Everything You Need to Know About the “Pay-if-Paid” Clause

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When it comes to legal disputes, it is not uncommon for a construction litigation attorney to deal with contracts with a pay-if-paid clause. This clause includes payment provisions often used between two or more parties, usually in the construction sector. A pay-if-paid clause determines which party will bear the financial risk of the project.

These Clauses are Risk-Shifting Systems

Pay-if-paid clauses are specifically designed to shift financial risk down the chain. A pay-if-paid clause allows a general contractor the freedom to pay subcontractors only after receiving payment from the property owner. This excuses the obligation of payment from the primary contractor and shifts the burden of non-payment to the subcontractors. 

State Legislation Against Pay-if-Paid Clauses

Over the past two decades, pay-if-paid clauses have become more sophisticated, especially after the housing fiasco and recession hit in 2008. Property developers and general contractors have used this clause to shift the financial risk of a project down the contracting chain, and abused it in order to withhold payments.

As a result, this has initiated many disputes that required the aid of a professional litigation attorney to resolve. Many contractors and subcontractors have strongly vocalized their disdain for the pay-if-paid clause, which prompted some states to legislate against it. 

The legislatures of these states have completely banned pay-if-paid clauses directly in statutory language. Several states have followed suit and adopted some version of a “prompt payment” statute – a mandatory payment to a subcontractor by the party with whom he contracted, provided the work was performed.  This approach seems to be gaining favor and currently, the pay-if-paid clause is already outlawed in the following states: California, Kansas, Illinois, Indiana, Nevada, Montana, Ohio, North Carolina, New York, South Carolina, Utah, and Wisconsin.

Despite the movement toward removing pay-if-paid clauses, there are some situations in which one may still be valid. It is important for contractors and suppliers, to be cautious when a contract includes this provision. It is crucial to include specific contractual language to state that both parties understand that the risk should be shifted. These contracts are best reviewed by a construction litigation attorney. Contact Warren S. Dank for more information about how you can protect yourself and your business.

Leasing Commercial Property? Here Are a Few Things You Should Know

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Congratulations! You have launched a new business and are ready to lease a commercial space. While you may have leased an apartment in the past, there are a few unique considerations when leasing commercially. Here are a few things that can help you to avoid lease-related civil litigation in NYC. 

Common Area Maintenance and Other Fees

In addition to your monthly lease, you will likely be required to pay a percentage of the common area maintenance (CAM) fees and property taxes. The types of maintenance CAM covers and the cap on how much can be charged should be clearly outlined in your lease. You must also ensure you understand what portion of ongoing repairs, maintenance, and essential renovations you are required to pay. You will likely be responsible for the cost of renovations required to meet your business needs, but you must clearly outline in your lease what general and ongoing fees you are responsible for. An attorney can help you to determine and negotiate these fees. 

The Right to Sublease or Transfer Your Lease

While it may not be your original plan, you may want to sublease your space to a secondary tenant. If you have a portion of your space that you don’t use regularly, you may decide to sublet the space to another company. Without a provision allowing for subleasing, you may not be able to reap the benefits of this coworking arrangement. Or, let’s say that you sign a multi-year lease—but your business booms and you outgrow your space. Many landlords will want to terminate the lease, which can be costly, so ask for a provision to transfer the remainder of your lease to a new tenant. 

Finally, to ensure you understand all lease provisions, it is best to have an attorney negotiate on your behalf—with or without you present. Your attorney understands the common risk factors and can guide you on the most proactive approach for your business. As a civil litigation attorney in NYC, Warren S. Dank is here to assist. We have worked closely with both commercial real estate and landlord/tenant cases and will negotiate and arbitrate on your behalf.

4 Common Causes for Employee-Employer Litigation

In this current age, lawsuits against businesses are occurring at a more frequent pace. Hiring civil litigation attorneys can guard against or entirely defuse legal woes with employees. An attorney can help you navigate state federal laws and avoid legal action. Below we discuss the four most common causes for employee/employer disputes.

The most common causes of litigation

Harassment Lawsuit

Harassment can come from a boss, a supervisor, or even a co-worker. Harassment lawsuits can be sexual or non-sexual. One form of non-sexual harassment is bullying or the display of active hostility toward one or more employees. In a harassment lawsuit, the business can be held fully liable or at least partially liable for the damages caused.

To avoid these types of lawsuits, enterprises must have an existing and up-to-date harassment policy that every employee is made aware of. Enterprises can consult with civil litigation attorneys to assist in drafting the policy.

Wrongful Termination

Wrongful termination lawsuits are generally filed when an employee views his or her termination as inappropriate and lacking reason. To avoid such a lawsuit, employers must prove the termination was necessary. Enterprises can do so by keeping accurate records. These should include copies of signed contractual agreements, employee performance reports, and copies of any sort of punitive measures taken against the employee. Businesses can use these documents to prove the reason for the termination was appropriate. Commercial civil litigation attorneys can assist throughout this process.

Wage Law Violations

Many lawsuits by former employees are based on allegations that the employer violated federal labor laws. Wage and hour lawsuits are often based on claims that the employer failed to pay either the minimum wage or overtime pay. To prevent these types of lawsuits, make sure to implement systems and processes to accurately monitor hours worked by employees.

Discrimination

Discrimination lawsuits are filed as a result of unfair treatment based on race, sex, national origin, color, religion, age, or disability. Businesses can avoid these types of lawsuits by simply not discriminating – intentionally or unintentionally. Businesses must consistently treat all employees equally and not arbitrary. Understand the laws and write policies and protocols with protected classes in mind. 

With numerous laws in place offering protection to employees, businesses are more sensitive to lawsuits today than ever before. Enterprises can best circumvent the most common causes of employee litigation by incorporating the help of civil litigation attorneys.

3 Tips for Mitigating Business Partnership Disputes

Business partnership disputes can cost the involved parties a pretty penny. Not only are there lawyer consultation fees, but the time that should be used running operations is instead wasted on solving the dispute. Here are three tips that will help business partners avoid a messy partnership dispute down the road.

1.  Involved parties should hire a civil litigation attorney to help draft a partnership agreement.

When two or more people go into business together, all parties feel like they can trust one another. This trust leads to the skipping of important preventative measures like drafting a formal partnership agreement. They’ll instead shake hands and go the verbal agreement route. The problem is that when a dispute arises between the parties, this verbal agreement is no longer a good idea. What may have been said between the parties changed over the process, or each of the parties remembers the agreement differently. 

Therefore, a business partnership should work with an experienced attorney to craft a formal, written partnership agreement. It will ensure each party has their proverbial I’s dotted and T’s crossed. It helps to make clear the business’ structure and what each party expects in the partnership. It also helps to make any disputes that arise easier to handle because there are contractual steps that each party will take to resolve the issue(s). Each of the parties is advised to consult their separate attorneys so they can review the partnership agreement to make sure that it is fair and balanced for everyone involved.  

2.  Review the partnership agreement’s dispute resolution process with all involved parties (including shareholders).

As much as we want to assume that we’ve made a sound decision in choosing our business partner(s), it’s best to ere on the side of caution. Therefore, you want to review the agreements before a dispute arises. Be open with the discussion. Consider the steps that the involved parties will take to resolve different types of potential disputes. We recommend that all parties remind each other that first and foremost, this is a business arrangement. That means that personal feelings should be left out of the dispute. The focus should be solely on the business. It’s also helpful to keep in mind that different disputes will require different types of resolutions. Informal communication can help resolve a small dispute, for example. A bigger dispute, in comparison, may need the help of a neutral third-party mediator to help quell tension. If worst comes to worst, all involved parties should understand the buyout options and what could happen if a resistant partner isn’t willing to leave the business voluntarily.

3.  Assume that the business will grow and expand and discuss how workloads will be divided early on.

Businesses and those involved in them should expect that things will continue to change for various reasons. Change can be exciting, but it can also be problematic. One of the things that will change is the amount of work the parties involved in the business will have to take on. If the workload feels uneven between the different parties, resentment will begin to grow. “Why am I left doing all this and the others aren’t doing much of anything,” one of the people involved may ask. In order to avoid these types of situations, we advise that all involved parties lay out their respective expectations of who will do what as the business picks up. Consider creating a plan that outlines the distribution of work among the parties in a fair way, and leaves room for flexibility as things change. This will also prevent the parties from assuming that one of the other partners isn’t doing enough work, especially when there is a written division of tasks to refer to. Consulting a civil litigation attorney early on (and keeping them around so that they can answer any lingering questions) will help to reduce any business disputes that may arise in the future. Warren S. Dank has experience with all types of civil litigation and can help your partners and yourself come to an agreement.

Is Franchising Right for You?

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The moment you decide to go to a drive-thru and pick up something to eat, chances are, you’re supporting a franchise. From fast-food to fitness gyms, franchising has made it easier than ever for anyone to start a business. It’s a huge part of the economy and directs many of our daily routines.  

What is franchising?

In short, franchising starts when a company decides that it’s doing well and wants to expand. Expansion is important for growing your business, but it can be a pain to try and run all these new locations. Rather than running all these locations themselves, businesses will essentially lease their business model and name to someone based in the new location. The person on the other side of the coin is called the franchisee. They dream of starting a business, understand the local market, and has access to capital to start a business or can be approved for a loan. Many of these people also may be new to the industry, thus lacking intimate knowledge of it. In other words, a franchisee may not want to risk going into the business world by themselves, without a proven product or system.

Franchising allows these individuals to make a deal with a company that is recognizable to consumers and already has a proven track record. The franchise supplies the franchisee with the tools necessary to set up an extension of their business, and in return, the franchisee takes a training course, pays an initial franchise fee, and come to an agreement. This agreement, especially when franchising with a food chain such as McDonald’s, usually has strict guidelines the franchisee must follow. Sometimes even as stringent as determining what type of toilet paper must be used in the bathroom. There’s also a royalty fee that the franchisee pays, which is usually about five to ten percent of the profits. Always have a franchise lawyer NYC review your agreement before you sign any agreement or contract with a franchise.

So, is franchising for you?

The answer is complicated. If you’re an entrepreneur who is new to the business world and want to learn from some of the most successful companies in the world, franchising may be for you. A franchise, however, doesn’t guarantee success. But if you’re risk adverse and don’t want to spend the time and money creating a business from scratch, franchising may be a good option. But in the end, you don’t own the business and you have to adhere to the company’s stipulations. If you do decide that franchising is right for you, be sure to hire a franchise lawyer NYC to help you understand what’s in your agreement and how it will impact your bottom line.

4 Questions to Ask Your Commercial Real Estate Attorney

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Investing in real estate can be complicated. Commercial real estate lawyers NYC are the perfect partners to help you navigate this complex environment, in order to protect your investment. They have expert knowledge in real estate law, advisory services, and contract negotiation. However, simply hiring a real estate attorney should not be done without asking some important questions. The questions below are focused on hiring an attorney that is the perfect fit for you.

Question #1: Do they have relevant experience?

Every attorney is different. Just because someone has a law degree, doesn’t mean they have in-depth knowledge and understanding of real estate law. Additionally, some real estate attorneys specialize in certain areas. By looking into their experience and background, you can see what type of deals they have helped make in the past, what investments they have coordinated, and anything else you find important.

Question #2: How skilled is their staff?

When dealing with an attorney, you are often dealing with their staff as well. It’s important to see what the procedure is for communicating with additional staff members in case the commercial real estate agent falls ill, goes on vacation, or anything other unforeseen problems arise. In these circumstances, it’s important to see how skilled their other staff members are.

Question #3: What are their rates?

This may seem obvious, but it is probably the most important question for a commercial real estate attorney to answer. By seeing how much they charge, you can create a budget. Although, be wary of rates that seem too good to be true. Lower rates can also mean less experience, which may not be the best choice for long-term savings.

Question #4: Where are they licensed?

Each state has different real estate laws, so having a commercial real estate attorney who understands your state’s laws is absolutely critical to success. Be sure to ask where real estate lawyers NYC received their licenses to make sure they can complete your job upon hiring.

 

Housing Discrimination: FAQs for Landlords

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If you’re a landlord, it’s important to know exactly what housing discrimination is and the answers to the questions most commonly asked of your landlord-tenant lawyer NYC. Housing discrimination effects every single landlord and tenant, as it forbids landlords from choosing (or excluding) certain tenants based on certain criteria. These criteria including not discriminating based on:

1. A tenant’s nationality

2. A tenant’s religious beliefs

3. A tenant’s sexual orientation

4. A tenant’s race or color

5. A tenant’s sex

6. A tenant’s disability

7. A tenant’s familial status such as being married, single, or cohabitating.

Armed with this knowledge, we can look at some of the most common questions that come to mind for landlords regarding discrimination.

Question 1: Can A Tenant Sue a Landlord for Discrimination in Federal or State Court?

It is possible for a tenant to file a lawsuit against a landlord within two years of the alleged violation. The result of this lawsuit may ensure that a tenant receives damages, including damages for emotional distress, punitive damages, and attorney fees.

Question 2: What are the approved, legal reasons that a landlord can refuse a tenant?

There are a number of reasons that are perfectly legal for a landlord to reject a tenant. These are not grounds for discrimination and can be used as grounds to refusing a tenant or terminate a lease. Before signing the lease, a tenant may fail a screening process that a landlord might pose to the tenant. The following are all criteria that would give a landlord just grounds for refusing a tenant:

1. Poor credit history

2. Insufficient income

3. A previous history of not paying rent

4. History of bankruptcy

5. No previous references

6. A criminal conviction

7. Having pets

Question 3: How Would a Tenant Lodge a Discrimination Complaint?

A tenant who believes they have been wrongly discriminated against can register a complaint with the U.S. Department of Housing and Urban Development. This can be done if they believe their rights under the Fair Housing Act has been violated. Tenants must lodge the complaint within one year of the alleged discrimination. The Department of Housing and Urban Development will then investigate the complaint to see if “conciliation” can be achieved between the two parties. If this process is unsuccessful, an administrative hearing can be held preceded by a judge to determine if discrimination had genuinely occurred.

If your organization is being sued for discrimination, contact your landlord-tenant lawyer NYC for more information about your options. Warren S. Dank has worked on similar cases for large commercial organizations and can help you win your case.

How to Resolve a Dispute with your Homeowners Association

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A Homeowners Association (HOA) is responsible for managing and maintaining an area of land shared by numerous homeowners. An HOA usually operates under a certain number of rules and regulations that all members must abide by. If you have purchased an area of land or a home, you might automatically become a member of an HOA. This might mean you have to abide by certain rules you do not necessarily have a say in changing. Often, HOA rules lead to conflicts. It’s important to know how to resolve a dispute with an HOA to manage your relationship. Here are some of the best tips and actions you must take to resolve a dispute.

The first step to resolving a dispute is understanding where the problem lies. For example, is the HOA disputing you changing the color of your house? Are they disputing you erecting a storage unit in your garden? Once you understand where the core of the problem lies, you can get clarity on how best to resolve it. Understanding where the problem lies also helps you understand what the motivations of the HOA are. For example, preserving the value of the neighborhood, keeping the aesthetics of the area consistent, etc.

Step 1: Resolve the Dispute Internally

Resolving the dispute internally with your HOA is the most straightforward method. In order to begin resolving your dispute internally, be sure to keep a detailed record of all your correspondence with the HOA to strengthen your case. Also, if you need to hire a Long Island real estate attorney, you’ll have them readily available.

  • Option 1: Requesting a Hearing

The best way to win a hearing is through calm, collected reasoning of your case within the HOA. This means presenting the facts for your case to be judged by the members of the HOA. In this circumstance, you could present a list of signatures from local residents who agree with you.

  • Option 2: Requesting an Exception to Rules

Another way to settle your dispute is to request an exception to the normal rules. These exceptions could be granted based on special circumstances, such as reduced mobility.

Step 2: Resolve the Dispute Externally

Resolving a dispute with your HOA can also be achieved externally. In the case of financial disputes such as fines, a small claims court provides an accessible way of resolving your dispute. For larger cases, you’ll need to hire a Long Island real estate attorney to help fight for you.

What You Need to Know as a First-Time Landlord

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Many people are intrigued by the idea of being a landlord, and collecting rent on property they own to help pay for it. When you own more than one property, renting out those that aren’t your primary residence may be a good idea. While it is a good idea to rent out your property, managing it can be time-consuming and sometimes costly. Things like landlord public liability insurance from constructaquote are by no means free, but they are absolutely necessary in giving you the best chance to be successful as a landlord. Knowing what being a landlord entails before you take the leap can set you up for success. It is important to know if/when you’ll need to hire a landlord-tenant lawyer NYC, when and how much you can raise rent prices, how much to charge for rent, and so much more. Here are a few things you should keep in mind prior to renting out your first property.

Establish a Reasonable Rent Price

All too often, new landlords make the mistake of thinking they can charge an exorbitant price for their property, regardless of what other nearby properties rent for. Often this is because you are now dependent on the rental income to cover the mortgage, insurance, and other associated costs. Chances are you’ll have stiff competition to keep your property rented, which means you’ll need to make your rental price competitive. But you should still make enough to cover all the expenses and make a profit.

Make Collecting Rent a Priority

In real estate, rent collection is the revenue that drives your success. Therefore, you’ll need to be diligent to make collecting rent every month a priority. Establish clear expectations with your tenants that clearly define when rent is due, how many grace days they have for late payments, and consequences for late or non-payment. Consistently charge a late fee for any payments that are made after the grace period ends. Always try to be fair and consistent.

Keep Meticulous Records

A benefit of owning rental properties is the several tax benefits to landlords. In order to benefit from these tax benefits and write off some or all of your maintenance fees, mortgage interest, insurance costs, and listing fees, you’ll need to keep meticulous records. Keep a copy of every expense related to your property, either a paper copy or an electronic copy. This will be especially crucial if you own and manage more than one property. It is also recommended that you take photographs before a tenant moves in and occupies a property. This will serve as a record for the condition of the property before they move in and will serve as a reference to assess any damage when they move out.

Know Your Local Laws

It is going to be imperative that you know and understand the laws for your area. These laws may dictate how you, as a landlord, can conduct business with your rental property. These laws determine residential zones and commercial zones. Additionally, these laws can dictate who (landlord or tenant) is responsible to pay for what, i.e. heating cost. