Proposed Law Would Allow Doctors/Physicians to File Mechanics Liens Against Real Estate in CT

While more people now have health insurance under the Affordable Care Act, many of their policies came with large deductibles. These deductibles are commonly between $2,500.00 and $6,000.00. Any deductible amount is due from the patient to the doctor or physician providing the healthcare services.

It is mandatory for the doctors to attempt to collect these fees, and necessary for them to so for the health of their business. For patient this creates financial strain beyond the monthly payments they are already making.

The Connecticut General Assembly is now considering a Bill which would greatly expand the range of materials and services for which a mechanic’s lien could be filed. Currently, the law allows a mechanic’s lien to be filed for materials and services in connection with site development of land or construction of a building.

The proposed law, SB887, would expand the services to include “any other service rendered to an owner of land.” Under this proposed law, a doctor rendering medical services to a person owning land could file a mechanic’s lien against the land if the doctor’s bill was not paid. The doctor would have 90 days after treating the patient to file the lien, and the lien would take priority over any mortgage or transfer which occurs within that 90-day period.

When buying a home or commercial property, it is common for the Seller to sign an “owners affidavit”, stating that no work had been performed on the property in the last 90 days that could lead to a claim against the property. This was done to provide the Buyer, and their Lender, with assurances that the no fresh liens would arise against their interest in the property once it was conveyed. Now, with doctors and other service providers being able to file mechanic’s liens, there would be no way to protect purchasers and mortgage lenders against claims by service providers for services that are not related to improvements on the property.

Title Insurance On Residential Bank Owned Real Estate – Buying Distressed Properties

Limits on Title Insurance Available to Buyers of Distressed Residential Real Estate Properties

Real Estate Owned properties, or REO properties, are real estate properties that are owned by a Bank or Lender following a foreclosure. A Lender can become the owner of property through foreclosure by sale (if the Lender is the only bid on the property at auction), strict foreclosure (if the owner does not redeem within 30 days) , or by deed in lieu of foreclosure (by agreement between owner and Lender).

Once the property is owned by the bank or lender, they want to sell it as fast as possible to get cash on hand. After all, the bank is in the business of lending money, not holding, leasing or selling real estate. Therefore, Buyers can get great deals on bank owned real estate. However, buying bank owned real estate does not come without risk. One of the considerations when buying bank owned real estate is the type of title insurance available.

When buying real estate, the buyer’s lender, in addition to a title search to show that Seller has proper title, will require the purchase of Title Insurance. Title insurance covers the unknown and undiscoverable defects which might eventually lead to another person making a claim against the buyers ownership of the property and therefore the lenders collateral on the loan. There is also an Expanded Title Insurance policy available only to owners which in addition to the standard policy also covers:

  • Cost of moving or repairing a house forced by zoning violations or lack of building permits;
  • Costs of removing structures because they encroach on neighbors;
  • Claims that the property is not properly zoned for single family residential use;
  • Expenses if neighbor builds structures on your property;
  • Expenses created by violation of restrictions on the property; and
  • Expenses if your house is not located on the property described in the title.

The purchase of an expanded policy requires the execution of an Owners’ Affidavit by the Seller as someone ‘who has personal knowledge of the property’. Since a bank or lender cannot have ‘personal knowledge’ of the property, and cannot provide Buyer with an Owners’ Affidavit, Expanded Title Insurance policies are NOT available for Buyers of bank owned real estate.

While Buyers of bank owned real estate might be getting a good deal, a safer bet is buying properties that are in pre-foreclosure, where a lis pendens has been filed but the title to the property has not yet passed to the lender, or buying property as a short sale, where the lender agrees to accept less than the full amount of the loan for the property. In both pre-foreclosure and short sale real estate transactions, the Seller is still the homeowner, and can satisfactorily execute an Owners’ Affidavit, allowing the Buyer to get Expanded Title Insurance protection.

Revised Residential Property Condition Disclosure Form

The Connecticut Department of Consumer Protection has finished revisions to the Residential Property Condition Disclosure Form as per Public Act 12-122 which was enacted in 2012.

