Category: The Law of Business

Do you need a license to manage your own real estate? If it isn’t all yours, you might

You can manage your own real estate without a license. But what if you own it through a limited liability company, or a family trust, or as tenants in common with others? Last month the Oregon Court of Appeals affirmed the Real Estate Agency’s determination that if you’re receiving compensation for managing the property, you might be violating the law.  Read our article on LinkedIn for more:

A bad contingency clause can produce a dissatisfied buyer

Almost every real estate sale agreement includes some contingencies: conditions that, if not met, will allow the seller or buyer to cancel the sale. The two most common are a financing contingency and a property inspection contingency.

Be sure when you’re writing a contingency that you identify what the contingency actually is. Don’t write “Buyer’s obligation is subject to Buyer obtaining a property inspection,” or (even worse) “This transaction is subject to Buyer obtaining a property inspection.” The actual contingency isn’t the inspection, but the buyer approving the inspection. What if the buyer obtains an inspection, but doesn’t like what the inspector has to say?  The buyer has satisfied the contingency, but is dissatisfied with the property, and likely to be dissatisfied (or worse) with the attorney or agent who drafted the contingency clause.

Instead, write “Buyer’s obligation is subject to Buyer obtaining and approving a professional inspection of the property on or before _______, 2018.”   When the actual contingency is the buyer being happy, say so.

A city tax bureau concedes that a married couple is two, not one

Some Oregon cities tax the income of businesses, but allow partnerships to deduct from their taxable income an allowance for compensation to their partners, whether or not for federal tax purposes the partnership pays the partners a salary. The amount of the deduction is $X per partner and the total deduction depends on the number of partners. If your partnership has twice the partners, it can claim twice the deduction.

Two married couples (let’s call them John and Mary A and Bill and Jane B) formed a partnership some years ago (let’s call it A & B Partnership). A & B Partnership filed city business income tax returns and claimed the compensation deduction based on the partnership having four partners. Last year the city told A & B Partnership that it had only two partners, because it counted Mr. and Mrs. A as one partner (not two) and Mr. and Mrs. B as one partner (not two). The city said that the partnership was entitled to only two compensation deductions, not four, and was assessed for underpaying its city income tax.

The A’s and B’s engaged our office to appeal the tax assessment. We made an unconventional policy argument against the assessment, based on a review of the history of women’s rights in Oregon.

Some arguments require force and bluster. Others can be won with gentle embarrassment. Last month the city agreed with our position and cancelled the assessment. The clients are happy – all four, not two, of them.

Our clients gave us permission to share our letter to the city.  In the continuation is a portion of what we wrote. You might enjoy reading it, even if you aren’t a married taxpayer.