Written by Forrest Wall, CAE, Staff Vice President and Industry Relations
Court Ruling A Victory For Real Estate Industry
In a huge victory for the real estate industry, an April ruling by the Michigan Court of Appeals has upheld the constitutionality of the Nonrecourse Mortgage Loan Act in the Cherryland Mall case. Cherryland Mall is one of two court cases in Michigan which essentially provided for personal liability within nonrecourse loans in the event of foreclosure, and resulted in the legislative effort in favor of the Nonrecourse Mortgage Loan Act. This law, enacted last year, corrected problems with the interpretation of nonrecourse loan carveouts by prohibiting 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, by specifying that a noncompliant provision in loan documents would be invalid. Key to the legislation is that it applied to the enforcement and interpretation of all nonrecourse loan documents in existence at the time or entered into in the future. The Michigan Supreme Court recently remanded the case back to the Michigan Court of Appeals to reconsider its previous decision that insolvency triggered full recourse liability given the passage of the Nonrecourse Mortgage Loan Act. The plaintiff then challenged the constitutionality of the legislature applying the law retroactively. AAM joined the Building Owners & Managers Association (BOMA) in the filing of an amicus brief supporting the constitutionality of the act.
HUD ISSUES NOTICE ON SERVICE ANIMALS & ASSISTANCE ANIMALSThe U.S. Department of Housing and Urban Development (HUD) recently issued a notice providing clarification on the differences between “service animals” and “assistance animals” as both relate to compliance under the Americans with Disabilities Act (ADA) and Fair Housing Act. Both laws contain provisions which address the use of assistance or service animals by people with disabilities. The notice provides guidance that the Department of Justice’s revised definition of “service animal” under ADA (which is “… dogs that are individually trained to do work or perform tasks for people with disabilities.”) does not apply to housing providers responsibilities under the Fair Housing Act. Under the Fair Housing Act there is an obligation to provide reasonable accommodations to people with disabilities who, because of their disability, require trained service dogs or other types of “assistance animals” to perform tasks, provide emotional support, or alleviate the effects of their disabilities. Visit www.hud.gov to read the full notice.