CT Real Estate Today December Edition

Lamont’s Executive Order Creates Living Nightmare For Homeowner Realtors Take Bold Approach in Combating Discrimination

December Edition

Published by:

FEATURED ARTICLES Page: Feature Story!: A CT Landlord has reached out to CTPOA to share her horror story after being forced to house a tenant for nearly a year rent free as a result of Ned Lamont’s eviction Moratorium.

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Realtors Take Bold Approach In Combatting Discrimination: The National Association of Realtors has taken bold action to combat discrimination in housing.

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Information About Flood Insurance: Ninety percent of all natural disasters in the United States involve flooding, and flood damage strikes frequently in low or moderate risk areas Learn about flood insurance protections.

Covid-19 Issues Drive State Lawmakers’ Policy Agendas: Democratic and Republican state House leaders have signaled their priorities for the 2021 legislative session, releasing policy agendas largely driven by COVID-19 issues.

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Three Strategies For Managing Rental Properties: If a rental property is not managed correctly, it will fall into shambles. Luckily, there are several different ways to manage property to fit every landlords' needs.

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Page: Year-End Tax Planning Tips: Start 2021 in the Best Wealth Shape: Here are some items that we suggest you consider before the end of 2020 to enable you to start 2021 in the best wealth planning shape possible.

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Tips To Save Energy While Spending More Time At Home: Small changes that you can make to save energy without sacrificing comfort.

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The Final Debt Collection Rule Is Here and Focuses On Communication Methods - Here’s What You Need To Know: On October 30, 2020, the CFPB published its long awaited Final Debt Collection Rule (the “Rule”) which is intended to interpret the federal Fair Debt Collection Practices Act (the “FDCPA”) and clarify how new communication technologies can be used in compliance with the FDCPA.

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Publisher’s Message “ Helping Property Owners Since 1994” - Bob De Cosmo, President

Bob DeCosmo began purchasing and managing rental real estate in 1982 and is a strong advocate for private property ownership right's in Connecticut.

Published by CTPOA Our goals; Educate our members on “Best Practices” for maximum efficiency.

Increase profitability by lowering operating expenses via vendor discounts.

Provide access to “Core Services” needed to better manage and maintain properties.

Our Team: Carmine DeCosmo Melissa DeCosmo Paul Jenney

I have been advocating for landlords for a long time, in fact since 1994. I have been told many times that I don't know enough when to quit and I probably should have quit advocating for years ago as support faded, and volunteer helpers sold their properties and were never replaced, but CTPOA kept working on policy matters.

After the recent election, there are now more Legislators that believe non-profit housing providers and the government should control who rents to low- and moderate-income renters. Private rental property ownership is not what a growing number of politicians want, and rental property owners must work even harder now than we ever did before!

To prepare CTPOA must broaden its focus beyond policy matters and grow our membership to continue with our Legislative activities and trust me, we do a lot of work on legislation!

What To Expect Next 1. Immediate Benefits - if we are asking you to pay $100 a year

in membership, we need to give you $200 to $300 back in immediate savings and are developing a membership welcome package now containing cost savings from vendors.

2. Educational Resources - it's been said "Landlords would rather learn to fix a toilet themselves to save the plumber's bill than participate in politics"...We understand this so expect online webinars and meetings presented by industry professionals on essential topics to help you become more efficient and achieve higher profits.

3. Expanded Reach - Legislation doesn't exist in a vacuum and we have helped establish the Southern New England Property Owners Association (SNEPOA), a regional policy "Think-Tank" for landlord - tenant issues. Its focus is to understand what is going on in other nearby States with proposed legislation and help defeat harmful laws....SNEPOA is headed up by "Emil" Ward, the Co-Chair for the

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Massachusetts Bar Association's landlord-tenant committee...There is no general membership at SNEPOA, just lobbyists and agency heads from housing related associations from CT, MA and RI. 4. More Visibility - we're partnering up with different groups including; the Front Porch Program, the Greater Waterbury Reentry Council, the CT State Health Improvement Program, Realtor Boards and are seeking to bring a Southern New England Chapter of the National Association of Residential Property Managers that provides Federal Lobbying on landlord issues.

5. More Marketing - we have done little to grow the group over the years but now have data for everyone purchasing a new property in CT as well as every landlord appearing in housing court. We plan on systematically contacting these potential members to grow our numbers and strength.

6. Ask for More Help - so I am asking if you would like to work on either the Membership, Meeting & Events or Legislative Committees that we need to reactivate. Please email us at info@ctpoa.com if you can help.

Have A Safe And Happy Holiday Season Bob DeCosmo

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Landlord Terrorized By Tenant A CT Landlord Shares The Story Of Her Ordeal As A Result of Ned Lamont’s Eviction Moratorium I am a first-time homeowner in Connecticut. When my landlord gave me the opportunity to purchase the three-family home that I rented, I was elated to become the new owner and purchased the property.

