CARES Act: Corrects a TCJA Drafting Error Providing Relief to Commercial Property Owners and Tenants


The Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted last month, and it is designed to provide economic relief to both businesses and individuals hit with financial stress and disaster due to the COVID-19 pandemic. For businesses, among the most publicized and popularized provisions, the CARES Act offers loans on borrower friendly terms, it provides cash grants, and it makes available certain federal tax benefits and incentives. For individuals, the CARES Act gave eligible taxpayers cash rebates depending on their filing status and adjusted gross income, and it offers deferment on mortgage payments and student loans. In addition, private businesses such as insurance companies, media companies, and internet providers have stepped up with assisting taxpayers in a time of health and economic crisis.

However, the CARES Act also provides relief in less publicized provisions. Specifically, the CARES Act revised (or, perhaps, corrected), an unintended consequence of the Tax Cut and Jobs Act of 2017 (TCJA) as it relates to the deductibility of interior property improvements made by commercial property owners and tenants.  Indeed, while drafting the TCJA, Congress had intended to expand the deductibility of qualified improvement property from fifty percent (50%) to one hundred percent (100%). In other words, commercial property owners and tenants making interior capital improvements could deduct 50% of the cost of such improvements – the TCJA intended to provide for the deductibility of the full cost of such improvements. This deduction had applied to both tenant and owner improvements of commercial properties, including retail shops, office buildings, and restaurants. However, due to drafting error, the precise language relating to such building improvements was left out of the TCJA. 

As a result, not only was the 100% deduction was left out of the TCJA, but it even voided the 50% deduction. In place of the 50% deduction, prior law kicked in, and for the past two (2) years, tenants and commercial property owners were instead stuck with a 39-year depreciation period. As a result, owners and tenants did not have much incentive to perform interior commercial improvements.

The CARES Act, however, corrects this drafting error. Now, commercial property owners and tenants can deduct one hundred percent (100%) of their property improvements immediately (there is no longer a depreciation period). In addition, the law is retroactive, allowing businesses to amend prior year’s tax returns to potentially receive a refund. 

Not only will this CARES Act revision provide certain businesses with potential refunds during these tough economic times, but it will also incentivize businesses to invest in their properties in the future.

Please contact Chris Young at 301-762-5212 for more information regarding this CARES Act provision.

Chris Young
is an associate in the Business & Tax practice at Miller, Miller & Canby. He focuses his practice on corporate legal agreements, business formation, tax controversy work and helping clients deal with new tax regulations. View more information about Miller, Miller & Canby's Business & Tax practice by clicking here.





Widening Washington D.C.’s Beltway & I-270 for Toll Lanes in Maryland: Project Update


If you live in Montgomery or Prince George’s Counties, or you regularly commute into Washington D.C. or Northern Virginia, you are likely already aware of plans to widen the I-495 Beltway and I-270 to make way for new toll lanes.  Miller, Miller & Canby’s eminent domain and condemnation attorneys are closely tracking this major infrastructure project.

The Landscape
This project is a priority of Governor Hogan, which is emerging out of the I-495 & I-270 Managed Lanes Study launched in March 2018 by Maryland Department of Transportation’s State Highway Administration (MDOT SHA).  A Public-Private Partnership (P3) has been established to manage and indeed fund the project’s development, design and construction.  The P3 releases periodic newsletters and info on their website.

On January 8, 2020, Maryland’s Board of Public Works (BPW), comprised of the Governor, Treasurer and Comptroller, voted 2-1 to approve Phase-1 of the project.  On February 7th the P3 posted an announcement on its website clarifying that the BPW’s vote “only allows the solicitation process to move forward for a Phase Developer to assist the MDOT SHA with preliminary development and design activities, which is allowable under federal regulations.” (Click here for full anouncement)  Once the project’s new toll lanes are constructed, the P3’s development contractor will retain some level of ownership interest in those lanes while operating and maintaining them for a given time period – purportedly 50 years.

Prior to January’s BPW vote, the National Environmental Policy Act (NEPA) process was already well underway for the I-495 & I-270 Managed Lanes Study.  In fact, the P3’s most recent September 2019 Newsletter noted that the Draft Environmental Impact Statement (DEIS) was scheduled to be released later this Winter 2020 for public review and comment, followed by public hearings in the Spring.  However, the P3’s February 7th website post announced that the DEIS would not be published until Spring 2020.

The Plan for Phase 1
The P3’s February 7th website post included a map of Phase-1 as planned, a copy of which is provided below.  Phase-1 will widen I-495 and I-270 for toll lanes, beginning by replacing and widening the American Legion Bridge that crosses the Potomac River from Virginia, and extending northward to I-70 in Frederick County.  Current plans are to divide Phase-1’s delivery, first widening I-270 up to its intersection with I-370 in Montgomery County.  However, since the project’s details remain undefined, the extent of privately owned real estate that will be required to support the widening remains unresolved.  At present, there is an interactive map posted online by MDOT SHA for preliminary planning purposes, which remains subject to change.



Legislation Proposed to Stop the Project
This project remains highly controversial.  In fact, Bills SB0229 & HB0292, cross-filed in both chambers of the General Assembly this session, propose to prohibit the State from constructing toll roads or bridges without the consent of the majority of the affected Counties.  The Bills propose to rewrite an existing law (Maryland Transportation Code Section 4-407), which already requires majority County consent for toll projects, but only amongst nine named Counties all located east of the Chesapeake Bay Bridge.  If successfully enacted, the new law would extend that majority consent requirement to ALL Maryland Counties and Baltimore City. 

The House Environment and Transportation Committee held a hearing on February 13th in which HB0292 was under consideration.  Those testifying in favor of HB0292 (i.e. in opposition to the 495/270 project), led by Prince George’s County representative Mary Lehman, raised arguments and allegations including:

  • The existing law stands as precedent, and to continue limiting the consent requirement to nine Counties is inequitable/unfair.

  • The State needs to fully engage affected Counties, yet there has been virtually no consultation, coordination and collaboration with affected Counties for this 495/270 project. 

  • The contract procurement process has been far from transparent, as solicitation was recently amended to essentially sole-source to an Australian company called Transurban who was Virginia’s P3 contractor that still owns and operates its I-495, I-395 and I-95 Express Lanes.

  • Preliminary MDOT SHA estimates indicate that the entire 495/270 project will range between $8 and $9 Billion, but witnesses asserted that budget estimate details have not been released and independent estimates are as high as $25 Billion.

  • Testimony challenged the assertion that the project will be financed wholly by private investment, thus enabling other planned MDOT SHA projects to remain funded and on-track.  Rather, it was suggested that taxpayers will likely absorb change-orders and cost overruns, which have proven to be significant in other P3 projects elsewhere.  Transurban’s current West Gate Tunnel project in Australia was presented as an example.

  • This Bill will not become a blanket veto of all toll projects, because County politicians are accountable to voters, and if the project makes sense, they will support it or face being replaced.

Those testifying in opposition to the Bill (i.e. in favor of the I-495/I-270 project) raised arguments and allegations including:

  • This is a Not In My Back Yard (NIMBY) Bill, in that its proponents living closer to D.C. are disregarding the decades-long notorious traffic issues faced particularly by Maryland commuters living in upper Montgomery County, Frederick County and further. (4+ hours daily commute for many) 

  • The State, not Counties, must ultimately consider how this 495/270 project will benefit its citizens at large and the larger State economy as it pertains to the livability and attractiveness to new persons and businesses considering moving here. 

  • Individual Counties cannot be given a first right of refusal that will impact the entire State and pit counties against each other – which in all likelihood will occur.  They referenced the recent I-95 toll road project north of Baltimore extending into Harford County, which Baltimore County could have opposed if this Bill were law, to the detriment of Harford County residents. 

  • It is a fallacy that adding toll lanes will increase greenhouse gas emission.

  • The 495/270 widening would generate jobs and income, which would be lost if this Bill were passed. 

