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Commercial Leases and Flood Zones: The Hidden Notice Requirement

Published on: November 10, 2021 | by Robert S. Burney and Eric B. Levine

On September 1, 2021, the remnants of Hurricane Ida struck New Jersey. Heavy rain and flooding ensued throughout the area, with many homes and businesses suffering significant damage as a result. Tenants of rental properties were particularly affected, as many were unaware their leased premises were located in a flood zone. Many commercial tenants suffered flood damage to their equipment, inventory, and other assets and incurred loss of business revenue but carried no flood insurance because they were unaware of its availability. This unfortunate circumstance raises questions about a commercial landlord’s obligation to inform its tenants about the flood zone status of their leased premises and its potential liability for failing to do so.

Many commercial landlords are unaware that New Jersey’s Truth in Renting Act (“TRA”), which is more commonly associated with residential tenancies, specifically addresses a commercial landlord’s obligation to advise tenants of the flood zone status of their leased premises. While the term “landlord” in the TRA is generally defined as one who leases “dwelling units,” see N.J.S.A 46:8-44(a), the “Tenant Notification of Flood Zone Location” provision, which requires landlords to notify tenants when a property is located in a flood area, expressly references lessors of commercial space. N.J.S.A. 46:8-50.

Many commercial landlords believe that the requirements under the TRA apply solely to residential leases. Yet, legislative history suggests the drafters of the TRA considered the damage caused by storms such as Hurricane Ida when determining flood zone notice requirements. The New Jersey Senate’s Community and Urban Affairs Committee reported favorably on the bill for the Truth in Rending Act, stating that “during the heavy flooding which occurred during the fall of 1999, many tenants discovered that the apartments or businesses which they rented were located in flood zones.” Notice to tenants was important because “had they been apprised of this information earlier, these tenants may have determined to purchase flood insurance, or to rent elsewhere.” Therefore, the plain language of N.J.S.A. 46:8-50 makes it clear that the flood zone notice provision of the TRA applies to commercial spaces, notwithstanding that the rest of the Act is limited to residential leased premises.

OSHA’s Emergency Temporary Standards for Mandatory COVID-19 Vaccinations; What Employers Need to Know

Published on: November 8, 2021 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

As part of President Biden’s plan for battling the COVID-19 pandemic, the Occupational Safety and Health Administration (OSHA) has issued the anxiously awaited emergency temporary standard (ETS) “to protect unvaccinated employees of large employers (100 or more employees) from the risk of contracting COVID-19 by strongly encouraging vaccination.” Consistent with the President’s plan, the ETS requires large employers to adopt policies mandating COVID-19 vaccination or alternatively, policies requiring employees to choose between vaccination or undergoing regular COVID-19 testing.

The ETS is expected to apply to two-thirds of private sector workers. While the ETS does not apply to state and local governments in states without OSHA-approved occupational safety and health programs (“State Plans”), jurisdictions with State Plans (such as New Jersey) must comply with the ETS. Although the ETS does not currently apply to small employers, OSHA cautions that it needs time to assess the capacity of small employers to meet the administrative burdens of the ETS and is seeking comment to help the agency make that determination.

We have distilled the 490-page ETS to provide an overview of the requirements that will be imposed upon large employers under the ETS.

THEY’RE HERE! OSHA Releases ETS Addressing Vaccination and Testing Mandates for Large Employers

Published on: November 4, 2021 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

On September 9, 2021, President Biden announced that large employers of 100 or more must mandate that their employees show proof of being fully vaccinated for COVID-19 or wear a mask and undergo weekly COVID-19 testing. These mandates were not slated to go into effect until the Occupational Safety and Health Administration (OSHA) developed an Emergency Temporary Standard (ETS) addressing the requirements employers must follow when implementing the vaccination and testing mandate.

On November 4, 2021, OSHA issued the highly anticipated ETS. The Lindabury team is currently wading through the 490-page ETS and will provide a more detailed analysis of the requirements in the near future. In the interim, here are only some of the ETS details employers have been anxiously waiting for:

The ETS is effective November 5, 2021, and will be in effect for 6 months

Emotional Distress Damages and the Rehabilitation Act

Published on: November 3, 2021 | by Lisa Gingeleskie

Can an individual get damages for the emotional distress suffered as a result of violations under the Rehabilitation Act (29 U.S.C.A. §701 to 796 (1973))? What if that is the only harm suffered and they have no financial losses? Can an organization still be liable? In New Jersey, the answer to these questions is likely yes.

The Rehabilitation Act (the “RA”) provides that individuals with a disability cannot be “excluded from, denied the benefits of, or be subjected to discrimination under” programs that receive federal funding. Individuals who believe they were discriminated against may sue an organization under the RA, alleging a violation. There is a split among Circuit Courts, however, as to whether emotional distress damages are an available remedy under the Act. For example, the Fifth Circuit Court has found that emotional distress damages are not warranted. In Cummings v. Premier Rehab, a deaf and legally blind patient filed suit against a physical therapy provider that refused to provide her with an American Sign Language (ASL) interpreter. The plaintiff sought emotional distress damages only. The Fifth Circuit dismissed the plaintiff’s claims, and held that because emotional distress damages are not available under a “breach of contract” case, they are not available under the RA.

Conversely, the Eleventh Circuit Court in Sheely v. MRI Radiology Network, P.A., found that emotional distress damages were warranted where a deaf plaintiff and her service dog were prohibited from accompanying her minor son into his MRI. The Court explained that even where only emotional distress was suffered by the plaintiff, it was nonetheless sufficient to award damages, noting that it was “the only available remedy to make good the wrong done.” Importantly, the plaintiff did not need to show physical symptoms of her emotional distress in order to recover damages.

When is Money from Family Considered a Loan Versus a Gift?

Published on: October 20, 2021 | by James K. Estabrook

It is very common for parents to provide funds to their children over their lifetime, but are these transfers gifts or loans? A recent ruling in the Tax Court, Estate of Bolles v. Commissioner, T.C. Memo. 2020-71, 119 T.C.M. (CCH) 1502 (June 1, 2020), highlights the importance in estate planning of differentiating between loans and gifts.

Mary Bolles was a loving mother of five children whom she tried to treat equally. Her practice was to keep a record of her advances to and the occasional repayments from each child. Based on her intent and the advice of tax counsel, she treated the advances as loans. She forgave the “debt” account of each child every year to the extent of the annual gift tax exclusion amount. According to the Tax Court, her practice would have been noncontroversial had she not advanced substantial funds to one son, Peter.

When Peter ran into financial difficulties with his architectural business, Mary supported him and between 1985 and 2007 she transferred $1,063,333 to Peter or for his benefit.

Changes to the Estate and Gift Tax Laws Still Pending

Published on: October 20, 2021 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

It has been our hope that estate and gift tax reform would be settled by the time this article goes to print. Unfortunately, this is not the case. Revenue issues involving the debt ceiling and stop-gap spending are circulating in Congress at the same time as legislative priorities, like infrastructure, are being hashed out, and procedural steps, like filibuster and reconciliation, are being threatened. Tax reform is but one issue in the mix, and its ultimate resolution is influenced by, and dependent upon, the resolution of a number of the others which are still unresolved. This article will provide a summary of the most recent available information.

Perhaps the most significant proposal on the table is the reduction of the lifetime estate and gift tax exemption, often referred to as the “unified credit,” from its current $11,700,000 per person to $6,020,000 per person in 2022 as estimated by the staff on the Joint Committee on Taxation. The lifetime exemption was increased from $5.5-million to $11-million (with adjustments for inflation) as part of the 2017 Tax Act. The increased exemption amount is due to sunset by its own terms on December 31. 2025, but the current proposal would accelerate that timetable. Individuals looking to make maximum use of the higher lifetime exemption currently available will want to consider making gifts before any reduction becomes effective. Under the proposed bill, the provision would apply to decedents dying and gifts made after December 31, 2021.

The current proposals would eliminate the use of discounts for transfer tax purposes when valuing passive, nonbusiness assets. Discounts are generally based on concepts of minority interest and lack of control, and can reduce the value of an asset for gift or estate tax purposes by as much as 50% or more. The proposal would not affect the valuation of assets that are used in the conduct of a trade or business, which could continue to be valued at a discount. Discounts have been useful in leveraging lifetime estate and gift tax exemptions. The new rule, if adopted, would be effective as of the date of enactment.

OUT WITH THE OLD… NO LONGER: New Jersey’s Law Against Discrimination Amended to Eliminate Exceptions for Certain Age-Based Employment Actions

Published on: October 7, 2021 | by Joshua L. Weiner

In response to an increasingly older workforce and higher ages in which employees are choosing to retire, on October 4, 2021, Governor Murphy signed a bill expanding the scope of the New Jersey Law Against Discrimination (“LAD”) by eliminating certain decades old provisions that permitted employers to make age-based decisions in certain circumstances. For private sector employers, this legislation amends the LAD to extend protections to older workers by: (1) eliminating a provision of the LAD that permitted employers to not hire or promote employees over 70 years of age; and (2) expanding the remedies available to an employee unlawfully forced to retire due to age to include all remedies available under the LAD.