The new disclosure form contains added provisions for the following:

  • Community and association fees if applicable;
  • The presence of or removal of underground storage tanks (namely oil);
  • Suggestion that prospective buyer should seek building permit and certificate of occupancy information;
  • Suggestion that property should be inspected;
  • Information regarding prior or pending litigation, governmental or administrative actions, orders or liens relating to hazardous substances;
  • Added information regarding smoke and carbon monoxide detectors;
  • Increased credit to Buyer from Seller from $300 to $500 for failure to provide the form.

Prospective Sellers can download a copy of the form by following he link below:

Residential Property Condition Disclosure Form

What Happened to The Connecticut Real Estate Market in 2012?

If you are trying to buy or sell a home in Connecticut right now, you might be having a hard time, and you are not the only one. The Multi-Indicator Market Index (MiMi), put out by Freddie Mac, illustrates the disturbing downturn in the Connecticut Real Estate Market.

The MiMi can be found at You will need to scroll the “Filter on State” down to Connecticut. The results will show a graph of the MiMi from 2001 to 2014.

From the MiMi graph, we can see that the Connecticut real estate market consistently outperformed the national average. In the dips of 2002-2004 and 2010 especially, when the national average was hit hard, the performance of the Connecticut real estate market was relatively impressive.

So what happened in 2012? The real estate market began to improve in Connecticut and Nationally, but why is the national average strongly outperforming Connecticut? Why are we so slow to recover?

Perhaps part of the answer is the employment rate. Connecticut has an employment rate of 83.8 points, while the national average is 99.1 points. Perhaps the answer is that Connecticut home owners are current on their mortgage 7.3 points less compared to the national average.

Whatever the reason, there is hope. While the Connecticut real estate market may not be improving quickly, the MiMi data shows a consistent improvement since 2013, just one that’s not as good as everywhere else. The increased Federal guidelines for real estate transactions, while they do have their downside, should further help to improve the overall health of the Connecticut real estate market.

What do we do to help? At The Law Office of Eugene Glouzgal, LLC, we offer our real estate expertise to assist buyers and sellers in this ever-changing real estate market. We especially enjoy helping our clients with “highly distressed” properties because it improves the overall Connecticut real estate landscape. Some clients are looking to sell highly distressed properties to pay off liens and get rid of headaches. Other clients are looking to buy highly distressed properties at friendly prices, invest their time and money, and get a greater return. That is how we need to repair this real estate market: one property at a time.

Increased Consumer Protection Brings Changes in Real Estate Closing Procedures

Upcoming Changes in Real Estate Closing Procedures

Closing Disclosure Form & ALTA Best Practices

The real estate mortgage bubble has brought some changes to the real estate arena, but it seems the biggest changes are yet to come. The Consumer Financial Protection Bureau is replacing the long used HUD-1 Settlement Form with the Closing Disclosure form effective August 1, 2015.

The HUD-1 was a 3 page document that outline the closing transaction and was prepared by the Buyers attorney for closing, and was usually approved by the bank the day before or day of the closing. The Closing Disclosure form will be a reported 7 pages, will be prepared by the bank, and delivered to the closing attorney 3 business days before closing.

The result here is that lenders and attorneys need to become involved in the real estate transaction much earlier in the purchase process, and closing dates will be further out from the date of contract signing. Further, if any issues arise that require changes in the Closing Disclosure form, it will be at the lenders discretion whether changes are needed, and if they are, closing will need to be delayed by at least 3 days!

Further, since the new protections are creating more responsibility, and therefore liability, for the lenders, the lenders are requiring closing settlement attorneys to follow stricter guidelines. Many lender will be requiring that attorneys form and execute an ALTA (American Land Trust Association) Best Practices compliance guide, and if they fail to do so, they will not be able to close on loans from that lender.

Real Estate attorneys can no longer rely on “the way it has always been done”. The real estate closing procedures are changing, and attorneys need to adapt with them in order to properly represent their clients. Clients need to understand that the newer protections remove some of the control from the hands of the attorney, but that ultimately those requirements are there to protect the client.

Building Wealth with a Property Holding LLC

Create a Property Holding LLC and Invest in Real Estate

Real Estate Wealth Building Strategy

Investing in real estate is nothing new. However, there are smarter ways than others to own property. One of the common services we offer to our clients is to create a property holding LLC.

An LLC, or limited liability company, can be organized under the Connecticut Limit Liability Company act for almost any legal purpose. A limited liability company shields it’s members from liabilities associated with the the actions of the LLC (with some exception). Therefore, instead of holding the property as an individual or individuals, and exposing themselves to liability, property investors can minimize liability by owning the property under an LLC.

Property can either by transferred directly into an LLC via Deed, or the LLC can be funded and then purchase property. The LLC can then sign leases with tenants to rent the property, creating income while paying off equity. Any fees such as taxes, sewer or water use, insurance, maintenance, etc., can all be paid out of the LLC as an expense of doing business. The LLC members can chose to reinvest any income, or pay themselves a salary from the LLC.

At any time, property from the LLC can be sold by the members. Also, the LLC can be sold in whole as a business entity, along with all of the property. If the LLC is creating income from it’s rentals the value of the LLC can be significant.

At the Law Office of Eugene Glouzgal we help our clients form and fund their LLCs, we can help draft and records deeds to transfer property into the LLC, we can handle all of their required filings with the State, we perform the closings on the properties they want to purchase or sell, we draft custom lease agreements, we can handle evictions for non-paying tenants, and we can handle the sale of the LLC when they ant to make their exit.

Contact us today for a free consultation on how we can help you build wealth by creating a property holdings LLC so you can invest in real estate while being protected from personal liability.

Short Sale as an Alternative to Foreclosure Defense

Being foreclosed on? Consider short sale as an alternative.

Being foreclosed on can be scary. You are already in financial hardship and now you stand the chance of losing your home. If you do not qualify for refinance, another alternative to foreclosure is the short sale of your home.

In a short sale, you put your house on the market, and ask the bank to allow you to sell it for a lower, previously agreed upon price (such as the actual Fair Market Value). The bank then promises to accept that sales amount, minus any fees they approve, in FULL satisfaction of your outstanding debt. Once the short sale closes, the foreclosure action becomes moot and is withdrawn.While it still results in the loss of the home a short sale has many advantages to the home owner over the foreclosure process.

The benefit of a short sale is that because the bank is accepting the amount in full satisfaction, there is no deficiency. A deficiency is the difference between the amount owed, and the value or sales price of the house. In a foreclosure, lenders generally seek a judgment for the deficiency against the home owner. You can lose your home AND owe the bank money after. However, in a short sale, any deficiency is forgiven and the home owner is free and clear of the lender.

The second benefit is that the attorney fees associated with defending against foreclosure can quickly accumulate, especially if your goal is to buy more time in the home. Going through short sale, where you stand a good chance of the bank covering the closing attorneys fees, can save you on some of those fees for court appearances and document prep associated with foreclosure.

Getting a lender to accept a monetary loss is never easy. the short sale process takes a lot of time. They will require documentation regarding the income of the home owner as well as the value of the property. Approval is not guaranteed in any way, as short sale approval is in the hands of the bank. Further, there are tax consequences associated with being forgiven debt, so a CPA or tax attorney should be consulted.

If you need representation for a foreclosure or a short sale, contact our law office today for a free consultation.


Connecticut Regulation of LLC’s Rendering Professional Services

Professional Limited Liability Company Members Limited to Those Licensed in that Profession

Generally, a limited liability company, or “LLC”, may be formed in the State of Connecticut for the transacting of any business or promotion of any purpose which is lawful. Due to the exposure for liability of a partner in a partnership, many professionals choose to create a limited liability company when joining with other professionals to render professional services. However, Connecticut has placed additional regulations on the formation of an LLC that is to provide professional services.

A limited liability company may only be formed to render professional services if (1) each member of the limited liability company is licensed or otherwise authorized by law to render the professional service involved, (2) the LLC will render only one specific type of professional services and services ancillary to that purpose, but may not engage in any business other than the rendering of the professional service for which it was formed, and (3) the LLC can only render its professional services through members, managers, employees and agents that are licensed or otherwise authorized by law to do so.

