Foundational Legal Considerations for Mixed-Use Apartment Blocks
As mixed-use projects rise in urban centres and suburban areas across Australia, developers are responding to the preferences of millennials and downsizing retirees. These groups seek walkable communities that are close to essential amenities, driven by changing demographics and environmental trends. Local governments support these developments for their ability to reduce infrastructure costs, create job […]
The Third Time’s A Charm: Colorado Adds Nuclear Energy as a Clean Energy Resource
After considering similar legislation in two prior sessions, the Colorado General Assembly passed, and Gov. Jared Polis signed into law, House Bill 25-1040 which explicitly adds nuclear energy to the state’s statutory definitions of “clean energy” and “clean energy resource” for purposes of complying with Colorado’s carbon dioxide emission reduction requirements and applying for financial assistance under Colorado’s Rural Clean Energy Project Finance Program. In so doing, Colorado joins more than a dozen other states that consider nuclear power to be a clean energy resource under various state energy policies, and is consistent with the growing number of states taking legislative, regulatory, or policy steps to support or at least consider adding nuclear power to their energy mix.
Acknowledging Colorado’s projected growth in peak electricity demand and the potential energy supply, reliability, climate, and economic benefits of nuclear energy, including advanced reactors such as Small Modular Reactors (SMRs), the legislation expands the statutory definitions to include “nuclear energy, including nuclear energy projects awarded funding through the United States Department of Energy’s Advanced Nuclear Reactor Programs.”
Under Colorado’s carbon dioxide emission reduction statute, qualifying retail utilities in Colorado are required to submit to the Colorado Public Utilities Commission (CPUC) a plan detailing how they intend to reduce by 2030 carbon dioxide emissions associated with their electricity sales by 80 percent as compared to 2005 levels, and how they will seek to achieve 100% emission free electricity sales by 2050. For compliance purposes, the Statute incorporates the “eligible energy resources” that can be used to comply with Colorado’s separate Renewable Energy Standards (RES); these include recycled energy, renewable energy resources (wind, solar, geothermal, new small hydropower, and certain biomass), and renewable energy storage, however, nuclear energy is expressly excluded. Recognizing that not all clean energy resources may be considered renewable, the Statute also allows any other “electricity-generating technology that generates or stores electricity without emitting carbon dioxide into the atmosphere.” While this catch-all language arguably encompasses nuclear energy, HB25-1040 amends the statute to remove any doubt and emphasize the potential benefits of nuclear energy.
Colorado’s three largest electric utilities are in the process of implementing their respective CPUC-approved clean energy plan or electric resource plan that meets the state’s emission reduction requirements. While none of the plans presently include nuclear power, Colorado’s largest investor-owned electric utility, Public Service Company of Colorado (PSCo), has indicated it is open to considering nuclear energy resources in the future.
HB25-1040 also expands the types of energy that qualify for potential financial assistance through Colorado’s Rural Clean Energy Project Finance Program. The Program allows certain rural property owners to apply to their board of county commissioners for the issuance of tax-exempt private activity bonds to help finance the construction, expansion, or upgrade of a clean energy project having a capacity of no more than 50 MW and which is owned by and located on the property owner’s land. The electricity generated by such a project would be delivered to the cooperative electric association in whose service territory the project is located. Similar to Colorado’s RES, the Program defined “clean energy” to include only biomass, geothermal, solar, wind, and small hydropower resources as well as hydrogen derived from these resources. As such, only projects using these technologies were eligible for financial assistance under the Program. Now, small nuclear power projects are also eligible for financial assistance under the Program.
Colorado presently has no operating commercial nuclear power plants. From 1979 until 1989, Colorado was home to the Fort St. Vrain Nuclear Power Plant, a 330 MW(e) high temperature gas cooled reactor, owned and operated by PSCo. The plant was decommissioned in 1992 following a series of operational issues and portions of the plant were converted to a natural gas combustion turbine generating plant. The statutory amendments resulting from HB25-1040 do not mean that new nuclear power is coming to Colorado, but they do evidence a state policy environment more favorable to nuclear power and provide practical, incremental improvements that may incentivize utilities and landowners to consider developing nuclear power generating facilities in the state.
For example, PSCo has indicated that new nuclear generation is one possible option to replace the electricity and economic benefits of its Comanche-3 power plant located in Pueblo, Colorado and which is scheduled to retire by January 1, 2031. The ability to count nuclear energy toward PSCo’s carbon dioxide emission reduction obligations may be an additional consideration as PSCo evaluates this option. Furthermore, once advanced reactor designs progress from First-of-a-Kind to Nth-of-a-Kind, cost effective, deployable systems, some SMRs and microreactors could align well with Colorado’s Rural Clean Energy Project Finance Program and become viable power supply options for Colorado’s rural communities.
Ultimately, taking advantage of HB25-1040’s incremental improvements will also require sound legal and regulatory advice related to nuclear matters as well as siting, permitting, environmental, and numerous other issues. If you have questions concerning this legislation or the opportunities it may create, please reach out to the author of this alert or the Womble Bond Dickinson attorney with whom you normally work.
