New Jersey Lawyers Blog

Published on: November 19, 2012

Mortgagees, Tenants and Tax Sale Certificate Holders May Have Standing to Appeal New Jersey Property Tax Assessments

Under New Jersey law, a taxpayer feeling aggrieved can appeal a property tax assessment. Obviously, the owner can qualify as a “taxpayer feeling aggrieved.” However, it is not well known that others can also qualify under the statute. Tenants, mortgagees, tax sale certificate holders and even non-owner spouses of a marital residence can, under certain under certain circumstances, qualify as aggrieved taxpayers and thus are permitted to file an appeal of a property tax assessment.

The word “taxpayer” has been interpreted by New Jersey courts to include not only the owner of record of a property but also tenants, mortgagees and holders of tax sale certificates under certain circumstances. The courts have often based their findings upon the belief that the “taxpayer feeling aggrieved” means anyone with a legitimate interest in the property and who pays the property taxes, and is thus adversely affected by an incorrect assessment.

If a lease requires a tenant to pay all taxes for a full tax year, the Tax Court has held that the tenant qualifies as an aggrieved taxpayer. However, the Tax Court required that because the appeal of the assessment could result in an increased assessment, the owner of the property must also be a party to the action. The Tax Court noted that the lease was silent on the issue of whether the tenant was permitted to file a tax assessment appeal.
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Published on: November 13, 2012

New Jersey’s New LLC Law

by Pauline M.K. Young

Since the entity known as a Limited Liability Company, or “LLC” came along in New Jersey in 1993, it has quickly become one of the most common business forms. LLCs are popular largely because of their flexibility, limited liability, and tax advantages.

For example, as long as they meet the requisite qualifications, an LLC may elect to be taxed as a sole proprietor, partnership, C corporation, or S corporation, which means it may avoid the double taxation of a C corp wherein both the owners and the company are taxed. Also, although an LLC is not incorporated, in many instances, LLC owners – called “members” – are protected from personal liability for the company’s debts the way a corporation is.

New Jersey’s Limited Liability Company Act was enacted in 1993, and while it has been revised in 1996 and 2006, revisions have been minor until recently. On September 21, 2012, Governor Christie signed the Revised Uniform Limited Liability Company Act which is scheduled to go into effect for new LLCs on March 20, 2013. (For existing LLC’s it will become effective in March of 2014.)

The new law will include several revisions and additions, including the following:

Duration: Under the prior law, an LLC has a default duration period of thirty years unless the members designate otherwise on the certificate of formation. Under the new law, an LLC will have an unlimited or perpetual duration period unless otherwise indicated on the certificate, which is more like a corporation which is also considered to have perpetual existence.

Not-for-Profit: The new law allows LLCs to be formed for any lawful purpose regardless of whether they are for profit or not-for-profit or formed to own non-income-producing property.

Published on: November 9, 2012

Hurricane Sandy Insurance Claims

by Maurice W. McLaughlin

Hurricane Sandy has inflicted unprecedented damage on New Jersey. Homes have been destroyed. Businesses, homes and schools have lost power. Tens of thousands of people in New Jersey are homeless. Homes and buildings were destroyed by fire, trees, waves and other casualties. Many homes, especially in the evacuated Shore communities, have been looted. Losses in the Tri-State area expected to exceed fifty billion dollars.

That, of course is the big picture. On the ground, however, the storm had a devastating impact on individual homeowners, renters, and small businesses. The first thing each of these homeowners, renters and small businesses should do is make a claim with their insurance companies.

This first question is, will there be coverage? This depends on two things: First, the type of insurance policies you have and, second, the type of damages you incurred. For instance, many homeowners and business policies exclude coverage for damage caused by flooding. However, flood insurance should obviously cover this.

Therefore, you should get a copy of your insurance policy, including the declaration page. The declaration page is a one or two page summary of the types of coverage you have, the amounts of coverage, and the amounts paid for each type of coverage. The policy itself, to which the declaration page is usually attached, is much larger, often twenty pages or more. If you do not have a copy of your policy, or if your policy was destroyed in the storm, you should contact your insurance agent or broker, or the company with whom you have the insurance.
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Published on: November 5, 2012

New Jersey’s Teacher Effectiveness and Accountability for the Children of New Jersey (TEACHNJ) Act Adopts New Procedures for Fighting New Jersey Tenure Charges

by Maurice W. McLaughlin

The Teacher Effectiveness and Accountability for the Children of New Jersey (TEACNJ) Act was recently enacted by the New Jersey Legislature and signed by New Jersey Governor Chris Christie. The TEACHNJ Act creates drastic changes to the process for fighting tenure charges by New Jersey teachers and other public school “teaching staff members.” In short, the TEACHNJ Act eliminates the hearing process before the Commissioner of Education and places the decision in the hands of an arbitrator.

