If you want to stop a homeowners association from collecting assessments or enforcing restrictions, often the best tactic is to smear the HOA.
Here’s how the smear works. Read the rest of this entry
Category Archives: Ozarks economy
When I think of spring, I think of gardens
When I think of growing things, I think of Jim Long, whose writings I’ve enjoyed reading and learning from for many years. Jim is well-known all over the United States for his knowledge about growing things, and he writes and lectures all over the place. Jim is an expert on growing herbs, flowers and vegetables in the Ozarks. Unlike most of the rest of us, he paid attention to his elders about such things, and he studied and experimented on his own.
Jim and Josh Young live at Long Creek Herb Farm, near Long Creek and the Arkansas-Missouri line outside Oak Grove, Arkansas, south of Table Rock Lake and Branson. Their website contains a wealth of information about gardening in the Ozarks, and how to purchase Josh’s interesting and funny book “Missouri Curiosities,” and the various other products that they sell. Despite the tremendous knowledge that they have, Jim and Josh are anything but snobs about gardening, food or anything else.
Jim has asked me if I know people in the area (Taney and Stone counties of Missouri; Carroll and Boone counties of Arkansas) who are interested in the slow food movement, which is partly a reaction to fast-food, but more a recognition of the basic need to eat well. If you are interested, please contact Jim through his website.
Maybe being married is okay, even with debts
Capital Bank asked the Taney County Sheriff to sell Rocky’s, a popular Italian restaurant in Branson, to satisfy a judgment awarded by an Arkansas court against the owner of the restaurant. Judge Orr stopped the sheriff’s sale, because the restaurant land and building were owned by Mr. and Mrs. Charles Barnes, while the Arkansas court’s judgment was against only Mr. Barnes. The Missouri Court of Appeals affirmed Judge Orr’s ruling in an opinion dated February 2, 2009.
I had a great lunch at Rocky’s on February 3, so I’m glad that a bank didn’t take over the restaurant.
In Missouri and several other states, a married couple can own property as though they were one person, in a form of ownership called “tenancy by the entirety.” In Missouri, a tenancy by the entirety is presumed to have been created when a deed to a married couple uses the words “husband and wife” after their names, if they are in fact married. A deed is a written document, signed by the grantor(s), which is evidence of the intent of the grantor to convey property to the grantee(s).
The holding of the Barnes case does not break new ground, but it explains why careful lenders usually insist that a personal guaranty and deed of trust (mortgage) be signed by each spouse, otherwise the collateral may not be reachable. Generally, the tenancy by the entirety form of ownership will stop even the IRS from seizing the property of a married couple for taxes owed only by one spouse.
From the borrower’s point of view, holding real estate as tenants by the entirety can be a good idea. A limited liability company (LLC) or corporation is created as an operating entity for a small business,which leases real estate from the husband and wife. The husband and wife are protected from personal liability for business debts that they have not personally guaranteed. The lease income is not subject to self-employment tax.
An additional question is whether the LLC membership interests or corporate shares should be held by both husband and wife, as tenants by the entireties or whether each should own half or whether some other form of ownership is desirable. Answering this question requires careful analysis by a lawyer, estate planner and tax advisor working together.
Calico Sunrise: watch what happens
Residents of the Calico Rock area, on the White River in north central Arkansas, are attempting to plan their future. They have created a blog called Calico Sunrise to serve as a newsletter and forum for their endeavor, which is intended to involve the input of all segments of the community.
The Calico Rock area is lovely, and it looks like a great place to live and to visit. It is similar to the Branson area in a purely physical sense–it is in the Ozarks on the White River with a railroad running alongside, there are lakes nearby, and there are wonderful bluffs and vistas and smaller streams in deep, quiet valleys. While there is some tourism there and a lot of retirees, the tourism lacks the industrial-strength tourism of Branson. In some ways, Calico Rock is what Branson might have been without Silver Dollar City and the music show industry.
I wish the people of Calico Rock well. I hope they will focus on health rather than growth, so that they can have the community they want and stay off the economic roller-coaster. To do this, they will need to look at giving their children great educations and building an economy with an export sector, rather than too heavily based on tourism.
In praise of real estate developers
Much of my work in the past decade has involved representation of real estate developers, though they are fading fast. Though my firm has other sources of revenue–municipalities, lenders and homeowner associations–I really miss the developers, because I admire their courage and enjoy their personalities and optimistic approach to life. All of them are low, and some of them are sunk. Most of them will pop back up eventually: they’re buoyant.
It bothers me to hear people talk about how bad they are and how, in this downturn, they’re getting what they deserve.
Developers are easy targets. They send in bulldozers and push over trees. They cause erosion. They would rather apologize later than ask permission. In other words, they have the energy required to plan and execute capital intensive projects, requiring personal financial risks and coordination of dozens of others–lenders, contractors, subcontractors, architects, engineers, lawyers, escrow companies, mortgage underwriters, insurance agencies, etc.
The result is that we have houses, streets, places to shop, and places to work. Read the rest of this entry
Is tourism impoverishing?
Many community leaders are jealous of the sales tax revenue and economic activity generated by tourism. They wish that their own communities had some of what Branson and other tourist towns have (the municipal revenue, the perceived business opportunities, and options for shopping, dining, entertainment and outdoor activities), but not the other stuff (the seasonal economy, the high percentage of residents who move in and move out, the number of business failures, the constant need to expand schools, the high sales taxes, the traffic snarls, the disorder of constant construction projects, etc.). Read the rest of this entry
Wish list for the Ozarks economy
Congress is going to do something. The House has approved a stimulus package, full of all kinds of goodies–only a few months after “earmarks” was a dirty, dirty word. And the Senate will put a few more pork cutlets into the package.
IRONY ALERT: THIS BLOG POST IS NOT ENTIRELY SERIOUS! PARTS OF IT ARE! WATCH FOR HINTS.
But what do we need in the Ozarks?
Whatever we don’t get here will go somewhere else. No matter how ineffective cash infusions are when injected elsewhere, we’d like it to have it go to waste in the Ozarks, where we know how to spend wisely because we’re not liberals mostly.
We might as well make a list Read the rest of this entry
Underlawyered: it’s also a problem, especially in real estate
The success of the book Overlawyered, and the popular website that followed, is based on the conventional wisdom that the quality of modern American life has been significantly lowered–and the costs of health care tremendously inflated–by the proliferation of junk lawsuits and regulations that don’t accomplish their goals and cost way too much. Finding stories to support these claims is really easy. But those tales should not keep an individual from getting good legal help when needed.
I’m astounded by the underlawyering that I encounter. It takes two forms: Read the rest of this entry
How to learn about the economy and form opinions
The biggest problem that I have in understanding economic ideas is that my own economic literacy is limited. I have only a bachelor’s degree in economics and am a poor mathematician. Yet I’m hungry for economic information. Here’s how I get it. Read the rest of this entry
Contracts for deed still cause problems
At least once a month, I get a call–usually a referral from a title company–about a problem caused by a contract for deed transaction. I wince, because the people who sell or buy under contracts for deed usually are people who don’t like working with lawyers, which makes my job harder. The people needing help for a problem that is difficult to assess and to fix often want to know exactly how much it will cost and how long it will take to fix. I could have prevented the problem in a couple of hours for $500 or less by configuring the transaction with a note and deed of trust or a lease with purchase option.
Now, fixing the problem it will require a lawsuit that could drag on for a couple of years or even longer. Legal fees and costs will be at least $2,000, but more likely $5,000 to $10,000.
If the property has been paid for under the contract for deed, but the seller has meanwhile died or become incapacitated due to Alzheimer’s or a stroke, solving the problem may require a probate or guardianship proceeding which may involve a nasty fight among the seller’s heirs.
If the buyer has defaulted, but won’t relinquish possession or has recorded some kind of claim in the county land records, a judicial foreclosure or quiet title suit and an unlawful detainer suit may be required. Sometimes the buyer, who has recorded the claim, is hard to find, and the best that we can do is get a default judgment based on service by publication, so the title is still uninsurable for years after the legal procedure to fix it.
I’ve added an article here to explain some of the problems I have encountered with contracts for deed.
Ozarks Law & Economy 