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Hotel Lawyers -- featured subjects and articles
Meet the Money® 2014

ADA defense and compliance

EB-5 financing

Workouts, bankruptcies & receiverships

Hotel Management Agreements

Hotel Franchise & License Agreements

Hotel industry trends

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.

Published on:

19 March 2021

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

The survey standards for the American Land Title Association® (ALTA®)/ National Society of Professional Surveyors (NSPS) survey were updated in February 2021. Given how important this survey is to most commercial real estate transactions, it is crucial that investors understand its scope in order to avoid unnecessary costs and delays. JMBM associate Trevor Countryman has outlined these recent changes below.

New ALTA/NSPS Land Title
Survey Standards for 2021

by
Trevor Countryman

Every 5 years the survey standards for ALTA surveys are revised. ALTA surveys are the standard for the commercial real estate and hotel industry.

The most recent revisions to the ALTA survey standards took effect on February 23rd, 2021. All new ALTA surveys and any updates to existing ALTA surveys will now need to comply with the revised standards.

Click here for a redline showing the changes for the 2021 ALTA survey standards.

Overall, there were not many substantial edits to the ALTA survey standards for 2021, but below is quick summary of some of the most significant changes: CONTINUE READING →

Published on:

20 February 2021

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

Hotel finance lawyer: PACE Financing is now mainstream

About five years ago, my partner David Sudeck, a senior member of JMBM’s Global Hospitality Group®, spoke at a hotel industry conference about the attractive features of PACE financing as an innovative financing technique. David has extensive experience with virtually all kinds of real estate financing from senior debt to joint ventures. At the time, he had just finished working on a hotel financing that included components of a senior construction loan from a private lender, Mello Roos community facilities district financing, EB-5 financing, and PACE Financing. Few people in the audience at the conference had heard about PACE financing, and there were a lot of questions about its characteristics.

Over the past five years, PACE financing has gained wider acceptance, and moved from a novel or creative technique to a widely-accepted practical solution to financings. It has gained traction with both lenders and borrowers. But its gradual increasing use was accelerated by the COVID pandemic and resulting lockdowns, and near collapse in many segments of the hospitality industry. The accompanying deficiency of construction and other financing since March 2020, supercharged the importance and use of PACE Financing. Over the past few months alone, David Sudeck and his team have worked, on the lender and borrower-side of transactions, on more than a dozen PACE financing transactions. The largest that we have worked on, more than $40 million of PACE financing, closed just a few weeks ago.

At this point, most owners and developers are considering PACE financing as part of their capital stack for development, for renovation, and for rescue capital (more on this below). And more and more lenders have been approving PACE as a part of the capital stack. Why, you ask?

Why PACE financing can be attractive:

PACE financing takes the form of a voluntary tax assessment on real property, having the same features and priority as an ad valorem real property tax (typically paid only twice per year, when real property taxes are paid). Here are some of the features that may be negotiated which can make it attractive financing: CONTINUE READING →

Published on:

19 February 2021

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

The Global Hospitality Group® just hosted a very timely webinar discussing the state of the hotel and CMBS industries. Our program featured senior representatives from Argentic, Greystone, and Situs – three of the largest CMBS special servicers with the most distressed hotel debt – as well as leading data and analytics firm Trepp, HREC’s runway capital program, Manhattan Hospitality for hotel industry perspectives, and our own hospitality workouts and receivership expert to break down the current state of the distressed hotels market and CMBS special servicing.

Two of our panelists, Jack Westergom of Manhattan Hospitality Advisors and Manus Clancy of analytics firm Trepp, presented slides packed with useful information, and we wanted to make them available to those who were not able to attend the program. Jack’s update on the state of hotel industry, and Manus’ state of the CMBS industry presentation are both available for download below.

CONTINUE READING →

Published on:

16 February 2021

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

For many years, businesses classed as public accommodations under the ADA have been the subject of “cookie-cutter” complaints that allege discriminatory conditions without providing any specific examples. Thousands of nearly identical complaints have been filed in federal courts nationwide, and their lack of detail makes it difficult for courts to provide a remedy that will prevent future harm. Martin Orlick, Chair of JMBM’s ADA Compliance & Defense Group, summarizes the recent decision in Whitaker v. Tesla Motors which may put an end to these fill-in-the-blank cases.

Whitaker v. Tesla Motors – the end of
cookie-cutter ADA complaints?

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

In a unanimous published opinion, the United States Court of Appeals for the Ninth Circuit (Ninth Circuit) affirmed the District Court’s dismissal of Whitaker v. Tesla Motors, for failure to state a claim of an action under Title III of the Americans with Disabilities Act (ADA). This case may have broad application for ADA defense lawyers because very similar “form” complaints are used widely in Southern California. According to the Ninth Circuit, these complaints are defective. There are literally hundreds, if not thousands, of virtually identical Complaints on Federal Court dockets in California and across the country.

About Whitaker v. Tesla Motors

Brian Whitaker, whose complaint states he uses a wheelchair for mobility, is a “tester” who visits businesses to ascertain whether their facilities comply with the ADA. Whitaker files lawsuits against those he determines are non-compliant, using complaints that are little more than a “fill-in-the-blanks” form.

In this case, Whitaker visited a Tesla dealership and alleged its service counters denied him full and equal access and “created difficulty and discomfort”. He further alleged that Tesla’s failure to provide accessible service counters prevented him from returning to the dealership. CONTINUE READING →

Published on:

02 February 2021

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

As we’ve discussed in previous blogs, there has been an uptick in lawsuits filed against hotels alleging a failure to list accessible features on their website as required by the ADA. While many of these cases have been successfully defended in federal courts, new filings continue to surge and many plaintiffs are turning to state courts which have different requirements for dismissal. Martin Orlick, Chair of JMBM’s ADA Compliance & Defense Group, explains why we should expect these cases to continue in 2021 and what hotels should be looking out for.

Hotels must list accessible features on the web or risk being sued

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

We previously warned the hotel industry of the inevitable explosion of ADA website lawsuit filed against hotels. Well, that time is here.

In 2020, we saw a surge of lawsuits filed against those in the hotel industry, alleging the failure to comply with 28 C.F.R. Section 36.302 (e) of the Americans with Disabilities Act (ADA), which requires hotels to list their accessible features on their websites as well as on the websites of online travel agencies (OTAs) such as Travelocity, Orbitz, hotels.com, etc. We expect this surge of lawsuits to continue well into 2021.

Whether you are a national “flag” or the owner of a small portfolio of hotels, the 2010 ADA’s, C.F.R. Section 36.302 (e) applies to your hotel properties and websites. This section of the ADA has been effective since March 15, 2012 and requires hotels to describe accessible features in hotels and guest rooms offered through its reservations services in enough detail to reasonably permit individuals with disabilities to assess independently whether a hotel or guest room meets their accessibility needs. CONTINUE READING →

Published on:

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 →

Published on:

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 →

Published on:

31 December 2020

See how JMBM’s Global Hospitality Group® can help you.
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 →

Published on:

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 →

Published on:

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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