THIS ISSUE'S HEADLINES

The Corporate Transparency Act - Preparing Now Will Help You Avoid Penalties

Potential Impact of Proposed Federal Rule on the Auto Industry

Buyer’s Remedy in Real Estate Purchase and Sale Contract

Stay Informed — PLDO COVID-19 Resource Library


THE CORPORATE TRANSPARENCY ACT - PREPARING NOW WILL HELP YOU AVOID PENALTIES

A new U.S. regulatory requirement aimed at combating money laundering and other illicit activity by reining in the use of anonymous shell companies has the potential to impact over 20 million existing businesses in the U.S.

The Corporate Transparency Act (“CTA”) will require small entities (both domestic and foreign) to report certain information about themselves and their founders, owners, or those who exercise control over them, with the required filings made to the U.S. Treasury Department. In an advisory entitled, The Corporate Transparency Act - Preparing Now Will Help You Avoid Penalties, PLDO Partner Leah A. Foertsch sheds light on who has the obligation to report, what must be reported, the penalties for failing to report, and more.

While final regulations are still pending, the Financial Crimes Enforcement Network (FinCEN) is expected to begin enforcing the CTA as early as the end of 2022/beginning of 2023. The reporting is reasonably minimal, and the penalties are onerous, so taking proactive measures now will save time down the line and help businesses avoid potentially incurring penalties.

If you have questions pertaining to the CTA or any other business, estate and trust planning matters, please contact Attorney Foertsch in our Boca Raton, FL office at 561-362-2030 or email lfoertsch@pldolaw.com.

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POTENTIAL IMPACT OF PROPOSED FEDERAL RULE ON THE AUTO INDUSTRY

The Federal Trade Commission (“FTC”) recently issued a Notice of Proposed Rulemaking ("Proposed Rule") that could significantly impact how dealers sell, lease and finance motor vehicles. The Proposed Rule aims to fight deceptive advertising, crack down on bait-and-switch marketing, and put a stop to hidden add-on charges when consumers go vehicle shopping. PLDO Partner William F. Miller discusses some of the major issues addressed by the Proposed Rule in his latest Advisory, Potential Impact of Proposed Federal Rule on the Auto Industry.

The Notice of Proposed Rulemaking seeks public comment, which must be submitted within sixty (60) days of publication of the Notice of Proposed Rule Making in the Federal Register. Auto dealers should consider a careful review of the Proposed Rules and filing of comment(s) pursuant to the Administrative Procedures Act.

For further information on the FTC’s Proposed Rule on the auto industry or other business matters, please contact Attorney Miller at 508-420-7159 or email wmiller@pldolaw.com.

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In a commercial real estate transaction, just as in life, what is fair is not the same as what is equal. Generally, the remedies in a breach of real estate sale agreement are (1) return or retention of a deposit, (2) suit for damages, and (3) the right to sue for specific performance. The right to sue for specific performance allows a buyer to go to court to force the seller to sell the property to the buyer for the agreed upon purchase price. Though theoretically available to both sellers and buyers, specific performance is rarely a remedy for sellers and is much more common as a remedy for buyers.

A fair approach to remedies in real estate transactions might provide that in a buyer default, the seller is entitled to keep the deposit as its sole remedy, while, in a seller default, the buyer is either entitled to the return of their deposit or to sue for specific performance.

Why the discrepancy?

First, the buyer generally has more costs in a commercial real estate transaction. For example, the buyer likely has to perform due diligence, including environmental reports, and review the title to ensure there are no issues. The buyer may also have to obtain permits for any particular uses or development of the property. In contrast, the seller generally does not have similar costs—only costs of carrying the property, such as taxes and insurance, which it would be required to pay regardless of the transaction. In the event the seller breaches the agreement after the buyer has spent money performing this diligence, return of the deposit alone may not compensate the buyer.

Second, and perhaps more importantly, allowing the buyer to sue for specific performance prevents the seller from strategically breaching the agreement if a better offer comes along after the agreement is signed. If the only remedy for the buyer were return of the deposit, there would be no disincentive for the seller to stop accepting offers on the property. Return of the deposit and even allowing the buyer to sue for damages (to recover the previously mentioned costs) may not be enough to prevent the seller from breaching the agreement, based on the new, better offer. A right to sue for specific performance, however, removes any incentive to breach for a better offer because the buyer can always go to court and enforce the sale.

In Summary

In the event of a breach of real estate sale agreement, there are certain remedies available to both sellers and buyers. Specific performance is a distinct, equitable remedy that may be available - usually to the buyer - to prevent the seller from breaching the agreement if they receive a better offer after they’ve already signed a valid and binding contract. If you would like further information on purchase and sale agreements in real estate transactions, please contact Attorney Joshua J. Butera at 401-824-5100 or email jbutera@pldolaw.com.

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STAY INFORMED – PLDO COVID-19 RESOURCE LIBRARY

PLDO’s team of attorneys continue to add updates and advisories regarding the pandemic and its impact on families, businesses and organizations. To access our COVID-19 Resource Library, click here.

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