These amendments are a significant alteration of the LAD, and now places age on equal terms with other recognized protected categories, including but not limited to race, gender, national origin, disability, religion, and sexual orientation. While the LAD has historically been touted as one of the most progressive anti-discrimination laws in the country, it nonetheless placed age on a separate footing with other protected categories, paradoxically putting it at odds with much less progressive State and federal anti-discrimination laws. Clearly, this new legislation seeks to remedy that contradiction.

These amendments will serve the laudatory goal of protecting older workers against workplace discrimination, and employers refusing to hire or promote otherwise qualified individuals simply because they are over age 70 may find themselves defending age discrimination claims. Thus, employers are advised to review and update employee handbooks and workplace policies to ensure compliance with the LAD amendments. Moreover, employers must be mindful of these amendments when making any personnel decisions affecting older employees to ensure they are made for legitimate business reasons unrelated to age.

Attention NY Employers: DOH COVID-19 Designation Triggers HERO Act Requirements

Published on: September 15, 2021 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

In June of 2021 the New York Legislature passed the HERO Act requiring employers to adopt an airborne infectious disease exposure presentation plan by no later than August 5, 2021. Employers were free to use the State’s model plan entitled Airborne Infectious Disease Exposure Prevention Standards and Model Plans for Various Industries, found at https://dol.ny.gov/ny-hero-act, or develop their own plans that were compliant with HERO Act’s requirements. However, employers were not obligated to implement the infectious disease plan until such time that the Commissioner of Health officially designated an outbreak as a “highly contagious infectious disease.”

On September 6, 2021, the Commissioner of Health formally designated COVID-19 as a highly infectious disease, thus triggering the obligations of New York employers to implement the protocols of their respective infectious disease prevention plans, including:

Review and update the plan to incorporate any updated requirements

President Biden’s Vaccination Mandate: What Employers Need to Know

Published on: September 15, 2021 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

The aim of President Biden’s “Path Out of the Pandemic,” announced on September 9, 2021, is to increase the number of vaccinated workers across the country. To that end, the plan includes several requirements that will affect more than 80 million private sector workers and most workers in the public sector.

Mandatory Vaccination or Weekly Testing for Large Employers of 100 or More. Under the President’s plan, large employers must ensure workers are fully vaccinated or provide a negative COVID-19 test at least once each week. In addition, large employers must provide workers with paid time off to get vaccinated or to recover from the effects of the vaccine. Upcoming regulations will likely address how the 100-employee threshold will be met, whether it will include part-time, temporary or remote workers.

When Must Employer Comply? It is unclear when these mandatory requirements will take effect. According to the White House, the Occupational Safety and Health Administration (OSHA) will develop an Emergency Temporary Standard (ETS) “in the upcoming weeks” implementing the vaccine mandate and ongoing testing requirements. While some suggest that this process will take 30 to 60 days, prior ETSs issued by OSHA earlier this year to combat the pandemic took five months. In addition, employers can expect legal challenges to the authority of the federal government to impose such mandates.

What Employers Need to Know About Vaccination Mandates and Incentive Programs

Published on: September 9, 2021 | by Lindabury, McCormick, Estabrook & Cooper, P.C.

Employers are faced with a variety of legal questions when determining whether to mandate COVID-19 vaccinations and other safety protocols in the workplace. These questions are further complicated by varying opinions on the safety of vaccines and whether such mandates impose upon the privacy rights of employees. This article outlines an employer’s legal rights in light of those concerns.

COVID-19 Vaccinations Mandates and Exceptions

The Equal Employment Opportunity Commission (“EEOC”) has stated that employers are free to mandate vaccinations in the workplace and to require proof of vaccination status. However, there are two exceptions to this mandate. First, the Americans with Disabilities Act (“ADA”) requires employers to provide “reasonable accommodations” for those objecting to the vaccine based on one’s medical condition. Accommodations may include, but are not limited to, continued mask wearing and social distancing, a private office or workplace, remote working, or even a leave of absence. Employees claiming they have a medical condition that prevents them from getting vaccinated should be required to submit documentation from a treating physician substantiating the need for an exemption.