ANOTHER BIG VICARIOUS LIABILITY WIN FOR TCPA DEFENDANT: Nevada Court Holds Providing Scripts and Training Alone Insufficient for TCPA Agency Liability
Hi TCPAWorld! Another huge vicarious liability win for a TCPA defendant!
The United States District Court for the District of Nevada has dismissed with prejudice all claims alleged by Plaintiff Kelly Usanovic (“Usanovic”) against Americana LLC (DBA Berkshire Hathaway HomeServices Nevada Properties or “BHHS”). Kelly Usanovic v. Americana, L.L.C., No. 2:23-cv-01289-RFB-EJY, 2025 WL 961657 (D. Nev. Mar. 31, 2025). The court concluded that Usanovic failed to plausibly allege that BHHS could be held liable for unsolicited calls made by its affiliated real estate agents under federal agency law principles.
Kelly Usanovic filed a class action lawsuit in August 2023 against BHHS alleging violations of the TCPA. Specifically, Usanovic claimed BHHS agents repeatedly called her cell phone despite it being listed on the National DNC Registry.
Usanovic alleged that BHHS should be vicariously liable under the TCPA, arguing that the company had provided training materials encouraging agents to cold-call consumers using third-party vendors like RedX, Landvoice, Vulcan7, and Mojo—vendors who purportedly supplied phone numbers on the National DNC Registry. Usanovic alleged these materials showed BHHS’s control and authorization of agents’ unlawful calls, seeking to hold BHHS responsible via agency theories of actual authority, apparent authority, and ratification.
Well, Judge Richard F. Boulware II disagreed and granted BHHS’s motion to dismiss WITH PREJUDICE reasoning that vicarious liability under the TCPA requires establishing a true agency relationship under federal common-law agency principles.
The court found that although BHHS was alleged to have provided general scripts, training, and recommendations on dialers and vendors, these actions alone were insufficient to establish an agency relationship. Critically, the Court underscored that Usanovic failed to allege essential elements of agency, such as BHHS’s direct control over the agents’ day-to-day call activities, the agents’ working hours, or their choice of leads. Simply offering resources and optional training sessions does not establish the requisite control necessary for vicarious liability under the TCPA.
On actual authority, the Court concluded that merely providing guidance to agents does not demonstrate authorization or instruction to call numbers listed on the Do Not Call Registry.
Regarding apparent authority, the Court stated that Usanovic did not plead any statements from BHHS that could reasonably lead her to believe the agents were authorized to violate the TCPA. The mere identification of agents as affiliated with BHHS was deemed insufficient.
Finally, for ratification, the Court found no allegations that BHHS knowingly accepted benefits from agents’ unauthorized calls or acted with willful ignorance.
Thus, because Usanovic’s complaint lacked plausible facts to support any of these common law agency theories, the court dismissed the TCPA claims with prejudice—denying further amendment due to prior opportunities to correct these deficiencies.
There you have it! Another court ruling that knowledge of illegality is required for vicarious liability to attach!
Selling a Business: A Practical Guide for a Successful Transaction
This guide is designed to help business owners and executives navigate the process of selling a business. It provides an overview of the sale process and practical tips for achieving the best possible outcome and addresses common challenges encountered during deals.
For many sellers, a transaction will involve unfamiliar procedures and terms where a lawyer can provide valuable guidance. The better the key concepts are understood, the better equipped one will be to make informed decisions and achieve a favorable result.
Sale Process
The timeline for the deal will likely include the following steps:
Selecting a business broker who is right for the business.
The buyer presents a proposal letter or letter of intent.
The buyer prepares an Asset Purchase Agreement (APA) for the parties to negotiate.
The seller’s board of directors and shareholders approve the APA.
Both the buyer and seller sign the APA at or before closing.
Additional steps, such as obtaining real estate title insurance, finishing due diligence, and preparing closing documents.
At closing, the buyer pays the purchase price, and the seller transfers the business.
Letter of Intent
The selected buyer will produce a written proposal letter or letter of intent naming the price, transaction structure, and key terms. It should be written to state that it is nonbinding, meaning that everything remains subject to negotiating and signing a more detailed, definitive purchase agreement. The letter of intent will often include a binding agreement to negotiate exclusively with the buyer for a period of time.
Due Diligence
The buyer will often do a thorough business review including financial statements, contracts, employee compensation and benefits, real estate, and other key aspects. Though the process can be time-consuming, it is typically better to provide the requested information rather than contest its necessity.
Review of Governing Documents
Early in the process, the selling corporation should review its articles of incorporation, bylaws, and any shareholder (buy-sell) agreements. The seller should identify anything that could affect the transaction, such as rights of first refusals or super-majority vote requirements. An attorney can help with this.
Structure – Sale of Assets
Most business sales are structured as asset purchases. In this structure, the selling corporation transfers its assets to a buyer-controlled entity. The buyer can form a new corporation to purchase the assets or use an existing entity. The seller keeps its corporate entity and dissolves it after the closing. Buyers do this to avoid any known or unknown liabilities the corporation may have.
Transferred assets include owned real estate, equipment, furniture, accounts receivable, prepaid assets, the goodwill of the business, the name of the paper, all website addresses, etc. In most cases, cash is retained by the selling corporation.
Some working capital liabilities may also be transferred to the buyer, such as accounts payable. Bank debt and other long-term liabilities are typically not assumed by the buyer. Liabilities not assumed by the buyer are paid off at closing and remain an obligation of the selling corporation.
The other transaction structure is for the buyer to purchase the corporation or LLC.
Purchase Price
Larger companies purchasing smaller companies typically pay all cash. Often 5 to 10 percent of the purchase price may be placed in an escrow account with a bank for an agreed-upon period of time.
The purchase price is for the enterprise value of the business without regard to bank debt and other long-term liabilities. This is frequently referred to as selling the business on a cash-free, debt-free basis. The seller will need to pay off any bank debt or other long-term liabilities out of the purchase price. Additional liabilities may include deferred compensation payments and any severance obligations.
The purchase price often includes a “net working capital adjustment” as well. Net working capital is current assets (excluding cash) minus current liabilities. Net working capital varies daily as revenues are received, expenses are paid, and liabilities and prepaid assets are accrued.
When a business is sold, the buyer and seller will usually agree on a “net working capital target.” The target is intended to be a normal amount of working capital that should be there as of the closing. If the actual net working capital at the time of closing exceeds or is less than the target amount, then the purchase price is increased or reduced dollar for dollar.
The seller will want to be careful about selecting the net working capital target because any shortfall at closing will reduce the purchase price. Different types of businesses have different working capital profiles. So, it is important to make sure the working capital definition and target fit for the business.
Asset Purchase Agreement
The buyer will prepare a detailed APA listing of the assets being purchased and the purchase price.
The APA will include several representations and warranties from the seller such as:
The selling corporation will have all director and shareholder approvals needed to sell the business.
The assets being sold will be free and clear of all liens when the transaction closes.
The seller’s financial statements are accurate.
There are no material liabilities that have not been disclosed to the buyer.
The list of employees and their compensation is accurate.
If the representations are not true at the time of the closing, the buyer is not required to complete the transaction.
If the buyer discovers a representation is not true after closing, the buyer may have a claim against the seller. For example, if the seller represents that the equipment is free and clear of liens, and it turns out there is a lien, the seller would be responsible for paying off the lien. The purchase agreement will include limits and procedures related to how and when the buyer can make a claim against the seller.
The seller can protect themselves by including disclosure schedules within the APA documenting any problems or facts contrary to the representations. If disclosed before the closing, the buyer cannot make a claim after the closing. This is where the due diligence review benefits both the buyer and the seller.
The APA will include a list of covenants or promises. The seller will promise to operate its business in the ordinary course between signing and closing. The seller will also agree to negative covenants promising not to do certain major actions between signing and closing, such as entering into a new contract or making a large dividend.
Board of Directors and Shareholder Approval
The board of directors should review and approve the definitive APA before it is signed. If a board decides that a sale of the company is the best decision, the directors have fiduciary duties to make an informed decision in the best interests of the shareholders. Hiring a business broker and soliciting multiple bids for the business is considered the gold standard to get the best possible price from the sale. The directors should carefully review the deal terms and transaction documents. Directors should also include their lawyers in the board meeting and ask to walk through the key terms of the legal agreements. An attorney can help prepare board minutes that document the process followed and the reasons for the transaction.
The APA must also be approved by the corporation’s shareholders (by a majority of the outstanding shares unless there is a super-majority vote requirement). The shareholder meeting takes place either at or before the APA is signed or between the signing and the closing.
In addition to approving the sale of all assets, the shareholders will often vote to dissolve the corporate entity after the closing. During the dissolution process, the corporate entity turns its assets into cash, pays its liabilities, and then distributes the net proceeds to shareholders.
Dissenters Rights
Most states have a corporations statute that includes dissenters’ rights. Early in the process, an attorney should review the corporations statute and advise whether the transaction is exempt from the dissenters’ rights provisions. In most states, dissenters’ rights do not apply when assets are sold for cash, and the proceeds are distributed to shareholders within one year. If dissenters’ rights apply and the transaction is not exempt, a dissenting shareholder has certain rights to go through a process designed to determine the fair value of their shares.
Real Estate
If the seller leases real estate, the lease must also be reviewed. Oftentimes it will be necessary to receive the landlord’s consent before transferring the lease to the buyer. If the seller owns the real estate, then the real estate will be transferred at the closing.
Title insurance will be obtained to confirm that the seller owns the real estate and to identify any mortgages, easements, or other liens or encumbrances on the property. The buyer will expect all mortgages to be paid at closing, so it gets a clean title to the property.
Often the buyer will obtain a survey of the property to show the precise boundaries and the building’s exact location.
The buyer will also typically hire an environmental consulting firm to examine the real estate for any contamination or asbestos. A Phase I assessment involves a tour of the property, a look at the history of the property, and a determination of whether there are any recognized environmental conditions that may require further investigation. If it looks like there may be serious issues, the buyer may proceed to a Phase II assessment which involves taking soil samples and testing them for contamination.
The buyer may also get a building inspection to inspect the structure, HVAC systems, roof, etc.
Net Proceeds to the Seller
The corporation selling the business closes the transaction and receives the cash purchase price. Out of the purchase price, the seller must pay off its bank loans and other long-term debt. It must also pay its transaction expenses, which include the business broker fee, attorney fees, accountant’s fees, real estate title insurance, etc. Any net working capital adjustment will also affect the net proceeds to the shareholders of the selling corporation.