When a New Jersey “teaching staff member” achieves tenure, she receives protections that most other New Jersey employees do not. Tenured teaching staff members can be dismissed or reduced in compensation “during good behavior” only for “incapacity,” “inefficiency,” or “conduct unbecoming” a teaching staff member, or some other “just cause.” However, they can be laid off for budget reasons or enrollment losses at any time as long as their seniority is honored.

For the purposes of tenure, “teaching staff members” includes a wide range of employees, including: Assistant superintendents, teachers, principals (but not administrative principals), vice-principals, assistant principals, school nurses, athletic trainers, business administrators shared by more than one school district, and other employees requiring appropriate certificates.

Left unchanged are the initial procedures. Tenure charges are instituted by the local board of education. They are filed in writing with the board’s secretary together with a sworn statement of evidence. The employee is promptly given a copy and the opportunity to submit a written statement in response. The board will then consider the charges in closed session and decide by majority vote if the evidence supports probable cause for the charges, and whether the charges are sufficient to warrant dismissal or reduction in salary. If so, it then forwards the charges to the Commissioner of Education. If the board does not make a determination within 45 days, the charges are dismissed.
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Published on: October 26, 2012

Minimizing New Jersey Estate Taxes by Utilizing a Disclaimer Trust Provision in a Will

by Jennifer C. Meusel

New Jersey imposes an estate tax on assets passing to any beneficiary other than a surviving spouse. The New Jersey exemption amount is $675,000, meaning that a decedent whose estate exceeds $675,000, and whose assets are to be inherited by any individual other than a surviving spouse, is subject to New Jersey State estate tax. While both spouses are entitled to an exemption amount of $675,000, careful planning is required to take full advantage of both spouses’ exemption amount and shield $1,350,000 from taxes when it is passed to the next generation.

A disclaimer trust is an excellent vehicle for married couples to ensure that their heirs can maximize their exemptions. This trust can be included as a provision in both spouses’ wills. It provides that the trust will on be funded upon the death of first spouse if the surviving spouse executes and files a valid and proper disclaimer within nine months of the spouse’s death. It is important that the surviving spouse does not exercise any control over the assets being disclaimed after the decedent’s death. There are a number of factors to consider when deciding whether to disclaim assets and thereby fund the disclaimer trust, including the value of the estate, the age of the surviving spouse, the health of the surviving spouse and the current status of estate tax law. A disclaimer trust provision in a will is flexible and allows the surviving spouse to decide whether or not to fund the trust. However, if the decedent’s will does not contain the necessary provisions, the surviving spouse does not have the option to fund the trust and minimize future New Jersey estate taxes for the next generation.

The terms of the disclaimer trust are usually that the surviving spouse is entitled to all of the income from the trust during her lifetime, and the surviving spouse also has the right to access the trust principal for her health, education, support and maintenance. Distributions in excess of that are not automatic and require the agreement of the co-trustee. Typically, upon the surviving spouse’s death, the couple’s children become the trust beneficiaries.
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Published on: October 22, 2012

Fighting Traffic Tickets in New Jersey

by Boris Peyner

New Jersey’s traffic laws protect people and provide safety to motorists and pedestrians. Alleged violations of traffic laws are when people most often come into contact with the court system. McLaughlin & Nardi’s New Jersey attorneys regularly represent people fighting traffic tickets in New Jersey’s municipal courts.

Once you are issued a ticket you should never argue with a police officer. A police officer’s responsibility is to issue a summons, commonly referred to as a ticket, when the police officer believes that you committed a violation of the law. You should wait until your day in court when a judge or will decide if you did, in fact, violate the law. Your court date will typically be just days from the date you receive your summons.

The first scheduled court date is known as the arraignment. The arraignment is when the Court will inform you of the charges that have been filed against you and ask you how you plead. The typical answer is not guilty, guilty or no contest (typically in non-criminal matters.)

In most cases you should plead “not guilty” and consult with an experienced New Jersey attorney who can obtain discovery (i.e., evidence) which the state and the prosecutor will rely upon to prove that you are guilty (that you committed the offense you were charged with.)
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Published on: October 18, 2012

Help for New Jersey Residential Foreclosures: Do Not Lose Your Home – Help is Here!

by Boris Peyner

Families across New Jersey are facing difficulties paying their home mortgages and facing foreclosure. There are many steps that can be taken to avoid foreclosure and keep the home. The important thing is to do something.

