Apartment Association of Michigan

Written by Forrest Wall, CAE, Staff Vice President and Industry Relations

Nonrecourse Loan Legislation Enacted
Legislation correcting problems with the interpretation of nonrecourse loan carveouts has been enacted. Senate Bill 992, now Public Act 67 of 2012, was introduced by Sen. Arlan Meekhof at the request of individual real estate interests and the Building Owners and Managers Association (BOMA). AAM vigorously advocated for the bill, which saw quick legislative approval and was signed by Governor Snyder on March 29th. Called the “Nonrecourse Mortgage Loan Act,” the legislation prohibits a post-closing solvency covenant from being used as a nonrecourse carveout or as a basis for any claim against a borrower, guarantor, or other surety on a nonrecourse loan, and, specifies that a noncompliant provision in loan documents would be invalid. Additionally, the Act specifies it does not prohibit a loan secured by a mortgage on real property located in Michigan from being fully recourse to the borrower or guarantor if the loan documents do not contain nonrecourse provisions. The new act applies to the enforcement and interpretation of all nonrecourse loan documents in existence now or entered into in the future.

The legislation was needed in response to two recent court cases in Michigan which essentially provided for personal liability within nonrecourse loans in the event of foreclosure. AAM, BOMA, and others initiated an amicus brief in one of the cases, Wells Fargo Bank, N.A. v. Cherryland Mall, to aid in the effort to reverse the court decision. I encourage all members who are interested in this issue to attend the next AAM Owners Breakfast Club on Wednesday, May 2 at 8:30 a.m. at the Association Offices. Attorney Jonathan Borenstein of Honigman will provide a further explanation of these cases and the impact of the legislation.

President’s Corporate Tax Plan Increases Carried Interest Tax Rate
In February, the Obama Administration released a framework for a plan to cut the corporate tax rate from 35 percent to 28 percent. Unfortunately for the real estate industry, one of the proposals to pay for this cut is to tax carried interest at ordinary income rates, rather than at the current capital gains rate. Increasing the carried interest tax rate has been proposed multiple times over the past few years, including by the Obama Administration last year in other legislation. The original rationale used by advocates for the change was that it was a means to tax Wall Street hedge funds, but now the Administration reasoning is that the current tax treatment of carried interest at the capital gains rate is a tax loophole. While no action on this issue is expected prior to the election, it is certainly something that will be discussed as a part of the post-election debate on comprehensive tax reform.

WRITTEN BY GARY SMITH, APARTMENT BUILDING MANAGEMENT WORKERS COMPENSATION SELF INSURED FUND

Swimming pool chemicals include various kinds of disinfectants and sanitizers to control the growth of algae and bacteria in the pool water. They may also be used in hot tubs, spas, wading pools, and whirlpools. The most common is chlorine which usually comes from chlorinating agents that release chlorine when they are dissolved in the water. The chlorine-based disinfectants may be called chlorinating liquid, dry chlorine or liquid chlorine.

There are two main types of chlorinating agents – inorganic and organic.  Organic and inorganic chlorinating agents are not compatible with each other. Many incidents occur when the same scoop or pail is used for both chemicals without cleaning them or when adding one product after the other or in the pool chlorinator. Mixing or cross-contamination of these chemicals can form an explosive mixture.

Swimming pool chemicals can also be oxidizers and corrosives. Oxidizing materials have the ability to react chemically to oxidize combustible materials. To be an oxidizer, the material itself provides oxygen that combines chemically with another material in a way that increases the chance of a fire or explosion. This reaction may be spontaneous at either room temperature or may occur with slight heating. Oxidizing liquids and solids can be severe fire and explosion hazards. Some pool chemicals can also be corrosive, which means they can attack and chemically destroy body tissues on contact, and can also damage or destroy metal.

Material Safety Data Sheets (MSDS) or product labels should be consulted for the specific effects on tissues or metals and for procedures to follow in cases of spills or splashes.

Tips for handling chlorinated swimming pool chemicals
DO
• Read entire product label or MSDS and follow instructions carefully.
• Always complete appropriate training or education.
• Use separate, clean plastic measuring cups for each chemical.
• Wear appropriate protective gear, such as safety glasses and gloves.
• Protect chemicals from moisture and water – such as a cup of water (or
coffee!). Even putting the wet scoop back into the pail may cause a reaction.
• Always add the chemical to the pool water – never the other way around (never
add water to the chemical) unless instructed to do so on the container label.
• Wash your hands thoroughly after handling any chemicals.
• Use or handle chemicals in well ventilated areas only.

DO NOT
• Do not use contents of unlabeled containers.
• Do not mix different chemicals together.
• Do not put spilled chemicals back into their containers.
• Avoid touching undiluted chemicals with hands.
• Do not smoke when handling chemicals.
• Do not expose to heat or flame.
• If fire breaks out, do not use dry chemical fire extinguisher.  Only use large amounts of water. If you cannot extinguish the flame immediately, leave area and call fire department.

Tips for safe storage of pool chemicals
• Secure chemicals away from children and pets.
• Store chemicals in their original containers; keep closed when not in use.
• Store in a cool, dry place away from sunlight.
• Be sure storage area is well ventilated. In high temperatures, vapors may
build up inside containers. Nose and throat irritation or more serious
respiratory problems may result if inhaled.
• Never store oxidizers and acid near each other. Oxidizers release chlorine gas
if they come in contact with acids.
• Do not store liquids above powders or solids; do not stack containers.
• Do not store materials or chemicals above head-level.
• Do not store pool chemicals near gasoline, fertilizers, herbicides, grease,
paints, tile cleaners, turpentine, or flammable materials. This is especially
important when pool chemicals are stored in sheds or small storage rooms.
• Do not reuse containers.

Sources:
Environmental Protection Agency – Safe Storage and Handling of Swimming Pool Chemicals; Centers for Disease Control and Prevention – Pool Chemical Safety; Canadian Centre for Occupational Health and Safety – Swimming Pool Chemicals.