Yes. With the right circumstances and a fair document, a land contract (sometimes called a “contract for deed”) can be a great way to transfer real estate when traditional financing is not available.

More often, we hear about terrible results from land contracts. Unscrupulous sellers can use them to trap low-income buyers who make a down payment, invest thousands of dollars for basic repairs, but miss one or two payments and then have everything taken away – evicted as if they had been a tenant. Or sellers complain that they thought they had sold the house only to find the buyer stopped making payments and they have to get a lawyer involved to regain possession.

Land contracts work best when (a) the house is in good shape, to begin with; (b) the buyer has good credit and can afford to purchase and maintain the home, but (c) the purchase price of the home is too low to support a traditional mortgage loan. In South Bend, we have a large number of homes that sell for less than $50,000. In many cases, banks and other mortgage lenders will not finance home sales in this range because federal regulations limit the fees they can charge to a small percentage of the loan amount, making a $40,000 loan (the loan amount after 20% down on a $50,000 house) simply unprofitable for the bank. Most of these homes are bought and sold on land contract.

Under good conditions – with a home in good shape and a buyer with good credit – a land contract can work well if it’s written fairly for both the seller and the buyer. Unfortunately, many of these deals are done with forms downloaded for free from the internet – most of which are poorly written or are one-sided (usually in favor of the seller).

When a lawyer reviews a land contract, he or she is usually looking to see how the contract handles a few key issues:

• Property Identity: Is it clear which legal parcel is being sold and what its boundaries are? It’s easy to check the public GIS records to make sure that what the County thinks the property boundaries are matches what the parties think is being sold. (Also good to check whether there might be any obvious boundary disputes with neighboring properties).
• Term: Over how many months will the seller finance the transaction? Is there a simple-to-understand schedule of payments?
• Interest Rate: Is the interest rate fair?  When you check the calculations, is the actual interest rate paid the same as the interest rate listed in the contract?
• Disclosures or Warranties:  Has the seller disclosed all defects that the seller knows about? Is the seller making any warranties about the condition of the home or major systems (e.g. plumbing, electrical, HVAC, roof)?
• Control: Does the buyer have full control over the property, except to allow the seller the right to inspect the property from time to time upon reasonable notice?
• Recording: Do the parties plan to have the land contract (or a summary) recorded? The buyer wants this both to give notice to the world of their interest and also to enable them to claim a homestead exemption.
• Mortgage Right: The seller should retain the right to mortgage the property during the term of the contract, so long as the balance of the mortgage loan never exceeds the balance due on the contract.
• Forfeiture: Have the parties agreed at what point the seller has made enough payments that they have “a substantial interest” in the property such that a default would lead to foreclosure rather than forfeiture? It’s better to pick a dollar figure – usually around 30% of the purchase price.

Finally, when someone is buying a home on a land contract, it’s always a good idea to have a basic title search done on the property before signing the contract. For around $150, a title company will comb through public records to (a) confirm that the party selling the home actually owns it and (b) reveal whether any other parties have liens on the property. It would obviously be a waste of time and money for a buyer to make years of payments only to later learn that the seller can’t transfer clean title.

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.

The Real ID Act passed in Indiana in 2010 but has been on the books at the federal level since 2005. Eric Feldman, Hoosiers will soon need Real ID to fly, August 18, 2017, https://www.wishtv.com/top-video/hoosiers-will-soon-need-real-id-to-fly/1063744787 (last accessed October 2, 2018). A Real ID is now required “for everyone applying for a new Indiana credential (driver’s license, learner’s permit, or identification card.).” Real ID Overview, Bureau of Motor Vehicles, https://www.in.gov/bmv/2577.htm (last accessed October 2, 2018). Indiana residents who are simply renewing, amending, or replacing their driver’s license may apply for a “non-compliant credential, but are encouraged to obtain a Real ID-compliant credential.” Real IDs will become important in the next few years, as beginning October 1, 2020, “a Real ID-compliant driver’s license, permit, or identification card will be required to board commercial airplanes,” take the Amtrak train, “or enter certain federal facilities” without a Homeland Security-approved document. Real ID Overview, Bureau of Motor Vehicles, https://www.in.gov/bmv/2577.htm (last accessed October 2, 2018); Eric Feldman, Hoosiers will soon need Real ID to fly, August 18, 2017, https://www.wishtv.com/top-video/hoosiers-will-soon-need-real-id-to-fly/1063744787 (last accessed October 2, 2018).

Applying for a Real ID is a relatively straightforward process, provided you have the appropriate documents and have never changed your name. I obtained a Real ID in under ten minutes without realizing what it even was. But for those who may be known by a name different than that on their birth certificate or passport, the process can be tricky.

The Indiana BMV website details the information you must bring with you to obtain a Real ID. If your legal name matches your identity document, then you must bring an unexpired U.S. Passport, U.S. Passport Card, or Birth Certificate to establish your identity and your lawful status. You must also present one original document with your current legal name and Social Security number to establish your Social Security number. Additionally, you must present two original documents with your name and Indiana residential address to establish Indiana residency. https://www.in.gov/bmv/2777.htm.

If your legal name does not match your driver’s license or identity card, then you must bring all of the documents identified above as well as proof of your name change. This could be your marriage license, divorce decree, certified amended birth certificate showing the change of gender, or court order granting a name change. If your legal name has changed multiple times since your last driver’s license or ID card was issued, then you must bring proof of every single name change.

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.

For employment law, this is a big deal. Just hours after the Supreme Court decision was announced, one national law firm posted information on its website offering to help clients prepare binding arbitration agreements. But is it a big deal for your business?  Should local employers change their policies or practices?

It depends. The Epic case was actually a combined decision dealing with three different cases. All three involved claims for overtime compensation under the Fair Labor Standards Act. All three also involved large-scale employers with hundreds of employees in the same job classification. For those companies, the risk of a class action was high. One or two claims surrounding overtime issues can be handled quietly. But if a complaining employee can orchestrate a class action involving hundreds (or more) current and past employees, that’s a different kind of problem. Business owners often complain about the costs of litigation. But class action litigation is on a completely different plane. The costs and risks are enormous. In some circumstances, a class action can force a company into bankruptcy.

So for Epic Systems and the other employers involved in that case, it made sense to hold their employees to an agreement compelling arbitration and waiving the right to a class action—and to fight the issue all the way to the Supreme Court. You should consult with your own legal, business, and financial advisors to determine if it makes sense for you. When you do, you may wish to think about arbitration agreements more broadly. Even if you believe the risk of a class action is low or claims for overtime compensation unlikely, the Epic Systems case is the latest in a trend favoring arbitration. The specific arbitration agreement used by Epic Systems Corporation did not cover workplace discrimination or harassment claims, but it might have. Knowing the federal courts take a strong pro-arbitration stance, you might want to consider requiring all employees enter into agreements requiring them to arbitrate all claims. Arbitration proponents argue it is faster, less costly, and more efficient than litigation. They also tout the confidentiality of the process. All those benefits could be yours, providing you with a mechanism to keep any employment dispute out of the courts.

But all rewards come with risks, and arbitration has its complications, too. For example, there is almost no opportunity to appeal an arbitrator’s decision.  Also, experience shows the costs of arbitration can, in some cases, run higher than courtroom litigation. Further, some observers complain that arbitrators often make “split the baby” decisions, rather than ruling in favor of one party or the other.

On top of all that, if you want to use arbitration to resolve employment disputes, you’ve got to have a binding arbitration agreement in place. Most of your at-will employees likely do not have a contract of any type.  You will want to structure any arbitration agreement in ways that do not change the at-will status.  And the law requires some other specific contract provisions if an employee is waiving statutory rights.  Although courts have been very favorable to arbitration agreements in recent years, that does not mean an employee won’t fight the issue. If you have to fight in court about the validity of the agreement before you even get to fighting about the underlying employment issue, then you have definitely missed out on the promise of prompt and inexpensive resolution.

Also, the law on this subject may change. Late last year, Senators Gillibrand and Graham introduced a bi-partisan bill called the Ending Forced Arbitration of Sexual Harassment Act of 2017. Early this year, the attorneys general of all 50 states, the District of Columbia, and the five U.S. territories sent a letter to Congress in support of the law. This may or may not become law, and if it does, there may be more to discuss about the differences between “forced” and “voluntary” arbitration.  But there is broad support across the political spectrum for combating sexual harassment. Many believe the confidentiality of an arbitration process is unsuitable for these types of claims. In fact, when it comes to confidentiality, you may have missed the so-called Weinstein provision in the recent tax law that prohibits employers from deducting legal expenses incurred as part of a sexual harassment case if the case is resolved through a confidential settlement.

Of course, differences between sexual harassment and other types of employment claims represent just one of the many factors to consider in evaluating the merits of an arbitration agreement for your employees. The courts will generally allow these kinds of agreements. But employers have to think carefully about when or whether to use them. Only time will tell if the Epic Systems case prompts a wave of arbitration agreements across the country.

Call 574.232.3538, if you’d like to make an appointment to discuss the merits of an arbitration agreement for your employees.

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.

In Indiana, most injury claims must be brought in two years; certain contract claims can be filed up to ten years later, and most warranty-related claims have a four-year statute of limitations. But sometimes Indiana law does not apply. (Michigan has similar, but slightly different, time periods). Claims involving government entities usually have special rules. And sometimes the Indiana rule applies but does not tell you the whole story. For example, an employment-related claim under Indiana law must be filed within two years, but many federal employment claims must be pursued with the Equal Employment Opportunity Commissions within 300 days, and in some cases, even shorter periods apply. And all of these different rules have exceptions.

I was reminded of this complexity hiding beneath the surface of statutes of limitations when I read about a case decided in the Indiana Court of Appeals this summer. In Whitlock v. Steel Dynamics, Inc., the court ruled on the type of evidence necessary to prove the “disability” exception to the statute of limitations. A man who was struck by a crane did not file suit until eight days after the two-year statute of limitations had run. He argued he was “disabled” because of the injury and should be entitled to a longer time period. His wife and mother-in-law both provided affidavits supporting his argument. The trial court was not convinced, and it dismissed his case. The Court of Appeals agreed, explaining that the “conclusory opinions” of his family were not enough to take the case to trial. Mr. Whitlock sought further review from the Indiana Supreme Court, which declined to hear his case this September.

When you read the entire case—including details about Whitlock’s capabilities right after the accident—this seems like the right result. But it was not obvious. One judge dissented, arguing that a jury should have to decide whether or not Whitlock was disabled. And in fact, the Whitlock decision could be read as conflicting with recent Indiana Supreme Court authorities commenting on the importance of the jury system and warning judges about when it is proper to summarily decide cases. The Whitlock ruling very likely has implications in other areas of law beyond just statutes of limitation, especially now that the state Supreme Court has declined to review the decision. And just think about this in practical terms. The accident, in that case, occurred in April 2011, but there was no definitive answer on how to apply the statute of limitations until four-and-a-half years later when the Indiana Supreme Court decided (and after both sides spent a lot on legal fees).

I suspect the parties going into the Whitlock case did not realize it would be so complicated to find a definitive answer. At Tuesley Hall Konopa, we work to stay abreast of these nuances and intricacies so that we can provide our clients with the advice they need. Sometimes, that means we can’t give you a simple answer to what seems like a simple question. Anyone with a search engine can look up a statute of limitations. But the next time you need to know how a legal time limit affects your rights, make sure you consult with an attorney who will take the time to analyze all the circumstances.

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.