Blog

Wednesday, March 9, 2016

March Madness Networking Event

March Madness Networking Event
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Events
Friday, March 4, 2016

Parsing Out a Bundle of Sticks

Owning real property is like owning a bundle of sticks.  Each stick represents an individual right.  One or more sticks may be given away or transferred to another.

For example, a stick may be given to the County for a roadway.  Another stick may be given to the power company for electric transmission lines.  A neighbor may have an easement for a utility line, airplanes have the right to fly overhead through airspace, and the bank may have a mortgage on the property.  These are all examples of rights in property that are held by someone other than the owner of legal title to the property.

Many farmers and ranchers have chosen to give their development rights to a land trust.  Those development rights are simply sticks in the bundle of land ownership.

Those development rights have value, and are typically called a "conservation easement."  By giving away development rights a farmer or rancher preserves his or her farm from future development, reduces its value so as to avoid estate taxes, and earns an immediate valuable tax credit.

For example, Farmer Jones who earns 50% or more of his income from farming or ranching is entitled to deduct 100% of a conservation easement from his Adjusted Gross Income.  A conservation easement on a 150 acre farm valued at $5,000 per acre results in a $750,000 tax credit.  Any unused portion carries forward for 15 years.  If Farmer Jones makes $50,000 per year from his farming, he will owe no taxes for the next fifteen years after granting a conservation easement. 

Farmer Jones will be able to continue to farms his ground, reduce or eliminate income taxes, and because of the reduced value of his property, preserve his farm property for the next generation.

All because of a bundle of sticks.

 
Lance J. Schuster at 10:53 AM No Comments | Post a Comment
Agribusiness
Wednesday, February 24, 2016

Beard St. Clair Gaffney Welcomes Michael D. Hales

Beard St. Clair Gaffney is pleased to announce that Michael D. Hales has joined the firm. Michael returns to Eastern Idaho after gaining valuable experience practicing law in Orlando, Florida where he represented individuals and businesses alike. His emphasis has been and continues to be centered around timeshare law.  He is experienced in protecting clients from unscrupulous companies, timeshare cancellations, and credit protection. Michael earned his Juris Doctor from the University of San Diego, and a Bachelor of Arts in English from Brigham Young University.

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News
Friday, February 5, 2016

Know What's Required Under a Farm Lease

 

A leasehold is an estate in real property.  The law recognizes a leasehold as a right to the use and occupancy of real property for an agreed length of time.  Typically a leasehold is created by signing a written lease agreement.  The lease agreement will usually include terms such as a legal description of the property being leased, the amount of rent due, the timing of the rent payments, the responsibilities and duties of the landlord and the tentant, and the term of the lease.

Farmers and ranchers typically will lease property for a term of at least one year.  It may take a year to prepare soil, plant a crop, fertilize, irrigate, and then harvest the crop.  For a crop like alfalfa it will be common for a farmer to lease land for a term of several years since the initial investment of buying alfalfa seed and planting alfalfa is high. 

The law recognizes that farmers and ranchers often hold over and continue to farm following the expiration of a lease.

When a farmer or rancher has possession of agricultural land and has retained possession of the land for more than sixty (60) days after his lease term has expired, and where the landlord has failed to demand possession or give notice to quit the property, the tentant is entitled to hold the property under the terms of the original lease for another full year.

This law protects a farmer tenant who may have completed fall work on the property anticipating that a new lease will be signed for the next year.  It also protects the farmer tenant whose lease has expired, but who plants a crop in the fall anticipating a harvest the following summer.

A wise landlord will make sure that all leases are in writing, and will give written notice to quit at the conclusion of a lease term.  An astute tenant will understand his rights before doing fall work or fall planting.

 

Lance J. Schuster at 10:50 AM No Comments | Post a Comment
Agribusiness
Thursday, January 7, 2016

Five Things Contractors Should Know About the Notice & Opportunity to Repair Act

Five Things Every Contractor Should Know About the Notice & Opportunity to Repair Act (NORA)

By: John Avondet, Esquire

This publication is intended to notify readers of developments in the law. It should not be construed as legal advice or opinion on any facts or circumstances, nor should it be construed as insurance brokering advice on any facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you may have.

The Idaho legislature enacted the Notice & Opportunity to Repair Act (NORA)* in 2003. NORA had the full blessing of the Idaho Building Contractors Association and IBCA specifically recommended the law as a way to reduce the number of lawsuits filed against contractors. Though it is unclear whether NORA has accomplished this goal of reducing lawsuits filed against contractors, every construction defect lawsuit involving a home involves NORA. The following are five things every contractor should know about NORA and how it might affect legal rights.

1.     Residences only, please.

NORA exclusively applies to construction defects in the construction of residences. NORA defines residence as a “single-family house, duplex, triplex, quadraplex, condominium or unit in a multiunit residential structure in which title to each individual unit is transferred to the owner under a cooperative system.” This does not only mean new construction but also applies to substantial remodels of existing residences. The Idaho Supreme Court** has ruled that NORA does not apply to construction defects in a detached shop built on the same property as the residence. So, NORA may affect only some of your rights and obligations in a given project where more than one building was built on the premises. The quick test for NORA’s application is if people can live there, then it’s probably a residence and NORA applies.