Soon afterwards, my third-floor apartment became vacant, so I listed it for rent and received several responses from tenants. A Social Worker from CHR contacted me about one of her clients and she gave me a story which later turned out to be fabricated. I believe it was created to get the client into the apartment, as unknown to me, this renter had a bad history with other landlords.

Unfortunately, being a brand-new landlord, I did not do my homework and investigate this person, instead, I went on the word of the social worker. I also let my heart make the decision as I was feeling sympathetic to the tenant.

The apartment was rented to this person in March of 2019. CHR paid a portion of the rent and the small sum of money the tenant needed to pay monthly was always late.

When October of 2019 came, the tenant stopped paying rent. I knew I was in trouble at this point and tried to be amiable so I gave her a typed letter to vacate the property, so the tenant could avoid court. Most people do not like to go to court but turns out this tenant was awfully familiar with the court system.

I was willing to forgive the nearly $2,000 dollars that was owed to me if they left before January of 2020, but the tenant promised to pay and catch up. I hoped she was trying to do the right thing, but the situation became worse. That’s when I discovered that she allowed a convicted felon who was involved with narcotics to move onto my property without my knowledge or permission. I soon filed eviction papers and my original court date was set for the first week of April. The pandemic had hit by then and the date of the hearing was postponed due to Governor Lamont’s Executive Order.

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My family, the other tenants in the building and myself have been forever traumatized by the nightmare experience in which we endured at the hands of these belligerent, destructive and nuisance tenants because of the eviction moratorium. My property was vandalized, and my other tenant was threatened and was forced to live in fear. The police were called repeatedly but didn’t help. The social agency that provided the tenant wouldn’t return numerous phone calls and even the Mayor was contacted but powerless to help me - I couldn’t believe this was happening!

As a taxpayer I am disgusted that landlords have no rights. We are fighting and fearing for our own lives, on our own property, and help never came!

My situation had nothing to do with COVID-19. The tenants had nothing to do with COVID-19. They should not reap the benefits of the eviction moratorium because their situation was not affected by this virus, but they did and have blatantly abused the system.

Finally, after a year of non-payment, I could bring the eviction forward. In my first mediation in court, I came to realize that the state of Connecticut is not for helping the Landlord. The State clearly favors tenants, no matter how abusive and destructive they are.

As much as we told the mediator the fear that we were living in for this duration of time, the Court didn’t seem to care about our trauma and gave the tenant six more weeks of free rent housing before they had to move. Landlords should not be responsible for these people; the government should have the responsibility of taking care of its people that can’t take care of themselves.

No other businesses were given the burden of taking care of the citizens without compensation because of Covid. The supermarkets were not responsible for feeding the people for free, we could not walk into the store and take food without paying, that would be stealing. Why was my rent payment allowed to be stolen? Why should Landlords take such a great loss?

This is not what I signed up for! Living in fear for over a year while not collecting rent from capable adults. These abusive tenants lived in my house rent-free for 14 months and my family and I have suffered greatly as a result. Owning rental property is a business, not a charity. Be careful who you rent to.

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Realtors Take Bold Approach in Combating Discrimination By: Susy Hurlbert, Chief Executive Officer, RCE, MPA, ePro Executive Director, Eastern CT Association of Realtors

The National Association of Realtors has taken bold action to combat discrimination in housing. On November 18, NAR launched an immersive online simulation app called Fairhaven, where members of the National Association of REALTORS® are put in the shoes of a client experiencing discrimination as they try to buy a home. In the app, REALTORS® work against the clock to sell homes while confronting discrimination in the homebuying process.

“Discrimination of any kind violates state and federal law. It is bad for our business and does nothing to unite the communities we serve and love so well", said Susy Hurlbert, CEO for the Eastern CT Association of Realtors®.

The new training program is free and will present real estate pros with various scenarios as they work to close transactions. When discrimination gets in the way of closing the deal, agents must choose how to handle each scenario.

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They receive feedback based on their answers as they advance through the simulation. The platform also includes powerful testimonials from buyers and discrimination testers, illustrating the effect of housing discrimination on people’s lives.

Participants who begin the simulation will be able to save their work and come back to complete it later. The training can take up to two hours but Pictured Above: Susy Hurlbert can go more quickly based on the user’s fair housing knowledge. Members can go through the simulations as many times as they want. A certificate of completion can be shared with an agent’s broker.

The website, fairhaven.realtor is part of NAR’s ACT! Initiative, a fair housing action plan that emphasizes accountability, culture change, and training to promote equal housing opportunity within the industry.

