“DIRECTLY LIABLE”: Court Holds eXp Realty Can Be Directly Liable for Calls Made By Agents in TCPA Class Action–It Should Be A Wake UP Call
Real estate brokerages need to be paying EXTREMELY close attention to the TCPA right now.
The old model of assuming the brokerage won’t be liable for the acts of franchisees or agents is completely out the window when it comes to the TCPA.
Take the example of the (very compliant) eXp Realty, which is still facing a class action TCPA suit up in Washington state.
Its lawyers (not me) challenged the allegations in a complaint contending eXp cannot be held directly liable for calls made by eXp agents.
Not sure that was a bright move at the pleadings stage and it certainly didn’t go well.
In Hollis v. eXp Realty, 2025 WL 2711424 (W.D. Wash Sept. 23, 2025), the Court held the allegations were sufficient to state a claim for DIRECT liability:
eXp Realty argues that it “did not make or initiate” the calls and text messages that Mr. Hollis received, and it asserts that Mr. Hollis failed to sufficiently allege eXp Realty’s direct liability under the TCPA. (MTD at 6.) Mr. Hollis, however, alleges that eXp Realty, along with Mr. Yoon, made multiple calls to his cell phone. (See, e.g., Am. Compl. ¶ 19, 21.) He also alleges that callers told him that they were acting on behalf of, or were part of, eXp Realty. (See Am. Compl. ¶¶ 28 (“The caller…told [Mr. Hollis] that the call was on behalf of [eXp] Realty[.]”), 29 (“[T]he caller identified himself as [Mr.] Yoon at [eXp] Realty[.]”) Furthermore, Mr. Hollis includes supporting allegations that allow the court to draw the reasonable inference that eXp Realty controlled the content of the calls he received: he includes the language of the questions asked in his allegations, and he alleges that the callers read from the same or similar scripts of questions to promote eXp Realty. (See, e.g., id. ¶¶ 19, 27.) In sum, by alleging that eXp Realty made the calls at issue and by including supporting allegations to explain his belief that eXp Realty made the calls, Mr. Hollis includes sufficient allegations, if accepted as true, to allow the court to reasonably infer that eXp Realty is directly liable for violating the TCPA.
Hmmm.
The Court also found eXp might be vicariously liable for the calls based on its connection with the agent at issue:
Mr. Hollis alleges that eXp Realty “is aware of and has authorized…or caused its agent [Mr.] Yoon’s illegal placement of telephone calls” to individuals who registered their numbers on the DNC. (See Am. Compl. ¶ 36.) In support, Mr. Hollis alleges that eXp Realty advertises on its website that Mr. Yoon is one of its real estate brokers and that eXp Realty encourages consumers to “Send [Mr. Yoon] a Message” directly through eXp Realty’s main website. (Am. Compl. ¶ 18 & n.6.) Mr. Hollis also alleges that, when he called eXp Realty to request that eXp Realty cease trying to contact him, he spoke with Robin McCue, an individual who was serving as a “Designated Managing Broker” at eXp Realty. (Id. ¶ 23.) Mr. Hollis alleges that Ms. McCue stated that she was Mr. Yoon’s “manager[,]”; that Mr. Hollis’s contact information had been “added to [eXp] Realty’s internal do not call list”; and “that the calls to [Mr. Hollis’s] number would stop[.]” (Id. ¶ 24.) Mr. Hollis also alleges that, after this conversation with Ms. McCue, Mr. Hollis continued to receive calls from eXp Realty, including a call from Mr. Yoon. (See id. ¶¶ 27-29.)
I have flown across the country talking with real estate agents and brokerages about the TCPA. The rules have changed folks. Brokers of record CANNOT expect to walk away clean in a TCPA class action when agents are making calls that violate the TCPA.
You MUST consider having affirmative measures to assure TCPA compliance in place these days– and certainly make sure you aren’t encouraging potential TCPA violations.
The stakes here are incredibly high.
Now I know eXp does things better than most– so I think they’ll end up being ok in this suit in the long run. But many other brokerages are far behind. Pay attention folks!
Home Equity Investment and Shared Appreciation Agreements as Reverse Mortgages in Washington – Olson v. Unison Agreement Corporation
Last month, in the unpublished opinion Olson v. Unison Agreement Corporation, the United States Court of Appeals for the Ninth Circuit found that a home equity investment (HEI) agreement met the definition of a reverse mortgage under Washington law and was not, as the company intended, a real estate option contract (2025 WL 2254522, at *5 (9th Cir. Aug. 7, 2025)). This was a critical ruling for a growing and unique industry that regulators and courts are still getting their arms wrapped around. And because the Olsons brought a putative class action, the eventual result in their suit could impact many other consumers.
In Olson, the homeowners in question alleged that the HEI provider violated several provisions of the Washington Consumer Loan Act (WCLA) in making the HEI agreement, including lacking “the necessary state approval to provide such loans,” failing to provide state-mandated counseling in association with the HEI agreement, and making “deceptive” statements in connection with the marketing of the HEI agreement. As a result, the key question for the court was whether the HEI agreement actually constituted a reverse mortgage loan under the WCLA.
Through Wash. Rev. Code Ann. § 31.04.505(5), the WCLA defines a reverse mortgage loan as a “nonrecourse consumer credit obligation” – meaning the obligation can only be enforced to the extent of the security interest granted in the security instrument. The statute also details that a reverse mortgage is a:
(a) A mortgage, deed of trust, or equivalent consensual security interest securing one or more advances is created in the borrower’s dwelling;
(b) Any principal, interest, or shared appreciation or equity is due and payable, other than in the case of default, only after:
(i) The consumer dies;
(ii) The dwelling is transferred; or
(iii) The consumer ceases to occupy the dwelling as a dwelling; and
(c) The broker or lender is licensed under Washington state law or exempt from licensing under federal law.
