FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Deducting 2018 Real Property Taxes Prepaid in 2017 Comes with Caveats

January 04, 2018 — William Hussey – White and Williams
Many clients and friends have inquired about accelerating the payment of their 2018 real property taxes as a result of the recent enactment of the federal Tax Cuts and Jobs Act. Pursuant to that Act, the deduction for state and local income, real property and other taxes will be capped at $10,000 in tax years 2018 through 2025. The Act, moreover, specifically disallows a deduction in 2017 for 2018 state and local income taxes that are prepaid before year-end. The Act was not clear on whether a prepayment of 2018 real property taxes would be deductible in 2017. For certain taxpayers that are not subject to the alternative minimum tax, a prepayment of those 2018 real property taxes might be of current benefit to them. Yesterday, the IRS issued an advisory to taxpayers outlining which real property tax prepayments will be deductible in 2017 and which are not. The text of that advisory, together with the illustrative examples, is set out below for your consideration. IR-2017-210, DEC. 27, 2017 WASHINGTON - The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances. The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed. The following examples illustrate these points. Example 1: Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return. Example 2: County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019. However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018. The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts - which can be used by some taxpayers on 2017 tax returns - is the April 2018 tax deadline. IRS.gov has more information on these and other provisions to help taxpayers prepare for the upcoming filing season. Read the court decision
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Reprinted courtesy of William Hussey, White and Williams
Mr. Hussey may be contacted at husseyw@whiteandwilliams.com

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Homeowner’s Claims Defeated Because “Gravamen” of Complaint was Fraud, not Breach of Contract

September 29, 2021 — Garret Murai - California Construction Law Blog
Be careful what you wish for or, as in the next case, what you plead. In Vera v. REL-BC, LLC, Case Nos. A155807, A156823, and A159141 (June 30, 2021) 1st District Court of Appeal, a the buyer of a remodeled home who asserted breach of contract and fraud claims against a developer discovered that her claims, including her breach of written contract claim, was subject to a shorter 3 year statute of limitations because the “gravamen” of her complaint was fraud. The REL-BC Case Homeowner Adriana Vera purchased a remodeled home in Oakland, California from developers REL-BC, LLC and SNL Real Estate Solutions, LLC. The developers had purchased the home in July 2011, remodeled it, and sold it to Vera in November 2011. As is typical in such transactions, the purchase agreement for the house required that the sellers disclose known material facts and defects affecting the property. In their disclosure, the sellers stated that they were not aware of any significant defects or malfunctions with respect to the property. The disclosure also stated that the sellers were not aware of any water intrusion issues with respect to the property. Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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Hovnanian Increases Construction Defect Reserves for 2012

January 06, 2012 — CDJ STAFF

In their fourth quarter earnings call, executives of Hovnanian Enterprises made some projections for investors, covering the company’s plans for 2012. During the call, Ara K. Hovnanian, the firm’s CEO, discussed their reserves to meet construction defect claims. The firm does an annual actuarial study of their construction defect reserves.

Mr. Hovnanian noted that there have been no changes for the past several years, but this year they are increasing their reserves by about $6.3 million. Additionally, the firm has added $2.5 million to their legal reserves. Mr. Hovnanian stated “we do not anticipate that changes of this magnitude will be recurring as we look forward to 2012.”

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Owner’s Slander of Title Claim Against Contractor Recording Four Separate Mechanics Liens Fails Under the Anti-SLAPP Statute

February 01, 2021 — Garret Murai - California Construction Law Blog
Most mechanics lien actions follow a pretty standard process:

1. A mechanics lien claimant, either a contractor subcontractor, material supplier, or laborer, performs work but is not paid;
2. Mechanics lien claimant records a mechanics lien on the property in which work was performed; and
3. Within 90 days thereafter files suit to foreclose on the mechanics lien.

Sometimes, either before or after a mechanics lien claimant files suit, the owner will record a mechanics lien release bond, in which case mechanics lien claimant files suit against the release bond. But what if a mechanics lien claimant records a mechanics lien, the owner records a mechanics lien release bond, and the mechanics lien claimant records three different but identical mechanics liens thereafter? Is this even legal? Read the court decision
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Reprinted courtesy of Garret Murai, Nomos LLP
Mr. Murai may be contacted at gmurai@nomosllp.com

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No Bond, No Recovery: WA Contractors Must Comply With WA Statutory Requirements Or Risk Being Barred From Recovery If Their Client Refuses To Pay

September 18, 2018 — Joshua Lane - Ahlers Cressman & Sleight PLLC
The risk that a contractor’s client may refuse to pay the full contract balance is a day-to-day reality for every contractor. That risk – and the stress it causes in the mind of any contractor – is tempered by the knowledge that Washington statutes provide contractors with ready access to the courts to file a lawsuit and be fully compensated for the work performed. But a recent case provides a grim reminder that the same statutes that giveth court access can also taketh away. Washington’s Contractor Registration Act (“WCRA”)[1] requires every contractor engaging or offering to engage in services in Washington to register with the Department of Labor and Industries (”L&I”). In order to sue to collect compensation for work or to enforce a contract, a contractor must prove that he/she “was a duly registered contractor and held a current and valid certificate of registration at the time he or she contracted for the performance of such work or entered into such contract.”[2] In order to conclude that a contractor has substantially comply with these requirements, a court must find that: (1) The department has on file the information required by RCW 18.27.030; (2) the contractor has at all times had in force a current bond or other security as required by RCW 18.27.040; and (3) the contractor has at all times had in force current insurance as required by RCW 18.27.050.[3] Read the court decision
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Reprinted courtesy of Joshua Lane, Ahlers Cressman & Sleight PLLC
Mr. Lane may be contacted at joshua.lane@acslawyers.com

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Another Worker Dies in Boston's Latest Construction Accident

June 20, 2022 — Scott Van Voorhis - Engineering News-Record
Boston Police and the US Occupational Safety and Health Administration are investigating a June 9 early morning construction accident that killed a worker in Boston’s Seaport district— the latest in a spate of fatalities at worksites across the city's metro area during the past 18 months. Reprinted courtesy of Scott Van Voorhis, Engineering News-Record ENR may be contacted at enr@enr.com Read the full story... Read the court decision
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Companies Move to Houston Area and Spur Home Building

December 30, 2013 — CDJ STAFF
A number of companies are developing commercial properties in the Kingwood area of the Houston metropolitan region and that’s spurring residential development as well. According to the Houston Chronicle, a number of key industries will be moving the area. And it’s leading to a lot of residential and commercial development. The 4,000-acre mixed-use development Generation Park will include offices, hotels, shops, and other amenities. But an important part of its success is expected to come from the adjacent master-planned community, Summerwood. Another development, Kingwood Parc City Center will include retail, restaurants, a movie theater, and office space. Other development in the Kingwood area includes a $71 million addition to the Kingwood Medical Center. The new tower will specialize in services for women and infants. Read the court decision
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LAX Runway Lawsuit a Year Too Late?

January 17, 2014 — Beverley BevenFlorez-CDJ STAFF
The City of Los Angeles filed a lawsuit against Tutor-Saliba Corp. and O&G Industries Inc., which had created a joint venture to rebuild Runway 25L at Los Angeles International Airport (LAX), according to Brian Sumers writing for the Daily Breeze. However, lawyers for the construction companies are alleging that the lawsuit was filed a year too late: “…the complaint’s first four causes of action against Joint Venture are indisputably barred under California Law,” lawyers from Castle & Associates claimed. This news came soon after a plane blew a tire on the same runway involved in the lawsuit, as reported by the Los Angeles Times. The blown out tire may not be related to the alleged construction defects: “The runway is usable,” Nancy Castles, spokeswoman for Los Angeles World airports told the Los Angeles Times. Castles explained that “the lawsuit is about ‘deterioration’ and that at some point the runway will need to be rebuilt, but that time is not now.” Read the full story at the Daily Breeze... Read the full story at the Los Angeles Times... Read the court decision
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