NAR also passed a new Standard of Practice, 10-5, in the Realtors Code of Ethics that prohibits the use of racially driven hate speech, slurs, or epithets anytime, anywhere, effective immediately. Training sessions are now available to all Realtors: https://www.nar.realtor/national-leadership/breakingdown-the-changes-to-the-code

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Information About Flood Insurance From Insurance Information Institute Ninety percent of all natural disasters in the United States involve flooding, and flood damage strikes frequently in low or moderate risk areas. Homeowners policies don’t cover flooding so—whatever your area’s risk level—learn about flood insurance protections.

The risk of flood damage or loss the possibility of a flood, know your flood According to the Federal Emergency insurance options and obtain adequate Management Agency (FEMA) floods— coverage. including inland flooding, flash floods and flooding from seasonal storms—occur in every region of the United States. In fact, 90 percent of all natural disasters in the U.S. involve some type of flooding.

If you're moving into a new home, apartment or business location, ask your mortgage lender, your local officials or your insurance professional if the location has been known to flood. The National Flood Insurance Program (NFIP) will also be able to provide flood risk information on your area.

Even if you don't live in a high flood risk area, you're in some danger of loss from a flood, because 20 percent of all flood claims are filed in low to moderate flood risk areas. That means, you should know how to prepare for

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Flood insurance basics

called “excess” insurance coverage to rebuild properties valued above those limits.

Insuring yourself against a flood is a little Buying flood insurance different than other policies.

Floods are not covered under homeowners and renters policies. Only a When buying flood insurance, you should specific flood insurance policy will cover home know that: flood related losses.

• It's easy to purchase – Federal flood insurance policies can be purchased directly • Most flood insurance is administered from an insurance professional. Nearly 100 through the federal government. insurance companies write and service NFIP Homeowners, renters and businesses can policies. purchase flood policies from an insurer under • It requires a waiting period – There is a 30contract with FEMA. Federal flood insurance day waiting period before a flood insurance is available where the local government has policy takes effect, so don’t wait until the last adopted adequate flood plain management minute to purchase it. regulations under the NFIP—and many It can be augmented with "excess" insurance communities participate in the program.

– The NFIP policy maximums are inadequate • Flood insurance covers direct physical to fully cover some people's assets so a losses from floods and losses resulting from growing number of private insurers have flood related erosion caused by waves or begun offering excess flood policies, intended currents of water exceeding anticipated to provide water damage protection to cyclical levels and accompanied by a severe homeowners over and above the coverage storm, flash flood, abnormal tide surge or a provided by the NFIP policies. Some private similar situation that results in flooding. insurers are also starting to offer “first dollar” • Flood insurance coverage for the structure flood policies. and contents of the home are sold separately.

Buildings are covered for replacement cost, What if I don't have flood but coverage for personal property is available insurance and there's a flood? on an actual cash value basis only.

• The maximum flood insurance coverage Having a flood insurance policy is way to amount is $250,000 for the structure of the protect your assets most fully from the cost of home and $100,000 for the contents of the home. ("Excess" coverage over and above the flood damages and loss.

Without insurance, relief from floods primarily maximums that are available from NFIP is comes in the form of loans. If your community offered by private insurers.) is declared a disaster area, no-interest or lowFlood losses for cars are covered under the interest loans are often made available by the optional, comprehensive portion of federal government as part of the recovery a standard automobile insurance policy.

Commercial flood insurance is available from effort. However, these loans must be paid back, which means you're still liable for the the NFIP; it provides up to $500,000 of coverage for your building and up to $500,000 entire cost of your damages or losses. for its contents. You can also purchase what’s

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COVID-19 Issues Drive State Lawmakers' Policy Agendas Article By: https://www.cbia.com/

Democratic and Republican state House leaders have signaled their priorities for the 2021 legislative session, releasing policy agendas largely driven by COVID-19 issues.

Shortly after House Democrats voted to endorse new leaders last month, SpeakerDesignate Matt Ritter (D-Hartford) and Majority Leader-Designate Jason Rojas (D-East Hartford) outlined their priorities.

After naming Rep. Sean Scanlon (D-Guilford) as House co-chair of the Finance, Revenue, and Bonding Committee, Ritter called for the General Assembly to increase borrowing to support state programs.

State lawmakers must address a projected $4.3 billion, two-year budget deficit when the General Assembly convenes in January.

Connecticut ranks among the most indebted states per capita in the nation, with debt service costs accounting for over 10% of annual budget state spending.

State-Run Healthcare Democratic leaders, along with state Comptroller Kevin Lembo, also kicked off a renewed push to bring a public option healthcare plan to Connecticut.

The 2021 bill will likely mirror legislation introduced last year that would have opened the state's troubled Municipal Partnership Plan to small businesses with 50 or fewer employees.

The comptroller would administer the plan, which—unlike private healthcare plans—would not be regulated by the state Department of Insurance.

Lembo's office would also have authority to set premiums and costsharing subsidies, raising new concerns given the state-run municipal plan has seen multimillion dollar deficits in recent years.

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Marijuana Legalization House Democrats also unveiled a renewed push to legalize recreational marijuana at a press conference announcing the reappointment of state Rep. Michael D’Agostino (D-Hamden) as co-chair of the General Law Committee.

"This level of fear is starting to drive businesses to despair and they’re starting to have this cost-benefit analysis of ‘Is it really worth it for me to try to keep my business open?'" Candelora told reporters.

Unemployment Fund

Candelora also urged the Lamont administration to Saying the vote would be "very, very close," allocate a portion of the Ritter pledged that if a legalization bill fails, he coronavirus relief funds will push for a constitutional amendment and Connecticut received send the issue to Connecticut voters. from the federal If the amendment clears both chambers, a government to stabilize public vote would not occur until 2022 or the state's bankrupt 2024. unemployment trust fund.

The legalization of marijuana has major workplace safety implications. The issue is of Connecticut employers particular concern for the state's defense face tax hikes to pay off manufacturers. the hundreds of millions of dollars in federal loans the state needs to continue paying In 2019, the legislature's Judiciary unemployment benefit claims.

Committee approved an employer workplace protections measure in tandem with a Republicans also want the administration marijuana legalization bill. Neither bill to renew Lamont's executive order preventing advanced.

COVID-19 related unemployment claims from affecting a business' experience rating.

Small Business Relief

House Republicans this week called for a series of reforms to help small businesses struggling to survive amid the COVID-19 pandemic.

Incoming House minority leader Vincent Candelora (R-North Branford) called for the Lamont administration to suspend implementation of the 0.5% paid family and medical leave payroll tax scheduled to go into effect Jan. 1.

The paid FMLA mandate disproportionately targets small businesses, who are bearing the brunt of COVID-19 shutdowns and disruptions.

Candelora has asked Connecticut's Congressional delegation to support extending the interest-free period on the state's federal unemployment loans.

Those loans, which could exceed $800 million, will be subject to a 2.4% interest rate beginning Jan. 1.

"It’s the business community that's going to pay that," Candelora said. "It's unnecessary, given these extraordinary times, that we should be adding interest to something that is really a national crisis."

Republicans also called for a 90-day delay in paying property taxes, suspending payments until April next year.

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1. Managing Tenants If a rental property is not managed correctly, it will fall into shambles. Luckily, there are several different ways to manage property to fit every landlords' needs. You can be completely hands on, or you can decide to outsource everything. Here are three management strategies for every potential landlord to consider that will keep your property up, running and generating revenue.

3 Strategies for Managing Rental Property Before you are able to select the right strategy for you, you need to understand all the different areas of a rental property that need to be managed. A landlord’s management responsibilities can be broken down into three sections: 1. Managing Tenants 2. Managing Property Maintenance and

Inspections 3. Managing Finances

This is the part of rental property management that is most immediate and most obvious.

However, being a successful landlord involves a lot more than just collecting rent. You have to manage: Rent Collection: Setting due dates. Collecting rent each week or month. Establishing late fees and grace periods. Dealing with unpaid rent.

Lease Agreements: Verifying that lease includes all legal terms required by your state’s landlord tenant law. Making sure lease is up to date with most recent version of law. Managing lease start and end date of all tenants.

Tenant Screening: Advertising vacancy. Setting up appointments. Verifying information on applications. You may also determine if certain tenants are a good fit.

Move-In: Signing lease agreements. Going over rules, requirements and regulations. Collecting security deposit and first month’s rent. Walking through and noting current condition of rental unit.

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Move-Out: Verifying that lease term is actually over. Checking the condition of the rental unit for any damage. Beginning the process to find a new tenant for an apartment.

The lender and insurance company inspect the property to make sure the property is worth the amount they are lending or the amount they are insuring it for.

Tenant Complaints: Fielding complaints. Setting 3. Managing Finances up a game plan to fix the problem.

The third part of management that you will have to deal with when owning a rental property Repair Requests: Responding to requests involves the finances. You need to understand quickly. Prioritizing the importance of repair. how much money is coming in each month and Doing the repair yourself or hiring someone to how much money is going out. do it.

Tenant Evictions: Sending tenant legally required notices before eviction. Filing for eviction with the court. Preparing your evidence which supports reason for eviction.

Rent Payments: How much you collect in rent each month.

Mortgage Payment: What you pay each month on your mortgage.

2. Managing Property Maintenance and Insurance: How much you pay to insure your Inspections property.

The second main part of rental property management is the property itself. The physical structure needs to be maintained for the health and safety of the tenants. Your insurance company may also require certain parts of the structure, such as the roof, to meet certain standards or they will refuse to insure the property.

Taxes: What your yearly property taxes are.

Utilities: If tenants are not responsible for paying for utilities, how much the water, gas and electric bills are each month for the property.