What does the State of Connecticut consider to be a “professional service”? A professional service is one that requires a member of that profession that wishes to render those professional services to first obtain a license or legal authorization. Currently this list includes:

  • Dentists
  • Naturopaths
  • Chiropractors
  • Physicians and Surgeons
  • Doctors of Dentistry
  • Physical therapists
  • Occupational therapists
  • Podiatrists
  • Optometrists
  • Nurses
  • Nurse-midwives
  • Veterinarians
  • Pharmacists
  • Architects
  • Professional engineers
  • Landscape architects
  • Real estate brokers
  • Insurance producers
  • Certified public accountants and public accountants
  • Land surveyors
  • Psychologists
  • Attorneys-at-law
  • Licensed marital and family therapists
  • Licensed professional counselors
  • Licenses or certified alcohol and drug counselors and
  • Licensed clinical social workers

The law does allow certain professions to form an LLC together if (a) each member of the limited liability company is licensed or otherwise authorized by law to render any of the professional services involved, (b) the limited liability company will only render the types of services involved and those services ancillary to that profession, and (c) the LLC only renders it’s professional services through members, managers, employees and agents who are licensed or otherwise authorized by law to render the professional services involved. Psychology, marital and family therapy, social work, nursing and psychiatry professions can be combined. Medicine, surgery, occupational therapy, social work and alcohol and drug counseling professions can be combined. Medicine, surgery and chiropractic professions can be combined.

If a member of an LLC that renders a professional service loses their license or authorization to render that professional service, they are deemed to be disassociated from the LLC as an operation of law.

It should be noted that a limited liability company rendering professional services is liable up to the full value of its property for any negligent or wrongful acts or misconduct committed by any of its members, managers, agents or employees who are engaged in rendering professional services on behalf of the LLC. Members, managers, agents and employees engaged in rendering professional services on behalf of the LLC are only personally liable for the negligent and wrongful acts or misconduct committed by himself or herself or any person directly under his or her supervision. However, as is the entire point with forming limited liability companies for rendering professional services, individual members are only responsible for the liabilities of the LLC to the extent of their interest in the LLC, unless it is their wrongful conduct that led to the liability.

If you are looking to form an LLC for the purpose of rendering a professional service, you will need the help of an experienced business attorney. Forming an illegal LLC or failing to think through the business organization process can create civil and potentially criminal liabilities for its members, cost the members a lot of money, and eventually lead to the downfall of the organization. The regulations discussed in this article are only some of the regulations imposed on professional services by the State of Connecticut, and every profession will have its own specific regulations. The Law Office of Eugene Glouzgal offers a range of business services including LLC formation. Contact us today for a free consultation by phone at 203-794-6691, by e-mail at or by using our interactive messaging and scheduling assistant.

Connecticut Increases Filing Requirements for Hospitals and Large Medical Groups

Hospitals and Large Groups Must File with Attorney General

In a new law that came into effect on October 1st, the State of Connecticut is increasing filing requirements for hospitals and large medical practices of eight or more physicians. Public Act Number 14-168, titled “An Act Concerning Notice of Acquisition, Joint Ventures, Affiliations of Group Medical Practices and Hospital Admissions, Medical Foundations and Certificates of Need.”, will require incidence and yearly filings for hospitals and medical practices that are making changes to their business or corporate structure.

First, the law requires that any group or hospital given written notice to the Attorney General within 30 days of any change in corporate or business structure if:

  1. The merger, consolidation or affiliation of a group practice with a hospital or another group practice resulting in a group of eight or more doctors;
  2. The acquisition by one group of all or substantially all of the property, assets, stock or membership interest in a hospital or another group resulting in a group of eight or more doctors;
  3. The employment by one group of all or substantially all of the physicians of a hospital or another group resulting in a group of eight or more physicians; and
  4. The acquisition of an insolvent group practices by another hospital or another group practice resulting in a group of eight or more doctors.

