Time is of the Essence in Nevada Purchase Agreements

Most state courts, including the Nevada Supreme Court, recognize and enforce the integrity of “time is of the essence clauses.” The Nevada Supreme Court recognizes that at common law a tender of money, which a party is bound to pay at a certain time and place, must be made on the day fixed for payment, and not thereafter, and that relief against forfeiture will not be granted where time of performance is made essential by the express terms of the contract, stating, “[a] court of equity has no more right than a court of law to dispense with an express stipulation of the parties in regard to time in contracts of this nature.” In one case the Nevada Supreme Court did rescue the defaulting purchaser from the harsh forfeiture of foreclosure of the “installment purchase agreement” whereby, the installment purchaser (the equitable owner) was in default of a mere $63.75 in tax payments and interest, and the seller had attempted to foreclose the equitable interest of the purchaser, pursuant to a harsh and inequitable forfeiture clause. Many times the court will rescue the defaulting purchaser, as it has done in many “equitable conversion” type cases that arise under installment purchase agreements, to avoid harsh, unjust forfeitures.

“Equitable conversion” cases are those where the purchaser is purchasing property on an installment “contract for deed.” In such cases, even though the deed and “legal title” may not be delivered until all payments have been made, the “equitable title” is held by the purchaser in the interim. In one often cited contract for deed purchase, the Nevada Supreme Court rescued the purchaser from total forfeiture of the property, allowing the purchaser a reasonable time to cure, in spite of a time is of the essence clause, because the default was minor in comparison to the substantial forfeiture that would have occurred if the court had not rescued the buyer in equity. In Slobe, the installment purchaser was granted a reasonable time to cure an $8,320.28 default in light of the substantial $90,000 investment into the motel in dispute. The courts have been willing to rescue purchasers from harsh forfeitures when they have taken legal, peaceful possession, and enhanced the property, and/or made substantial payments thereon. However, in non-equitable conversion cases, the courts have not been so willing to rescue, and will require strict compliance with the “time is of the essence” provision. The Nevada Supreme Court has held that, [t]he rule is well established that in order for a purchaser to successfully sue a vendor for damages for breach of a contract for the sale of land, the purchaser must show that he has performed all conditions precedent or concurrent, or that such performance has been excused.

Even surrounding states’ appellate court decisions hold identically with Nevada case law, that a seller of real property, pursuant to a real estate purchase agreement, is justified in canceling the escrow if the purchaser has failed to perform a material part of the contract which is a condition concurrent or precedent to the seller’s obligations to perform. In one instance the purchaser of real property tendered his performance three hours beyond the specified time for performance. The appellate court ruled that the purchaser was in breach and not entitled to specific performance, because the “time is of the essence” clause and plain language contained in that purchase agreement caused the contract to expire precisely three hours prior to tendered performance.

It has been held that if neither party tenders performance by the date set for closure under a contract that provides time is of the essence, the duties of both parties are discharged by passage of that date.

Where the escrow agreement specifies a definite time for performance, performance must be made within the time limit of the agreement, and the escrow agent is without power to deliver a deed thereafter. It is well settled that performance must be made within the time limit of the escrow agreement.

The Nevada Supreme Court recently held that, “this court will not rewrite the parties’ contract and will require strict compliance with the ‘time is of the essence’ provision.

Thus, Realtors, lawyers, and purchasers beware: the “time is of the essence” clause is still alive and well in Nevada and surrounding states. Most courts will rely on this clause and longstanding precedents to deny any relief to a late purchaser, based upon the sound legal principle that a purchase agreement expires by its own terms and will not be rewritten or extended by the court. The exception to the rule is applied to prevent a harsh, inequitable forfeiture where a defaulting installment-contract purchaser is rescued from a harsh forfeiture which would not be justified by a relatively minor breach which could be cured within a reasonable time. In such cases the laws of equity will intervene to promote fairness and to avoid the harsh, inequitable forfeitures that would otherwise result through a strict application of “time is of the essence” clauses. In such cases the courts have favored an action for damages over a full forfeiture of a substantial equitable interest.

Copyright 2008. All rights reserved. www.HugginsLaw.com

The 4 Categories of “Carrying of a Concealed Weapon” Laws

A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed. The Second Amendment to the United States Constitution was adopted in 1791 with the intention of giving every American the right to legally own firearms. Despite the endless attempts by politicians to destroy this right, most States in our great Union still respect the right of the individual to legally own and carry concealed weapons.

Our Founders were strong advocates in States’ rights and, thankfully, the Federal Government has yet to legislatively intrude on our 2nd Amendment right. To date, 48 States have passed individual laws allowing, in some respect, citizens to carry certain firearms in public. Each State has its own laws that are enforceable by huge fines and even jail time if they’re not abided by so it is extremely important that every individual be aware of these laws.

Carrying a Concealed Weapon Regulations will differ between each state, but each state generally falls into one of four categories. The four categories are listed as follows:

Unrestricted – Also known as “Constitutional Carry,” Unrestricted states do not require a permit to carry a concealed handgun.

Shall Issue – Shall Issue states require a person to have a permit to carry a concealed weapon. The permit is approved or declined if specific criteria are met, i.e. criminal background check, age, paying a fee, etc. If a person meets the specific criteria, they will be approved a permit – the issuing authority does not have the authority to deny a permit based on their own discretion.

May Issue – May Issue states require a person to have a permit and, similar to Shall Issue states, require certain criteria be met before being approved for the permit to CCW. However, May Issue states are more stringent. The local government (usually a County or City) that will be issuing the permit has discretion to approve or deny any applicant even if the specific criteria are met.

No Issue – No Issue states do not allow any person to carry a concealed firearm.

The complexity of Concealed Carry Laws are constantly changing, but I have broken down each state into one of the above 4 categories below.

Unrestricted (Constitutional Carry): Alaska, Arizona, Montana (Outside of City limits), Vermont, Wyoming (as of July 1, 2011)

Shall Issue: Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wyoming.

*States that are both Shall Issue and Unrestricted states may allow citizens to carry without a permit, but will often grant permits to individuals who wish to have it for reciprocity reasons.

May Issue: Alabama, California, Delaware, Hawaii, Maryland, Massachusetts, New Jersey, New York, Rhode Island

No Issue: District of Columbia, Hawaii*, Illinois, New Jersey*, Wisconsin

*Technically May Issue states, but in reality they will not issue permits.

The laws regarding the concealed carry of handguns get more complicated by the day and will continue to change according to individual state laws. Because of this, I strongly suggest that each individual regularly visit our site and contact their local government authority to find out the exact details and laws regarding gun permits. I hope this information has helped educate you on your rights under the 2nd amendment. For more information regarding CCW and your state’s laws, please visit our free, informational site.

New Nevada Corporate Laws You Need to Know

Bearer Shares Outlawed
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Ownership Disclosure Procedure Instituted
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Stronger Asset Protection for Corporations

The Nevada legislature made some significant changes to Nevada’s Corporation Code in its most recent session. You need to know these new rules.

The biggest changes, which are effective July 1, 2007, will be discussed in this article. As is often the case, the rules and regulations used to carry out the new laws will be implemented over time, and we will keep you informed of them as they arise. (If you or your friends would like a free subscription to the Corporate Direct Report please click here.)

For now, there are three important changes and several miscellaneous new rules you need to know about immediately.

1. Bearer Shares Outlawed

Bearer shares are stock certificates which, instead of listing the owner by name, list the owner only as “The Bearer.” The supposed advantage of this was to maintain privacy of ownership. The Bearer was whoever held the certificate, so shares could be transferred from one person to the next without notice to anyone or recordation anywhere.

I have never really liked the whole notion of bearer shares. If someone comes to me with the bearer certificate, how do I know if the certificate wasn’t stolen or forged? The idea of simply handing a certificate from one person to the next may sound nice and easy (and a bit crafty) but such a transfer can create all sorts of tax problems. If you hand a certificate representing a million dollar business over to your friend you’ve made a significant gift, for which gift taxes are due. And when by prearrangement he hands the certificate back to you there’s another taxable event. Worse yet, what if your ‘friend’ wouldn’t give you the certificate back?

The big reason bearer shares were outlawed has to do with fraud. Less than ethical corporate promoters would sell their less than ethical corporate clients on the idea that by simply handing the bearer certificate over to a friend they could deny a judgment creditor (one with a court awarded judgment) access to the business or other asset. Of course, such a transfer is a fraudulent conveyance, meaning that a court could overturn the transfer if anyone ever found out about it. The problem was that it could be very difficult to find out about it. As a result, bearer shares enabled a certain class of people to commit fraud. The Nevada Legislature was right in outlawing bearer shares.

2. New Ownership Disclosure Procedures

The use of Nevada corporations and other entities to commit fraud is also the reason for this next big change. It is unfortunate that privacy of entity ownership is now somewhat compromised, but when people continually abuse the system something will usually give.
Apparently the federal and law enforcement authorities pushing for these changes played the terrorist card–that insanely bad people were using the privacy of Nevada entities to ultimately greatly harm us. While it is my opinion that this red hot card gets played a little too often these days, there can be no denying that domestic bad guys, your average American scam artist, used Nevada privacy for nefarious purposes. But the new law for corporations, LLC’s, LP’s, business trusts and the like is not as bad as you may expect. Here is the rule for corporations:

1. In addition to any records required to be kept at the registered office pursuant to NRS 78.105, a corporation that is not a publicly traded corporation shall maintain at its registered office or principal place of business in this State:

a. A current list of its owners of record; or

b. A statement indicating where such a list is maintained.

2. The corporation shall:

a. Provide the Secretary of State with the name and contact information of the custodian of the list described in subsection 1. The information required pursuant to this paragraph shall be kept confidential by the Secretary of State.

b. Provide written notice to the Secretary of State within 10 days after any change in the information contained in the list described in subsection 1.

3. Upon the request of any law enforcement agency in the course of a criminal investigation, the Secretary of State may require a corporation to:

a. Submit to the Secretary of State, within 3 business days, a copy of the list required to be maintained pursuant to subsection 1; or

b. Answer any interrogatory submitted by the Secretary of State that will assist in the criminal investigation.

4. If a corporation fails to comply with any requirement pursuant to subsection 3, the Secretary of State may take any action necessary, including, without limitation, the suspension or revocation of the corporate charter

5. The Secretary of State shall not reinstate or revive a charter that was revoked or suspended pursuant to subsection 4 unless:

a. The corporation complies with the requirements of subsection 3; or

b. The law enforcement agency conducting the investigation advises the Secretary of State to reinstate or revive the corporate charter.

6. The Secretary of State may adopt regulations to administer the provisions of this section.
It is important to note that Nevada is not asking for the owners of the entity up front. The requirement is that the registered agent either keeps a list of the owners or the name of a contact person who has a list of the owners. The Secretary of State will request the ownership list only when a law enforcement agency needs it for a criminal investigation. Not for a civil case mind you, but only for a criminal case.

What this means is that if your business and asset protection plans are on the up and up, your privacy will be protected. Or, to put it another way, if you are engaged in fraud and other crimes, our firm will be happy to comply with these new rules. You may even want to take your bad business somewhere else to begin with. But for the good guys, you will still maintain your privacy.
Two points are worthy of further note. First, for limited partnerships the only owners the new legislation aims for are the general partners. While the generals do indeed control a limited partnership, frequently they only own 2% or less of the entity, and are usually just a management corporation or LLC. The limited partners will own 98% of the limited partnership and, except for management, are the economic beneficiaries of the entity.

Whether the new law intentionally just wanted information only on the general partners or will be corrected to include the limited partners’ identities remains to be seen. But for now, people very concerned about privacy may want to use Nevada limited partnerships.
The second point has to do with Wyoming. The corporate law of Wyoming does not have such an ownership disclosure procedure. Yet.

Apparently the federal authorities are working to get similar legislation approved in other states, including Wyoming. We will keep you informed of such developments. Until then, once again, those very concerned about privacy may want to use Wyoming entities.

3. Stronger Asset Protection for Nevada Corporation Shares

One of the strongest asset protection laws on the books is the charging order. This law holds that a judgment creditor of a member of an LLC or a partner of a limited partnership can’t acquire those interests directly and use that control to force a sale of the assets. Instead, they only obtain the rights of an assignee of the membership or partnership interest, meaning they are only entitled to distributions from the entity. They can’t vote to sell the assets to satisfy their claim. They can’t even vote to increase distributions. They are stuck waiting for future distributions, which may or may not come. The charging order is a very effective deterrent to frivolous litigation, especially in Nevada and Wyoming LLC’s and LP’s where the charging order is the exclusive remedy.

Up until now, the charging order had never applied to shares of corporate stock. So, for example, if John got in a car wreck and his insurance did not cover him, the victim could proceed against all of his assets. If John owes 75% of a profitable corporation the victim could get control of the shares and vote to sell the business to satisfy the claim. This certainly is not fair to Jane, the 25% owner of the business, who worked hard to build it up only to see it sold out from under her.
With Nevada’s new law the charging order now applies to shares of corporations. This is an excellent development.

There are several important rules to point out. The charging order protection only applies to corporations that have more than one and fewer than 75 shareholders. If you own 100% of a profitable corporation you may well want to consider issuing a nominal amount of shares to a relative or friend in order to gain the better protection. As well, the new law does not apply to subsidiaries of publicly traded companies or to professional corporations.

The charging order protection for corporate shares does not apply to any litigation filed before July 1, 2007, and it does not supersede any private agreement between a stockholder and a creditor. This new law puts Nevada at the forefront of asset protection states. While Wyoming will most probably follow suit, until they do Nevada is the state in which to incorporate. Even though Nevada’s initial and annual filing fees are somewhat higher than Wyoming’s fees, the better protection is well worth the extra cost.

4. Miscellaneous New Rules

The new law dealt extensively with the conduct of restricted agents. A new category was created that of the commercial registered agent, which shall be registered with state. Registered agents that don’t comply with rules to be established by the Secretary of State’s office can be banned from the business. In keeping with the new disclosure rules, registered agents must keep a company’s stock ledger for three years following the registration or termination of the agent or dissolution of the company.

The new law allows for professional LLCs. Many doctors, lawyers, CPAs and the like have wanted the flexibility of operating their practices as an LLC but were prohibited from doing so. The new law follows the trend of many states of now allowing for professional LLCs.
The importance of the corporate election of directors was underscored in the new law. Companies that fail to elect directors within 18 months beware. The owners of 15% of the corporate stock can go to court to force such an election.

The reinstatement of entities was made more effective. A corporation, LLC or LP that fails to pay its annual fees to the state can lose its right to do business. Reinstatement involves paying back fees to bring the entity current with the state. The new law provides that reinstatement reinstates the entity’s right to do business as if the entity had been current all along.
As we have noticed before, the law is a dynamic and ever changing area. Nevada’s new laws prove the point. Once again, if you or a friend would like to continue receiving these updates please click here.

We will keep you informed. If you have any questions or concerns regarding these new laws, please contact us at Sutton Law Center.

Internet Gambling Laws in the US Will Soon Take a Dramatic Turn

The U.K. introduced sweeping changes to its internet gambling laws with the passage of the Gambling Act of 2005. The stated purposes of the act were very noble: to prevent gambling from being a source of crime and disorder; to ensure gambling would be conducted in a fair and open manner; and to protect children from being harmed by enforcing the legal gambling age of 18 years. In practice, of course, the act led to a surge in on site operators moving to the country and a corresponding increase in tax revenues as a result.

In the U.S., the situation is much different. Gambling is legal under Federal law but prohibited in many states, with some local exceptions. Legal gambling states include Nevada and New Jersey, although many states have passed laws that legalize gambling in certain municipalities as well as on Native American lands. Internet gambling laws, on the other hand, have effectively prohibited operators from doing business within the states.

In 2006 Congress approved an act that dramatically affected the internet gambling laws and effectively proclaimed the industry illegal. That act threw the industry into turmoil, and drove virtually all of the U.S. based operations out of the country. Sites operated out of the U.K. and the Bahamas now garner a majority of this profitable business. But numerous faults in the 2006 legislation and the feeling that Congress has more important things to worry about have now pushed the country to the brink of legalizing the industry.

If the U.S. is to proceed with the legalization of gambling over the internet, congress must first do away with its awkward attempt at making it illegal under the 2006 Unlawful Internet Gambling Enforcement Act (more easily referred to as UIGEA). The purpose of that act was fairly simple: make it illegal for banks, credit card companies, and other payment processors to transfer funds from gamblers to online casinos and from those online casinos back to the gamblers.

You must understand, however, that the preference of lawmakers has always been to prohibit online gambling. But concerns about the constitutionality of such a prohibition as well as the mind boggling problems associated with enforcing the ban have consistently killed any possible actions along those lines. So Congress chose instead to try to attack the problem by preventing the flow of capital between the gamblers and the casinos under the UIGEA.

Now, thanks in no small part to the national financial meltdown, Congress is poised to reverse its approach to internet gambling laws and scrub the problem-plagued UIGEA. Under a couple of proposed House bills including one sponsored by Barney Franks and Ron Paul, Congress now appears poised to legalize and regulate the industry.

Whenever Congress actually considers such a sensible approach you can assume that there are potential tax revenues to be gained. So it shouldn’t come as a surprise to learn that one of the major benefits of legalized gambling is additional revenue for the government. Recent studies have indicated that the tax revenues the government stands to reap from a legalized online gambling industry could reach more than $50 billion over the next 10 years.

Hopefully, based on current sentiment in Congress regarding internet gambling laws, U.S. based online gambling fans will soon be able to enjoy their sport legally through U.S. based operations that will be under the scrutiny, and taxing power, of the Federal government.

Know All About Nevada Health Insurance

If you want to know about Nevada health insurance, check out the Nevada Division of Insurance, which helps to regulate the various types of insurance policies for health that are sold in the state. For the best of insurance coverage, you can even locate a health insurance company according to your choosing, with the help of the Division of Insurance.

These companies are licensed by the state and all you need to do to get started is get in touch with them through their official web site. The Division of Insurance also helps handle disputes regarding Nevada health insurance that you might have with your insurance provider. Here, you need to fill an online form and thus lodge your complaint.

The Labor Department

The US Labor Department is the body that is responsible for handling the medical insurance policies that you get through your job. These Nevada health insurance policies are taken care of by the EBSA – Employee Benefits Security Administration which creates as well as enforces the laws that should be followed by your employer while they are offering insurance benefits for health to their employees. For instance, your employer cannot single out an employee for excluding them from a certain insurance plan in Nevada on the grounds that they are terminally ill or their illness requires expensive treatment.

If the total number of employees reaches 20, the employee should be offered COBRA benefits which is actually continuation coverage in case you have left your job. The task of the EBSA is to ensure that everything happens according to the rules and that the rights of the employee are protected.

If you have anxieties regarding the practices of your employer, about carrying out their insurance responsibilities to their employees, you can get in touch with your local EBSA office. These are situations where you feel you have been terminated on unjustified grounds or that you deserved COBRA continuation, but it was not given to you.

How to Purchase Individual Health Insurance Plans in Nevada

Nevada insurers are permitted by the state to reject your insurance application for medical coverage on the basis of the status of your health. But then, you may be considered as HIPAA eligible on the following grounds:

If you have had a minimum of 18 months’ continuous creditable coverage with its last day falling under a group plan
If you have exhausted your existing COBRA continuation coverage

In case you happen to be HIPAA eligible, you can purchase insurance through the Nevada Comprehensive Health Insurance Risk Pool Association. For doubts, you can clarify the terms with your insurance agent or Nevada Division of Insurance. The State Children’s Health Insurance Program covers kids below 19 if their family meets certain income requirements. The State Health Insurance Assistance Program offers free counseling for Medicare beneficiaries. Nevada Medicaid helps the poor obtain medical acre. Children below 19 years and pregnant women are eligible along with the aged, blind or physically handicapped people on meeting certain criteria.

Drug Addiction In Nevada

Drug addiction is growing by the day and has affected the lives of countless people who once led a normal, healthy life. Almost 24% men while 16% percent of women in America have admitted to abusing at least one type of drug if not all and the number of teenagers abusing drugs is on the rise. The drug situation in Nevada is grim and the imported and locally produced meth leads the list of drugs that concern Nevada. In the urban parts of the state, cocaine especially crack cocaine is being abused on a large scale while clubs drugs have become a regular feature of number of nightclubs out there. Its close proximity to California makes it an important transshipment point for smuggling drugs, which is why drugs are available in abundance in Nevada.

Almost all addicts love to believe that they can easily control their addiction however this is not true, as they suffer from severe withdrawal symptoms when they give up or reduce the frequency of drug use. Addiction causes substantial changes in the brain that remain for a long time even when a person stops abusing drugs. As a result, addicts need much more than will power to overcome their addiction. For complete recovery, addicts not only need to fight the cravings, but also learn to resist all those stimulants from the past that can take them back to where they started. Nevada has number of state-of-the-art rehab centers that help addicts combat their addictive behaviors and lead a life of dignity and respect in the society. These treatment centers offer wide range of treatment options to suit individual needs and it’s important that the choice is made by the patient himself for successful recovery. In patient residential treatment may be the right choice for people who have made a series of unsuccessful attempts to end their addiction. On the other hand, those who have a recent history of drug abuse and seriously want to put an end to their addictive behaviors may go for out patient treatment or counseling.

The number of drug arrests in Nevada is steadily rising and while the number of arrests in the year 2001 was 180, year 2005 statistics indicate that this number went up to 207. In spite of having stringent laws to curtail drug addiction in the state, the fact remains that drug addiction is on the rise.

The nightlife in Nevada can also be blamed for providing opportunities to drug traffickers who make a lot of money providing all kinds of drugs to teenagers in rave parties and nightclubs. In an effort to curb drug related criminal activities in Nevada, DEA Mobile Enforcement Teams have been established. They identify high trafficking areas in Nevada to combat the meth problem that has been bothering the state for quite some time now. With persistent efforts, the state of Nevada will surely succeed in suppressing drug related crimes and the rapidly increasing drug abuse among younger generations across the United States.

How to Compare Low Cost Automobile Insurance in Nevada

If you drive a motor vehicle on any public road in Nevada then you must have automobile insurance. It’s the law – and the state of Nevada is one of the toughest states when it comes to enforcing that law, so you do not want to get caught driving without automobile insurance.

And keep in mind that if you cancel one insurance policy the state of Nevada checks to make sure that you take out a replacement policy – if you can’t prove that you’ve replaced a lapsed or cancelled policy you will be required to turn over your car’s registration and you will not be allowed to drive.

Nevada requires all drivers to carry liability insurance, but does not require drivers to carry collision insurance. However, if your car is financed then your bank or other financial institution will almost certainly require you to carry collision insurance and will further require that you carry more than the state-mandated minimum amount of liability insurance.

What are some of the things you can do to keep your auto insurance rates as low as possible? The job starts with the vehicle you choose to buy in the first place. If you drive a fancy, fast sports car or a big muscle car then you can expect to pay through the nose for your automobile insurance. The more costly your vehicle the more costly your monthly premiums will be to insure that vehicle.

Keep your driving record clean. Moving violations, especially drunk or impaired driving or speeding will send your monthly premium payments sky-high.

If you can keep the number of miles you drive each week as low as possible, most insurance companies offer a low-mileage discount.

Know what deductible you can afford to pay, and if you are looking for the lowest cost for your automobile insurance then be prepared to pay the highest deductible you can possibly afford.

Now get online and start comparing policies and prices side-by-side. You can’t stop after comparing insurance prices at just one website, however, since each website uses a different set of insurance companies when making its comparisons. In order to get an accurate picture and to insure that you have truly found the lowest cost automobile insurance in Nevada, you will need to make your head-to-head comparisons on at least 3 different websites.

The time spent doing this will pay off in the long run through lower monthly automobile insurance premiums for years to come.