While the WCLA does not define the term “consumer credit obligation,” the court looked to the dictionary definition of the term “credit” and the definition of a “loan” under the WCLA to determine that a “credit obligation . . . must involve, at a minimum, an initial advance of funds or goods coupled with an obligation to make future payment to the person providing the advance.” The court further noted that this broad definition of a “credit obligation” aligns with the definition of a reverse mortgage loan that secures “shared appreciation or equity.”
After establishing the scope of a reverse mortgage under the WCLA, the court considered whether the HEI agreement in question qualified as such. The key terms of the HEI agreement at issue include the following:
The homeowners receive an initial lumpsum payment of $64,750 in exchange for the HEI provider obtaining a future right to purchase up to a 70% interest in the homeowners’ home.
To exercise the purchase option, the HEI provider must make an additional payment of $194,250 to the borrower.
At the time the parties entered into the HEI agreement, the relevant property was valued at $370,000, meaning the two payments from the HEI provider to the homeowners would equal 70% of the home’s value at the time the HEI agreement was executed.
There are four conditions that allow the HEI provider to exercise their purchase option:
the expiration of the HEI agreement’s 30-year term;
the sale of the property;
the death of the last surviving homeowner; or
the homeowners’ default under the HEI agreement.
The homeowners’ may cancel the HEI agreement and terminate the HEI provider’s option right only after the HEI agreement has been in effect for at least 3 years.
However, to cancel the HEI agreement, the homeowners must pay the greater of the initial lumpsum payment of $64,750 plus costs the HEI provider has advanced on behalf of the homeowners or the amount the HEI provider would receive if the house was sold at the time of cancellation.
The court noted that the lower court initially dismissed the homeowner’s claims under the WCLA because the HEI agreement was an option contract, not a loan. And while the court agreed that “option contracts generally do not constitute credit obligations,” the court looked to the broader context of “this overall agreement” to determine that the HEI agreement “effectively creates the substance of a shared-appreciation reverse mortgage” subject to the WCLA. Overall, the court concluded that the consumers were advanced funds and were obliged to repay those funds – therefore, the product was a loan. The court did not point to a specific term of the HEI agreement as the basis for its finding. Instead, the court noted that the “entire structure of the [HEI agreement] is designed to put [the HEI provider] in the same position, and to have the same right to payment, as an unadorned nonrecourse obligation to pay [the HEI provider] 70% of the home’s equity.”
Unison filed a Petition for Panel Rehearing and Petition for Hearing En Banc on September 11, 2025. Therefore, the findings in the Olson matter may continue to evolve.
Takeaways for HEI Providers
While the current high-level takeaway is that the United States Court of Appeals for the Ninth Circuit has found that an HEI product constitutes a loan, it is important to note that this ruling may ultimately have a narrow impact on the industry because the case is specific to the definition of a reverse mortgage under the WCLA and the particular HEI agreement in question. However, HEI providers should conduct, or potentially re-conduct, a thorough review of state lending laws in their relevant jurisdictions to determine whether other states define a reverse mortgage or other loan products so broadly as to arguably include HEI products. In states with laws similar to the WCLA, it may be prudent for HEI providers to take a proactive approach and engage in conversations with relevant regulators about their expectations with regard to HEI products.
Healey Administration Proposes MEPA Amendments to Streamline Housing Production
Massachusetts Governor Maura Healey and Secretary of the Executive Office of Energy and Environmental Affairs (EEA) Rebecca Tepper recently announced proposed changes to Massachusetts Environmental Policy Act (MEPA) regulations to streamline certain housing projects.
Under MEPA, any project that meets certain review thresholds and requires a state-level agency to take an action (such as by approving a permit) must be reviewed by the EEA to evaluate the potential environmental impacts and consider alternatives.
MEPA regulations establish review thresholds that determine what level of review must take place. In general, projects with lower anticipated environmental impacts require only a 30-day “Environmental Notification Form” (ENF) process, while projects with more extensive impacts require an “Environmental Impact Report” (EIR) process that can take nine to 12 months (and cost $350,000 to $1 million, according to the Governor’s Unlocking Housing Production Commission). Projects that would require only an ENF but lie within one mile of an Environmental Justice Population (or within five miles for air-related impacts) must undergo EIR review.
The EEA’s proposed amendments would designate certain projects to “not be presumed likely or reasonably likely to cause Damage to the Environment” by adding a new section 11.01(2)(c). Those projects include ecological restoration projects, urban renewal projects (not otherwise triggering thresholds outside of Section 11.03(12)), and, most importantly, residential projects.
However, not all residential projects can skip the EIR process. The proposed regulations describe seven criteria (11.01(2)(c)1. a.-g.) that a residential project must meet to be considered “not…reasonably likely to cause Damage to the Environment.”
67% or more of gross floor area is devoted to residential uses, with the remainder devoted to “supportive commercial uses.”
The project achieves a density of eight units per acre for single-family homes, 12 units per acre for 2-3 family houses, or 15 units per acre for four+ family buildings.
The project alters up to five acres of undeveloped land or up to 10 acres with a tree retention and replanting plan (but excluding certain protected areas such as rare species habitat and prime farmland).
The site is outside the highest hazard areas and outside the Special Flood Hazard Area under the Massachusetts Wetlands Protection Act.
The project complies with the Massachusetts Stretch Energy Code.
The development does not require new or expanded gas mains or approval of a new interbasin transfer of water or wastewater (unless determined insignificant by the Water Resources Commission).
The project generates fewer than 3,000 new additional daily trips (ADT) of traffic on roadways providing access to a single location, or up to 6,000 ADTs if the project is located in a transit-oriented development district or mixed-use district, or is less than ½ mile of a public transit stop.
Projects may also skip the EIR process if they meet criteria 1, 4, and 5, and either 2 or 3.
If this all sounds familiar, that’s because our client alert from June 2025 reported that the Healey administration was seeking to streamline the MEPA process for housing projects and ecological restoration projects through her proposed MassReadyAct.
It is unclear why the Healey administration changed course—perhaps they obtained a legal opinion that the MEPA amendments they sought didn’t require a legislative change after all. Either way, the proposed regulations, if enacted, should significantly cut down on costs and development time for residential projects by shortening the MEPA review period.
The One Big Beautiful Bill Act: The QOZ Remix – Changes in Timing and Territory
On July 4, 2025, the President signed into law, a reconciliation bill that is also referred to as the One Big Beautiful Bill Act (“OBBBA”). In significant part, the OBBBA extended or made permanent various provisions of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) that were set to expire at the end of this year. The OBBBA also permanently extends and updates the qualified opportunity zone (“QOZ”) program, which had previously been set to expire for new investments made after December 31, 2026. Below is a high-level summary of key impacts relating to the QOZ program.
Qualified Opportunity Zones
The QOZ program, enacted under the TCJA, aims to boost long-term investment in economically distressed and low-income areas by deferring, and in some cases permanently excluding from income, certain capital gains invested in a qualified opportunity fund within a 180-day window.
The OBBBA made several changes to the QOZ program, including a new designation process, deferral mechanics, changes to the designation of qualified census tracts, incentives to promote investments in rural low-income communities, and new information return reporting requirements and associated penalties.
Previously, so called “qualified opportunity zone business property” needed to be acquired after December 31, 2017, but before December 31, 2026; now the required acquisition date will reset with each new 10-year cycle. Additional guidance will be required as to the specific mechanics of the new decennial redesignation program. Under the prior regime, investors could defer the gain that would otherwise be recognized on a sale of property to the extent that gain was rolled over into a qualified opportunity fund (“QOF”) within 180 days of the sale. Such gain would be deferred until December 31, 2026, unless the QOF investment was disposed of prior to that date. The amount of the deferred gain would be capped at the fair market value of the investment as of December 31, 2026, or the earlier acceleration date, if applicable. In addition, the prior QOZ regime provided for potential reduction of the deferred gain through a basis increase of up to 15% of the original deferred gain amount if certain holding requirements were satisfied by the earlier to occur of the disposition date or December 31, 2026 (10% increase for a 5-year holding period and an additional 5% increase for a 7-year holding period). If the QOF property was held for 10 years (a “10-year investment”), there generally was a complete elimination of the gain attributable to the appreciation in value of the taxpayer’s QOF investment, which elimination was affected by an elective step-up in basis of the QOF investment subject to an outside date limitation described below.
G&S Insight: The rolling nature of the revised QOZ program will provide investors with the opportunity for predictable and level benefits. As the revised QOZ program will apply to investments made after December 31, 2026, investments made in the 2025 and 2026 calendar year generally will be subject to the more limited benefits still available under the old regime.
Under the OBBBA, deferred gains with respect to QOZ investments made after December 31, 2026, will be recognized on the fifth anniversary of the investment date, instead of a fixed date. The OBBBA also provides for a permanent 10% basis step up which applies immediately before the end of the 5-year gain deferral period. This results in all QOZ investments that are held for at least 5 years having a 10% basis increase (30% for certain rural investments as described below).
Under the new QOZ program, new QOZ designations will be certified starting on July 1, 2026, and every 10 years thereafter. The OBBBA tightened the rules regarding the census tracts that may qualify as QOZs (i.e., low-income communities). After December 31, 2026, in order to qualify as a QOZ, a census tract’s median family income may not exceed 70% of the applicable metropolitan or state area median family income (a 10% reduction from the prior rule’s 80% median family income limitation) or, alternatively such census tract must have a poverty rate of at least 20% and a median family income that does not exceed 125% of the metropolitan or state median family as applicable. The OBBBA also repealed the rule for contiguous census tracts, which previously allowed a census tract contiguous to a low-income community to be a QOZ if its median family income did not exceed 125% of the median family income of the contiguous low-income community. The special designation for low-income communities in Puerto Rico is also repealed, effective as of December 31, 2026.
G&S Insight: Under the revised QOZ rules, subject to certification by the Secretary of the Treasury, Governors will designate new qualified opportunity zones for their respective states during the designation period beginning July 1, 2026. The changes to the designation standards along with the repeal of the contiguous census tract rule likely will narrow the tracts that qualify for QOZ benefits under the new QOZ regime.
The OBBBA expands the QOZ program to focus on “rural areas” by creating a new type of fund, a “Qualified Rural Opportunity Fund” which provides greater tax benefits to investors. For this purpose, a rural area is any area other than 1) a city or town with a population greater than 50,000 and 2) an urbanized area adjacent to a city or town with a population greater than 50,000. The enhanced tax benefits include a 30% basis step up for investments held for more than 5 years (as opposed to the 10% basis step up for “regular” QOZ investments described above). In addition, Qualified Rural Opportunity Funds have a reduced substantial improvement requirement; the reinvestment must exceed only 50% of the property’s adjusted basis, instead of an investment in excess of 100% of the property’s adjusted basis.
Under Treasury Regulations promulgated under the old QOZ regime, gain elimination was only available for dispositions of 10-year investments that were disposed of on or before December 31, 2047. The OBBBA now removes the 2047 sunset date and allows rolling 30-year periods for 10-year investments instead. In the case of a 10-year investment sold before 30 years, the basis step up will equal the fair market value of the investment on the sale date, but in the case of a 10-year investment sold after 30 years from the date of investment, the basis step up will equal the fair market value of the asset on the 30-year anniversary of the original investment date.
The OBBBA now requires Qualified Opportunity Funds to file annual returns to provide information including, among other things, the value of the QOF assets, the value of the fund’s QOZ assets, the QOZ census tract it invests in, the number of residential units, the number of full-time employees and reports of investors’ sales of interests in a QOF. Failure to file such returns may result in penalties of up to $10,000 per return or up to $50,000 for QOF with asset values over $10 million. The reporting requirements introduced by the OBBBA will apply to taxable years beginning after July 4, 2025.
Essential Strategies for North Carolina Creditors: Foreclosures, Fraudulent Transfers, and Piercing the Corporate Veil
Not every loan proceeds as planned. When borrowers default, understanding available legal options can mean the difference between recovery and writing off substantial losses.
Strategic Foreclosure Planning: A Foundation for Successful Recovery
Upon default, the initial instinct may be to rush to foreclose. However, taking time to evaluate certain factors at the outset can prevent complications and maximize recovery potential.
Factors to evaluate include:
Thorough Collateral Assessment
The distinction between real property, personal property, or a mix of the two fundamentally affects the foreclosure approach. Real property requires filing a foreclosure proceeding in the county where the property is located, and involves in rem relief only (affecting only the property itself).
On the other hand, when pursuing personal property, there may be more flexibility in venue selection and the ability to pursue in personam relief (affecting the individual in possession) through a judgment. Also consider whether the situation involves easily movable assets, such as vehicles that can be quickly repossessed (or concealed by a debtor), or specialized equipment that requires more complex recovery procedures.
In some cases, creditors may have access to prejudgment remedies that allow for the immediate seizure of collateral through a court order, thereby preventing debtors from hiding or moving assets during collection proceedings.
The Nature of the Underlying Debt
Commercial debts are often governed by less restrictive laws and have fewer procedural hurdles to navigate than consumer debts, with restrictions varying considerably between categories. Creditors will need to be careful about how they proceed in any given situation, depending on how the debt and borrower are classified.
Collateral Location Considerations
Where collateral is situated can affect recovery strategy due to legal requirements and practical considerations. When personal property is spread across multiple locations, it may require coordinated efforts across different jurisdictions. On the other hand, real property that straddles county lines can require additional efforts to ensure notice requirements are met and a clean title passes at foreclosure.
Lien Perfection
The importance of ensuring security interests are properly perfected cannot be overstated. Nothing derails collection efforts faster than discovering halfway through the process that title problems or inadequate documentation exist.
It is essential to verify that all signatures are authentic, that collateral descriptions between security instruments and UCC filings match, and that all documents were filed and recorded properly. This due diligence becomes even more crucial if borrowers file for bankruptcy, as trustees can jump ahead of improperly secured liens.
The Strategic Advantage of Simultaneous Actions
Another effective collection strategy involves filing a foreclosure proceeding while simultaneously initiating a lawsuit to obtain a money judgment for the anticipated deficiency balance. While this approach requires greater upfront investment, it offers compelling advantages that may justify the additional cost.
The additional pressure placed on the borrower alone can prove decisive. A borrower who may be inclined to ignore a foreclosure action suddenly faces two legal proceedings, each with its own set of legal fees and defensive considerations. This dual pressure can sometimes accelerate a resolution to help avoid ever-increasing legal costs and expenses.
From a practical standpoint, simultaneous actions can also help avoid service problems that may arise later. If a creditor completes a foreclosure and then attempts to serve the borrower with a new deficiency lawsuit months later, the borrower may have become wise to the creditor’s collection efforts and try to actively evade service. By addressing both actions simultaneously, this cat-and-mouse game is eliminated.
Simultaneous actions can also help sidestep certain common defenses. For example, North Carolina’s “offset defense” allows borrowers to reduce deficiency judgment awards if the property’s fair market value equaled the debt on the day of foreclosure, or if the foreclosure sale yielded an amount substantially below true value. However, that defense only applies to post-foreclosure deficiency actions, meaning that it is unavailable in those actions filed prior to a foreclosure sale.
Recovering Fraudulent Transfers and the Importance of Asset Monitoring
Even the most carefully structured loan can become uncollectible if the borrower or guarantor transfers assets beyond the reach of the lender. The lender who understands the law of voidable transactions (sometimes called fraudulent transfers) can have powerful legal tools at their disposal to recover assets that debtors have attempted to hide.
North Carolina’s version of the Uniform Voidable Transactions Act (“UVTA”) covers three main categories of problematic transfers. While this article mainly covers “transfers” of assets and uses that terminology, the UVTA also covers voidable “obligations” – such as the granting of a mortgage or lien – where the transaction in question had the same kind of fraudulent intent or impact on the creditor.
The first category of transactions under the UVTA involves transfers made with actual fraudulent intent – i.e., the intent to hinder, delay, or defraud creditors. This classic scenario occurs when a debtor, facing default and fearing a money judgment, transfers assets to family members or other third parties to remove them from the reach of creditors.
Proving actual fraud typically requires circumstantial evidence since debtors rarely admit to having fraudulent intent. Courts examine a debtor’s intent by looking for “badges of fraud”—fact patterns commonly seen in fraudulent transfer cases. These may include, for example, transfers to close relatives or other insiders, debtors retaining possession or control of the assets supposedly transferred, inadequate consideration received for the assets transferred, threatened litigation against the debtor around the time of transfer, and attempts to conceal the transfer.
The second category of voidable transactions covered by the UVTA is constructively fraudulent transfers, where a debtor may not have intended fraud, but the transfer nonetheless has the same harmful effect on creditors. This category may involve transfers for less than reasonably equivalent value at a time when a debtor was engaged or was about to engage in a business or transaction for which their remaining assets are unreasonably small, or when they intended to incur or believed they would incur debts beyond their ability to pay. Perhaps an even more common variation involves transfers without reasonably equivalent value at a time when the debtor was already insolvent or became insolvent as a result of the transfer.
The third category of voidable transactions addressed by the UVTA involves preferential transfers to insiders, situations where insolvent debtors pay legitimate debts to family members or other closely related parties instead of using those assets to pay unrelated creditors. The UVTA recognizes this as unfairly preferring these insiders if they had reasonable cause to believe the debtor was insolvent at the time of the transfer.
The UVTA contains various remedies for a creditor who has been harmed by a debtor’s voidable transaction. Such remedies include, among other things, obtaining a judgment that avoids the transfer to the extent necessary to pay the creditor’s claim, an order attaching the asset transferred and enjoining the transferee from disposing of the asset, the appointment of a receiver over the asset, or the ability to enforce a judgment against the debtor against the transferred asset or its proceeds.
Critically, a creditor must bring a voidable transaction claim within the time periods prescribed by the UVTA. For preferential transfers, the deadline to file a claim is only one year from the date of the transfer. For other types of voidable transactions, the deadline is not later than four years after the transfer was made or the obligation was incurred. For claims based on actual fraud, there is a “savings clause” that allows a claim to be brought later than four years as long as it is brought within one year of when the transaction was or could reasonably have been discovered by the creditor.
Finally, the one-year statute of limitations for deficiency actions creates another compelling reason for simultaneous filing. Time moves quickly after foreclosure sales, especially when factoring in REO processes, cleaning and preparing the property for sale, resolving any tenant or title issues, and finally, marketing and selling the property. That one-year deadline can seem to approach faster than expected, but simultaneous filing eliminates this concern entirely.
The case of KB Aircraft Acquisition, LLC vs. Berry, et al. provides North Carolina creditors with a crucial lesson about the limitations of the UVTA’s one-year savings clause and the need to effectively monitor a debtor’s assets.
In this case, the purchaser of a loan brought a claim to set aside the loan guarantor’s transfer of a $4 million vacation home to a related LLC. The loan purchaser had obtained a $10.5 million judgment against the guarantor before discovering that he had transferred the home to the LLC five years earlier. The transfer occurred after the loan was in default, with no consideration paid to the guarantor, creating strong grounds for a fraudulent transfer claim. But the creditor still lost the case because the claim was untimely.
The court held that a careful examination of the guarantor’s personal financial statements, which the original lender had periodically collected from the guarantor during the life of the loan, would have revealed the transfer shortly after it was made. The loan purchaser failed to act within the four-year limitations period and was not entitled to receive the benefit of the one-year savings clause because their predecessor-in-interest (the original lender) reasonably could have discovered the transfer years earlier.
This case highlights why lenders who collect personal financial statements and other financial information during the life of the loan should actually review and compare the documents, year over year, to determine whether an obligor is inappropriately transferring assets or incurring inappropriate obligations that may render the lender insecure. If so, the lender should seek legal advice about enforcing its rights under the loan documents and the UVTA. Otherwise, the lender’s right to challenge a voidable transaction may be lost.
Piercing the Corporate Veil: Reaching Beyond Business Entity Shields
Oftentimes, borrowers will take advantage of the corporate structure to help shield themselves from personal liability or insulate certain valuable assets. However, when those individuals ignore corporate formalities or commingle assets, piercing the corporate veil may be a viable recovery option. In general, piercing the corporate veil allows creditors to ignore the separate legal identity of a business, to be able to hold the owner personally liable for the business debts.
When considering whether piercing the veil is an available remedy, North Carolina follows the instrumentality rule, which examines three key factors: dominion and control so complete that entities have no separate business mind or will; using the business to commit a fraud, wrong or other injustice; and actual harm caused by such dominion and control. While no single factor guarantees success, courts generally look for fact patterns implicating these factors when considering whether an entity is merely an alter ego of its owner rather than a legitimate separate business.
Warning signs include inadequate capitalization, ignoring corporate formalities like annual reports or required meetings, complete domination and control by a single owner, commingling of personal and corporate funds and assets, fraudulent misrepresentations, and excessive fragmentation of what should be a single enterprise into multiple entities designed to separate the business’s assets from its liabilities.
The commingling of personal and corporate funds often provides the clearest and most convincing evidence that veil piercing may be appropriate (although it is not altogether determinative). When business owners use corporate accounts as their own—buying personal vehicles, paying personal expenses, or treating business funds as their own—they destroy the separate identity that justifies the corporate protection.
Veil piercing claims can be expensive to pursue (largely because they typically require a jury trial) and the outcome is usually uncertain. Substantial discovery is required to gather evidence to support the claim, which may include depositions of corporate officers, and the forensic analysis of corporate records that are often disorganized. Success depends heavily on judicial interpretation of whether the evidence is sufficient to meet the burden of proof. A creditor considering a veil piercing claim should carefully consider the associated burdens, costs, and risks, while also understanding that it may be the only available option when dealing with judgment-proof debtors who structured their affairs to improperly shield assets that should have been available to address corporate liabilities.
Building Comprehensive Collection Strategies
Successful collections require more than just good loan documentation—they demand strategic thinking about potential problems before they arise. By understanding collateral positions, timing legal actions strategically, monitoring debtor assets for suspicious transfers, and recognizing when business entities are being misused, creditors can position themselves to maximize recovery even when borrowers default.
Every situation presents unique circumstances, and these collection strategies should always be developed and implemented with guidance from experienced legal counsel who can assess specific facts of the case and help navigate the complexities of creditors’ rights law. Investing in a comprehensive and correct legal strategy at the outset often proves far more cost-effective than attempting to remedy problems after they have fully developed.
How Digital Platforms are Changing Property Transactions
Almost every stage of the property market has some kind of legal check to perform along the way, with the odd exception of a deal on a sale not actually being legally binding until contracts are exchanged. In any case, the rise of proptech and digital platforms has gone hand in hand with legal innovations. […]
Real Smart with Spencer B. Kallick: Capital Markets, Office Trends & What’s Next [Podcast] [Video]
In this episode of Real Smart, Spencer Kallick sits down with Kevin Donner, Executive Vice Chairman at Newmark, to explore the evolving capital markets landscape and how to navigate a market defined by uncertainty. Kevin shares insights from decades at firms like Eastdil, Goldman Sachs, and Cushman & Wakefield — and opens up about rebuilding his life and home in the Palisades after the devastating fire. This is an episode about relationships, resilience, and how the smartest players in real estate stay grounded during transitions.
HOA Elections: Guidelines for a Fair and Legal Process
Electing a board of directors is one of the most important functions the membership plays in a community association (“HOA”).
The board of directors is tasked with making important decisions on behalf of the HOA, including managing the HOA’s finances, adopting and enforcing rules and regulations, and overseeing the upkeep of common areas. The following guidelines are designed to help HOAs conduct board elections that are legally compliant.
Follow Governing Documents and State Law
In general, the HOA’s bylaws set forth the specific procedures for board elections, including the number of board members, their qualifications, terms of office, and the manner of election. State laws, such as the North Carolina Planned Community Act (Chapter 47F), North Carolina Condominium Act (Chapter 47C), and the North Carolina Nonprofit Corporation Act (Chapter 55A), also provide important requirements. The first step is to always review the HOA’s governing documents.
Provide Proper Notice
All HOA members must receive advance notice of the annual meeting where board elections will take place. Notice should include the time, place, and agenda, and must be sent not less than 10 nor more than 60 days before the meeting, unless stated otherwise in the governing documents. Notices can be delivered by hand, mail, or electronic means, as specified in the bylaws. In addition, it is also possible to elect directors with a written ballot instead of at a meeting. To have a better understanding of the differences between voting at a meeting and voting by written ballot, please check out our article linked here.
Ensure a Quorum
A quorum is the minimum number of members who must be present for the election to be valid. Unless the bylaws specify otherwise, a quorum is present if persons entitled to cast at least 10% of the votes are present in person or by proxy at the start of the meeting. It is possible for the HOA’s governing documents to require a higher quorum, but North Carolina law does not allow the quorum to drop below 10% for an HOA.
Nominate Candidates Transparently
The members should understand the process for nominating candidates to the HOA Board of Directors. Absent a specific process in the governing documents, members should be allowed to nominate themselves or others and provide information about each candidate to all members before the election. This transparency helps ensure that all interested and qualified individuals have an opportunity to seek election.
Conduct Voting Fairly
Each member may vote as specified in the governing documents. Votes may be cast in person or by proxy. If a lot has multiple owners, the owner who is present is entitled to cast all votes allocated to that lot. If more than one of the multiple owners is present, the majority in interest decides how to cast the vote unless otherwise specified.
Publish Election Results
Within 30 days of the election, the association must publish the names and addresses of all officers and board members. This ensures transparency and allows members who were not in attendance at the meeting to know who is representing the HOA.
Document the Process
Keep detailed records of all nominations, notices, ballots, and meeting minutes. This documentation protects the association and its members in the event of disputes. As a general rule, these records should be kept for 3 years following the election.
Conclusion
A legal board election process is essential for the proper governance of any HOA. By following these guidelines and adhering to your HOA’s governing documents and state law, you can help ensure that your HOA is well-represented and that the election process is trustworthy. Having qualified legal representation can go a long way to ensure the health of your HOA.
Homebuyers Privacy Protection Act Amends FCRA
On September 5, 2025, President Trump signed into law the Homebuyers Privacy Protection Act, H.R. 2808 (the “Act”), which amends the Fair Credit Reporting Act (“FCRA”) by restricting consumer reporting agencies (“CRAs”) from furnishing “trigger leads” except in certain limited circumstances. A “trigger lead” occurs when a lender pays a CRA to produce consumer reports on a specific list of consumers that meet certain criteria provided by the lender. Trigger leads are provided upon a “triggering” event, most commonly when a prospective homebuyer applies for a mortgage. This sale of information occurs without the consumer’s knowledge or consent. These leads can result in a deluge of marketing offers from lenders to prospective home buyers, which can cause confusion and disrupt financing processes already underway.
The FCRA permits lenders to acquire trigger leads from the CRAs if the lender intends to extend a “firm offer of credit” to the consumer, which is defined as an offer of credit or insurance that “will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer.” Importantly, the FCRA does not permit conditions to be attached to these firm offers. Trigger leads must result in firm offers – and not merely marketing materials – because under the FCRA, obtaining consumer reports for general marketing and advertising is not a permissible purpose (and using consumer data for marketing is only allowed under specific exceptions and conditions).
Under the Act, a CRA may furnish a trigger lead (i.e., a consumer report in connection with a credit transaction involving a residential mortgage loan) only if the following conditions are met:
The transaction consists of a firm offer of credit or insurance; and
The requestor meets one of the following conditions:
Opt-in Consent: The requestor has obtained the consumer’s documented authorization (i.e., opt-in consent) and provides evidence of the consumer’s authorization to the CRA; or
Existing Relationship: The requestor has an existing relationship with the consumer, namely: (1) the consumer’s current mortgage originator; (2) the consumer’s current mortgage loan servicer; or (3) an insured depository institution or credit union that holds a current account for the consumer.
The Act also mandates the U.S. Comptroller General (i.e., the head of the Government Accountability Office (“GAO”) to conduct a study to evaluate the value of trigger leads received by text message.
The Act will take effect on March 4, 2026. The GAO report is due September 4, 2026.
Slip and Falls in Michigan at an HOA Property: What You Need to Know
Slip and fall accidents can occur anywhere, but when they happen on property managed by a homeowners association (HOA), determining who is responsible can become complicated. If you live in a neighborhood, condominium, or community with an HOA, it is important to understand how these cases work in Michigan.
What Is an HOA Property?
An HOA is responsible for maintaining shared or common areas in a neighborhood or condominium complex. This can include sidewalks, parking lots, clubhouses, playgrounds, pools, and landscaped areas. When someone slips, trips, or falls in one of these areas, the HOA may be held legally responsible if it failed to maintain a safe environment.
Common Causes of Slip and Fall Accidents
Slip and fall injuries on HOA property often happen due to unsafe conditions in shared spaces. Some common examples include:
Uncleared snow or ice
Uneven sidewalks or broken pavement
Dim or poor lighting in walkways and parking lots
Wet or slippery floors in shared spaces
Loose handrails or unstable steps
In Michigan, HOAs and other property owners are expected to take reasonable steps to keep these areas safe. If they know about a hazard, or should have known about it, they have a duty to fix it or warn residents before someone gets hurt.
Proving an HOA is Responsible
In Michigan, an HOA can be held responsible for a slip and fall if they knew about the hazard and had enough time to fix it. For example, if snow and ice were left untreated for several days, the HOA may be liable. If the danger appeared recently and there was no time to address it, they may not be at fault. You must also prove that the hazard directly caused your injuries.
What to Do After a Slip and Fall
If you are injured in a slip and fall on HOA property, taking the right steps can protect your health and your legal rights:
Get medical attention right away, even if your injuries seem minor.
Take photos and video of what caused your fall, such as ice, a spill, or broken pavement.
Report the fall to the HOA or property management and file an incident report.
Collect contact information from any eyewitnesses.
Save all records of your medical treatment and expenses.
Talk with a skilled lawyer to understand your options and protect your claim.
When to Speak with a Lawyer
Slip and fall cases can be complicated, especially when they involve an HOA. In Michigan, you generally have three years from the date of the accident to file a claim. The HOA’s insurance company may try to avoid paying or argue that they are not responsible. A lawyer can review what happened, gather evidence, and guide you through the process so you have the best chance of recovering compensation for medical bills, lost income, and pain and suffering.
Conclusion
Falls can cause serious injuries and affect your ability to work and enjoy daily life. Knowing your rights helps create a safer community
10 FAQs About California’s New Algorithmic Discrimination Rules
On October 1, 2025, California’s groundbreaking regulations on the use of artificial intelligence (AI) and automated decision-making systems (ADS) in employment practices go into effect. The regulations, advanced by the California Civil Rights Council, aim to prevent algorithmic discrimination against applicants and employees, ensuring compliance with California’s Fair Employment and Housing Act (FEHA). This article reviews ten frequently asked questions about the new requirements.
Quick Hits
California’s new AI regulations, effective October 1, 2025, prohibit the use of AI tools that discriminate against applicants or employees based on protected characteristics under the Fair Employment and Housing Act (FEHA).
Employers are required to keep all data related to automated decision systems for four years and are held responsible for any discriminatory practices, even if the AI tools are sourced from third parties.
The regulations target AI tools that cause disparate impacts in various employment processes, including recruitment, screening, and employee evaluations, while allowing legal uses of AI for hiring and productivity management.
Question 1: What are California’s new algorithmic discrimination regulations?
Answer 1: The new AI regulations prohibit the use of an ADS or AI tool that discriminates against an applicant or employee on any basis protected by FEHA. The new regulations will make the state one of the first to adopt comprehensive algorithmic discrimination regulations regarding the growing use of AI tools to make employment decisions.
Q2: When are the regulations effective?
A2: On October 1, 2025.
Q3: What exactly is an ADS?
A3: An ADS is “[a] computational process that makes a decision or facilitates human decision making regarding an employment benefit,” including processes that “may be derived from and/or use artificial intelligence, machine-learning, algorithms, statistics, and/or other data processing techniques.” (Emphasis added.) Many AI hiring tools fall within this definition.
Q4: Are employers prohibited from using all AI tools?
A4:No. The regulations do not prohibit any particular tool or limit the legal ways in which employers may use AI tools, including to source, rank, and select applicants; facilitate the hiring process; and monitor and manage employee productivity and performance. Instead, they prohibit the use of any AI tool to discriminate intentionally or unintentionally against applicants or employees based on their membership in any class of employees protected from discrimination under FEHA.
Q5: Who is an “applicant”?
A5: An “applicant” is “[a]ny individual who files a written application or, where an employer or other covered entity does not provide an application form, any individual who otherwise indicates a specific desire to an employer or other covered entity to be considered for employment. Except for recordkeeping purposes, “Applicant” is also an individual who can prove that they have been deterred from applying for a job by an employer’s or other covered entity’s alleged discriminatory practice.” ‘Applicant’ does not include an individual who without coercion or intimidation willingly withdraws their application prior to being interviewed, tested or hired.”
Q6: What conduct is targeted?
A6: The regulations seek to limit the use of AI tools that rely on unlawful selection criteria and/or cause a disparate impact in the areas of recruitment, screening, pre-employment inquiries, job applications, interviews, employee selection and testing, placement, promotions, and transfer. The California Civil Rights Department (CRD) identifies several examples of automated employment decisions potentially implicated by the regulations.
“Using computer-based assessments or tests, such as questions, puzzles, games, or other challenges to: [m]ake predictive assessments about an applicant or employee; [m]easure an applicant’s or employee’s skills, dexterity, reaction-time, and/or other abilities or characteristics; [m]easure an applicant’s or employee’s personality trait, aptitude, attitude, and/or cultural fit; and/or [s]creen, evaluate, categorize, and/or recommend applicants or employees
“Directing job advertisements or other recruiting materials to targeted groups”
“Screening resumes for particular terms or patterns”
“Analyzing facial expression, word choice, and/or voice in online interviews”
“Analyzing employee or applicant data acquired from third parties”
Q7: Are there new record-keeping requirements?
A7: Yes. Employers must keep for four years all automated-decision system data created or received by the employer or other covered entity dealing with any employment practice and affecting any employment benefit of any applicant or employee.
Q8: Who can be held responsible for algorithmic discrimination?
A8: Employers will be held responsible for the AI tools they use, whether or not they procured them from third parties. The final regulations also clarify that the prohibitions on aiding and abetting unlawful employment practices apply to the use of AI tools, potentially implicating third parties that design or implement such tools.
Q9: Are there available defenses?
A9:Yes, claims under the regulations are generally subject to existing defenses to claims of discrimination. The regulations also clarify that “evidence, or the lack of evidence, of anti-bias testing or similar proactive efforts to avoid unlawful discrimination, including the quality, efficacy, recency, and scope of such effort, the results of such testing or other effort, and the response to the results” is relevant to a claim of unlawful discrimination.
Q10: What should employers do now?
A10: Employers may want to consider the following steps:
Reviewing internal AI tool usage, practices, procedures, and policies to determine whether any tool being used would be covered by the regulations.
Piloting proposed AI tools before rolling them out to the workforce. This includes thoroughly vetting the steps taken by AI developers to avoid algorithmic discrimination.
Training workforce on the appropriate use of AI tools.
Notifying applicants and employees when AI tools are in use, and providing accommodations and/or human alternatives where required.
Establishing an auditing protocol. Although auditing is not required by the regulations, the act of engaging in anti-bias testing or similar proactive efforts may form the basis for a defense to any future claims of algorithmic discrimination. The regulations also suggest that a fact-finder may also consider the quality, efficacy, recency, and scope of any auditing effort, as well as the results of and response to that effort.
Reviewing record-keeping practices to be sure required data can be securely maintained for at least four years.
Florida Commercial Lease Sales Tax Repeal
Signed into law on June 30, 2025, House Bill 7031 eliminates the sales tax on commercial leases in Florida. Effective October 1, 2025, Florida will no longer be the only state in the country that imposes such a tax on commercial leases, a change expected to save commercial tenants billions of dollars annually. While the repeal is a welcome change for businesses, landlords and tenants should prepare to ensure a smooth and efficient transition.
Historical Background
Florida enacted Chapter 212.031, Florida Statutes, in 1969, imposing a 4% sales tax on rent charged under a commercial real estate lease. The rate fluctuated over the years, at times reaching 6%. Since 2016, the Florida legislature has focused on lowering the tax rate, reducing it to as low as 2% in July 2024. HB 7031 completes this process, permanently eliminating the tax on commercial leases.
What Does HB 7031 Do?
House Bill 7031 repeals both the state-level tax, currently at 2%, and optional local surtaxes, typically 1% – 1.5%, saving commercial tenants across Florida an estimated $2.5 billion annually. The repeal applies to office, retail, and industrial leases. Supporters expect the change to lower tenant costs, simplify compliance for landlords, and strengthen Florida’s business climate.
Importantly, the bill only affects rent due after October 1, 2025. Rent due on or before September 30, 2025, remains taxable, even if the payment is made after the October 1 deadline. However, prepaid rent for amounts due on or after October 1, 2025, will fall under the scope of the bill, and the sales tax should not be incorporated into the payment.
What Remains Taxable?
The repeal applies only to commercial leases governed by Chapter 212.031. Other property-related rentals remain subject to sales tax under Chapter 212.03, including:
Short-term residential rentals (less than 6 months)
Parking space rentals
Self-storage rentals
Boat slips and docking facilities
Aircraft hangar leases
Landlords should confirm their lease does not fall under one of these categories before eliminating sales tax charges.
Key Considerations for Landlords and Tenants
Landlords and tenants should review current leases to determine the portion of rent subject to sales tax and ensure no tax is charged or paid after October 1, 2025. Lease templates and existing agreements should be updated to remove references to the commercial lease tax, unless relating to one of those leases that remain subject to tax. Landlords may want to issue notices to tenants to prevent confusion during the transition. Landlords and Tenants should also monitor their annual reconciliations for 2025 additional rent to confirm that sales tax is not applied to periods on or after October 1, 2025. Landlords should also confirm which parts of their portfolio, if any, remain subject to tax.
Final Considerations
The repeal of the tax provides commercial tenants with significant annual savings on their leases. Landlords and tenants should take action now to maximize benefits and ensure a smooth transition.