Homeowners facing foreclosure should seek counsel from an experienced New Jersey real estate attorney who can ensure that your rights are protected. For example, before banks can foreclose on a home they must follow a step by step procedure. Banks must first send a notice to the mortgagee (the person who owes the money) and advise of the intent to foreclose. Foreclosure notices must allow at least thirty days to cure defaults and must have certain information which is required by law. For example, the notice must conspicuously identify the real estate which is the collateral for the loan, describe the default, and advise the homeowner of the right to cure. The foreclosures notices must also provide the amount necessary to cure as well as the name, address, and telephone number of the person to whom payment should be made. Banks which fail to provide this required notice will not be permitted to foreclose.

In New Jersey, banks are permitted to file a lawsuit to foreclose on a residential home thirty days after a homeowner has been served with a foreclosure notice. Time becomes critical once a homeowner is served with a complaint. Answers to complaints must be filed within thirty-five days after receipt of the summons and complaint. Failure to file an answer will result in default and the case will being deemed uncontested – in other words, the foreclosure will be treated as unopposed.

Banks may obtain a judgment for foreclosure very quickly once a matter is deemed uncontested. Banks are only required to mail a notice to the homeowner and advise that she has fourteen days to cure default and that upon entry of a foreclosure order the mortgagee will forever lose the right to cure the default.
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Published on: October 8, 2012

Accessing Online Accounts After the Account Holder’s Death

by Jennifer C. Meusel

NJ Assembly Bill A-2943 will ease access to Online Accounts after a persons death.

The New Jersey State Assembly has approved legislation allowing an executor or administrator of an estate to assume control of a person’s online accounts in the event of her death. If the bill is approved by Congress, the executor or administrator will be able to conduct, continue or terminate the social networking website, micro-blogging, and e-mail websites.

Currently the executor or administrator must research, navigate and wade through the protocols in place for each separate website. For example, Yahoo! Mail will not allow access to an executor or administrator, or anyone else, unless it is court ordered while G-mail and Hotmail will allow access upon providing proof that the executor or administration has been authorized to access these accounts.

Social media websites each have their own rules. Facebook will not allow access to a deceased person’s account. They do however, provide a memorial status for the deceased person’s account. They require a copy of the death certificate to close the account, but will not grant access.
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Published on: October 5, 2012

Transfer of a New Jersey Lottery License

by Jennifer C. Meusel

There are steps which must be followed in a timely manner to obtain a New Jersey Lottery License and have a smooth transition during the purchase of a business.

At least 45 days before closing, the seller of the New Jersey business must send a letter to the New Jersey Lottery district office. The addresses of the district offices can be found here. The letter must include information regarding the pending sale including the seller’s name, address, home phone number, cell phone number, and work phone number, as well as the buyer’s name, address, home phone number, work phones and cell phone number, and the anticipated closing date.

Upon receipt of that letter, a New Jersey lottery agent will contact the buyer and the seller, and they will be required to meet with the lottery representative . The buyer must bring the following to this meeting:

The Lottery Division will conduct a background check on all people listed on the application.
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Published on: September 25, 2012

New Jersey’s Teacher Effectiveness and Accountability for the Children of New Jersey (TEACHNJ) Act Makes Significant Changes to Acquisition of Tenure

by Maurice W. McLaughlin

On August 6, 2012, New Jersey Governor Chris Christie signed the Teacher Effectiveness and Accountability for the Children of New Jersey (TEACHNJ) Act, which had been passed by both houses of the New Jersey Legislature. The TEACHNJ Act significantly changes how New Jersey teachers and other New Jersey public school “teaching staff members” acquire tenure.

A “teaching staff member” who obtains tenure can only be dismissed or have their compensation reduced “during good behavior” for “inefficiency, incapacity, or conduct unbecoming [ ] such a teaching staff member or other just cause.” It also provides procedural safeguards before they can be fired. (However, tenure does not prevent the school district or board of education from instituting layoffs – including laying off tenured teaching staff members – for reasons of economy or reduced enrollment, provided seniority rules are followed.)

“Teaching staff members” who may receive tenure include New Jersey public school teachers, of course, but also include these positions:

principal, other than administrative principal, assistant principal, vice-principal, assistant superintendent, and all school nurses, including school nurse supervisors, head school nurses, chief school nurses, school nurse coordinators, and any other nurse performing school nursing services, school athletic trainer and such other employees as are in positions which require them to hold appropriate certificates issued by the board of examiners, serving in any school district or under any board of education, excepting those who are not the holders of proper certificates in full force and effect, and school business administrators shared by two or more school districts.