from this one transaction? While certain financial institutions may not permit their employees to witness signatures, title companies appear to be fine with their employees acting in this role. Rumors have swirled that many of Indiana’s 92 county recorders are ignoring the statute and accepting documents without witness signatures, provided…
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Banking and Commercial Transactions, Blog, News, Real Estate
Notarize & Prove Recorded Documents in Indiana Effective July 1, 2020
Effective July 1, 2020 A recent change to Indiana Code section 32-21-2-3(a), which takes effect on Wednesday, July 1, requires all written instruments (such as deeds, mortgages, powers of attorney, affidavits, and any other documents that must be recorded in an Indiana county recorder’s office) to be both notarized and proved. Without going into the nitty gritty details (you can find those on the “directive” from the Indiana State Bar Association ), every recorded instrument must now include a witness statement to prove that the person whose signature is notarized signed and delivered the instrument in the witness’s presence (and the witness’s signature must also be notarized).
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Blog, News
Our Community
The lawyers and staff of Kroger Gardis & Regas, LLP were shocked and appalled at what happened to George Floyd. But it’s not enough to be appalled and to hear the pleas for change; meaningful reform is necessary. We express our sincere hope for a peaceful week and ask our elected leaders to reflect, listen and act thoughtfully on the many issues which face our city, our state and our nation. We all must work together to end the violence, disparagement and lack of understanding, recognize we have serious issues to address, and to thoughtfully heed the calls for justice and unity in our community. As a firm established to advocate for the rights of all citizens we fervently support those expressing their right to speak out individually, and to assemble collectively, to demand an end to the racial injustice so prevalent in our society. Our community’s leaders must heed the call to end disparate treatment of minorities by our law enforcement ranks and immediately begin the process to permanently change how we protect and serve our neighbors, with the active input of those most affected by the disparities. We are in this together. While we don’t have the answers, we want to help find them. Calls for the immediate establishment of a task force to address these issues is a sound one, and we stand ready to support and participate in that effort. Kroger Gardis & Regas has been located in the heart of our Indianapolis urban core for more than 80 years. We aren’t…
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Bankruptcy Law, Blog, Business, Business Litigation
Who Do You Pay When the Business Can’t Pay Everyone?
Which Creditors To Pay? This doesn’t seem that tough a question to most folks. You’ll pay the creditors you need to keep your doors open and delay paying the ones who may let you slide or are just not that vigilant when you are past due. Well, an important different analysis will likely lead to different priorities. Consider first to whom you may be personally liable if the doors do close. Taxing authorities and holders of guaranties must be at the top of the list. Then consider whether you have it in you to guide the company through the dark times. First, even though you set up a corporation or limited liability company to own your business and protect your assets from company debts, some claims for unpaid taxes create personal liability for those associated with the business. If you are focusing on who to pay to keep the doors open, you will likely not consider the IRS and the Department of Revenue (in most states), who will often be about the last creditors to show up when you don’t pay on time. But often liability can pass to the owners, officers, or even an employee entrusted with making decisions on who to pay (yes, even the bookkeeper can be personally liable). Personal Liability Personal liability for unpaid business taxes generally arises from the failure to pay sales or use taxes and federal payroll taxes. In the case of sales/use taxes, that money never belonged to your business. The business collected it for the state and…
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Blog, Business, News
COVID-19 AND CONTRACT BREACH
With the American economy grinding almost to a halt due to the Covid-19 Virus and the accompanying onslaught on National, State and local directives and executive orders restricting, and in some cases, preventing the operation of many businesses, performance of contracts by the affected business owners has become all but impossible for reasons totally beyond their control. These owners have contacts with key employees, contracts to supply goods, real estate leases requiring them to be open for business, contracts to manufacture and supply goods to others, franchise payments, product warranty repair claims in areas where travel is restricted, and the list goes on and on. The business owner asks “Am I liable for not doing something I can’t do, even if I want to do it”. As with so many other things in the law, there is no bright line test to answer the question, its fact sensitive and more than one legal principle needs to be considered if the business owner is to be rescued from liability. The law (and in most cases – Indiana) recognizes several defenses to enforcement of a contract against a party who, through no fault, cannot perform. In summary, these are (i) Force Majeure, (ii) Impossibility of Performance, (iii) Commercial Frustration and (iv) Impracticability of Performance. Of these defenses, only Force Majeure is a defense which must arise from the terms written into the written contract. Force Majeure – Is Covid 19 an Act of God? Indiana has few cases discussing force majeure. A force majeure clause is a “contractual provision allocating the…
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Blog, News
Paycheck Protection Program
Enacted as part of the CARES (Coronavirus Aid, Relief, and Economic Security) Act, Congress has created a new program to support small businesses and their employees during the COVID-19 crisis. The Paycheck Protection Program (PPP) authorizes almost $350 billion in forgivable small business loans that are designed to help small businesses pay their employees, keep the lights on, and help weather the crisis. Generally, all businesses with 500 or fewer employees are eligible to apply. This includes self-employed individuals and independent contractors. There are exceptions for certain industries with more than 500 employees based on SBA size standards. The loans are designed to be used for payroll costs, mortgage and rental obligations, and utility costs in the 8-week period after the loan is made. For non-payroll costs, the mortgage, rental, and utility obligations must have existed before February 15, 2020. In order to have the loan forgiven, proceeds must be used for the above obligations and borrowers must not reduce their full-time employee headcount, decrease compensation by more than 25% for any employee making less than $100,000 in annualized income, and they must have restored full-time employment and salary levels by June 30, 2020. Key things to know: Applications for small businesses were scheduled to open on April 3rd, 2020, although the timing may be pushed back as many banks are waiting for additional guidance from the SBA. Interested businesses can apply through any SBA lender, or any participating federally insured depository institution, federally insured credit union, or Farm Credit System institution. Applications for independent contractors…
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Blog, Employment Law, Government Practice, News
Families First Coronavirus Response Act’s Impact on Municipalities and Government Entities
INTRODUCTION On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (the “Families First Act” or “Act”) which takes effect on April 1, 2020. The Families First Act includes two significant provisions mandating most employers to make sick leave and expanded family leave payments available to employees impacted by the coronavirus disease 2019 (“COVID-19”). Those provisions are the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act (the “EFMLEA). The Families First Act is applicable to private sector employers with less than 500 employees[1] and all local government employers[2] with one or more employee. As such, all governmental entities such as townships, counties, municipalities, school districts, fire districts and other political subdivisions are subject to the mandates under the Families First Act. The Act provides refundable payroll tax credits to private employers to ease the burden associated with these paid leave requirements. Unfortunately, these tax credits cannot be claimed by any entity, agency or instrumentality of State or local government. This memorandum briefly summarizes the impact the Families First Act will have on our governmental clients throughout the state. OVERVIEW The Emergency Paid Sick Leave Act applies to all employee leaves taken from April 1, 2020 through December 31, 2020. All governmental employers with one or more employee are required to provide two weeks (up to 80 hours) of paid sick leave for employees meeting the COVID-19 related criteria described below. Employees unable to work due to a bona fide need to care for an individual…
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Blog, Business, Government Practice, News
COVID-19: News to stay informed from Indiana Courts
Government and Business organizations have been acting fast and furious in response to COVID-19. This running blog entry identifies operational changes and helpful links. We will update this blog as more changes are made: Indiana’s Shelter in Place Order. Governor Holcomb has issued a shelter in place order that expires at 11:59 p.m. on Monday, April 6. The order applies to all businesses expect essential businesses and services. Essential businesses include but are not limited to grocery stores, pharmacies, gas stations, police stations, fire stations, hospitals, doctor’s offices, health care facilities, garbage pickup, public transit, and public service hotlines. A full list of essential businesses can be found at Essential Businesses The Executive Order can be found at Stay-at-Home Order and a FAQ sheet can be found at FAQ Sheet Employer Paid Sick Leave Act and Emergency FMLA Please see our blog post here Updated Information from the IndyBar can be found here The Indianapolis Chamber of Commerce has established a Rapid Response Hub for small businesses. The Chamber’s Hub can be found here Federal Courts Located in Indiana Northern District of Indiana The Northern District of Indiana has issued two orders, both linked below. A summary of the changes follows: March 17, 2020 Order March 23, 2020 Order All jury trials scheduled up through May 1, 2020 are continued and will be rescheduled Civil proceedings will be converted to telephonic or videoconference proceedings Criminal cases: Plea and sentencing hearings scheduled up through May 1, 2020 are continued and will be reschedule. Initial appearances, arraignments, and…
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Blog, Business, Employment Law, Government Practice
CORONAVIRUS AID, RELIEF AND ECONOMIC SECURITY ACT (“CARES ACT”)
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). This historic economic recovery package, commonly referred to as “Phrase Three,” is intended to provide relief to the American economy in response to the coronavirus disease 2019 (“COVID-19”). The CARES Act contains numerous significant provisions impacting individual Americans and businesses of all sizes. ALL BUSINESSES Employee Retention Credit The CARES Act creates a tax credit equal to 50% of the qualified wages paid to employers during the COVID-19 outbreak. Eligible employers are those whose: (1) operations are fully or partially suspended because of a governmental COVID-19 order; and (2) gross receipts declined by more than 50% compared to the same quarter in the previous year. For employers with more than 100 full-time employees, qualified wages are those paid to employees when they are not providing services because of COVID-19. For employers with less than 100 full-time employees, qualified wages are those paid to employees whether the employer is still in operation or ordered to shut-down because of COVID-19. The credit is for the first $10,000 of compensation for each employee, including health benefits. Other Key Provisions The CARES Act permits employers and self-employed individuals to defer payment of the 6.2% social security tax on employee wages. The deferred payments must be paid over the following two years. The CARES Act also permits employers to provide a tax-free student loan repayment benefit to employees. Employers can contribute up to $5,250 annually towards employees’ student loans, and that amount…
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Blog, Business, Employment Law, News
NEW COVID-19 Employer Pay/Leave Regulations
Update April 1, 2020: At the time of our initial post, the federal government had not defined health care providers or emergency responders. In a new FAQ sheet, the Department of Labor has defined both classifications: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions FAQ 56: Who is a “health care provider” who may be excluded by their employer from paid sick leave and/or expanded family and medical leave? For the purposes of employees who may be exempted from paid sick leave or expanded family and medical leave by their employer under the FFCRA, a health care provider is anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. This definition includes any individual employed by an entity that contracts with any of the above institutions, employers, or entities institutions to provide services or to maintain the operation of the facility. This also includes anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments. This also includes any individual that the highest official of a state or territory, including the District of Columbia, determines is a health care provider necessary…
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