New Jersey Lawyer & Attorney : Stark & Stark Law Firm : New Jersey Law Blog

When contracting to build a high-performance home that is worthy of the label "green," it is essential for the future homeowner to have someone on the project team who has experience in and understands energy-efficient building materials, appliances and products.  This responsibility can be delegated to the architect or a green building products and design consultant working with the architect.  Additionally, the homeowner’s contractor, although not a design professional, may be able to advise a homeowner with respect to green building materials, products and appliances.  However, whoever the homeowner chooses, at a minimum, should be accredited in a recognized green building certification protocol, such as the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) Green Building Rating System or the National Association of Home Builders’ National Green Building Standard approved by the American National Standards Institute in January 2009.

Homeowners should also specify in their contract with the person advising on green building products and/or design just how green they want the home to be and what that means.  Indeed, recommendations and decisions in this regard may vary depending on whether the homeowner’s chief goal is protecting the environment, improving indoor air quality or saving money on energy costs.  For example, if a homeowner is primarily interested in building a home that is environmentally "sustainable," then - depending on how that term is defined - the person advising on green building products and/or design might suggest doing a "life cycle" analysis for each of the home’s principal components.  This entails a holistic evaluation of a given item’s impact on the environment at every stage of its "life," including extraction of raw materials, manufacturing and assembly, installation or delivery, maintenance, disposal and, possibly, reuse or recyclability.
 

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Vincent J. Mangini, Shareholder in Stark & Stark's Real Estate, Zoning & Land Use Group, authored the article, Environmental Law: Policing Unfair and Deceptive Environmental Product Claims in Advertising, for the July 19, 2010 New Jersey Law Journal.


The article discusses the US Federal Trade Commission's attempts to meet present day challenges when complying with the Guide for the Use of Environmental Marketing Claims. The FTC first issued the Guide in an attempt to assist marketers of products and services having environmental attributes to avoid running afoul of the FTC Act. Since the Green Guides were last updated in 1998, the interest in green products and services has grown tremendously, and therefore, the FTC is struggling to ensure providers are staying compliant with the guides.


You can read the full article online here. (PDF)

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In a letter opinion dated June 14, 2010, the Bankruptcy Court confirmed that under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”) a debtor is not required to contribute money to a Chapter 13 Plan that is presently being used to repay a loan borrowed against a 401(k) plan. However, a creditor(s) challenging the confirmation of the plan may (1) inquire as to the terms of repayment and (2) the debtor may be required to propose a plan that steps up payment at a later date. 

In In Re Todd R. Roth, 10-13287 (JHW), the largest unsecured creditor of the debtor, a law firm, filed a motion to dismiss the debtor’s Chapter 13 case and objected to the confirmation of the Plan. The Court scheduled an evidentiary hearing to decide the motion to dismiss, but addressed the movant’s objection to the confirmation of the Plan.

As to confirmation of the Plan, the moving creditor argued that 401(k) contributions and repayments of a loan from a 401(k) account constitute disposable income that should be dedicated to pay unsecured creditors under the Plan. In opposition, the debtor submitted that post-BAPCPA, regular 401(k) contributions and repayment of a loan from a 401(k) account do not qualify as disposable income. The Court rejected the creditor’s arguments because, under BAPCPA, money being contributed to a 401(k) plan and money being used to repay a 401 (k) loan are not deemed disposable income.

However, the Court recognized that money utilized towards the repayment of a 401(k) loan should be reduced as the loan is repaid. As such, a creditor may inquire about the repayment terms of the loan. Consequently, the debtor may be required to propose a plan that steps up payment at a later date. For example, if the bankruptcy plan is for five years, but the loan will be repaid in two years, payments to creditors must increase at the beginning of the third year. In support, Court relied upon an unpublished bankruptcy court opinion that held that a step up plan may be required to include amounts presently being used to service a 401 (k) loan.

The Bankruptcy Court’s letter opinion highlights the need for a creditor objecting to a Chapter 13 Plan to request information and documentation pertaining to the length and repayment terms of a voluntary pension loan. The debtor may be required to pay additional money under the Plan, but without diligent investigation by creditor’s counsel, the terms of repayment of the loan may not be disclosed.

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On July 15, 2010, the Appellate Division of the Superior Court of New Jersey affirmed a trial court's ruling that a billboard owned by Lamar Advertising of Penn ("Lamar") is personal property for purposes of eminent domain.  Lamar entered into a lease with the property owner and built a billboard on the property.  When the New Jersey Turnpike acquired the property, an issue arose over whether the billboard was real or personal property.  The court ultimately ruled that for purposes of eminent domain, the billboard is personal property. 

You can read the decision here.

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A person seeking to achieve certification for an energy-efficient structure under a particular green building rating system, such as the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) Green Building Rating System should delegate to a qualified member of the project team the responsibility for assembling, reviewing and managing all required documents and obtaining certification at the desired rating level, as specified in the project manual for the proposed structure.  The architect is often the best person to carry out these tasks provided that the architect is accredited under the green building rating system selected by project owner.

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Thomas B. Lewis, Chair of Stark & Stark Employment Litigation Group, was quoted in the July 7, 2010 Reuters.com article, J.P. Morgan sues former adviser. Mr. Lewis comments on the recent case filed by J.P. Morgan Chase & Co in response to a former advisor who left J.P. and took $30 million of client assets with him to Morgan Stanley Smith Barney. Mr. Lewis states that becuase J.P. Morgan is not a signatory to the Protocol for Broker Recruiting, they are fee to sue advisers as well as other firms.

You can read the full article online here. (PDF)

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On June 17, 2010, I attended the BuildingsNY/Green BuildingsNY Conference at the Jacob K. Javits Center in New York City and was absolutely amazed at the number of vendors who were present and the array of educational programs that were available to attendees.  Although attendance did not appear to be overwhelming, probably due to the continuance of the Great Recession, the flow of inquisitive passersby was steady and enthusiasm was high at the Conference lending some credence to the notion that interest in green building can thrive even in a down economy.  I am going to make a point of attending next year.

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Gary S. Forshner, Shareholder in Stark & Stark's Real Estate, Zoning & Land Use Group, was featured in the June 2010 edition of the South Jersey Building News, published by the Builders League of South Jersey. The piece discusses some hot topics affecting the real estate today, and highlights Mr. Forshner's active involvement in the real estate industry. You can access the full article online here. (PDF)

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On June 8, 2010, I attended the Promotions East 2010 Conference in Atlantic City, New Jersey and was interested to see how many companies selling promotional items that have either a line of green products or are entirely green.  Everything from “eco-friendly packaging” to biodegradable water bottles to recycled paper and logo floor mats were on display.  One vendor was even selling anti-bacterial eco-bags!  It just goes to show how far “green-thinking” has penetrated not only our law, but also our corporate culture.

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My blog post dated January 28, 2008, provides an overview of the New Jersey Correction of Errors Statute and explains when a property owner is entitled to go back in time and get a refund due to an error made by a tax assessor.  On June 22, 2010, the Appellate Division of the Superior Court of New Jersey once again confirmed the legal principal that an error alone is not enough for relief - the correction must also be self-evident. (See case here)


From 1996 through 1998, a property owner received a 20% credit on the value of her land since the land was encumbered with a conservation easement.  When the municipality completed its revaluation in 1999, it did not consider conservation easements in reducing land values (an obvious error).  In 2005, the municipality performed a reassessment and all land values were substantially increased.  In 2005, the subject property’s assessment went from $222,000 to $479,000, again with no deduction for the conservation easement (the error continues!).


In 2008, the property owner noticed that she was not receiving a reduction or any type of credit for the conservation easement encumbering her property.  On November 26, 2008, she filed a complaint with the Tax Court seeking a reduction for the tax years 2005 through 2008, arguing the error was the type of error subject to correction under the Correction of Error Statute.


The Tax Court and the Appellate Division of the Superior Court of New Jersey disagreed. The Court acknowledged that the municipality’s failure to take the conservation easement into account when assessing the plaintiff’s property was an error in assessment.  However, the Tax Court continued that once the error was determined “it would have been necessary for the assessor to exercise her judgment as to how much that conservation easement would reduce [the land value of the property], that is clearly an error of judgment and not one of correctable error.”


This case underscores the requirement that not only must there be an error, but the correction itself must be “self-evident.”   The only true way to avoid this problem is to diligently review your tax assessments on an annual basis

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Managing risk is crucial for anyone who seeks to construct a high performance building, especially with respect to the attainment of certification under a green building rating system, such as the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) Green Building Rating System, or the receipt of grants or tax credits for the installation of energy-efficient improvements or renewable energy facilities.  One way to manage these risks is the proper delegation of tasks to those on the project team with the greatest capacity to perform them successfully.  For example, the architect should take responsibility for adjusting project design in the event there are changes in the law relating to energy efficiency or building performance or changes in the standards relating to the applicable green building protocol being utilized by the project owner.  Likewise, the architect should be made to pay for compensatory and consequential damages that flow from any failure to achieve LEED certification or the loss of financial incentives if either such occurrence is due to design deficiencies or any other act or omission on the part of the architect.  However, these and any other type of risk allocation would have to be specified in the contract in order to be enforceable.

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