Fees/Fines: Fees you may have to pay for property inspections or court costs. Unexpected fines for maintenance issues at the property.

Maintenance: Cutting the grass. Picking up leaves. Shoveling snow. Taking out the garbage. For more tips for Current & Prospective Keeping all common areas clean. Making sure Landlords please check out The Balance, Small tenants have access to running water at all times Business Here! and heat in the winter. Fixing roof leaks, plumbing leaks, cracked tiles, loose handrails, faulty door or window locks.

Inspections: You will have to deal with inspections from the town and even from your lender and insurance company. The town inspections are to make sure your property is following certain health and safety codes.

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Article From: www.law.com 2020 and 2021 (or $30,000 for a married couple electing to split gifts), without using any hayrides and year-end tax planning. With the portion of his or her federal estate and gift tax exemption (discussed below). Annual upcoming election, which, depending on the exclusion gifts can be made outright, through results, brings the possibility of a reduction in 529 Plan benefits (education savings the federal estate and gift tax exemption, we accounts), or in special qualifying trust structures. For those still considering such are anticipating a particularly busy year-end. gifts, it may be worthwhile to plan for 2020 and Therefore, it’s a great idea to start thinking of 2021 at the same time, keeping in mind that year-end tax planning ahead of time, rather gifts for 2021 can be made effective as of Jan. than wait until December when timing may be 1.

It’s that time of year again—pumpkins,

Use of Exemption. For 2020, the federal and gift tax exemption amount is $11.58 million per out way. Here are some items that we suggest individual (allowing a married couple to shield you consider before the end of 2020 to enable up to $23.16 million from federal estate and gift taxes), and is projected to increase for you to start 2021 in the best wealth planning inflation in 2020 to $11.7 million per individual shape possible: (or $23.4 million for a married couple). Of Annual Exclusion Gifts. Each individual can course, there is no guarantee that these exemption amounts will remain at such high make a cumulative annual gift tax exclusion levels. gift of $15,000 per donee during too tight to get things done in a well thought

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In fact, the exemptions are scheduled to decrease to about half of those amounts in the year 2026, and, depending on the outcoming of the upcoming election, there is currently widespread concern over speculation that new laws could be passed after the election to reduce these exemptions even earlier (possibly as early as January, 2021, and possibly to a lower amount than currently scheduled for 2026). As we explained in our last article, “Will It Be 2012 All Over Again,” many high net worth individuals are considering whether to make large gifts before year end in order to use their exemptions in case they might lose them next year. This type of planning needs to be carefully thought out and considered well in advance of year end, so that there is not a last minute rush into making irrevocable and potentially irreversible decisions. Moreover, estate planners will need ample time to properly guide clients and draft documents to get this done. There will also need to be enough time to open accounts at financial institutions in many instances.

However, be mindful of the 30-day wash sale rule of Internal Revenue Code Section 1091, which could disqualify a deduction of the capital loss if the same, or substantially identical, security is purchased within 30 days after selling at a loss.

Required Minimum Distributions. Normally, those who have reached their required beginning date or who hold inherited IRA accounts would be required to take a required minimum distribution for 2020 from their IRAs or qualified plan accounts by Dec. 31, but, this year that requirement has been waived under the CARES Act.

Qualified Retirement Plan Establishment. Business owners who are considering funding a new retirement plan have the opportunity to establish a qualified retirement plan by the end of the year but defer the decision about the funding amount (and the actual contribution) until later during 2021 (contributions can generally be Accelerate Deductions. Prepay deductible delayed until at least Sept. 15). The expenses due in January (including state limitation for tax deductible contributions for and local income tax estimated payments 2020 is $57,000 per participant for defined which may not be due until January). contribution plans (or up to $63,500 when However, because of the $5,000 per person including the $6,500 catch-up contribution cap (i.e., $10,000 for a married couple) for for a participant who has reached the age of deductions for all state and local taxes, it’s 50). Next year this cap is projected to be important to ascertain whether the limit has increased to $58,000 (or $64,500 when been reached before accelerating a payment including the $6,500 catch-up for 2021). of such taxes which may be deferred until 2021.

Loss Harvesting. Harvest tax deductible losses to offset taxable gains for 2020.

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Roth IRA Conversion. Convert a traditional IRA to a Roth IRA to take advantage of lower brackets or absorb excess deductions.

By converting a traditional IRA to a Roth IRA, any untaxed amounts that are rolled over to the Roth IRA are subject to income taxation. The conversion must take place by Dec. 31. Under current law, Roth IRA conversions can no longer be reversed.

Before 2018, under prior law, you had until Oct. 15 of the year after conversion to reverse it by re-characterizing the conversion back to a traditional IRA to avoid the tax hit.

So, stay tuned.)

Charitable Giving. If you are in a high income year, consider “prepaying” future charitable contributions to generate current income tax deductions. This is also something to consider given the new higher standard deduction (for 2020, $12,400 for individuals and $24,800 for married couples) which might make bunching of charitable deductions worthwhile so you can benefit from the standard deduction in a year where your charitable deductions are reduced due to the prior year bunching/prepayment. This can be accomplished simply by increasing Basis Step-Up Planning. For individuals the contributions to your favorite charities, in who have funded “grantor” trusts for their general, or you can defer the receipt by the families, year-end is a good time to consider charitable organizations you wish to benefit swapping back low basis assets (e.g., (or even defer the decision as to which ones appreciated stock) for high basis assets to benefit) by contributing to a donor advised (e.g., cash) to help make tax reporting after fund, a private foundation, charitable lead the swap cleaner (rather than switch tax trust or charitable remainder trust or identification numbers in the middle of a tax purchasing a charitable gift annuity. Both the year). It’s better to own the lower basis charitable gift annuity and charitable assets at death because of the opportunity remainder trust options allow you to retain for a basis step-up to fair market value under an income stream for life and defer the Internal Revenue Code Section 1014. (Note transfer of the remaining funds to the charity this is one of the items targeted for repeal, until after your death. as a revenue raiser, under Biden’s tax plan.

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IRAs and HSAs. While you technically have until April 15, 2021, to fund your Individual Retirement Account and Health Savings Account for 2020, it is always a good idea to start planning for such funding at year end.

Consider helping your children (to the extent that they have earned income) to fund tax favored Roth IRAs if at all possible. The maximum contributions for IRAs for 2020 is $6,000 and is projected to stay the same in 2021 (plus an extra $1,000 catch up for those who have reached the age of 50). The maximum family contribution for an HSA in 2020 is $7,100 (or $3,550 for individuals), with an extra $1,000 available for those who have reached the age of 55. For 2021, the maximum family contribution for an HSA will increase to $7,200 (or $3,600 for individuals).

of changes in the tax law, your wealth, your chosen fiduciaries, or objects of your bounty). If you don’t give this some thought at year-end, you might never get around to making desired changes before it’s too late, since none of us can know if we will have any advance notice of the actual deadline. We have all most certainly learned over the last year (as well as in November of 2016) that, like it or not, we must expect the unexpected.

Article Written By: Rebecca Rosenberger Smolen and Amy Neifeld Shkedy who are members and co-founders of Bala Law Group. They focus their practices on tax and estate planning.

Trust Income Tax Planning. While a trustee will generally have until 65 days after the end of the tax year to shift trust taxable income to a beneficiary, it’s worthwhile to monitor the issue at year end to get a jump start on evaluating the issue. This is becoming a more consequential issue with the Medicare tax imposed at 3.8% and the extra 5% tax which is imposed on dividends and capital gains at the higher brackets (which are reached pretty quickly for a trust).

Estate Plan Review. Last, but not least, although it’s not necessarily year-end sensitive, the end of the year is a great time to review your estate plan (or make a resolution to review in 2021) to see if changes might be in order (whether because

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TIPS TO SAVE ENERGY WHILE SPENDING MORE TIME AT HOME Small changes that you can make to save energy without sacrificing comfort.

HOME LIGHTING TIPS Keep your home bright and your costs down with these easy lighting tips and tricks.

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Remember to turn lights off before leaving a room. If you own voicecontrolled assistants like Alexa or Google, use them to turn lights on and off with ease.

Put lamps in the corners of rooms so that light reflects off two walls. This way, you won't have to use as many light sources.

Whenever possible, use ENERGY STAR certified LED lightbulbs. Traditional incandescent bulbs release 90% of the energy they use as heat. LED's are much more efficient, emit very little heat and last 10-25 times longer.

Switching your outdoor porch or post lamp to an LED bulb, especially one with a motion sensor, can help save energy and cut down on costs.

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HOME HEATING TIPS Stay warm and comfortable with these energy-saving tips.

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by 40 to 50 percent. In extremely cold regions, triple glazing should be considered.

Install Programmable Thermostats. You can save as much as 10% a year on heating and cooling by simply turning your thermostat back 7°-10°F for 8 hours a day from its typical setting. Programmable thermostats allow you to easily set your home’s temperature in advance to avoid coming home to a freezing house. A smart thermostat takes that a step further by allowing you to set your temperature from your smart phone or tablet. Some even learn your habits and adjust accordingly – saving you even more.

Check Your Attic for Air Leaks. An unfinished, poorly insulated attic is another common area where homeowners experience significant heat loss.

Adding insulation to the attic floor and sealing any air leaks can help stabilize the temperature inside your home, prevent ice dams, and save on energy costs.

If you have a simple open masonry fireplace, make sure you close the flue. The flue can pull warm air up the chimney and out of the home.

