Connecticut Now Allows Foreclosure by Market Sale

On June 3, 2014, Governor Malloy signed into law Public Act 14-84: An Act Concerning an Optional Method of Foreclosure. This new law creates a third option for those facing foreclosure: foreclosure by market sale. Traditionally a house going through foreclosure will either be transferred directly to the foreclosing party in cases where there is no equity in the property (strict foreclosure) or the property will be put up for sale at a foreclosure auction (foreclosure by sale). A foreclosure by market sale will allow for a realtor to list and sell the property in order to pay off the lender. 

The new law gives the borrower the ability to sell their home in a more traditional manner by selecting a listing agent and listing the house for its fair market value. Foreclosure auctions tend to yield lower selling prices, so the market sale should ideally be a win-win for both borrower and lender. The market sale requires approval by the lender and the court, so in practice it will likely look and feel more like a “short sale”, where the lender agrees to a sale of the property, even though the lender’s net proceeds are less than what is owed.  

The law will take effect January 1, 2015, and will be codified in Section 49-24 et seq. of the Connecticut General Statutes. With questions or concerns on how this new law may affect you, please contact the experienced real estate lawyers of Brown, Paindiris & Scott.

Taxi Companies Want to Stop Popular Uber Technologies and Lyft Inc

Connecticut taxi companies are unhappy with the popular start-up companies Uber and Lyft. Last week, fifteen taxicab companies asked the District Court for the District of Connecticut for an injunction to stop these companies from operating in Connecticut. Taxicab companies in other states have initiated similar lawsuits. 

Uber and Lyft, both internet start-up companies, are new to Connecticut. The companies allow customers to summon rides through smartphone applications. Rides with Uber can be paid for with credit cards that are connected to the smartphone application. Lyft similarly accepts only credit card payments via the app but allows riders in some cities to instead make a “donation” in the amount the customer feels is appropriate for the services rendered.

The Connecticut taxicab companies argue that Uber and Lyft violate state regulations and other federal laws. The taxi companies also argue that Uber and Lyft deceive customers about insurance coverage, the safety of Uber and Lyft vehicles and the fares that customers are charged. 

They further claim that both companies’ practices result in discrimination. Uber and Lyft drivers have discretion in choosing who to drive and there are no requirements that Uber and Lyft vehicles be handicap accessible. Finally, because Uber and Lyft accept only credit card payments, those without credits cannot utilize their services. 

It will be interesting to see whether the court grants the injunction, which would effectively shut down increasingly popular services or whether the court will permit Uber and Lyft to continue to operate in Connecticut, which would effectively give Connecticut taxicab companies some stiff competition.

Could New Law Make You Responsible for Snow Removal and Maintenance Costs For Your Shared Driveway?

An easement is a property right that allows a person to use the property of another.  An easement can give you the right to use someone else’s property, or give someone else the right to use yours.  The question is who needs to maintain a driveway that is on your property, but is used by your neighbor?  A new law, effective October 1, 2014, Public Act. No. 14-67 will now require those who use easements to pay the costs associated with the maintenance and repair of the easement. What constitutes maintenance or repair is not explicitly defined in the law, although the law does state that snow removal is included as a maintenance cost.  

If multiple people use the easement, then the costs associated with maintenance and repair are to be divided on the basis of the proportionality of use among all easement users. A single person, however, may be responsible for the costs associated with the easement repair if that person directly or indirectly caused damage to the easement. Failure to pay for these repairs gives the other easement users a cause of action against the user who caused the damage.

The law applies to “private appurtenant easements.” These types of easements remain associated with the property, even after it is sold or another person takes possession. The parties, however, do have the ability to enter into agreements that could supersede the law’s provisions. The law firm of Brown, Paindiris & Scott has experienced real estate attorneys that can assist you with questions on how this law may impact you as an easement user or owner of a property with an easement.

Connecticut Leads Nation in Raising Minimum Wage to $10.10

On March 27, 2014, Connecticut Governor Dannel Malloy signed Senate Bill 32, now known as Public Act 14-1, which gradually increases Connecticut’s minimum hourly wage to $10.10 over the next three years. Currently, Connecticut’s minimum wage is $8.70 per hour, but this amount will increase to $9.15 per hour on January 1, 2015; $9.60 per hour on January 1, 2016, and $10.10 per hour on January 1, 2017. 

            This past March, President Barack Obama visited Connecticut to advocate for raising the federal minimum wage to $10.10.  Considering the partisan divide in Washington, it is unlikely that Congress will act on this. Connecticut is the first state to respond to Obama’s call to action.  Advocates for this legislation have said that it will help working families and will stimulate the economy by providing additional funds to people who spend their money locally; whereas opponents of the Act have cautioned that it could slow hiring at a time of already high unemployment.

            The Act also effectively raises the minimum wage for tipped employees, such as hotel staff, wait staff, and bartenders, who may currently have a percentage of their tips counted towards their hourly income. Employers are allowed to count some employees’ tips as a percentage of their hourly minimum wage, which results in employers paying a smaller portion of the employees’ required minimum wage as long as the employees’ tips make up the difference. Presently, for hotel and wait staffs, employers are required to pay their employees $5.69 per hour, which will increase to $5.78 in 2015, $6.07 in 2016, and $6.38 in 2017. Similarly, bartenders who are now receiving $7.34 per hour exclusive of tips will receive $7.46 in 2015; $7.82 in 2016; and $8.23 in 2017.        

            In addition, the Act enables employers to pay learners, beginners, and employees younger than 18 years of age an hourly rate equal to 85% of the required minimum wage for an employee’s first 200 hours of employment. Thus, the required minimum wage for learners and beginners will increase from $7.40 to $7.78 in 2015; $8.16 in 2016; and $8.59 in 2017. 

            Attorney David Rintoul has experience handling wage and hour claims, and defending employers against Department of Labor Wage and Hour Audits, and can work with you to ensure compliance with this new legislation. 

ClearEdge Power Employee Files Class-Action Lawsuit

A former Connecticut employee filed a class-action lawsuit against ClearEdge Power alleging that the company failed to give the required 60-day notice before the company laid off 268 of its employees last week. Instead, the company issued a letter to its employees explaining that giving more notice would have prevented the company from finding new investors and customers and would have made it more difficult to collect payments from existing customers.

The Worker Adjustment and Retraining Notification Act (WARN) is a federal law, administered by the Department of Labor, that requires employers to provide their employees with 60 calendar days notice of plant closings and mass layoffs. WARN applies to employers with 100 or more employees. The advanced notice requirement is intended to give employees and their families time to transition to the loss of employment and time to find new jobs.

WARN does contain exceptions for faltering companies and companies that encounter unforeseen business circumstances. ClearEdge Power maintains that under these exceptions, it provided its employees with as much notice as possible, given the company’s circumstances.

Although the class-action has only just begun, it will be interesting to see whether the ClearEdge Power fell within one of the WARN Act’s exceptions or whether the employees were entitled to the 60 days notice of the shutdown.

The Minimum Wage for Servers in Connecticut May Surprise You

Employers are legally allowed to include the tips that servers receive as part of the minimum wage, which makes the employer responsible for a smaller share of the server’s hourly wage. The current minimum hourly wage in Connecticut is $8.70. The Connecticut General Assembly recently passed Senate Bill No. 32, which sets the 2015 minimum hourly wage at $9.00. For a restaurant server in Connecticut, however, the current hourly wage is $5.69 and will rise to $5.78 in 2015.

To calculate severs’ pay, the law requires that the overall minimum wage be reduced by a statutorily set percentage. This percentage is commonly referred to as the “tip credit.” The current “tip credit” for servers, as set by Connecticut General Statute Section 31-60 is 34.6%. For an example of the “tip credit” calculation, click here.

Connecticut servers fare far better, as compared to servers in Rhode Island and Massachusetts, for example. The current hourly minimum wage for a server in Rhode Island server is $2.89. In Massachusetts, it’s $2.63 per hour.

Attorney David Rintoul has experience handling wage and hour claims and can work with you to make sure you are being paid fairly and correctly.