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1. The ADA Compliance and Defense Guide — free download

2. Hotel Lawyer on HMAs: “The shrinking terms of hotel management agreements”

3. Hotel Financing 2015: JMBM’s “preferred” EB-5 construction financing program for top developers and projects

4. The “new breed” of condominium hotels — Key to financing new hotel development? Selling condo hotels as “securities” under new SEC Rule 506(c) . .

5. Los Angeles is the new magnet for real estate investment

6. FAQs on “service animal” requirements of the ADA. What every hotelier needs to know. Why Uber was sued over service animals.

7. Why this may be the time to buy or sell a hotel management company

8. Hotel development & EB-5 financing: Why you don’t want to form your own regional center

9. Hotel Liability for Guest Information — What you need to know and how to avoid liability.

10. Hotel Franchise Lawyer: 8 things to negotiate in your next franchise agreement

11. Hotel Lawyer: The 5 questions every owner should ask before selecting a hotel brand

12. Hotel Franchise Lawyer: Hotel Franchise Agreements and the 5 biggest mistakes a hotel owner can make

13. Hotel Lawyer with insights on "How to get a great hotel operator"

14. The importance of Comfort Letters in financing franchised hotels

15. Hotel Lawyer: Something everyone buying or building a golf course should know . . .

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This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer. Please contact me at Jim Butler at jbutler@jmbm.com or 310.201.3526.

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08 January 2021

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on the coronavirus.

We have a new PPP Loan authorization bill out of Washington, after months of political wrangling. Congress could have done more, but they did provide for up to $2,000,000 in additional forgivable loans per borrower, along with provisions which specifically cater to the hospitality industry.

As Jay Thompson and other members of our Corporate team write below, Congress has made obtaining a PPP loan and getting forgiveness for that loan easier. They have also expanded the definition of what can be an “eligible expense” upon which to base a PPP loan, and they have allowed for the issuance of a PPP Loan to a borrower in bankruptcy as part of a restructure of the borrower’s business. The Small Business Administration wasted no time in starting to issue interim rules interpreting the new law, and we will probably see one or two more before they produce a working application form.

COVID Relief Bill: Changes to the Paycheck Protection Program and New Lending Terms

by
Jay Thompson, Vanessa Han and Marianne Martin

On December 27, 2020, the President signed the Consolidated Appropriations Act, 2021 (“2021 Act”), which contains the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Economic Aid Act”). The acts contain changes to the Paycheck Protection Program (“PPP”) that are intended to limit assistance to small businesses that need the financial support. The following highlights the impact of the 2021 Act and the Economic Aid Act on PPP loans.

Tax Treatment of the Paycheck Protection Program Loans

The 2021 Act provides for special tax treatment in Division N, Section 276 for forgiveness of loans granted pursuant to the original Paycheck Protection Program under the CARES Act (“Existing PPP Loans”) and any new PPP loans (“New PPP Loans”) under the Economic Aid Act.

The Economic Aid Act provides that any loan forgiveness under either the Existing PPP Loan Program or the New PPP Loan Program (collectively, the “PPP Program Loans”) shall not be treated as gross income to the recipient for tax purposes or the recipient’s partners or shareholders. Further, all costs that were considered in calculating a PPP loan (salaries, rent and utilities) are still eligible to be used as deductions against gross income of a PPP loan applicant even if it receives loan forgiveness. The IRS had previously issued a ruling that the costs could not be considered as offsets to income if loan forgiveness had been granted to the taxpayer and those costs were used to calculate the Existing PPP Loan.

Specifically, the PPP Program Loans are subject to the following tax treatment:

  • No amount shall be included in the gross income of a recipient by reason of forgiveness of a PPP Program Loan.
  • No deduction shall be denied, no tax attribute shall be reduced and no basis increase shall be denied as the result of the exclusion of the forgiveness amount under a PPP Program Loan from the recipient’s gross income.
  • Neither the partners in a partnership nor the shareholders of an S corporation shall have to recognize any gross income by reason of forgiveness of a PPP Program Loan.
  • The partners in a partnership and the shareholders of an S corporation shall be entitled to their distributive share of any costs giving rise to forgiveness under either of the PPP Program Loans.

CONTINUE READING →

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31 December 2020

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on ADA Compliance and Defense.

A number of recent cases have been dismissed by federal courts citing a lack of standing under Article III of the Constitution, proving that ADA lawsuits can be successfully defended. Martin Orlick, Chair of JMBM’s ADA Compliance & Defense Group, summarizes one such case below.

The Court Dismisses ADA Lawsuit for Lack of Standing Proving Once Again These Cases Can Be Won

Anthony Bouyer v. LAXMI Hospitality, LLC

by
Martin Orlick, Chair, JMBM’s ADA Compliance & Defense Group

It’s important to remember federal courts are courts of limited jurisdiction.  That limited jurisdiction derives from Article III of the U.S. Constitution. To establish standing under Article III, an ADA plaintiff must show actual or imminent injury. Injunctive Relief to remove access barriers is the only relief available to an individual ADA plaintiff in Federal Court.

In August, 2020, the plaintiff in Anthony Bouyer v. LAXMI Hospitality, LLC filed an action alleging the defendant’s hotel in Woodland Hills, California violated the Americans with Disabilities Act (ADA).  According to the Complaint, the plaintiff is substantially limited in performing regular life activities and uses a wheelchair when traveling in public.  The Complaint alleges that the plaintiff visited the hotel where he encountered ADA violations.  The hotel had no record of the plaintiff’s alleged visit.  The plaintiff’s Complaint sought injunctive relief requiring the defendant to make the hotel accessible.

The plaintiff served the Complaint on a hotel clerk.  Due to a variety of COVID-19 related factors, the defendant failed to respond to the Complaint.  The Court Clerk entered the defendant’s default and the plaintiff filed a Motion for Default Judgment.  Despite being served with notice of the Motion for Default Judgment, the defendant sought our  representation just before its opposition to the Motion was due. CONTINUE READING →

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31 December 2020

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Click here for the latest on labor and employment guidance.

As 2020 comes to a close, many employers have questions about a number of new laws which are about to come into effect. In the article below, JMBM’s Labor and Employment Group have summarized recent changes to labor regulations and provided a snapshot of what to expect in the new year.

Labor & Employment New Year Round-Up
What to Expect in 2021

Several new pieces of California legislation have either recently gone into effect or will take effect on January 1, 2021, impacting nearly all employers and how they handle COVID-19 related issues, leaves of absence, workers’ classification, discrimination disputes, arbitration agreements, union relations, and other miscellaneous issues.

The start of a new presidential administration also brings potential changes to labor regulations; find out what we’ll be watching for, below.

Our round-up will help you determine which key issues may impact you in 2021; contact us to be sure you’re ready for all these upcoming changes. Click the ‘read more’ link for each topic to see a comprehensive summary.

New COVID-19 Reporting Obligations

AB 685 adds to California’s growing list of COVID-19 health and safety related laws, imposing additional reporting obligations on employers and expanding Cal/OSHA’s authority to issue shutdown orders for workplaces that pose a risk of an “imminent hazard” relating to COVID-19.

What this means for employers: Employers should update their written COVID protocols for employees, and prepare template notices that include the information required under the new law.

Read more here.

COVID-19 Workers’ Compensation Presumption

SB 1159 creates a disputable workers’ compensation presumption that illness or death related to COVID-19 is an occupational injury and therefore eligible for benefits.

What this means for employers: The presumption is disputable, meaning that employers have an opportunity to refute the presumption by providing evidence to indicate that an employee did not contract COVID-19 at the workplace. Employers should ensure that they implement adequate measures to reduce potential transmission of COVID-19 in the workplace and that these measures are well documented.

Read more here.

Temporary Cal/OSHA “COVID-19 Prevention Rule”

California’s Office of Administrative Law approved Cal/OSHA’s emergency COVID-19 Prevention Rule, which will remain in effect through at least October 2, 2021. One of the key provisions of the new rule requires California employers to establish and implement a written prevention program tailored toward preventing the spread of COVID-19 in the workplace.

What this means for employers: This rule is expansive and imposes a number of significant burdens on employers. Employers should consult with counsel upon reviewing each of the Rule’s mandates to ensure compliance.

Read more here.

Significant Expansion of Family Leave Requirements to Almost All CA Employers

CONTINUE READING →

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23 December 2020

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on ADA Compliance and Defense.

As websites become a larger consideration for hotel owners hoping to avoid ADA lawsuits, courts have repeatedly dismissed claims by “testers” who visit hotel websites without any clear intention of visiting the hotel itself. A judge in the US District for the District of Maryland has ruled a third time that a serial tester does not have standing to sue. Martin Orlick, Chair of JMBM’s ADA Compliance & Defense Group, explains the ruling and what it could mean for hotels, below.

ADA Website “Tester’s” Lawsuit
Dismissed – Again

by
Martin Orlick, Chair, JMBM’s ADA Compliance & Defense Group

In 2020, we saw an explosion of federal lawsuits against hotels alleging that they failed to comply with 28 C.F.R. 36.302(e) of the Americans with Disabilities Act (ADA) by not identifying accessible features on their own and third party booking agents’ websites.

Twice this year, we reported that ADA website lawsuits filed against hotels by serial plaintiff Deborah Laufer were dismissed as she failed to show she had standing to sue. Is the third time a charm?
On November 19, 2020, a federal district court judge dismissed yet another ADA website lawsuit because Ms. Laufer failed to show she had standing to sue under Article III of the Constitution because she did not show “individual” or “particularized” injury.

CONTINUE READING →

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20 December 2020

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on the coronavirus. and here for the latest on labor and employment guidance.

Hotel Lawyer: What stance should hotels take on mandatory COVID-19 vaccinations?

Most of the world has been anxiously waiting for the “silver bullet” of an effective COVID-19 anti-virus vaccine to save lives, reopen business, save severely damaged hotels and restaurants, and restore public confidence. The FDA approval of the first two US vaccines and the massive distribution immediately thereafter is projected to provide sufficient doses of the vaccine for about half the US population by March 2021 and 100% of the population by the Summer of 2021.

But almost before the anti-virus vaccine distribution started, a significant faction of anti-vaxxers started challenging the effectiveness and desirability of taking the vaccine. Many such advocates said they do not want to take the vaccine, or at least want to wait. Some raised questions about the vaccine’s effectiveness and side effects. Issues of allergic reaction and religious conviction (against the vaccine) were raised. “Social control” issues started to shape the debate and the controversy. It is ironic that so many are fighting for priority to get the vaccine first while others fight attempts to force vaccination.

So, what should hotels do to protect their employees and guests? Can – or should – hotel employers mandate vaccination for their public-facing workforce? What are the important legal and business considerations in charting the right course? CONTINUE READING →

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14 December 2020

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Click here for the latest articles on ADA Compliance and Defense.

Last week, the Department of Transportation modified the rules of the Air Carriers Act so that “emotional support” animals will no longer be permitted to fly for free, and only “service animals” will be allowed aboard.

Martin Orlick, Chair of JMBM’s ADA Compliance & Defense Group, has written an article giving some context to this decision and outlining what animals will be allowed to join passengers on commercial flights. Hotel owners should be aware that while this rule change only applies to airlines, they do not have to permit emotional support animals on their property.

Emotional Support Animals Now Banned
on Commercial Flights
Airlines are Crying “Woof”
by
Martin Orlick, Chair, JMBM’s ADA Compliance & Defense Group

News accounts abound of passengers bringing a variety of so-called “emotional support” animals aboard commercial air flights. Who hasn’t seen a cute, expensive dog, cat or other animals on flights? And we have also heard about passengers bringing along cats, turkeys, lizards and emotional support snakes aboard commercial flights. Well, the days of flying pets for free are over, according to new federal rules.

Last week, the Department of Transportation (DOT) adopted new rules that only specially trained dogs can assist passengers with physical or psychiatric disabilities on commercial flights. This rule comes after years of abuse by passengers who want to have their pets fly free.

Under the Air Carriers Act, passengers could bring their “emotional support” animals aboard commercial flights. All the passenger needed was a note from a friendly doctor or therapist stating that the passenger required the animal for emotional support in flight. For $175, anyone can go online and fill out a check-the-box questionnaire and receive a letter from a doctor or therapist stating that the passenger needs the company of an emotional support animal to fly safely. With such a note, pets could fly free of charge. For another $75 one can buy an “official” looking dog vest and emblem, purporting to be an emotional support animal certification on eBay. But such “notes” and indicia are meaningless, as there is no legitimate certification for emotional support animals. CONTINUE READING →

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10 December 2020
Click to see our category-killer experience with hotels. See also our distressed loan credentials and The Lenders Handbook for Troubled Hotels. And click here for the latest blog articles on loan modifications, workouts, bankruptcies and receiverships, and outlooks and trends.

Most of the receiverships in the United States are state court receiverships. But lenders seeking the relief and protection of receiverships are giving new consideration to filing in federal court.
Our partner Nick De Lancie took the lead in putting together this summary of some key factors in making this choice today.

Time for a new look at
Federal vs. State Receiverships

Many state courts are closed or backlogged

Due to the Covid-19 crisis, getting receivers appointed in many state courts may be difficult. Some state courts are effectively closed, others are backlogged, and still others have temporary restrictions on receivership or foreclosures proceedings that push receivership applications even further down the stack.

Federal courts are generally open and working. Federal courts, however, have generally been proceeding with their cases in a more-or-less normal fashion. Even though federal courts do not have the quick receivership hearings that some states permit in ordinary times, federal receiverships, which are not commonly used by secured creditors, can be a very useful remedy for defaulted loans. This is particularly true even when state courts are fully “open for business” where the borrower’s operations and the creditor’s collateral are located in multiple states.

Similarities to state receiverships. Federal receiverships are similar to traditional state court receiverships but they have nationwide scope and may avoid many of the problems that arise from seeking and using multiple receivers, each from a court in a different state. They are historically recognized by federal law and are recognized and governed by the Federal Rules of Civil Procedure. CONTINUE READING →

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1 December 2020

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on ADA Compliance and Defense.

Following our ADA Website Litigation Update in June, federal courts have begun to signal the end of a series of nearly 500 ADA lawsuits filed by one plaintiff against several hotels concerning accessibility descriptions on hotel reservation websites. Martin Orlick, Chair of JMBM’s ADA Compliance & Defense Group, gives an overview of these cases and explains why a recent ruling by a Maryland judge has proved that they are defensible.

While this ruling demonstrates that courts are beginning to push back against serial plaintiffs, it is important for hotels to understand what the ADA requires during the online reservations process.

Federal Judges Deal Further Blows to Debra Laufer’s Nationwide ADA Lawsuits Against the Hospitality Industry: ADA Lawsuits Are Defensible
by
Martin Orlick, Chair, JMBM’s ADA Compliance & Defense Group

On June 8, 2020, we reported on the opinions of a New York federal judge that 30 of Debra Laufer’s Complaints had no place in federal court. Since then, in other jurisdictions, federal judges have dealt further blows to Ms. Laufer’s campaign of lawsuits alleging that hotels and online travel agencies’ (OTA) websites violate the Americans with Disabilities Act (ADA) under 28 C.F.R. § 36.302(e)(1) by failing to identify the accessibility features of their hotels. On November 10, 2020 in Deborah Laufer v. Ft. Meade Hospitality, Civ. 8:20-cv-1974, a Maryland judge dismissed Ms. Laufer’s Complaint for lack of Article III standing.

Debra Laufer has filed nearly 500 lawsuits against hotels in Florida, Georgia, Maryland, New Jersey, New York, Illinois, Texas and other states. Until recently, hotel defendants found it easier and cheaper to settle, thereby encouraging more lawsuits. But a recent federal court decision may signal the end of these serial ADA lawsuits filed by Ms. Laufer.

Ms. Laufer is a self-described “tester” who reviews hotel websites to determine whether these “places of public accommodation” and their websites are in compliance with the ADA. The plaintiff, physically disabled, resides in Florida and requires assistive devices, often including a wheelchair if available. When allegedly visiting hotels, she requires disability accommodations. Online reservations can be made directly through the hotel’s website or at booking.com, priceline.com, expedia.com and other booking websites. Laufer alleges she visited these websites to test whether they meet the requirements by providing disability information about the hotel accommodations. If the websites do not provide sufficient information, she files litigation through the same lawyers.
CONTINUE READING →

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19 November 2020

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Click here for the latest articles on the coronavirus.

Hotel Lawyer: Is the hotel industry on the verge of salvation, or precipice of despair?

We are less than a week from Thanksgiving and a lot of new data has been released in the past few days, with important implications for the hotel industry and the economy. Some highlights discussed below are:

  • An American Hotel & Lodging Association survey taken November 10-13, 2020, provides a grim short-term forecast for the hotel industry, saying 71% report they can last only 6 months more, and 34% can last only 1 to 3 more months.
  • A City National Bank (CNB) report provides a November 18 update that new COVID vaccines now claim 90% or higher effectiveness; they might become available in December and be widely available by spring 2021.
  • The same CNB report projects short-term pain (rising COVID cases, deaths and hospitalizations) a decrease in consumer activity, and contraction for the economy (driven by COVID) – but projects a strong economic recovery starting with the second half of 2021.
  • CNB Report warns that its projected recovery in for the economy and markets is “unconditionally dependent on [the COVID] vaccine ending the pandemic.”

The AHLA Survey

The American Hotel & Lodging Association (AHLA) issued a press release on November 19, 2020 with the results of a survey taken November 10-13, 2020 with 1,200 respondents. The survey indicates widespread hotel closures and failures unless there is significant federal economic relief to survive the devastating loss of travel and tourism.

  • 71% of hotels report they will only be able to last 6 more months at current projected business, and 34% say they can last only 1 to 3 months longer.
  • 82% of hotel owners say they cannot obtain additional debt relief from their lenders beyond the end of the year.
  • 59% of hotels says they are in danger of foreclosure by their lenders due to COVID-19.
  • 52% say they will close without additional federal assistance, and 98% would apply for and use another round of Payroll Protection Program (PPP) loans.

CONTINUE READING →

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10 November 2020

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Data Technology, Privacy & Security.

On November 3rd, Californians voted to approve Proposition 24 which amends the California Consumer Privacy Act to include expanded consumer rights and greater privacy protections.

The California Privacy Rights and Enforcement Act – which also establishes an enforcement agency to guarantee strict compliance – places additional obligations on businesses to ensure that consumer data is transparent and secure. Given the scope of the Act and the short timeframe for compliance, hotels should immediately start looking at their data profiles and security to avoid running afoul of the new rules.

Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, explains the major provisions of the Act and discusses the challenges hotels face as they look to address its requirements.

New Challenges for Hotels:
The New California Privacy Rights and Enforcement Act of 2020
by
Bob Braun, Hotel Lawyer

Many races and initiatives that California voters considered on November 3 are still undecided, but Proposition 24, the California Privacy Rights Act of 2020 (the “CPRA”) isn’t one of them.  The California electorate approved Proposition 24 by a comfortable margin – 56% of Californians voted in favor.

Like its predecessor the California Consumer Privacy Act of 2018 (the “CCPA”), the impact of the CPRA won’t be felt immediately.  It goes into effect on January 1, 2023, and many of its provisions are unclear and will require study.  But hotel companies with a presence in California will need to consider its requirements, and given the scope of the law, addressing its requirements early will be essential.

New Sheriff in Town

Perhaps the most significant development in the CPRA is the establishment of a new agency, the California Privacy Protection Agency, dedicated to handling enforcement and compliance with privacy regulations.  This makes California the first state with an agency focused solely on enforcing privacy laws.  This new agency will replace the California Attorney General in interpreting and enforcing the CCPA.  The ultimate impact of the agency will develop as its members are selected and interpret its mandate, but it is clear from the CPRA that it has broad authority to bring civil and criminal actions.

Select Key Provisions

The CPRA is an extension and modification of the CCPA.  It adds a number of new definitions and provisions that, in some cases, extend the scope of the CCPA and, in other cases, clarify the requirements of the CCPA.  The result is that hotel companies that already comply with the CCPA will need to revisit their policies and procedures to ensure compliance with the CPRA, and any firms that have not yet considered CCPA compliance have a steep learning curve.  Key provisions include: CONTINUE READING →

Contact Information
Jim Butler, Chairman
Global Hospitality Group®
Jeffer Mangels Butler & Mitchell LLP
(310) 201-3526 • jbutler@jmbm.com
www.HotelLawyer.com

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