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AN ACT CONCERNING FAMILY COURT PROCEEDINGS

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A Committee Bill is pending that may affect Connecticut family law practitioners, and our clients:

General Assembly

 Committee Bill No. 5505

January Session, 2015

 LCO No. 4691
*04691HB05505JUD*
Referred to Committee on JUDICIARY
Introduced by:
(JUD)

AN ACT CONCERNING FAMILY COURT PROCEEDINGS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2015) Notwithstanding any provision of chapter 815, 815a, 815e, 815j, 815p, 815t or 815y of the general statutes, a court shall not order that a parent have supervised visitation with his or her child, unless such court finds, based upon the evidence presented to the court, that such parent: (1) Has engaged in an act of neglect or abuse that has been substantiated by the Department of Children and Families; (2) has no established relationship with the child with whom visitation is sought; (3) has engaged in criminal conduct that presents a potential risk to the health, safety or well-being of a child; or (4) suffers from a severe mental disability that presents a potential risk to the health, safety or well-being of a child.

Sec. 2. (NEW) (Effective October 1, 2015) A person aggrieved by the action of counsel or a guardian ad litem for a minor child or children, appointed under section 46b-54 of the general statutes, as amended by this act, may bring a civil action seeking appropriate relief, including equitable relief, damages, or both, in the superior court for the judicial district in which such counsel or guardian ad litem for a minor child was appointed. If such civil action results in a judgment for the plaintiff, the court shall award the plaintiff all costs of the action, including such attorney’s fees as the court may allow to the plaintiff. The court shall not enter any order under this section that would require a plaintiff to pay the costs, expenses or attorney’s fees of counsel or a guardian ad litem for a minor child named as a defendant in such civil action. It shall not be a defense to such civil action that the defendant is entitled to absolute, quasi-judicial immunity.

Sec. 3. (NEW) (Effective October 1, 2015) (a) In a family relations matter, as defined in section 46b-1 of the general statutes, if a court orders that a parent undergo treatment or an evaluation from a licensed health care provider, as defined in section 52-184e of the general statutes, the court shall allow the parent to select the licensed health care provider who is to provide such treatment or evaluation.

(b) In a family relations matter, as defined in section 46b-1 of the general statutes, if a court orders that a child undergo treatment or an evaluation from a licensed health care provider, as defined in section 52-184e of the general statutes, the court shall permit the parent or legal guardian of such child to select the licensed health care provider who is to provide such treatment or evaluation. If two parents do not agree on the selection of a licensed health care provider to provide such treatment or evaluation to a child, the court shall continue the matter for two weeks to allow the parents an opportunity to jointly select the licensed health care provider. If after the two-week period, the parents have not reached an agreement on the selection of a licensed health care provider, the court shall select such provider after giving due consideration to the health insurance coverage and financial resources available to such parents. In the case of two parents who cannot agree on the selection of a licensed health care provider to provide such treatment or evaluation to the child, if a parent incurs expenses as a result of permitting the child to be treated or evaluated by such provider, without the express written consent of the other parent, the parent who permitted such treatment or evaluation to occur shall be solely responsible for the costs incurred for such treatment or evaluation.

(c) In a family relations matter, as defined in section 46b-1 of the general statutes, if a court orders that a parent or child undergo an evaluation from a licensed health care provider, as defined in section 52-184e of the general statutes, the results of such evaluation shall be submitted to the court by such provider not later than thirty days after the date of completion of the evaluation.

Sec. 4. Subsection (e) of section 46b-54 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(e) [Counsel] Except as provided in this subsection, counsel or a guardian ad litem for the minor child or children shall be heard on all matters pertaining to the interests of any child, including the custody, care, support, education and visitation of the child, so long as the court deems such representation to be in the best interests of the child. To the extent practicable, when hearing from such counsel or guardian ad litem, the court shall permit such counsel or guardian ad litem to participate at the beginning of the matter, at the conclusion of the matter or at such other time the court deems appropriate so as to minimize legal fees incurred by the parties due to the participation of such counsel or guardian ad litem in the matter. Such counsel or guardian ad litem [may] shall not be heard on a matter pertaining to a medical diagnosis or conclusion concerning a minor child made by a health care professional treating such child. [when (1) such counsel or guardian ad litem is in possession of a medical record or report of the treating health care professional that indicates or supports such medical diagnosis or conclusion; or (2) one or more parties have refused to cooperate in paying for or obtaining a medical record or report that contains the treating health care professional’s medical diagnosis or conclusion. If] Instead, if the court deems it to be in the best interests of the minor child, such health care professional shall be heard on matters pertaining to the interests of any such child, including the custody, care, support, education and visitation of such child.

This act shall take effect as follows and shall amend the following sections:
Section 1 October 1, 2015 New section
Sec. 2 October 1, 2015 New section
Sec. 3 October 1, 2015 New section
Sec. 4 October 1, 2015 46b-54(e)

Statement of Purpose:

To implement reforms in family court proceedings.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]

Co-Sponsors: REP. GONZALEZ, 3rd Dist.; REP. FRITZ, 90th Dist.

H.B. 5505

Two Tolland County Law Firms are Joining Practices

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Introducing …

MR&DeF_Logo_sm

 

 

 

 

MORE THAN 90 YEARS OF COMBINED LEGAL EXPERIENCE

Two well-established law firms in Tolland County, Connecticut are joining their law practices. Marder, Roberson & DeFelice Law Offices, LLC will begin operations on January 1, 2015.

By combining legal practices of Marder & DeFelice Law Offices, LLC, and The Law Office of Dale C. Roberson, LLC, this new law firm can provide a depth of experience in multiple practice areas including litigation, bankruptcy, estate planning, family law, business law, criminal law, and commercial and residential real estate.

We are focused on growing our law practices to provide enhanced services, so that we may better serve our clients.

The firm will be located at:

76 South Frontage Road, Vernon, Connecticut

Please contact us for further information. Our telephone numbers, email, and web-site information, will remain unchanged:

www.marder-law.com
Tel. (860) 871-8000
Fax (860) 871-8307
[email protected]

www.robersonlaw.net
Tel. (860) 872-3000
Fax (860) 872-3626
[email protected]

 

Does a party to a divorce need to disclose an accrued, but unvested pension?

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Does a party to a divorce need to disclose an accrued, but unvested pension?

In Connecticut parties to a divorce need to exchange Financial Affidavits. These affidavits are designed to provide a comprehensive picture of income, living expenses, assets, and liabilities. A party to a divorce is entitled to rely on the representations of an opposing-party’s Financial Affidavit.

What happens when a party to a divorce does not disclose an accrued, but unvested pension on his or her Financial Affidavit? If a party can argue that an asset was not appropriately disclosed, they may try to re-open a divorce judgment, as it relates to property distribution.

The Connecticut Supreme Court, in the case of Catherine Reville vs. John Reville (SC 18452) (officially released July 8, 2014) addresses the issue. As stated in this decision:

• A party is legally obligated to disclose the existence and characteristics of a pension regardless of whether it clearly is distributable property (under Connecticut General Statute Section 46b-81).

• A party’s ability to show she was defrauded, is not dependent on her establishing that had she known about the pension, she would have been awarded some portion of it.

The real issue in the Reville case is disclosure, as opposed to the right to a party’s interest in the pension, which is addressed in an earlier case . See Bender v. Bender, 258 Conn. 751
The Supreme Court commented that the existence of the pension “was a highly relevant consideration both for the plaintiff in deciding whether to agree to the proposed settlement agreement, and for the dissolution court in deciding whether to approve that agreement.” “Accordingly, nondisclosure, if proven, could have caused the plaintiff to act to her detriment, and full disclosure could have led to a different result in the dissolution action.”

The Court reiterated that “all retirement and employment benefits potentially receivable by a party to a dissolution action must be fully and frankly disclosed on that party’s financial affidavits, regardless of whether they are definitively established to be distributable marital property.”

Joel A. DeFelice is a partner at Marder & DeFelice Law Offices, LLC, located in Vernon, Connecticut.

Should I rent my home or condo, while I try to sell it?

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To answer the question, ‘Should I rent my home or condo, while I try to sell it?’, consider these additional questions:

1) Do you have a mortgage? Does your mortgage permit you to rent the property?

If you have a mortgage, then in addition to your Promissory Note (your contract / promise to pay the mortgage debt), you signed a Mortgage at closing that gives your lender (“Mortgagee”) a security interest in your home. If this is a “uniform” security instrument then the Mortgage includes many promises.

Look for the following promise (or a similar clause), in a residential mortgage:

“Occupancy. Borrower shall occupy, establish, and use the Property as Borrower’s principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower’s control.”

No lawyer should ever tell you that you can breach a contractual promise, out of convenience.

If you rent your property before one year from the date of occupancy, you have breached your agreement and you risk the lender defaulting you. Lenders have a way of finding out that you have moved out of the property.

If your mortgage restricts you from renting, you will have to ask your Mortgagee for permission to rent. This will likely come with a cost. Good luck getting a large banking institution to agree to this. If your Mortgagee is a small bank, you will have a better chance of working something out, at a lesser cost.

2) Does your condominium association permit you to rent the property?

You may have signed an affidavit relating to occupancy of the property. Find out if the occupancy affidavit or condominium rules committed you to reside at the property, or if it merely asked what your current intention was (i.e. on the date you signed it). Find out if the Condominium Bylaws prohibit renting. You might need to determine if the occupancy affidavit is connected to / supported by, the Bylaws. It is possible that the association is trying to enforce a ‘no-renters policy’, but the association doesn’t have the authority to do this.

3) Will your homeowners insurance cover your loss, if the property is rented?

Assume the answer is “no”. It is crucial that you address this problem. You must keep insurance in place because it would be catastrophic if there were a significant loss that went uncovered during a rental period.

Ask your insurance agent if you can get a rider to allow rental, and find out the cost. You may have to change insurance companies.

4) What are the tax consequences?

Capital Gains:

If and when you do sell your property, your closing attorney will ask you a series of questions to determine if you are subject to capital gains reporting. To claim an exemption, you will need to answer (amongst other questions) that you have “owned and used the residence as my principal residence for periods aggregating 2 years or more during the 5-year period ending on the date of the sale or exchange of the residence.”

Occupancy need not be continuous, nor must the residence be the seller’s principal residence at the time of the sale. If you owned the home for two years, and then rented it for three years, you will likely qualify (if other criteria is met). However once the tenant stays longer than three years, you no longer qualify for the capital gains exemption.

Income Taxes:

Don’t forget about income taxes, for the rental proceeds (assuming your tenants actually pay – giving you income). Consult with your tax advisor to determine your own tax consequence (i.e. given your individual circumstances). Expect to start keeping receipts for all work done on the property. You are now operating a business. Also ask your tax advisor if interest paid towards your mortgage, will remain deductible.

5) Do you need to register your rental property with your municipality?

Many municipalities are requiring that tenant-occupied properties be registered. Expect to see smoke detector requirements, rights of inspection to determine compliance with building codes, and fees. You may have to get a “Certificate of Occupancy” each time a property is rented. As an aside, did you know tenants may be protected from eviction, if your property is not up to code?

6) What is the personal liability risk?

If someone is injured at the property, will they sue you personally? Can they try to attach your wages, or your bank accounts, or even your home? Do you need to convey the property to an LLC, to minimize your personal liability? What are the costs and benefits of conveying the property to an LLC? Is the hazard insurance coverage (See Question No. 3) sufficient to protect you from risk? Do you need an umbrella policy? What is the effect of conveying the property to an LLC, on capital gains when you sell? (See Question No. 4 and consult your tax advisor.)

7) Do I need a written lease?

The answer is “yes”. It is still possible to evict a tenant with an oral (month to month) lease, but with a written lease, you can enforce many more provisions that are important to you, such as: don’t keep pets at the property; don’t smoke; and don’t paint the walls mauve. Each of these actions by a tenant will cost you money. The eviction process will cost you money. With a written lease the eviction process should go smoother, but it is rarely easy.

In Connecticut, expect that the eviction process will take several months, even with a written lease, and expect that during this time your tenant will pay you nothing. The tenant is given a 10-day grace period to pay the rent, by law. If the rent is not paid within the grace period, you will need to serve your tenants with a “Notice to Quit”. There must be three intervening days between the date of service of the Notice to Quit, and the move-out date shown on the Notice, for a ‘Non-Payment’ eviction. If you don’t know the rules, you may make costly mistakes. For a lapse of time eviction, you will need to give the tenant until the end of the rental period, i.e. until the end of the month, for a month-to-month tenancy. This is only the first step. Now you need to sue the tenant who fails to leave voluntarily. This means filing a Summary Process Eviction Complaint, serving the tenants (again), waiting for the tenant to file their “Answer and Special Defenses”, which once filed (even if the tenant admits all allegations) entitles your tenant to a day in court. If you make a mistake, you may not find out until late in the process and you will need to start all over again. Think of the financial impact of 6-months with no rent from your tenant! If your tenant appeals the judgment of a trial court, the delay and cost is even greater.

8) Can I sell a tenant-occupied property?

Yes, but probably only to an investor. A potential investor will want to see that the existing tenant has been making consistent payments, and that you have a written lease agreement. Don’t expect an investor to buy the property if rentals are prohibited by the Condominium Bylaws. Also, a potential home-owner (non-investor) does not want to buy your property only to have to evict the tenants. See Question No. 7 to understand why.

Don’t expect your tenant to move out voluntarily just because you have sold the property, and don’t expect your Buyer of the property to be comfortable with the mere promise that a tenant will move out. Even if your tenant promises to move out when the property is sold, he/she probably won’t.

Nothing that a lawyer includes in a written lease agreement, will entitle you to a “quick” eviction. Tenants are not permitted to waive statutorily granted housing rights, and judges know this.

9) Can I get a mortgage loan, if I am already on a mortgage loan?

Ask your lender if you can be on two mortgage loans at the same time. Even if lending rules allow this, and you meet eligibility criteria, do you really want two mortgages? Talk to an experienced mortgage broker or lender, but also think about your long-term financial plans, and whether this is consistent with your plans and willingness to take on risk.

10) Will my tenant(s) pay me?

Just because there is a written lease does not mean you are guaranteed payments. Speak to an experienced attorney about drafting a lease, and getting security. You may also want to do a background check on your potential tenants. Your lease may require extensive discussions with your attorney which are beyond the scope of this short article.

11) Do I really want to be a landlord?

Dave Ramsey cautions against becoming a landlord ‘by default’ (i.e. falling into it, as opposed to deliberately becoming a landlord. He would also tell you not to own a rental property unless you can buy it wish cash.) Putting aside the cash / debt debate – Do you really want to be a landlord? If these eleven questions scare you, and you don’t want to take the time to understand all of the issues, you should not be a landlord. It is much safer to wait until the right buyer comes along, to sell your property. However don’t just wait for a sale. Find an aggressive, experienced real estate agent who will take control of the sale process. Your agent should tell you exactly how to show and market the property. Showing the property will be difficult when tenants paint the walls mauve and don’t clean up after their slobbering litter of Neapolitan Mastiffs.

In conclusion, renting a house or condominium while you try to sell it brings significant risk. Always understand these risks. Speak with your attorney, tax advisor, insurance agent, and experienced mortgage professional first.

Joel A. DeFelice is a partner at Marder & DeFelice Law Offices, LLC, located in Vernon, Connecticut.

Transferring Real Estate in a Divorce

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Billy Joel told us that Brenda and Eddie “were the popular steadies and the king and the queen of the prom”. But as the song goes, “[t]hey got a divorce as a matter of course, and they parted the closest of friends.”

How should parties divide jointly owned real estate, especially jointly owned real estate encumbered by a mortgage (usually in both names), in a divorce?

One important consideration is that the party who keeps the home, should be required to make efforts to refinance or assume the existing mortgage, so as to release the other of liability on the mortgage debt.

The timeline for this requirement will vary depending on the circumstances. Dividing real estate in a divorce is just one part of the ‘mosaic’ of a property settlement. For example the party keeping the home, might be given several years to re-finance, so as to give the children stability until they reach a certain age.

What if the party who keeps the home doesn’t refinance within the time permitted (i.e. according to the agreement / judgment)?

The party who was obligated to refinance the home, may be subject to 1) a finding of contempt of court (resulting in sanctions), or 2) the court might order that the home be sold.

However, in Connecticut, the statute that governs “assignment of property” states:

“At the time of entering a decree annulling or dissolving a marriage… the Superior Court may assign to either spouse all or any part of the estate of the other spouse. …” (See C.G.S. 46b-81(a)) (Emphasis added.)

This means a Court may not order the home be sold before, or after, the divorce judgment, but only at the time of the divorce judgment. Therefore, some circumstances may justify asking the Court, at the time of entering judgment, to “reserve jurisdiction” over disposition of the home, after the judgment. Many things can be done by agreement of the divorcing parties, that the law otherwise doesn’t allow for.

Speak with an experienced attorney about this issue. Despite Brenda and Eddie “departing the closest of friends”, neither wants to be tied up on a mortgage, for the next thirty years.

Joel A. DeFelice is a partner at Marder & DeFelice Law Offices, LLC, located in Vernon, Connecticut.