Early in the process, the seller’s Chief Financial Officer and outside accountant should prepare an estimate of what the net proceeds will be after payment of expenses and taxes.
Escrow Account
The buyer will often withhold between 5 and 10 percent of the purchase price. That money will be put in an escrow account for a period of time. If the seller has misrepresented the business to the buyer, the buyer will take money from the escrow account to make itself whole. If the buyer does not have any legitimate claims, the money will be distributed to the seller at an agreed upon date, often 12 to 18 months after the closing.
For sellers, one tactic is to negotiate a staged release of the escrow funds. For example, 50 percent is to be released to the seller six months after the closing, with the remaining 50 percent to be distributed to the seller 12 months after the closing.
Employee Transition to Buyer
In an asset sale, the employees are the seller’s employees before the closing, and the buyer’s after the closing. The buyer will typically do the same new employee intake paperwork that it would do for any new employee. Employees may be required to fill out an employment application, a form I-9 to verify employment eligibility, etc. Employees will enroll in the buyer’s benefit plans. If the seller has a 401(k), then arrangements will be made to terminate that 401(k) or transfer balances to the buyer’s 401(k) or to individual employee IRAs.
A buyer in an asset purchase is not required to hire all the seller’s employees. Sellers should ask buyers about their intentions as part of the negotiation process and consider severance obligations and policies for any employees not hired by the buyer.
The Closing
At closing, the final documents are delivered, the buyer pays the purchase price, and the business is transferred. Often it is a virtual closing that does not require people to be physically present. The lawyers arrange for documents to be signed and delivered. After the documents are signed, the parties and/or their lawyers will join a conference call, agree that everything is completed, and direct the buyer to transfer the purchase price.
After the Sale
After the closing, the selling corporation then enters a wind-down period that may take 3 to 12 months. The corporation must pay all its creditors.
Bumps along the way
Every deal comes with its frustrations, which can include:
The sale process is taking longer than expected.
The buyer’s due diligence review may seem intrusive. Responding to requests is time-consuming, and it may seem like the buyer is requesting the same information repeatedly.
The buyer may be slow to commit to the future role of key members of the seller’s management team.
The seller may become frustrated with the buyer’s focus on environmental or other risks that have never been an issue in the past.
The buyer may seem overly concerned about contracts and vendor relationships that have not caused issues before.
Some buyers have a smooth and well-thought-out transition process with good communication. Others may have poor communication and may seem haphazard and reactive. A buyer may also be distracted by other deals in the process.
Tips for a Successful Transaction
Here are some tips that can help achieve a better result for the company, employees, and shareholders:
Keep the sale process moving. The longer things drag on, the more likely a bad event will happen. Whether external like market trouble, or internal, like losing key employees or advertisers.
Stay focused on operating the business. A deal can be a huge distraction that negatively impacts operations and earnings. Employees may lose focus, and deteriorating earnings during a sale process can be problematic.
Plan ahead for third-party tasks and lead times – for example, environmental assessments, real estate surveys, obtaining consent from landlords, getting shareholder approval, and paying off bank debt or bonds.
Review employment agreements, deferred compensation arrangements, or bonus or profit-sharing plans with a lawyer.
Be careful with capital expenditures. Using working capital to buy equipment could negatively affect net working capital at closing, and consequently the purchase price.
Create complete, detailed, and accurate Disclosure Schedules. Good Disclosure Schedules reduce the risk of post-closing claims from the buyer, helping preserve the net purchase price.
Have a good strategy and process for announcing the deal to employees and customers.
Manage shareholder expectations. Net proceeds will be reduced by debts, taxes, and transaction expenses. Even after the closing, there will be a wind-down period before final distributions are made.
Consider severance pay for employees who are not hired by the buyer. Some companies pay special bonuses to employees in connection with the deal.
Acknowledge that key members of the management team may be conflicted, disappointed, or even outright hostile to the deal. It could mean changes to their title, responsibility, autonomy, compensation, or even their job.
Work with a bank early on regarding payoff arrangements for bank debt. If more complex financing, such as bonds, are in place, a lawyer can help navigate the complexities of this process.
Be mindful of vacation and travel schedules for key individuals involved in the process to plan ahead and avoid delays.
How to Avoid Pitfalls in Your First Home Purchase?
Purchasing your first home is thrilling. However, if you’re not cautious, it can become a financial snare. A lot of first-time home buyers tend to jump into the process without being fully informed of the red flags. Such careless mistakes can cost them thousands of dollars or even put their homeownership at risk. That’s why […]
Environmental YIR: 2024 Regulatory Legacies and Impacts
This report provides an overview of major federal environmental regulations and court decisions of 2024. Landmark U.S. Supreme Court decisions with lasting consequences for environmental policy include Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024),1 which ended judicial deference to administrative agencies, and Corner Post v. Federal Reserve, 603 U.S. 799 (2024), which opened the doors of federal courts to many more plaintiffs challenging regulations. These decisions have subsequently bolstered efforts to limit or rollback regulatory actions, both by industry and by members of the Trump administration. The Congressional Review Act (CRA), which allows Congress to rescind or invalidate new regulations, has also been used as the basis for invalidating many of the environmental regulations adopted since August 2024.
