COVID

Lawyers, as we begin 2022, let’s take care of our mental health!

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I was impressed once again during the holidays with the fact that some people, and especially some lawyers, don’t enjoy “the most wonderful time of the year”, and I wanted to encourage everyone especially every lawyer who needs help to get help now.

You may have heard about a fellow lawyer in Lexington who committed suicide a few weeks ago, leaving three daughters to grieve his loss. We have all heard news stories of a low country lawyer who has fallen from grace in spectacular fashion with mental health playing a major part in his saga.

My church held a “Blue Christmas” service in early December. This service brought home to me the sorrowful point that many people are unusually sad during the holidays.

Many among us are suffering from the uncertainty and isolation caused by the COVID pandemic. Just when we were beginning to think things were getting much better on that front, we are now being warned about the dangers of the Omicron variant that has created a new surge.

I don’t often recommend books in this blog and especially not works of fiction, but I recently read a novel that handled the impact of COVID so well that I highly recommend it to you. Wish You Were Here, a 2021 novel by Jodi Picoult, gives voice to medical professionals through a New York doctor who works in an emergency department. As the author said in her afterword, we will never be able to thank these professionals for what they have done for us, for what they have seen and for what they have been through.

The book also gives voice to a COVID survivor who spent time on a ventilator. Through this character, we see the importance of some lessons COVID has taught us.

These lessons are particularly important to lawyers. Specifically, the things that are significant in life are not monetary, they are not about the next case or closing. They are not about work at all. COVID has taught us to appreciate the present moment, to appreciate the beauty of nature, and to hold our loved ones close. We must understand that at the end of our lives, our work will not be important at all, but our loved ones will.

We, as lawyers, are supposed to be problem solvers. We are supposed to be strong. We are not supposed to have problems. But lawyers do have mental health problems. I read one statistic that indicated lawyers are 3.6 times more likely to suffer from depression than non-lawyers.

In order to pass our “character and fitness” check to become lawyers and in order to keep our licenses for the long haul, we tend to hide our mental health problems. Having problems and hiding the problems can create perfect storms in our lives.

I encourage any lawyer who is particularly unhappy as the year begins to get help! Therapy is a good thing! You might begin by calling South Carolina Bar’s Lawyers Helping Lawyers toll free helpline at (866) 545-9590 or contact any Lawyers Helping Lawyers member directly. But begin somewhere! The resources are available, and they are helpful.  Please, please seek help if you need it. 

And, in the meantime, I wish for all of you a wonderful 2022!

Eviction ban extended…again

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The federal block on evictions expired on July 31, but on August 3, it was extended for an additional sixty days. The new order indicates it is designed to “target specific areas of the country where cases are rapidly increasing, which likely would be exacerbated by mass evictions.” The new deadline is October 3. The money received through this program is nontaxable.

I’ve read that the targeting language only limits the extent of the moratorium to 80 percent of the country geographically and 90% of the population, so that’s not much of a restriction.  The Department of Housing and Urban Development (HUD) has indicated that 14.3% of the 44.1 million renter households are behind of rent.

There are many problems with the system. I’ve read the major concern is that the bulk of the available funds for rental assistance haven’t been distributed. Landlords seem to be faced with helping their tenants apply for the funds in order to receive the funds. And for all of us who have dealt with government, we understand that few governmental processes are efficient. This one is apparently not an exception to that general rule.  For tenants who are living on the outer edge of their ability to work and take care of their children, time and patience to deal with the inefficient process may be in short supply.

Under the new order, protected renters include:

  • Renters who have tried to obtain governmental assistance for rent or housing.
  • Renters who earned no more than $99,000 or $198,000 filing jointly in 2020 or do not expect to earn at those levels in 2021.
  • Renters who are unable to pay the full rent because of loss of household income or out-of-pocket medical expenses.
  • Renters for whom eviction would result in homelessness or force them to reside in close quarters in a shared living setting (thus increasing the risk of COVID).
  • Renters who living in a county experiencing a high rate of infection.

Because the bulk of the funds have not been claimed, the CFPB has introduced an on-line tool to help landlords and tenants locate the funds in state and local governmental agencies. The tool can be found here.

I have concerns that this program is going to take a great deal of sorting out at some point. Is it constitutional?  What will a holding of unconstitutionality mean? Will COVID require further extensions? Will funds have to be repaid by states and local governments if the funds are not properly applied? Will landlords or tenants be forced to repay such funds? Dirt lawyers will undoubtedly have to deal with of these issues in the future in representing their landlord and tenant clients.

All of us are tired of COVID. We seemed at one point to being so close to having it under control, but now we are seeing a frightening trend of rising cases and deaths, particularly among a younger population. All of us with children and grandchildren who cannot be vaccinated are concerned about what this school year will bring. At the risk of being perceived as preaching and apologizing up front who have medical reasons to resist, I strongly encourage vaccines!

South Carolina legislature passes “IPEN” electronic notary law

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Don’t know what that is? Neither did I!

South Carolina rarely leads the pack when it comes to innovation, and we certainly didn’t break our streak with the early passage of an electronic notarization law. When we did pass legislation, it undoubtedly wasn’t the RON (remote on-line notary) legislation we need to move into this century. Instead, we have “IPEN” legislation—in person electronic notary, a term I had never heard. Why do we need in person electronic notarization when old fashion notarization is easier?

Doing my best to put a positive spin on this idea, perhaps we have taken baby steps.  Our legislature passed the South Carolina Electronic Notary Public Act on May 13, and Governor McMaster signed it into law on May 18. Our Code was amended to add Chapter 2 to Title 26. Chapter 1 was also amended.

At first blush, the new law does appear to be RON legislation, but buried deep inside is the requirement that signatory be in the notary’s presence. This provision defeats the whole purpose of RON legislation.

The last time I was at an in-person seminar with a roomful of South Carolina real estate lawyers where the topic of RON was discussed (and that seminar was pre-COVID, so it’s been awhile), several lawyers pushed a collective panic button and encouraged the group to lobby against this idea because they believed RON legislation may lead to electronic notaries, not South Carolina lawyers, supervising closings.

The new law specifically addresses that issue. Section 26-1-160 was amended to add Section 5, “Supervision of attorney”, which reads, “Nothing in this act contravenes the South Carolina law that requires a licensed South Carolina attorney to supervise a closing.”  Maybe this is the baby step we need. If lawyers are assured that this provision will be included in RON legislation, they may support that legislation.

Implementing the new law we do have will not be a simple process. Our Secretary of State has significant work to do to get ready to receive applications for registration of electronic notaries. The Secretary of State must create the regulations necessary to establish standards, procedures, practices, forms and records relating to electronic signatures and seals. The regulations must create a process for “unique registration numbers” for each electronic notary. The Secretary of State must approve “vendors of technology.”

Each electronic notary must secure an electronic signature, an electronic journal, a public key certificate and an electronic seal. A form called a “Certificate of Authority for an Electronic Notarial Act” must accompany every electronic notarization. I’m not sure any of this is worth the effort unless it facilitates the implementation of true RON legislation that may be passed in the future. The earliest the new legislation can be considered is January of 2022.

South Carolina dirt lawyers: let’s get behind RON legislation with the provision requiring lawyers to continue to supervise closings. We really don’t have anything to lose, and there is much to gain!

Special thanks to Teri Callen, professor and dirt lawyer extraordinaire,  who helped me figure out what is going on with this legislation!

CFPB issues proposed rule to ban foreclosures until 2022

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The Consumer Financial Protection Bureau (CFPB) issued a notice on April 5 proposing an Amendment to Regulation X that would require a temporary COVID-19 emergency pre-foreclosure review period until December 31, 2021, for principal residences. This amendment would, in effect, stall foreclosures on principal residences until January of 2022. The press release, which can be read here, requests public comments on the proposal through May 10, 2021.

The press release states nearly three million borrowers are delinquent in mortgage payments and nearly 1.7 million will exit forbearance programs in September and the following months. The rule proposes to give these borrowers a chance to explore ways to resume making payments and to permit servicers to offer streamlined loan modification options to borrowers with COVID-related hardships.

Under current rules, borrowers must be 120 days delinquent before the foreclosure process can begin. Anticipating a wave of new foreclosures, the CFPB seeks to provide borrowers more time for the opportunity to be evaluated for loss mitigation.

Many provisions of the CARES Act apply only to federally backed mortgages, but the CFPB seeks, by this proposed rules change, to set a blanket standard across the mortgage industry.

Lawyers: Tell your clients, friends and family members!

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South Carolina launched a funded rental and mortgage assistance program

South Carolina’s Housing Authority announced last week a new funded program to assist residents who face financial difficulty in housing as a result of the pandemic.

The program, called SC Stay, has $25 million to be provided on a first-come, first-serve basis to qualified residents for rent and mortgage deficits dating back to February of 2020. Residents may receive up to a total of $7,500 for prior and/or future mortgage or rent payments. The funding is provided through the U.S. Department of Housing and Urban Development’s Community Development Block Grant Program for Coronavirus and is a part of the CARES Act.

To qualify, individuals and families must:

  • Certify that their income is at or below 80% of county medium income adjusted by family size. (A chart reflecting the requirement for each county is attached);
  • Demonstrate that they are unable to make all or part of their rent or mortgage payments or are behind on those payments because of circumstances stemming from COVID. Those circumstances may include layoffs, reduced work hours as well as the inability to work because of infection and quarantine.
  • Have landlord or lender confirmation of their past-due payments and willingness to accept payments on behalf of the tenant or borrower.

The application process can be started here or by calling (833) 985-2929.

South Carolina REALTORS® announces record year

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South Carolina real estate practitioners, if you thought 2020 was outrageously busy, there was an excellent reason for that. In the middle of a global pandemic, our state had a record year in home sales.

South Carolina REALTORS® (SCR) recently issued a press release reflecting the market data as of the close of 2020, stating that the number of sales closed in South Carolina in 2020 was 101,500, representing a 20% increase in closed sales, an increase in median price sales of 13% and a decrease in inventory of 40%.

SCR’s press release touted its efforts in fighting for real estate to be deemed an “essential service”. We want you to be aware that Chicago Title fought for that designation, too.

Despite these phenomenal numbers, it was clear that inventory was an issue through 2020 and remains an issue in early 2021. SCR’s press release states that as of the end of December, there were only 16,480 active home listings in our entire state, compared to 118,667 at the end of 2019.

And we all know that home prices were up. It was indeed a seller’s market! SCR reports that the overall median sales price increased in South Carolina by 12% to $245,000, and that sellers received, on average, 98% of their original list price. This represents a year-over-year improvement of 0.6%.

As we prepare for 2021, it appears to us that the trends of low inventory and higher prices in housing will continue at least through mid-year.

We’re hoping for continued good news in our marketplace as our population gets vaccinated and we are all able to move around more freely.

Here’s wishing for each of you a healthy, happy and prosperous 2021. And here’s wishing for the end of COVID for all of us sooner rather than later!

How does the rest of 2020 look in South Carolina housing?

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We have had an incredible year in real estate in South Carolina!

Mortgage rates are at historic lows resulting in a refinance boom. Home sales have also been strong. We have seen a steady stream of migrations to our beautiful state from less desirable locations. We have seen folks tire of being stuck inside their homes by COVID looking for larger and more modern residences. And the low interest rates have assisted in those moves, too.

And commercial real estate has remained strong for us. We’ve seen the due diligence periods of some commercial projects slowed by COVID uncertainty, but these transactions appear to be closing, even if later than expected.

Real estate closing attorneys and their staff members have worked at a frenzied pace this year! They have tried to keep up with the whirlwind of activity while sanitizing between closings, performing closings on porches, in tents and in parking lots. They’ve worn masks and given away the used pens. It has taken a great deal of innovation to run a closing law firm in this environment, and they have succeeded!

It’s almost October, and we haven’t yet seen a slowdown. I point you to this article, however, written by Warren L. Wise for Charleston’s Post and Courier newspaper. The article points to a slip in the numbers of real estate sales in August as compared to August of 2019. Sales seem to have been slowed by inventory. We are still experiencing a desire for new and improved housing, but the houses aren’t available. It’s a true seller’s market.

I doubt these numbers will result in a huge slow-down between now and the end of the year. Perhaps we will see something akin to the seasonal slowdowns we have historically seen toward year-end. And if things go well, spring will give us the typical increase we are accustomed to in housing sales. Hang on for the ride!

CDC announces COVID eviction moratorium through the end of 2020

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On Tuesday, September 1, the CDC announced a temporary eviction moratorium through December 31, 2020. The order applies to all rental units nationwide and goes into effect immediately. Treasury Secretary Steven Mnuchin said that the order applies to around 40 million renters.

The CDC announced the action was needed to stop the spread of the coronavirus and to avoid having renters wind up in shelters or other crowded living conditions. This order goes further than the eviction ban under the CARES Act which covered around 12.3 million renters in apartment complexes of single-family homes financed with federally backed mortgages.

The Order, entitled, “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19, does not suspend mortgage foreclosures. To take advantage of the suspension, the tenant must sign a declaration form alleging:

  1. The individual has used best efforts to obtain all available government assistance for rent or housing;
  2. The individual either (i) expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), (ii) was not required to report any income in 2019 to the U.S. Internal Revenue Service, or (iii) received an Economic Impact Payment (stimulus check) pursuant to Section 2201 of the CARES Act;
  3. The individual is unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses;
  4. The individual is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other nondiscretionary expenses; and
  5. Eviction would likely render the individual homeless— or force the individual to move into and live in close quarters in a new congregate or shared living setting— because the individual has no other available housing options.

The order specifically does not excuse rent, it just delays eviction. There is a substantial body of depression -era caselaw that holds this type of governmental action is permissible because it does not impair the contract, it only delays the remedy, and it is not a taking because the rent is still due. Lawsuits are likely to follow regardless of this old caselaw.

Many would argue that a temporary ban on eviction for non-payment burdens landlords with the cost of rental delay. Many landlords are individuals or small businesses that cannot spread the losses and cannot pay maintenance costs, mortgages and property taxes without the benefit of rental income.