Finally, there was discussion regarding the potential constitutional Commerce Clause challenges that could be raised should HB0292 become law.  It was also noted that while toll projects tend to be State projects, they usually receive federal funds, making federal law applicable, which would potentially preempt a State law such as the one proposed.  HB0292’s opponents posited that it is more susceptible to being repealed or preempted than the existing law requiring nine eastern Counties’ consent.  They pointed out that the I-495 project involves interstate transit into Virginia falling under federal purview, while asserting that the existing law only impacts intrastate roadways in nine counties.  HB0292’s proponents reiterated that it changes nothing about existing law other than the number of Counties whose consent is required. 

As the General Assembly continues to deliberate these Bills, the 495/270 widening project will undoubtedly press ahead.

About Miller, Miller & Canby
Miller, Miller & Canby has extensive experience in protecting property owners’ rights throughout the eminent domain process. Jamie Roth is an Associate in the firm’s Litigation Practice Group, concentrating his practice in real estate litigation with a focus in eminent domain. Prior to becoming an attorney, Jamie enjoyed a distinguished career spanning over twenty years in the private and public sector with experience in project management, strategic planning, asset management and risk mitigation, including eleven years as a successful real estate consultant in federal eminent domain matters.

If you have any eminent domain-related questions or questions about the project or its potential impact to your property, please contact Jamie at 301.762.5212 or via email.

Visit our firm’s website for general information on the eminent domain process and our firm’s services by clicking here.





Commercial Property Owners Have Until February 10th to Appeal New Maryland Property Tax Assessments


At the end of December, the Maryland Department of Assessments and Taxation (SDAT) issued new Assessment Notices to owners of one-third of all commercial and residential properties in Maryland. For instance, in Montgomery County, commercial properties in Bethesda, Potomac and Germantown were reassessed.  In Anne Arundel County, commercial properties in Annapolis, Glen Burnie and Linthicum were reassessed. In Frederick County, commercial properties in and around downtown Frederick were reassessed. In Prince George’s County, commercial properties in Beltsville, Laurel, Clinton and Upper Marlboro were reassessed.

Property owners have 45 days from the date of the Assessment Notice to challenge these new assessments.  Based on the notices we have seen this cycle, the appeal deadline is February 10, 2020, although this could vary depending upon the notice date. The “first-level” appeal takes place at the local Assessment Office. If the assessor refuses to reduce the assessment, the owner may file a further appeal to the county’s Property Tax Assessment Appeals Board (PTAAB).  This Board will consider the evidence and issue a written decision, usually within two weeks. If the property owner is still dissatisfied, another appeal may be filed to the Maryland Tax Court.

Miller, Miller & Canby has been challenging the assessments of various types of properties in Maryland for more than 30 years and has obtained substantial reductions in real property assessments for our clients. Our litigation attorneys regularly represent clients before the local Assessment Office, PTAAB and the Maryland Tax Court.  We have successfully appealed the assessments on office buildings, retail stores, senior living centers, warehouses, industrial sites, casinos, apartment buildings and cemeteries.  Let us help you reduce your Maryland property assessments in 2020.

Michael Campbell
is a partner in the litigation group at Miller, Miller & Canby.  In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals. Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance or to help reduce your commercial Maryland property tax assessment.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.





The 3 Types of Real Estate Co-ownership in Maryland: What Every Owner Should Know


Do you co-own, or are you planning to co-own, real estate in Maryland?  Perhaps you are married or planning to marry, you are acquiring property with others, or you have inherited a property along with others.  There are many decisions to make when considering real estate co-ownership, one of which is the type of co-ownership you should enter into, referred to legally as your estate in the property.  In fact, as circumstances change, you may benefit by changing your type of co-ownership.  However valid your reason for sharing ownership in a given property may be, you should clearly understand the type of co-ownership you have, because it matters a great deal more than you may realize. 

Consider these three important questions:

  • Can you convey your share of the property by gift or sale, or devise it in a will, without consent of your co-owners?
     
  • Is your property vulnerable to a creditor who may be actively seeking to collect on a personal debt you owe, or on the debt of a co-owner?
     
  • What happens to your property interest in the event of a divorce or death?

There are three types of real estate co-ownership in Maryland:  Joint Tenancy, Tenancy by the Entirety (a.k.a. Tenancy by the Entireties) for married couples and Tenancy in Common.

  1. JOINT TENANCY is when two or more co-owners simultaneously have an interest in the whole property, as well as a separate, undivided individual interest.  Each Joint Tenant enjoys a shared right of possession to the whole property, while holding title to a portion of it.  Joint Tenancy requires that the Joint Tenants acquire their interests at the same time, by the same instrument (e.g. deed or will) and in equal interests.  The hallmark of Joint Tenancy is a right of survivorship.  When one Joint Tenant dies, by operation of law the decedent’s interest is automatically transferred proportionally amongst the surviving Joint Tenants.  The intent to form a Joint Tenancy must be clearly expressed in the instrument.  If the instrument does not contain the words “Joint Tenants” or “Joint Tenancy,” it must otherwise clearly intend a right of survivorship.

    Pros & Cons of Joint Tenancy:  In one sense a right of survivorship is an advantage, because there is no need to record a deed verifying that the survivor(s) now owns the decedent’s interest.  However, this also means that a Joint Tenant cannot devise her property interest to her heirs.  Joint Tenants are only responsible for their respective share of cost of maintaining the property, such as property taxes, mortgage and insurance.  Moreover, Joint Tenants are entitled to share proportionally in any income the property earns.  Also, if a Joint Tenant incurs a debt unrelated to the property, any resulting judgment lien is only against her apportioned interest in the property.  However, if a judgment creditor successfully levies the property within the debtor Joint Tenant’s lifetime, the other Joint Tenants may suffer the consequences of either a forced sale or partitioning (physical division) of the property.  A Joint Tenant retains the right to sell or gift his/her interest in the property without permission of the other Joint Tenants, but in doing so, the Joint Tenancy is severed, creating a Tenancy in Common with the remaining Joint Tenants.  In Maryland, a Joint Tenant’s mortgage of his/her property interest also converts his/her co-ownership into a Tenancy in Common.  Finally, an individual Joint Tenant may file a lawsuit to potentially force a partition of the property, or a sale in lieu of partition, in which case the proceeds are distributed amongst the Joint Tenants.
     
  2. TENANCY BY THE ENTIRETY is a form of Joint Tenancy recognized under common law for married couples.  In Maryland, couples who are married when executing the deed to a property are presumed to take title as Tenants by the Entirety unless otherwise provided in the instrument.  However, if two persons marry while already owning property together as Joint Tenants, their ownership is not automatically converted into a Tenancy by the Entirety. They must update their deed. Conversely, when the Court grants an absolute divorce, the Tenancy by the Entirety is severed by operation of law and their co-ownership is converted into a Tenancy in Common, thus extinguishing the right of survivorship.

    Pros & Cons of Tenancy by the Entirety:  Under a Tenancy by the Entirety there is only one shared interest between the married co-owners, consequently one spouse cannot sell or otherwise convey the property without the consent of the other.  Also, if only one spouse owes a debt to a creditor, that creditor cannot force a sale to satisfy the debt; the property is shielded from the debts of one spouse.
     
  3. TENANCY IN COMMON differs from Joint Tenancy in that each co-owner has a divisible interest in the property, and there is no right of survivorship.  When a Tenancy in Common is formed, the property interests will be apportioned equally between the Tenants in Common, unless allocation is otherwise specified.  Any property granted to two or more unmarried persons is a Tenancy in Common unless there is a clear intention in the instrument to form a Joint Tenancy.

    Pros & Cons of Tenancy in Common:  A Tenant in Common may convey, encumber and devise his/her property interest as he/she wishes without the consent of the other co-owners.  However, a Tenant in Common’s interest in the property is susceptible to liens and judgments.


As a co-owner in any arrangement, you should understand the ramifications of your type of co-ownership.  This is particularly true when facing litigation. It is important to consult a professional to review your deed, and discuss how your property interest may be impacted if you are facing litigation or other situation.

James (Jamie) Roth is an Associate in the Litigation Practice Group at Miller, Miller & Canby. He concentrates his practice in real estate litigation with a focus in eminent domain, as well as business and commercial litigation. He has enjoyed a long-standing and distinguished career as a successful real estate consultant, including more than twenty years of private and public sector experience in project management, strategic planning, asset management and risk mitigation.  

Contact Jamie at 301.762.5251 or via email.

For more information on Miller, Miller & Canby’s Real Estate Litigation Practice, click here.

DISCLAIMER - This article is offered as an overview for educational purposes, it is not a comprehensive coverage of the law, and it is not a substitute for an attorney’s consultation.

 





25 States Have Supported 5G by Passing Small Cell Legislation to Promote Rapid Deployment of 5G


In May 2019, Nebraska passed its “Small Wireless Facilities Deployment Act” becoming the 25th State to pass legislation implementing the 5G and Small Cell deployment.   Thus, half of the Country now has state-wide legislation (versus just municipality or county specific legislation) to facilitate the deployment of 5G small cells.  While Maryland has introduced legislation the past two years on the topic, it has yet to pass a law.  Meanwhile, its neighboring States of Virginia, Delaware and West Virginia are among the 25 States.

These State laws take into consideration the unique circumstances of their State and local environment, but baseline principles can be established and are consistent with wireless industry standards, including:

  • Streamlined applications to access public rights of way

  • Caps on costs and fees

  • Streamlined timelines for the consideration and processing of cell siting applications

The Wireless Infrastructure Association (WIA and National Conference of State Legislatures) are tracking Mobile 5G and Small Cell 2019 Legislation. Click here to view the current legislation by State.

The telecommunications land use attorneys at Miller, Miller & Canby are experienced in Maryland, D.C. and Virginia and are closely monitoring the impacts of the FCC order and the efforts of State and local governments to craft small cell legislation in order to advise telecommunications and property owner clients.

Sean P. Hughes
is an attorney in Miller, Miller & Canby’s Land Use practice group. His career spans more than two decades of focus in legal and wireless telecommunications and he has represented clients in land use and zoning matters throughout the Mid-Atlantic.  To learn more about the firm’s Land Use and Zoning practice, click here.

Cathy Borten
is an attorney in Miller, Miller & Canby’s real estate practice group. She focuses in commercial real estate transactions and leasing, real estate litigation, land use and zoning and commercial financings and settlements. Cathy has over 10 years' experience in leasing, land use and zoning in the wireless telecommunications industry. Cathy also participated in the drafting of the Montgomery County and City of Gaithersburg original small cell ordinances. To learn more about the firm’s Real Estate practice, click here.





Promoting 5G: Two US Senators Re-Introduce Legislation to Streamline Rapid Deployment of Small Cells


On June 3, 2019, U.S. Senators John Thune (R-SD) and Brian Schatz (D-HI) re-introduced the Streamlining the Rapid Evolution and Modernization of Leading-edge Infrastructure Necessary to Enhance Small Cell Deployment Act, or STREAMLINE Small Cell Deployment Act.

The bipartisan legislation updates the Communications Act to better reflect developing technology and facilitate the rapid deployment of 5G networks. It also sets reasonable standards for local government review of infrastructure siting while recognizing the unique challenges for smaller municipalities.

Key Provisions of the STREAMLINE Small Cell Deployment Act:

  • Permits must be approved or denied on publicly available criteria that are reasonable, objective and non-discriminatory.

  • Small cell applications may be denied or regulated for objective and reasonable structural engineering standards, safety requirements or aesthetic or concealment requirements.

  • Applications must be acted on no later than 60 days for requests to co-locate equipment and 90 days for other requests.

  • Flexibility and additional time is allowed for small municipalities (fewer than 50,000 residents).

FCC Commissioner, Brendan Carr, released the following statement. “I commend Senator Thune and Senator Schatz for their leadership on smart infrastructure policies.  Their bill demonstrates bipartisan support for fee limits, timelines, and other reforms that are key to accelerating the buildout of 5G infrastructure in communities across the country.  If passed, their work to modernize our country’s approach to small cells would notch another solid win for the U.S. in the race to 5G.”

The telecommunications land use attorneys at Miller, Miller & Canby are experienced in Maryland, D.C. and Virginia and are closely monitoring the impacts of the FCC order and the efforts of State and local governments to craft small cell legislation in order to be able to advise telecommunications and landlord clients.

Sean P. Hughes
is an attorney in Miller, Miller & Canby’s Land Use practice group. His career spans more than two decades of focus in legal and wireless telecommunications and he has represented clients in land use and zoning matters throughout the Mid-Atlantic.  To learn more about the firm’s Land Use and Zoning practice, click here.

Cathy Borten
is an attorney in Miller, Miller & Canby’s real estate practice group. She focuses in commercial real estate transactions and leasing, real estate litigation, land use and zoning and commercial financings and settlements. Cathy has over 10 years' experience in leasing, land use and zoning in the wireless telecommunications industry. Cathy also participated in the drafting of the Montgomery County and City of Gaithersburg original small cell ordinances. To learn more about the firm’s Real Estate practice, click here.
 





Maryland Holds the Line on Property Tax Rate; But Buyers Should Consider Total Tax Burden


Recently, the Maryland Board of Public Works voted to keep the state property tax rate at its current level.  The Board is composed of the Governor, Comptroller and State Treasurer.  Governor Larry Hogan, a fiscal conservative, announced that holding the rate was part of his commitment to “prudent capital spending.”  As a result, the state tax rate will remain at 11.2 cents per $100 of assessed value, or 0.112% of total value.  That means a property assessed at $1,000,000 will incur a state tax of $1,120 annually.

While this might suggest good news for Maryland property owners, the state property tax is only a small portion of the overall tax burden on properties.  Each non-exempt property is also subject to county property taxes and, in some jurisdictions, municipal property taxes as well.  For instance, in Montgomery County, a D.C. suburb and the most populated county in the State, the current county tax rate is 0.9927%, which adds another $9,927 in taxes for a $1,000,000 assessment.  Further, a person owning property in Takoma Park, located inside Montgomery County and on the D.C. border, would pay an additional municipal tax of 0.5291.  Consequently, a non-exempt property assessed at $1,000,000 in Takoma Park is subject to a total property tax rate of 1.6338%, equaling $16,338 in annual property taxes.

Other Maryland municipalities that impose a third layer of property taxes include Frederick City (0.73%), Hyattsville (0.63%), and Annapolis (0.54%). When considering the location and timing of purchasing property in the Maryland, buyers should consider the total property taxes imposed annually.  Moreover, if the pre-purchase assessment is lower than the purchase price, the buyer can generally expect the assessment to increase up to the purchase price for the next triennial assessment cycle. The local assessment offices track sales of properties and will pick up the sale price when issuing new assessments.

Miller, Miller & Canby has been challenging the assessments of various types of properties in Maryland for more than 30 years and has obtained substantial reductions in real property assessments for our clients. We have successfully appealed the assessments on office buildings, retail stores, senior living centers, warehouses, industrial sites, casinos, apartment buildings, golf courses and cemeteries. 
Michael Campbell
 is a partner in the litigation group at Miller, Miller & Canby.  In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance or to help reduce your commercial Maryland property tax assessment.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.





Should Maryland Commercial Property Owners Complete Tax Questionnaires?


Every year, the Maryland Department of Assessments and Taxation (SDAT) is tasked with reassessing one-third of all commercial properties in the state.  In the year prior to the reassessment, SDAT is required to obtain income and expense information from the property owner.  The information allows the assessor to determine the value of the property using an income approach.  This approach determines value by taking gross income (e.g., rent, CAM reimbursements and other income), applying a vacancy rate and deducting property-related expenses such as maintenance, repairs, utilities, insurance, professional fees (attorney or accountant) and management fees.  The resulting net operating income (NOI) is then divided by an appropriate capitalization rate to reach a final value.

Types of SDAT Property Questionnaires
There are several different types of questionnaires issued by SDAT, each tailored to the type of property being reassessed.  These include apartments, hotels, assisted living facilities, nursing homes, cemeteries, garages and parking lots, mobile home parks, marinas, golf courses and commercial/industrial properties.  The owner is asked to complete the questionnaire and return it to the local Assessment Office by May 15.  

Are Property Tax Questionnaire Submissions Mandatory?
Property owners often inquire whether the submission of the questionnaire is mandatory, and what happens if the questionnaire is not returned.  The answer depends upon the value of the property.  For income-producing property that has a value in excess of $5,000,000, as listed on the assessment roll, the owner is subject to a statutory penalty for failing to produce the information.  The penalty is $100 per day up to a maximum equal to 0.1% of the value of the property.  For instance, a property assessed at $6,000,000 would be subject to a penalty up to $6,000 for the failure to submit the competed questionnaire.

Despite the statutory mandate, there can be instances where the property owner would rather incur a penalty than submit income and expense information to SDAT.  A classic example is where the property is under-assessed by a large margin and submission of the income information would likely cause a significant increase in the assessment. Conversely, a property owner who is not required to submit a questionnaire might want to do so in certain situations. In this instance, the property may be over-assessed and the income and expense information will educate the assessor and likely lead to a reduction in the assessment.

What Should Owner-Occupied Properties Submit?
For properties that are owner-occupied, there is no stream of rental income to report to SDAT.  In this situation, the owner should return the questionnaire without inserting the income and expense data and simply note: “Owner-Occupied.”  The Assessment Office will then estimate market rent and expenses in order to conduct an income approach to value. Occasionally, an owner will have a “friendly lease” with itself or a closely related entity that holds title to the property.  Since this is not an arms-length lease, the rental income should not be reported on the questionnaire because it is unlikely to reflect fair market rent.

Miller, Miller & Canby has been challenging the assessments of various types of properties in Maryland for more than 30 years and has obtained substantial reductions in real property assessments for our clients. We have successfully appealed the assessments on office buildings, retail stores, senior living centers, warehouses, industrial sites, casinos, apartment buildings, golf courses and cemeteries.  

Michael Campbell
is a partner in the litigation group at Miller, Miller & Canby.  In addition to trial and appellate advocacy, his practice focuses on real estate litigation and property tax assessment appeals.  Please feel free to contact Mr. Campbell at 301.762.5212 or send him an email for property tax guidance or to help reduce your commercial Maryland property tax assessment.  For more information about the firm’s Maryland property tax appeals practice and representative cases, click here.





Democratic Congressional Leaders Accuse FCC of Collusion in Small Cell Ruling


In a letter to FCC Chairman Ajit Pai dated January 24, 2019, the heads of the House Energy and Commerce Committee and the Subcommittee on Communications and Technology accused the agency of colluding with telecom companies to win court approval for a ruling that limits fees and approval processes for small cell deployments. Click here to view the letter.

When the FCC approved the rule change in September 2018, it was positioned as a necessary step to meet the needs of 5G and speed up the deployment of small cells and other telecom equipment. Regulators limited the fees that cities and states can charge for small cell installations and set reduced timelines for the approval process.

Cities must now act on applications within 60-90 days and can only charge a $100 application fee and an annual $270 fee per small cell. The move drew criticism from local officials who believe the FCC overstepped its authority, and many continue to call for an appeal or outright reversal of the ruling.

As discussed in previous MM&C articles on this topic, many local governments have combined forces to appeal the FCC Order. The U.S. Court of Appeals for the 10th Circuit denied the cities’ request for a stay, the FCC’s Declaratory Ruling and Third Report and Order on small cell deployment went into effect on January 15, 2019. The cities’ appeal has moved to the 9th Circuit.

According to MM&C Telecommunications Attorney, Sean Hughes, “I suspect that this debate and accompanying legal and legislative maneuvering is going to continue. Between the Fed’s  actions to streamline 5G infrastructure development for the  consumer, which is nearly everyone (considering there are over 400 million wireless devices active in the United States), versus local government efforts to prevent or roll back Federal preemptions that are limiting local government review authority and citizen involvement over wireless development requests.“

The telecommunications land use attorneys at Miller, Miller & Canby are experienced in Maryland, D.C. and Virginia’s 5G Wireless and Small Cells Zoning. Our telecommunications, zoning attorneys and real estate attorneys are closely monitoring the impacts of the FCC order and the efforts of local legislatures to craft small cell legislation in order to be able to advise telecommunications carriers and potential landlords.

Sean P. Hughes
is an attorney in Miller, Miller & Canby’s Land Use practice group. His career spans more than two decades of focus in legal and wireless telecommunications and he has represented clients in land use and zoning matters throughout the Mid-Atlantic.  To learn more about the firm’s Land Use and Zoning practice, click here.

Cathy Borten
is an associate in Miller, Miller & Canby’s real estate practice group. She focuses in commercial real estate transactions and leasing, real estate litigation, land use and zoning and commercial financings and settlements. Cathy has over 10 years' experience in leasing, land use and zoning in the wireless telecommunications industry. Cathy also participated in the drafting of the Montgomery County and City of Gaithersburg original small cell ordinances. To learn more about the firm’s Real Estate practice, click here.
 





FCC Order on 5G and Small Cells Goes into Effect; Cities’ Appeal Goes to 9th Circuit Court


After the U.S. Court of Appeals for the 10th Circuit denied the cities’ request for a stay, the FCC’s Declaratory Ruling and Third Report and Order on small cell deployment went into effect on January 15, 2019.

Known as the September Small Cell Order, the item states that fees charged by a municipality for applications or rent must be limited to costs or they may be deemed as “effective prohibitions of service.” Aesthetic and undergrounding requirements may also be deemed to be a prohibition of service of small cell deployment. Additionally, it established new small cell shot clocks and codified previous ones, as well.
However, the courtroom drama is not over. In a second order, the 10th Circuit remanded the cities’ motion to review their petitions against the September Order back to the U.S. Court of Appeals for the 9th Circuit.

The 9th Circuit was already considering a lawsuit against the FCC’s Order banning municipal moratoria, which is basically part of the same rulemaking as the Small Cell Order. So with the transfer, both the moratoria and the Small Cell Order will be examined by the same court.
Which circuit rules on an appeal can have a big impact on the final outcome of the case. The 9th Circuit could turn out to be more supportive of the cities’ point of view as numerous 9th Circuits’ precedents were overruled by the FCC’s Small Cell Order.

Section 253 of the Telecommunications Act states that local regulations may not prohibit telecommunications services. The FCC Small Cell Order attempted to expand upon the definition of what would be deemed as a prohibition.

Another wrinkle in this case, the FCC currently does not have a lawyer working on this with the partial government shutdown. If it is not reopened in time, the Dept. of Justice will argue the case.

Congressional Involvement
The cities have also taken their fight against the FCC to Capitol Hill. Congresswoman Ana Eshoo introduced the “Accelerating Broadband Development by Empowering Local Communities Act of 2019,’’ on Jan. 14th to preserve the rights of state and local governments, essentially nullifying the September small cell order by the FCC: ‘‘Accelerating Wireless and Wireline Broadband Deployment by Removing Barriers to Infrastructure Investment.

Sean Hughes of Miller, Miller & Canby weighed in, “All interested parties are anxiously watching the Courts and legislative actions that will steer 5G infrastructure development.  Nearly all agree that the 5G state of the art technology is desired, the debate really exists about where the 5G equipment can be located, what it can look like and what local governments can charge as the related fees.”  

The telecommunications land use attorneys at Miller, Miller & Canby are experienced and entrenched in Maryland, D.C. and Virginia’s 5G Wireless and Small Cells Zoning. Our telecommunications, zoning attorneys and real estate attorneys are closely monitoring the impacts of the FCC order and the efforts of local legislatures to craft small cell legislation in order to be able to advise telecommunications carriers and potential landlords.

Sean P. Hughes
is an attorney in Miller, Miller & Canby’s Land Use practice group. His career spans more than two decades of focus in legal and wireless telecommunications and he has represented clients in land use and zoning matters throughout the Mid-Atlantic.  To learn more about the firm’s Land Use and Zoning practice, click here.

Cathy Borten
is an associate in Miller, Miller & Canby’s real estate practice group. She focuses in commercial real estate transactions and leasing, real estate litigation, land use and zoning and commercial financings and settlements. Cathy has over 10 years' experience in leasing, land use and zoning in the wireless telecommunications industry. Cathy also participated in the drafting of the Montgomery County and City of Gaithersburg original small cell ordinances. To learn more about the firm’s Real Estate practice, click here.
 





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