Click here to read the full article.
HUD’s Enforcement of the Violence Against Women Act: What Housing Providers Should Know
The Violence Against Women Act (VAWA), enacted in 1994, was most recently amended in 2022. As part of its 2022 reauthorization, the U.S. Department of Housing and Urban Development (HUD) and the Attorney General of the United States are now mandated to implement and enforce the housing provisions of VAWA consistently and in a manner that affords the same rights and remedies as those provided for in the Fair Housing Act (FHA). This is reflected in new forms updated from HUB in February 2025 regarding the protections for victims of domestic violence.
Pursuant to VAWA, anyone who has experienced domestic violence, dating violence, sexual assault, and/or stalking:
Cannot be denied admission to or assistance under a HUD-subsidized or -assisted unit or program because of VAWA violence/abuse.
Cannot be evicted from a HUD-subsidized unit or have their assistance terminated because of VAWA violence/abuse.
Cannot be denied admission, evicted, or have their assistance terminated for reasons related to the VAWA violence/abuse, such as having an eviction record, criminal history, or bad credit history related to the VAWA violence/abuse.
Must have the option to remain in their HUD-subsidized housing, even if there has been criminal activity directly related to the VAWA violence/abuse.
Can request an emergency transfer for safety reasons related to VAWA violence/abuse.
Must be allowed to move with continued assistance (if the victim has a Section 8 Housing Choice Voucher).
Must be able to self-certify using the HUD VAWA self-certification form (Form HUD-5382) and not be required to provide additional proof unless the housing provider has conflicting information about the violence/abuse.
Must receive HUD’s Notice of VAWA Housing Rights (Form HUD-5380) and HUD’s VAWA self-certification form (Form HUD-5382) from the housing provider when:
Denied admission to a HUD-subsidized unit or HUD program
Admitted to a HUD-subsidized unit or HUD program and/or
Issued a notice of eviction from a HUD-subsidized unit or a notice of termination from a HUD program.
Has a right to strict confidentiality of information regarding their status as a survivor.
Can request a lease bifurcation from the owner or landlord to remove the perpetrator from the lease or unit.
Cannot be coerced, intimidated, threatened, or retaliated against by HUD-subsidized housing providers for seeking or exercising VAWA protections.
Has the right to seek law enforcement or emergency assistance for themselves or others without being penalized by local laws or policies for these requests or because they were victims of criminal activity.
EnforcementAs such, HUD’s Office of Fair Housing and Equal Opportunity (FHEO) now enforces VAWA by accepting and investigating complaints thereunder using its FHA complaint process. If a housing provider is found by HUD to have violated VAWA and the matter is not settled via HUD’s conciliation process, HUD may refer the matter to the Department of Justice (DOJ) for litigation and/or enforcement.
HUD issued a press release regarding two settlements of VAWA cases pursuant to its enforcement authority under the VAWA Reauthorization Act of 2022 in September of 2023.
THE FIRST CASE involved a tenant in Nevada who requested an emergency transfer after being stalked by a former partner. The complaint alleged that the respondent public housing agency in Nevada and its housing specialist (a) demanded confusing and contradictory documentation from the charging party that it was not permitted to request under VAWA, (b) threatened to revoke the charging party’s Housing Choice Voucher, (c) denied her request to extend her voucher, and (d) stopped paying its portion of the rent when the charging party prepared to move to protect her safety.
HUD found that the housing authority lacked an emergency transfer plan that would allow survivors who qualify to move quickly without losing their assistance. The case settled for an agreement to implement an emergency transfer plan, to hire outside experts to provide VAWA training, and to pay the charging party monetary compensation.
THE SECOND CASE cited in the 2023 press release involved a housing provider and property manager in California who were alleged to have denied the charging party’s application due to a history of violations of previous rental agreements that were allegedly related to her status as a survivor of dating violence. The housing provider maintained that the charging party did not disclose her status as a dating violence survivor, but acknowledged that it failed to provide information about her rights under VAWA or advise her about how she might appeal when it sent her the denial letter.
This settlement agreement involved (a) some monetary amount, (b) placing the charging party on the top of a waitlist for the next available unit at the property or a companion property, (c) a revision of the housing provider’s policies to include a VAWA policy, (d) the establishment of a VAWA Rights Coordinator position, and (e) the requirement that its employees undergo annual VAWA training.
HUD issued press releases regarding two more cases it settled under VAWA in 2024.
THE FIRST CASE addressed claimed violations of VAWA as well as Section 504 of the Rehabilitation Act, which prohibits discrimination in housing for residents in communities that receive federal funding. This matter involved multiple allegations that reasonable accommodation and modification requests were denied by housing providers in Tennessee, as well as allegations of failure to provide requested VAWA transfers. In addition to non-monetary components similar to those in the cases mentioned previously, this case settled for $50,000.
THE SECOND CASE, in June 2024, involved a HUD-negotiated settlement with a Michigan housing provider alleged to have violated VAWA.. That matter involved a landlord who allegedly did not respond to the charging party’s rental application due to her vision impairment and because she disclosed that a previous landlord had terminated her tenancy due to dating violence and stalking. The monetary component of that settlement agreement was $8,500, in addition to VAWA-related training and an agreement to ensure that the housing provider’s policies and procedures complied with VAWA.
TakeawaysAs noted above, housing providers should ensure that their employees are familiar with VAWA requirements and should incorporate these requirements into their regular fair housing training sessions. They also should take advantage of the website HUD released in 2023 to help navigate VAWA’s housing protections, as it features the latest updates, frequently asked questions about VAWA, and VAWA training resources. It appears that HUD’s enforcement of rights of domestic violence victims to housing pursuant to VAWA will continue to grow absent an indication from the new HUD Secretary of a change in this policy, which to date has not been announced.
MAKING SMART TCPA MOVES: Rocket Mortgage Follows Up Its Redfin Purchase With STUNNING $9.4BB Take Over of Mr. Cooper
So multiple outlets are reporting that Rocket is set to absorb the nation’s largest mortgage servicer Mr. Cooper.
With Rocket having just recently acquired Redfin it looks like the company is poised to be an absolute behemoth in the mortgage industry.
Just like with Redfin, however, the TCPA is likely driving this initiative.
Yes, mortgage servicing can be profitable in its own right but it is MASSIVELY valuable to an originator to have a large servicing pool.
Why?
Who is more likely to NEED mortgage or refinance than folks who already have a mortgage product? And with trigger leads now widely available (probably illegal under FCRA but don’t tell the CRAs that) having a massive servicing book means you can LEGALLY call folks who just submitted an application elsewhere and convince them to stay.
This is because the DNC rules will soon allow Rocket to call all of the MILLIONS of Mr. Cooper customers it just acquired WITHOUT CONSENT.
Pretty slick, eh?
So with Redfin providing consent on the front end and with access to a massive pool of mortgage customers now bolted on to the backend Rocket can make ready use of the phones to bring customers into its ecosystem–and keep them there.
Pretty clever. And it was all brought to you by the TCPA.
People think of the statute as a profit killer. But leveraged correctly it can actually drive profits by building a moat around your customers and a barrier-to-entry for others in your vertical.
Smart money uses the law as a competitive advantage. Nicely done Rocket.
Can Common Interest Communities Ban Religious Displays On Doors And Doorframes?
The Nevada legislature is currently considering a bill, SB 201, that would restrict, with certain exceptions, an association or unit’s owner who rents or leases his or her unit from prohibiting a unit’s owner or occupant of a unit from engaging in the “display of religious items”. The bill defines “display of religious items” as “an item or combination of items: (1) Made of wood, metal, glass, plastic, cloth, fabric or paper; and (2) Displayed or affixed on any entry door or doorframe of a unit because of sincerely held religious beliefs”. At the Senate Committee on Judiciary the bill was amended to, among other things, expand its application to include apartments.
The reference to doorframes caused me to think of mezuzot. A mezuzah consists of a case containing a small piece of parchment inscribed by hand with the first two sections of the Shema. The fixing of mezuzah to a doorframe is governed by a number of specific rules, including a requirement that it be visible (or there be a symbol indicating the presence of the mezuzah).
As noted, an item must be displayed “because of sincerely held religious beliefs”. Mezuzot and doorposts should meet this requirement because are specifically mentioned in Deuteronomy 6:9 (“וּכְתַבְתָּ֛ם עַל־מְזֻז֥וֹת בֵּיתֶ֖ךָ וּבִשְׁעָרֶֽיךָ׃ {ס} inscribe them on the doorposts of your house and on your gates”). In obedience of this divine command, Jews affix mezuzot to every doorway in their homes (other than bathrooms and small closets).
What about religious symbols of other faiths? The bill does not specifically refer to any particular faith or symbols (including a mezuzah). Crosses or crucifixes are generally recognized as Christian symbols and nothing in the bill excludes either. However, they do raise a question of what is meant by “sincerely held religious beliefs”. Does this simply require that the owner or occupant sincerely hold a belief in Christianity or does it require that the owner or occupant specifically believe that the display is religiously mandated? If the latter requirement is imposed, then it may be difficult for an owner or occupant to meet it, for I know of no Christian canon similar to Deuteronomy 6:9 that mandates a display of a cross or crucifix on a door or doorframe (if any reader is aware of such a requirement, please let me know). Thus, a Christian may choose to affix a cross to his or her doorway because they are a sincere believer, but they may not believe that they are required by their religion to do so.
I therefore find the requirement of a “sincerely held religious belief” to be problematical because it invites owners associations, landlords, and ultimately the courts to delve into religious law and belief. In addition, the requirement could invite challenges to the sincerity of an owner’s belief.
The bill also excludes, among other things, a display that “promotes discrimination or discriminatory belief”. As a content-based restriction on speech, this exclusion is highly problematical from a First Amendment perspective.
While SB 201 is well-intentioned, it does serve to illustrate how difficult it is to draft legislation that affects religious practices without entangling the government in questions of religious belief.
Privacy and Data Security in Community Associations: Navigating Risks and Compliance
Privacy and data security laws govern how organizations collect, handle, and protect personally identifiable information (PII) to ensure it is properly processed and protected.
For community associations, this is especially important as these organizations often manage large amounts of PII of homeowners and residents (e.g., name, address, phone number, etc.), including certain categories of sensitive PII, such as financial details. With identity theft and various cyber scams on the rise, cybercriminals frequently target this type of data. Once this data is accessed, a threat actor can do anything it wants with the data. For instance: the threat actor can sell the PII to the highest bidder; encrypt the data and hold it for ransom, meaning that a community association can no longer access the information and potentially must pay large sums in order to get it back; or make a copy of the PII and then extort the community association to return or delete the data instead of releasing it publicly, among other malicious acts.
With these risks in mind, data security breaches have become a widespread concern, prompting legislative action. All fifty states now have laws requiring organizations to notify individuals if unauthorized access to PII occurs. These laws apply to community associations in North Carolina under North Carolina General Statute § 75-65. In order to avoid being involved in a data security breach, North Carolina community associations should prioritize taking steps to protect PII of their residents and homeowners.
While North Carolina does not offer specific statutory guidance for community associations regarding personal data handling, federal frameworks can help. The National Institute of Standards and Technology (NIST) has developed comprehensive privacy and cybersecurity guidelines. To view their resource and overview guide, visit this link. The NIST’s frameworks assist organizations in identifying the data they possess, protecting it, managing and governing it with clear internal rules, and responding to and recovering from data security incidents. To summarize some of the key steps necessary for a community association to protect its data, please see the list below.
Key Steps for Strengthening Privacy and Data Security
Keep Technology Updated. Community associations should prioritize keeping their systems, networks, and software up to date. Oftentimes, software updates include patches for security vulnerabilities that threat actors can exploit. As technology evolves, new threats emerge, and these software updates are designed to address these risks by closing security gaps. In addition, community associations should change passwords periodically and be sure that passwords are not universal among all systems and websites. If presented with the option, it is recommended to use multi-factor authentication on various log-in platforms. By using multi-factor authentication, there is an extra layer of security beyond a password that can be guessed, stolen, or compromised.
Manage Access. Ensure that only necessary employees have access to residents’ and homeowners’ PII. For those who have access, be sure to adequately train those employees to confirm they are apprised of the community associations’ cybersecurity policies and procedures. Additionally, be sure these employees can recognize common attack methods of threat actors and are able to avoid and report any suspicious activity. One of the basic ways to manage access is to ensure the community association is only collecting information that it absolutely needs to carry out its operations. If less data is in the possession of the community association, less data can be accessed by a threat actor.
Regularly Review Vendor Contracts. It’s crucial for community associations to audit contracts with vendors, at least annually, to ensure they align with the association’s risk tolerance. Many breaches stem from third-party service providers who have access to PII and sensitive PII. Without clear contractual safeguards, a breach could result in significant remediation costs, with limited legal recourse against the responsible vendor. Always be sure that your contracts address data protection and breach response obligations.
Consider Cyber Insurance. Cyber insurance has become an essential risk management tool for community associations. However, it’s important to understand that cyber insurance is not a catch-all solution. Insurers are increasingly raising premiums and limiting coverage for organizations that fail to implement strong data protection practices. Cyber insurance should be seen as a safety net, not a substitute for a comprehensive privacy and security strategy. Community associations should also periodically review their cyber insurance policies to confirm they are providing coverage for any new or emerging threats that may arise.
Engage the Community. Transparency, especially regarding the categories of data collected and how they are used, is key in building trust with residents and homeowners. Community Associations should seek input from their stakeholders on privacy and data security policies. While legal obligations will not change based on community sentiment, understanding residents’ concerns can help guide decision-making and foster a sense of accountability. Discussing data security efforts and proactively addressing cybersecurity challenges at an annual meeting provides an opportunity to clarify expectations and show the association’s commitment to protecting personal information.
For guidance on strengthening a community association’s privacy and data security efforts, contact us to learn more about best practices and compliance strategies.
FHFA Rescinds UDAP Oversight Bulletin and SPCP-Based Renter Protections
The Federal Housing Finance Agency (FHFA) has taken two significant deregulatory steps affecting its oversight of the government-sponsored enterprises, Fannie Mae and Freddie Mac (GSEs). The agency rescinded a 2024 advisory bulletin asserting its authority to regulate unfair or deceptive acts or practices (UDAP) by Fannie Mae and Freddie Mac. Additionally, the FHFA withdrew renter protection requirements—previously scheduled to take effect on May 31—for multifamily loans made through Special Purpose Credit Programs (SPCPs) backed by the GSEs.
UDAP Advisory Bulletin Rescinded
FHFA stated that enforcement of unfair or deceptive acts or practices should remain with the FTC, which is the primary administrator of Section 5 of the FTC Act. The agency emphasized its focus on the safety and soundness of the GSEs, rather than duplicating existing consumer protection authority.
The rescinded bulletin had stated that FHFA would evaluate whether the GSE’s actions or inactions could be considered unfair or deceptive under established standards, and would hold the enterprises accountable if they facilitated or failed to prevent such conduct. It also emphasized UDAP concerns could arise in connection with third-party servicers or counterparties acting on behalf of GSEs. By revoking the bulletin, FHFA clarified that it does not intend to impose separate or parallel UDAP obligations on the enterprises beyond those enforced by the FTC or CFPB.
SPCP-Based Tenant Protections Withdrawn
FHFA has formally reversed course on renter protections that were previously tied to multifamily loans issued through SPCPs backed by GSEs. These conditions, which had been scheduled to take effect on May 31, would have required landlords to implement a five-day grace period before charging late fees and to provide at least thirty days’ notice before modifying lease terms.
The protections were introduced as part of the GSEs’ Equitable Housing Finance Plans and were aimed at improving housing stability for very low-, low-, and moderate-income renters. FHFA’s current leadership characterized the requirements as exceeding the agency’s role and stated that lease-related protections should be governed by state and local law.
Putting It Into Practice: The FHFA’s recission of its UDAP bulletin and SPCP-based renter protections reflects a shift toward a narrower role for the agency, centered on institutional supervision and market stability. Financial institutions should continue look to the FTC, CFPB, and state regulators for UDAP enforcement, tenant protection standards, and other consumer-facing compliance obligations.
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Import-Tariffs: Acts of God or just another Thursday?
Many of us are quietly watching and waiting to see how newly imposed tariffs will affect the U.S. and global economy in the coming weeks, months, and potentially – years.[i] Anticipating these changes and protecting your transactions is going to be crucial, but what about deals that have already been negotiated and signed? Which party will bear the greater risks and burdens of tariff-related cost increases? There are several theories that may provide relief.
A widely used contract provision that will bear considerable scrutiny is the ‘Force Majeure Clause,’ which allows a party to avoid liability if it cannot fulfill its obligations due to circumstances beyond their control or unforeseen events.[ii] The motivator behind this provision is to protect parties against defined disasters, calamities, and acts (and wraths) of God.[iii] Numerous courts have considered such clauses, and many have declined to invoke the force majeure clause.
Kyocera Corp. v. Hemlock Semiconductor, LLC:
In 2015, the Michigan First District Court of Appeals considered this question in Kyocera Corp. v. Hemlock Semiconductor, LLC.[iv] This case arose in the midst of upheaval within the solar industry caused by tensions between the United States and China. Chinese companies began engaging in the process known as “large-scale dumping,” in which a foreign producer, perhaps with state support, sells a product at a price that is lower than its cost of production to intentionally manipulate an industry and capture market share. Global solar prices began to decline (including the price of polysilicon, a critical component used in solar panels), causing numerous manufacturers to go out of business. In response, the United States imposed anti-subsidy and anti-dumping import tariffs.[v]
Kyocera, a Japanese solar panel manufacturer, had previously entered into a ten year, take-or-pay supply contract with Hemlock Semiconductor, a Michigan based polysilicon manufacturer, to purchase its polysilicon. The very nature of a take-or-pay contract allocates the risk of a rise in prices to the seller (Hemlock) and a fall in prices to the buyer (Kyocera). Kyocera argued that purchasing polysilicon at this higher price would cause its “solar business to cease to exist.” Kyocera tried and failed to negotiate a satisfactory price change with Hemlock and ultimately provided Hemlock with notice that it was excused from performance under the contract’s force majeure clause.[vi]
The Michigan First District Court of Appeals was unsympathetic, finding that economic hardship and unprofitability alone, including increased costs due to tariffs, are insufficient to invoke force majeure unless explicitly covered by the clause. The risk of falling prices fell squarely on Kyocera under its contract, and Kyocera “opted” not to protect itself.[vii] The court refused to “manufacture a contractual limitation that it may in hindsight desire by broadly interpreting the force majeure clause to say something that it does not.”[viii]
Further, the court addressed the issue of foreseeability. The court rejected Kyocera’s argument that they did not foresee the illegal actions of the Chinese government, simply stating that “markets are volatile” and that the fact that “prices may rise and fall was known to both parties and such risk was precisely allocated by the take-or-pay nature of [a]greement.”[ix]
Kyocera is one of many cases illustrating that unless very carefully drafted to say otherwise, economic hardship and decreasing profits may not be enough for a court to intervene and apply the protections of a force majeure clause. Under these cases, the most that an aggrieved party may receive is more time to comply with its contractual obligations.
So, what type of language would a court consider explicit enough to apply the force majeure clause against tariffs? We will consider this issue in an upcoming post!
[i] See Robert McClelland et al., Tariffs, Trade, China, and the States, Tax Pol’y Ctr, Urb. Inst. & Brookings Inst. (Oct. 17, 2024), https://taxpolicycenter.org/briefs/tariffs-trade-china-and-states.
[ii] See Force Majeure, Legal Info. Inst., Cornell L. Sch., (last visited Mar. 26, 2023) https://www.law.cornell.edu/wex/force_majeure#:~:text=Force%20majeure%20is%20a%20provision,or%20both%20parties%20from%20performing.
[iii] See Mark Trowbridge, Acts of God and Other Force Majeure Events, Supply Chain Mgmt. Rev. (May 2, 2022), https://www.scmr.com/article/acts_of_god_and_other_force_majeure_events.
[iv] See Kyocera Corp. v. Hemlock Semiconductor, LLC, 886 N.W.2d 445 (Mich. Ct. App. 2015).
[v] See id. at 449.
[vi] See id. at 447, 450.
[vii] See id. at 453.
[viii] See Kyocera Corp, 886 N.W.2d at 453.
[ix] See id. at 452-53.