Check for drafts around windows and doors. According to the U.S. Department of Energy, air leaks around doors account for 18-20 percent of heat loss in a typical home; drafty windows account for up to 30 percent of heat loss. A 1/8-inch gap under an exterior door lets as much cold air in as a 2 ½-inch hole punched in the wall. A no-cost Home Energy • Assessment includes air sealing and can help to minimize drafts and heat loss.

Sunlight shining in windows adds heat to homes. Open the drapes, shades, and blinds during the day to warm up on sunny days, then close them at night to keep out the cold air.

Energy efficient windows are an For more energy savings tips, check important consideration for out Eversource’s Save Money & both new and existing Energy Page Here! homes. Single-paned windows should have storm windows.

Wood or metal frame storm windows provide a second layer of glass and a barrier of still air that reduces heat transfer. Doublepaned windows cut heat transfer

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The Final Debt Collection Rule is Here and Focuses on Communication Methods –

What’s Not Included in the Rule?

The Rule leaves for another day the final

Here’s What You Need to Know

versions of Sections 1006.26 (Collection of

By: Caren D. Enloe

Time Barred Debt), 1006.34 (Notice of

On October 30, 2020, the CFPB published its long awaited Final Debt Collection Rule (the

Validation of Debts) and the Safe Harbor Model Forms. The proposed rule and supplemental proposed rule included new

“Rule”) which is intended to interpret the

provisions as to time barred debt and

federal Fair Debt Collection Practices Act (the

validation notices. These provisions are still

“FDCPA”) and clarify how new communication technologies can be used in compliance with

under consideration by the CFPB and are anticipated to be published in December. The final provisions are widely expected to include

the FDCPA. As an unexpected twist, the CFPB mandatory disclosures in addition to those already required by 15 U.S.C. §1692g(a). has delayed publishing its final rules as to Those additional mandatory disclosures are validation notices and time barred debt likely to include: disclosures and has indicated that those

• Disclosures as to time barred debt or debt

provisions will be published in December.

that can be revived by payment; and

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•

Additional validation information, including a tabular itemization of the amount of the debt from its itemization date and a response section which allows the consumer to dispute the debt by simply checking a prescribed number of boxes as to the basis of the dispute.

technologies, the Rule establishes rules for engaging in communications with consumers and identifies certain policies and procedures that if implemented, would create safe harbors from FDCPA violations for debt collectors. Of

When Does the Rule Go Into Effect?

particular note, the Rule contains a robust The Rule will take effect one year from its Official Commentary which includes sample publication in the Federal Register. As of the date this article was written, it has not yet language for such things as opt out notices. been published. It is therefore unlikely it will take effect until December 2021 or early 2022. While the Rule will not take effect until some time towards the end of 2021 or early 2022,

Who’s Covered?

While the proposed rule provided some concern as to whether it would cover first party creditors, the final version of the Rule expressly states it applies only to “debt collectors” as that term is defined in the FDCPA. First party creditors, however, need to be mindful of the CFPB’s warning that the Rule is not intended to address whether activities performed by entities not subject to the FDCPA would violate other statutes, including the unfair, deceptive or abusive act provisions found in the Dodd-Frank Act.

compliance departments should begin aligning their policies, procedures, letters and scripts with the Rule now in anticipation of its effective date.

Attempts to Communicate vs. Communications Generally speaking, the Rule attempts to distinguish between attempts to communicate and actual communication. “Attempts to

communicate” are any acts to initiate a

What’s Included in the Rule?

communication about a debt and include

The bulk of the Rule addresses

leaving “limited contact messages.”

communications between the consumer and

“Limited Content Messages” are a new

the debt collector. The Rule expands

concept introduced by the Rule in its

significantly on the provisions of the FDCPA

definitional section (1006.1) and are intended

while attempting to clarify how debt collectors

to provide a safe way for debt collectors to

can use new communication technologies

leave non-substantive messages for a

which were not in place when the FDCPA was

consumer requesting a return call while not

enacted including email, voice mail and text

inadvertently disclosing the debt to third

messages. Focusing on those communication

parties.

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The Rule and its Comments make clear that Limited Content Messages are not communications regarding a debt. To qualify as a Limited Content Message, the message must be left by voice mail and only contain the specified limited content set forth explicitly in Section 1006.1(j). Those familiar with the proposed rule should note that while the proposed rule allowed for limited content messages via text message and orally, the final version of the Rule does not. Similarly, while the proposed rule included the identification of the consumer as an allowed component of the Limited Content Message, the Rule as finalized does not. Instead, a Limited Content Message can only include: (a) a business name for the debt collector that does not indicate that the debt collector is in the debt collection business; (b) a request that the consumer reply to the message; (c) the name or names of one or more natural persons whom the consumer can contact; (d) a telephone number or numbers the consumer can use to reply to the debt collector; and (e) certain very limited and specified optional content. Communications are distinguished as they convey information regarding a debt.

attempt to provide debt collectors with guidance in circumstances in which the debt collector needs additional clarity or information from the consumer by allowing the debt collector to ask follow-up questions regarding a convenient time and place. Additionally, the Rule makes clear that no particular words are necessary for a consumer to indicate a time and place are inconvenient.

Use of Electronic Communications and a Safe Harbor

The Rule allows for the use of email and text message communications and sets forth procedures which provide the debt collector with a safe harbor if followed. Specifically, Section 1006(d)(4) allows for email communications to the consumer: first, by allowing the use of an email address the consumer has either used to communicate with the debt collector (and has not subsequently opted out) or the consumer has provided prior express consent to use and second, by allowing an email address used previously by the creditor or a prior debt collector subject to certain limitations and conditions. Section 1006(d)(5) allows for text messaging subject to similar conditions.

Time and Place Section 1006.6 further requires debt collectors With the advent of new technologies, allow consumers to opt out of electronic preventing communications at a time and communications and further requires debt place which is known or should be known to be collectors provide a clear and conspicuous inconvenient has become challenging for debt statement describing a “reasonable and simple collectors. The Rule attempts to address these method” for opting out. challenges in Section 1006.6 and its Official The CFPB has indicated that it is currently Comments. Section 1006.6 provides that an finalizing provisions that will require debt inconvenient time for communication with the collectors to provide consumers with, among consumer is before 8:00 AM and 9:00 PM local other things, a reasonable and simple method time at the consumer’s location. The Official to opt out of electronic communications and to Comments further clarify that if the debt control the time, place and medium for collector has ambiguous information as to the communications. Presumably, these provisions consumer’s location, then in the absence of will be included in the December supplement information to the contrary, the debt collector to the Rule. may assume a time that is convenient in all time zones at which the debt collector’s information indicates the consumer may be located. The Official Comments additionally

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Frequency and a Safe Harbor

Section 1692d(5) of the FDCPA prohibits a debt collector from causing a telephone to ring and from engaging a person in telephone conversations repeatedly or continuously with the intent to annoy, abuse, or harass. As compared to the proposed rule, the final rule is more restrictive. Section 1006.14 establishes a bright line by placing numeric limitations on the placing of telephone calls. In its final version, the Rule creates presumptions of compliance and violation. Generally, and subject to certain very limited exceptions, a debt collector is presumed to have violated the provision if: (a) it places telephone calls to a particular person in connection with a particular debt more than seven times within seven consecutive days; or (b) after having had a telephone conversation with a particular person regarding a particular debt, makes a call within seven days of that conversation.

The converse is also true. The debt collector is presumed to have complied if it stays within the call frequency limitations.

It should be noted that the exceptions presented in the final version of the Rule are more limited than those that were originally proposed. In particular, the Rule clarifies that any prior consent provided by a consumer for follow up communications expires within seven days of being provided.

Unfair or Unconscionable Means

Section 1006.22 interprets and implements Section 1692f of the FDCPA which contains a non-exhaustive list of unfair or unconscionable means to collect a debt. Section 1006.22 adds new prohibitions on communications using certain media. Section 1006.22(f)(3) prohibits communicating or attempting to communicate with a consumer using an email address that the debt collector knows is provided to the consumer by his employer unless the consumer provided the email address to the debt collector or a prior debt collector and the consumer has not subsequently opted out.

What’s Next?

As with any rulemaking, it’s not over until the fat lady sings. Depending upon the final outcome of the 2020 election, Congress may consider legislative proposals to walk back certain provisions of the Rule and potentially overturn the Rule using the Congressional Review Act if the Democrats seize control of both the House and the Senate. It remains to be seen how the continued effects of the pandemic will impact any legislative effort to circumvent the Rule.

Additionally, there is more to come from the CFPB. In December, the CFPB plans to release the remainder of the Rule, this time focusing on disclosures. Additionally, the CFPB is looking at additional interventions, including the debt collector’s obligations to substantiate debts. In any event, compliance departments should begin carefully reviewing the Rule and its Official Comments and aligning their policies, procedures, media content and scripts to conform with the Rule and take advantage of the safe harbors contained within the Rule.

Caren Enloe is a partner with Smith Debnam in Raleigh, NC and leads the firm’s Consumer Financial Services Litigation and Compliance Group. Caren additionally serves as the Chair of the American Bar Association’s Debt Collection and Bankruptcy Subcommittee. Active in a number of trade groups, Caren serves as the Member Attorney Program State Chair for ACA International and as a member of the National Creditors Bar Association’s Defense Bar.

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Update On Future Events.

Due to COVID-19 our in-person events are very limited due to current restrictions in place by the Governor. If you or your organization is hosting an event or virtual meeting please let us know by emailing us at media@ctpoa.com and we will put you into the Event Calendar. Stay safe!

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