2.     Don’t expect details.

NORA only requires a homeowner to provide notice of a construction defect in “reasonable detail sufficient to determine the general nature of the defect” and nothing more. The statute does not define reasonable detail but the courts have construed NORA’s language as not requiring excessive particularity. The Idaho Supreme Court explained that most homeowners won’t know the technical nature of the defects. As long as the homeowner gives some description of the general nature and location of the defect, then the homeowner has provided notice under the law. NORA only applies to claims of defects in construction. It does not apply to allegations that a contractor failed to perform under a construction contract.

3.     Timing matters.

Once a homeowner has provided notice to the contractor of the nature and location of the defect, the clock is ticking for the contractor. The homeowner cannot file a lawsuit until at least twenty-one (21) days after serving the contractor with notice of the defect. If the contractor does not respond within twenty-one days, then the homeowner may file a lawsuit on the twenty-second day. So, even if things are busy and chaotic, which often happens in the construction industry, respond to the homeowner if only to buy more time to evaluate options or negotiate a resolution.

4.     Write it down.

Any response to a homeowner should be in writing. Oral responses to notices are not enough. NORA requires a written response to the initial claim. The contractor’s written response should address one of three things: (1) propose an inspection of the property and state a deadline to complete the inspection; (2) offer to compromise and settle the claim without inspection; or, (3) dispute the claim and state that the contractor does not want to inspect and will not compromise the claim. Any other response constitutes a failure to meet NORA’s requirements and will entitle the homeowner to proceed with filing a lawsuit irrespective of any additional provisions found in NORA.

5.     It’s about the money.

There’s a daily cost to doing business and litigation will affect a contractor’s ability make a living. NORA specifically outlines the damages a homeowner may recover in a lawsuit. The law allows for a homeowner to recover reasonable and necessary attorney’s fees. This is not reciprocal for the contractor. Unless there is a contractual provision or other applicable statute providing for the recovery of attorney’s fees between the contractor and the homeowner, the contractor will be unable to recover its attorney fees against the homeowner. This is a powerful arrow in the homeowner’s quiver that should not be underestimated by the contractor when weighing options about whether the compromise, inspect, or refuse to remedy any claimed defects.

 If you’ve received a letter from a dissatisfied customer claiming construction defects, do not hesitate to contact an attorney for consultation. As noted, timing matters once you’ve received a notice from a homeowner claiming a construction defect. 

*NORA is found in the Idaho Code at §§ 6-2501 through 2504.

**As of the time of writing this article, the only Idaho Supreme Court case interpreting NORA is Mendenhall v. Aldous, 146 Idaho 434 (2008).

John Avondet at 5:08 PM No Comments | Post a Comment
Construction, Business Law
Friday, January 1, 2016

The Curse and Blessing of Wildlife

 

We are blessed in Idaho with an abundance of wildlife.  Herds of deer and elk are often found wintering at lower elevations.  Moose wander down from the mountains into the valleys looking for food.  Ducks and geese land in grain fields looking for an easy meal.  Bears, lions, coyotoes and wolves are always looking for an easy meal.

All of this wildlife can be a headache for farmers and ranchers. Wildlife knows no boundaries, and moves easily from public to private property. Farmers and ranchers can face finanical ruin if big game animals eat all the hay that a farmer worked so hard to bale and stack, or if predators kill livestock.

With a few exceptions it is illegal for farmers and ranchers to shoot or harass wildlife that has entered upon private property.  A farmer or rancher can shoot an elk or a deer that is on his property if he has a license and a tag and is otherwise harvesting an animal during a lawful hunting season.  The Idaho Department of Fish and Game also conducts special depredation hunts to relieve big game damage problems in agricultural areas.  These hunts are typically held on short notice, and in small areas, to relieve a farmer or rancher from a problem.

In addition, farmers and ranchers can legally shoot without a permit a predator, like a black bear, mountain lion, coyote, or a wolf, that is molesting or attacking livestock.  In regard to wolves, "molesting" specfically includes the actions of a wolf that are annoying, disturbing, or persecuting, especially with hostile intent or injurious effect, or chasing, driving, flushing, worrying, following after, or on the trail of, or stalking or lying in wait for, livestock or domestic animals.  The law requires that farmers and ranchers notify Fish and Game of lions and wolves that are taken while molesting or attacking wildlife.

Farmers and ranchers may also obtain relief from critters like beavers and muskrats that are interfering with water rights or damaging ditches.

 Wildlife is yet another variable that can affect farmers and ranchers.  Know the law and protect your property.

 

Lance J. Schuster at 10:41 AM No Comments | Post a Comment
Agribusiness
Monday, November 9, 2015

Concentrated Animal Feeding Operations

Many in Eastern Idaho have a small herd of cows on pasture ground.  However, special rules apply in Idaho to concentrated animal feeding operations, or "CAFOs." 

A CAFO is defined in Idaho as a lot or facility where beef cattle, or dairy cattle, are confined and fed for forty-five (45) or more days during any twelve month period in an area that doesn't produce vegetation during a normal growing season over any portion of the facility.  A feed lot or a dairy operation are examples of a CAFO.

A CAFO is required by law to to have wastewater and storage containtment facilities.  These wastewater facilities trap manure and water from the feeding operation.  They are required to be built according to engineering standards, and must prevent manure and wastewater from entering into lakes, streams, rivers and groundwater.  They must be designed such that they are able to hold a twenty-four (24) hour rainfall event, or three inches of runnof from the accumulation of winter precipitation.  No other materials or waste may be disposed of in a containment facility.

Also required is a nutrient manangment plan.  Such a plan must address: (a) proper managment of dead animals, (b) ensure that clean water is diverted from the production area, (c) prevent direct contact of confined animals with rivers, streams and lakes, (d) ensure that chemicals on-site are handled properly, (e) identify appropriate conservation practices, (f) identify protocols for testing of water and soil, (g) identify protocols for applicaiton of manure and wastewater to land, and (h) identify records that will be kept to assure compliance with the nutrient managment plan.

The Director of the Department of Agricutlure is authorized to inspect animal feeding operations to insure compliance with the rules.  The Director may file an administrative enforcement action and seek civil penalities for those who are not in compliance.

If you are confining and feeding animals, you may may be subject to the special rules for CAFOs.

Lance J. Schuster at 8:51 AM No Comments | Post a Comment
Agribusiness
Friday, October 2, 2015

6 Sure Ways to Make a Family Farm a Failure

Most farms in Idaho are family-owned and operated. Here are some good ways to make a farm fail:

  1. Believing that the farm can financially support any and all family members who want to work on the farm. Farming is a business and expenses cannot exceed cash flows. You must consider whether the business can really support a family member.

  2. Presuming that a conversation is a contract. Statements by Dad that, "If you work hard, this will all be yours someday," or "It's yours when I die," are not enforceable. Get things written down with the help of an attorney.

  3. Ignoring the in-laws or off-farm families. People may be members of the immediate family, but they have to contribute to the business to be compensated by the business. Communicate clear expectations - in writing - to all family members.

  4. Having no business-like meetings. A business is required by law to have at least one annual meeting. At that meeting, the family should have an agenda and review financial statements, discuss goals, make evaluations and review management decisions. Successful businesses meet often. Decisions should be made by voting based upon ownership of the company. People active in the business should be majority owners so that they can legally make decisions.

  5. Forgetting common courtesy. We sometimes treat strangers better then we do family members. It is important to treat family members who work on the farm as respected and valued members of the workforce.

  6. Having no estate plan, transfer plan or buy/sell agreement. Parents do not owe their children a business, but do owe them good morals, an opportunity for an education and legal plans for the estate. Failure to properly transfer management or ownership of a farm is a sure, painful and often expensive path to farm failure.

Success or failure of the family farm ultimately depends on good legal planning and treating your farm like the business it is.

Lance J. Schuster at 12:53 PM No Comments | Post a Comment
Agribusiness
Tuesday, September 29, 2015

BSG Welcomes Kristopher D. Meek and Megan J. Hopfer

bsg welcome Kristopher D. Meek and Megan J. Hopfer
Staff at 3:21 PM No Comments | Post a Comment
News
Wednesday, September 16, 2015

Food Safety's the Law

Federal authorities have recommended that the owner of Peanut Corporation of America spend the rest of his life behind bars.  The owner, Stewart Parnell, was found guilty of 71 criminal counts after his company distributed salmonella contaminated peanut butter that killed nine people and sickened some 900 others.  Parnell is slated to be sentenced in September in federal court.

Food safety is the law.  The owner, operator, or agent in charge of a domestic or international food facility is required to develop a safety plan for any food facility that is subject to FDA regulation to assure that food sold or distributed by that facility is safe for conusmers.  An owner or operator who fails to do so can subject themselves, and his or her company, to fines and prison. 

More importantly, a food safety plan assures that food distributed by a FDA regulated facility does not sicken or kill consumers.  (Dead or sick customers are never good for business – just ask Blue Bell Creameries).

A food safety plan must be a HARPC plan.  HARCPC stands for “Hazard Analysis and Risk-Based Preventive Controls.”  A HARPC plan identifies food safety and adulteration risks associated with foods and processes, it implements controls to minimize the risks and verify that the controls are working, and it designs and implements corrective actions to address any deviations from the controls that might arise.  Everthing that takes place as part of a HARPC food safety plan must be properly documented and must conform with FDA standards

There are certain exemptions for very small businesses, but most food will originate in or come through facilities that are subject to the requirement of having a HARPC based food safety plan.  Companies must create their HARPC plan, update it as required by law, and produce the documentation to the FDA upon request.  It’s required, and its good business.

Lance J. Schuster at 10:14 AM No Comments | Post a Comment
Agribusiness