The written notice shall identify each party to the transaction and explain the material change in the business or organizational structure. More specifically, the notice must include a description of the nature of the proposed relationship, the names and specialties of each physician, the names of the business entities under which medical services will be provided after the change, the address of each location at which the medical services will be rendered, a description of the medical services that will be provided at each location, and the primary service area that will be covered by each location.

The new law also demands a yearly follow up filing, to be filed no later than December 31 of each year, detailing the same information as is required on the initial filing. However, the follow up filings are limited to hospitals and group practices of thirty or more physicians only.

Due to the recent changes in the medical industry, many physicians have joined hospital systems or formed medical groups, to share risk and expenses. This new law seeks to gain information on these larger medical service providers, and to keep updated records on their hospital or group size, the services they render, and the areas they cover, by placing the burden of providing this information on the medical service providers themselves.

The Law Office of Eugene Glouzgal is proud to specialize in the legal business needs of Connecticut’s medical services providers. If you are a medical services provider in Connecticut and need assistance in creating your business entity and acquiring licenses and/or staying current with the mandatory filings of the State of Connecticut, please contact us today to discuss our legal consulting services.

Connecticut Law Places Additional Burdens on Scrap Metal Industry

New Connecticut Law Places Additional Burdens on Scrap Metal Industry

Violation Can Result in Criminal Action Against Business Owner

Starting October 1, 2014, a modification to Connecticut law regarding the scrap metal industry will place new burdens on scrap metal processors. Replacing Section 21-11a of the Connecticut General Statutes, the bill entitled “An Act Concerning Scrap Metal Sold On Behalf of Municipalities” is aimed at preventing the unauthorized sale of municipal property.

What will now be section (e) of the law,  states that “no scrap metal processor…may purchase or receive property from a municipality unless the person delivering such property presents at the time of delivery a letter from the chief executive officer on the letterhead of such municipality authorizing such purchase or receipt” and “send any moneys paid for such municipal property to the chief executive officer of the municipality by first class mail.”

This law seems to make perfect sense. It is aimed at stopping the theft of municipal property, that is then scrapped for the financial benefit of the thief, and has to be replaced at a cost to tax payers. But what does it mean for the scrap metal processors?

If an item is brought for scrapping that reasonably seems to belong to a municipal department, for example a guard rail, they must request a letter from the chief of that department, for example the transportation department. If the vehicle delivering such scrap is a municipal vehicle, they must request a letter from the chief of that department which is marked on the vehicle.

Failure to request the authorization letters can result in criminal penalty. The first offense is a Class C misdemeanor, second offense is a Class B misdemeanor, and the third and any subsequent offense is a Class A misdemeanor. In Connecticut, a Class C misdemeanor is punishable by up to 3 months in prison and/or up to a $500 fine, a Class B misdemeanor is punishable by up to 6 months in prison and/or up to a $1000 fine, and a Class A misdemeanor is punishable by up to 1 year in prison and/or up to a $2000 fine.

The law also keeps all of the old requirements for the scrap metal industry, including:

  1. Recording a description for all loads of scrap metal purchased;
  2. Recording the weight of such metal;
  3. Record the price paid for such metal;
  4. Record the identification of the person delivering such metal;
  5. Take a photograph of the motor vehicle delivering such metal;
  6. Take a photograph of the license plate of the vehicle delivering such scrap metal.
  7. Maintain such records in good condition for no less than two years;
  8. Make the records open to inspection by law enforcement officers upon request during business hours
  9. Notify the local law enforcement of any person trying to sell a bronze statue, plaque, historical marker, cannon, cannon ball, bell, lamp, lighting fixture, lamp post, architectural artifact or similar item; and
  10. Not take in any keg with markings of ownership by anyone other than the person delivering it.

The punishment for violating any of these other requirements is identical to those for buying municipal scrap without proper authorization.

The requirements by this law increase the administration and fill storage costs of metal scrappers, affecting their bottom line, as well as the amounts of money they are willing to pay for scrap metal. Will these requirements meet the intended purpose of preventing unauthorized sale of municipal property? Only time will tell. In the mean time, owners of scrap metal processing stations need to educate their employees and have set procedures for the intake of scrap metal. Failure to do so could have drastic consequences.


A copy of the Bill that is to become this new law can be found here: