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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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6 January 2024

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

Meet Mark S. Adams, Hotel Dispute Lawyer –
Hospitality Litigation, Arbitration & Dispute Resolution

Mark S. Adams is an experienced trial lawyer, partner, and senior member of JMBM’s Global Hospitality Group®. In his more than 14 years with the Firm, Mark has created an international reputation as a Hotel Dispute Lawyer, handling litigation, arbitration, and alternate dispute resolution in hundreds of matters affecting hotels, resorts, restaurants, and other hospitality properties.

We caught up with Mark for some candid insights about him and his practice.

Q: Mark, you have had an amazing litigation career. What is the secret of your success?

A: I rarely lose, and that’s because I have a fantastic support team, unrivaled in talent. We also believe in and practice the Global Hospitality Group® mantra of “aggressive and passionate advocacy.”

Q: That is a good summary, particularly with your track record. But what is the philosophy or approach that leads to such success?

A: I customize my strategy and approach with each client in each situation. First, I need to understand my client, their goals, and other concerns. Then we initiate an iterative process where the client and I explore all relevant facts affecting the matter, what laws and contracts may govern, the aggressiveness of the parties, and various options for proceeding.  Numerous factors affect our choices, including timing for resolution, funding available to the paying party to accomplish a resolution and creative non-monetary solutions. There is no successful cookie-cutter approach.

Q: Controlling litigation costs is important for clients. If a client cannot avoid litigation, what do you do to work with the client to control the costs of pursuing or defending a claim?

A: The cost of litigation is important to all our clients, whether it is a relatively minor matter or a “bet the company” case. The cost-benefit analysis may vary depending upon the circumstances.

Here is how I advise clients to control litigation costs: CONTINUE READING →

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22 December 2023

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

Hotel Dispute Lawyer: How Pennsylvania Resort Fees Settlements Could Play Out for US Hotel Industry

Hospitality Litigation, Arbitration & Dispute Resolution

On December 12, 2023, Mark S. Adams, Hotel Dispute Lawyer, was a guest on the Hotel News Now podcast where he discussed the effects of mandatory fee disclosure litigation in Pennsylvania on the hotel industry.

Consumer advocacy groups, law firms and federal and state governments have begun to push back on hidden resort fees, which are often not disclosed until customers near the end of the booking process. Resort fees are charged in addition to hotel room rates and can include things like amenity fees and destination charges.

In Pennsylvania, the state’s attorney general reached settlement agreements with Omni Hotels & Resorts, Choice Hotels International and Marriott International over their fee disclosure practices. According to Adams, the main objective in these cases was to ensure full transparency. If a hotel has a mandatory fee, they will have to let customers know upfront.

“I see the impact as being multifaceted,” explained Adams. “One, it’s good for the consumers because you know what you’re buying. Two, I think it’s actually good for the industry.”

He went on to explain that because some of the biggest hotel brands have become compliant with full disclosure, the smaller brands will get on board. CONTINUE READING →

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19 December 2023

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

On July 1, 2024, a comprehensive ban on pricing goods and services without including all mandatory fees will go into effect in California. This ban is the result of a bill recently signed into law by Governor Gavin Newsom, and similar proposed legislation has gained bi-partisan support from state governments and federal authorities. In the below article, JMBM partner Mark Adams discusses the implications of these legal developments for hotel owners. He emphasizes the need for full transparency to avoid financial penalties, litigation, and reputational damage.

The Final Check-Out: Bidding Farewell to Undisclosed Mandatory Resort Fees

by

Mark S. Adams, Hotel Dispute Lawyer
Partner & Senior Member
JMBM’s Global Hospitality Group®

Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com.

In October this year, California Governor Gavin Newsom signed into law (effective July 1, 2024) a sweeping ban on pricing goods and services without including all mandatory fees or charges.

Presently pending in the U.S. Senate is a bipartisan-supported bill that would do the same.

These bills join state governments, federal authorities, state attorneys general, and consumer advocacy groups in intensified scrutiny of undisclosed mandatory resort fees included in hotel rates. Additionally, several state attorney generals and consumer groups are targeting hotels that charge undisclosed resort fees.

In response to this developing trend, it is imperative for hotel owners to quickly implement full transparency, revealing the total cost of mandatory resort fees upfront. Failure to do so may result in significant financial penalties, expensive litigation, and reputational damage among consumers, who often do not view these fees favorably.

What are Resort Fees?

Resort fees are extra charges imposed by hotels and resorts, ostensibly for providing certain amenities. This additional cost is typically calculated daily and added to the basic room rate. Resort fees are sometimes relabeled as a facility fee, destination fee, amenity fee, urban fee, or  resort charge. In the end, they are all the same thing; and even if a guest does not actually use the amenities associated with the resort fees, they are still required to pay for them.

Consumer Complaints About Hotel Resort Fees

Resort fees have become a significant point of contention for consumers worldwide. These mandatory charges, often added to hotel bills after booking, have been criticized for their lack of transparency and fairness. Many consumers claim to be blindsided by these additional charges, only realizing they are being charged a resort fee when they check out. This lack of upfront disclosure makes it difficult for consumers to accurately compare room costs and budget for their stay. CONTINUE READING →

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12 December 2023

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on EB-5 Financing.

Join JMBM partners Jim Butler, Catherine DeBono Holmes and David Sudeck on January 15-16, 2024, in Newport Beach, California, at the upcoming EB-5 & Global Immigration Expo, hosted by EB5Investors.com magazine and Uglobal Immigration Magazine. At the conference, these JMBM partners will be honored for their inclusion on EB5 Investors Magazine’s “Top 15 Corporate and Securities Attorneys” list for 2023. Read the Top 25 issue of EB5 Investors Magazine here. CONTINUE READING →

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07 December 2023

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

On December 5, 2023, the Los Angeles City Council removed a contentious measure from the March 2024 ballot which would have required hotels in the city to provide accommodation for homeless individuals alongside paying customers. The proposed ordinance, initially sponsored by hospitality worker union UNITE HERE Local 11, was withdrawn at the request of the union following a compromise ordinance.

UNITE HERE Local 11’s original proposal would have compelled hotels to report their vacancies to the city of Los Angeles Housing Department. Individuals or families would then be given a “market rate” voucher for payment at these locations which the hotels would not be able to refuse.

The measure faced sharp criticism from the American Hotel & Lodging Association (AHLA). AHLA President and CEO Chip Rogers accused Unite Here of creating “an atmosphere of dangerous uncertainty for hotel employees, hoteliers and the City of Los Angeles.” He characterized the proposal as a bargaining chip rather than a genuine effort to tackle the homelessness issue. Following the withdrawal of the ballot measure, Rogers expressed gratitude to the LA City Council for brokering a compromise that removed what he called UNITE HERE’s “ridiculous homeless-in-hotels proposal” from consideration. He emphasized the importance of prioritizing the safety and security of hotel employees and guests, urging leaders in LA and other cities to learn from this episode and put safety first in future dealings with Unite Here. CONTINUE READING →

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07 November 2023

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

In 2021, Congress passed the Corporate Transparency Act in order to combat money laundering and other illegal activities. The CTA goes into effect on January 1, 2024, and requires almost all businesses to file a report with FinCEN identifying their beneficial owners. JMBM’s Taxation, Trusts & Estates Department has written the below article detailing the steps businesses should take to prepare for this new law.

 

Preparing for the Corporate Transparency Act
Disclosure of Beneficial Ownership Information to FINCEN

by JMBM’s Taxation, Trusts & Estates Department

 

New federal disclosure requirements for your businesses and entities will become effective January 1, 2024 – the reporting requirements are burdensome, can be triggered multiple times in a single calendar year and are subject to both civil and criminal liability. Accordingly, you should prepare to comply with the new law now.

Specifically, in 2021, Congress passed the Corporate Transparency Act, which can impact (subject to certain exceptions) essentially all businesses and investment vehicles (including, but not limited to, partnerships, limited liability companies and corporations). The CTA itself aims to combat money laundering, terrorism financing and other illegal activities by requiring entities to disclose information about the individuals who beneficially own and control them to the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

In that regard, the CTA authorizes FinCEN to collect beneficial ownership information (“BOI”, as discussed below) and disclose it to various federal and state agencies (including the Internal Revenue Service). Accordingly, if you own or control an entity, then you may be subject to these requirements.

Reporting Requirements

Beginning on January 1, 2024, most U.S. entities will be required to file a report with FinCEN identifying the beneficial owners of such entity (inclusive of driver’s license and/or passport), in addition to (among other things) the reporting entity’s address, jurisdiction and taxpayer identification number (TIN). Reports will be filed electronically through FinCEN’s filing system. CONTINUE READING →

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30 October 2023

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

Many hotel owners already know they need to pay attention to Americans with Disabilities Act (ADA) compliance, both to provide a positive experience for guests and to avoid costly litigation. A proposed new California law, however, should bring their focus to website accessibility; if adopted, business owners, as well as their web developers, would be vulnerable to substantial statutory damages and attorney’s fee if sued by a plaintiff who succeeds in court.

JMBM’s ADA Compliance and Defense Team outlines the potential impact of this law, below.

 

 

New California Website Accessibility Bill
Would Expose Your Business to ADA and Unruh Act Liability

by Martin Orlick, Stuart Tubis, and Christopher Whang
JMBM’s ADA Compliance & Defense Group

 

Recently, the California Assembly quietly instituted a bill that would dramatically change the landscape of ADA website litigation. If you think the recent wave of ADA website lawsuits has been alarming, buckle up – because you haven’t seen anything yet.

The Assembly re-drafted an existing bill, AB1757, which if passed would include the adoption of the Web Content Accessibility Guidelines (“WCAG”) 2.1 into California’s disabled access law. AB1757 specifically would give plaintiffs the right to sue businesses if their website fails to meet those guidelines, which are not yet part of Federal accessibility law. Additionally and perhaps more alarming, if passed into law, the legislation would give ADA plaintiffs a direct claim to sue you and your web developers.

A plaintiff who prevails under AB1757 will be entitled to collect all damages, including but not limited to, statutory damages of $4,000 every time a person who is blind, low visioned or cognitively disabled visited your website or was deterred from visiting the website, as well as attorney’s fees resulting from the lawsuit.

To whom would AB1757 apply?

If passed, AB1757 would apply to all public businesses that own or operate a website for the sale of goods and services. AB1757 also would apply to “resource service providers,” or website developers, who operate, maintain, and/or build websites for public accommodations. CONTINUE READING →

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03 October 2023

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on EB-5 Financing.

JMBM is pleased to announce that partners Jim Butler, Catherine DeBono Holmes and David Sudeck have been named to EB5 Investors Magazine’s “Top 15 Corporate and Securities Attorneys” list for 2023.

Jim Butler authors the Hotel Law Blog and chairs JMBM’s Global Hospitality Group®, which provides business and legal advice to hotel owners, developers and commercial real estate investors. Jim’s team has provided clients with global business and legal advice on more than 4,700 hotels worth more than $125 billion. This advice includes both traditional and specialty financing like C-PACE and EB-5. JMBM’s team has closed more than $1.5 billion of EB-5 funding, and often helps clients source financing. Jim serves on the Public Policy Committee of the IIUSA (the EB-5 industry’s trade group for regional centers), and since 2015, he has been named one of the Top 25 EB-5 lawyers in the country.

Catherine DeBono Holmes is the chair of JMBM’s Investment Capital Law Group, and she has practiced law at JMBM for over 40 years. She helps real estate developers and business owners, brokers, investment advisers and investment managers raise and manage investment capital from U.S. and non-U.S. investors. Cathy has represented hundreds of EB-5 offering sponsors and real estate developers to obtain financing through the EB-5 immigrant investor visa program for the development of hotels, multi-family, assisted living and mixed use developments throughout the U.S. She also represents private investment fund managers, registered securities broker-dealers and investment advisers on securities offerings, business transactions and regulatory compliance issues. For the last five years, Cathy has been named as one of the top 25 securities lawyers in the country by EB5 Investors magazine. She also authors JMBM’s Investment Law Blog.

David A. Sudeck is a senior member of JMBM’s Global Hospitality Group® and JMBM’s Real Estate Department. His practice primarily involves the complex issues associated with hotels, resorts, vacation ownership properties, restaurants, golf courses and spas. David represents owners in the purchase and sale, development, construction, financing, leasing, and sale-leaseback of properties, and advises them on their branding and management agreements, including hotel management and franchise agreements. He has helped hotel developers source over $1 billion of EB-5 financing. David has significant experience in real estate finance and represents several financial institutions and EB-5 lenders as a special counsel to their hospitality interests. He is a frequent author on the Hotel Law Blog.

Read the Top 25 issue of EB5 Investors Magazine here. CONTINUE READING →

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28 July 2023

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

This month, the Securities and Exchange Commission (SEC) announced new rules requiring companies who experience a cybersecurity attack to publicly disclose the impact of the attack within four days. Hotel companies whose securities are registered with the SEC should take note of these regulations and develop a robust incident response plan.

Bob Braun, senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group, outlines the new regulations below.

Time is Short – Reporting your Data Breach
by Bob Braun, Hotel Lawyer

 

Over the past years, hotel companies – including brands, managers and owners – have increasingly sought the benefit of access to public markets and, in doing so, have become subject to the registration and disclosure requirements of the United States Securities Act and Securities Exchange Act. In doing so, these companies need to comply with a broad variety of detailed regulations addressing their disclosure and reporting obligations. The Securities Exchange Commission recently adopted regulations which will have an impact on publicly traded hotel companies that suffer a data breach.

Breach Notifications for the Past 20 Years. Ever since California became the first state to require companies to notify their customers of data breaches in 2003, the time between the date a breach was discovered and the time the breach was reported has been an issue of contention. Early reporting gives consumers a leg up in protecting their personal information, and lets investors, vendors and customers of companies know if key business information has been compromised. At the same time, companies want as much time as possible to investigate a breach, understand what happened, and provide accurate information – companies that give early notice often have to give multiple notices as more information becomes available, and may even find that the original notice wasn’t necessary. Regardless, lawsuits against companies that have suffered data breaches almost universally point to the gap in time between the discovery and notification of a breach. CONTINUE READING →

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25 July 2023

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

Earlier this week, the Global Hospitality Group® co-hosted a breakfast briefing in Los Angeles with CREDE, a leading real estate development and project management firm. The program focused on how hotel owners and developers can reduce their cost of capital and costs of construction while filling in gaps in their capital stack through a few critical construction management techniques and exploitation of both traditional and alternative financing options.

Luigi Major, Managing Director of HVS, opened the program with an economic overview, providing an inspiring update on the state of the industry. His data shows depressed urban markets like San Francisco and San Jose are now enjoying double digit RevPAR growth, and some formerly red-hot leisure markets such as Santa Barbara have softened (-24% RevPAR growth). Business travel continues to get stronger and leisure travel is slowing. Cap rates are rising, but only by 40-90 basis points, which is modest compared to the interest rate environment. Luigi believes this is due to hotels coming into favor as a class of real estate. 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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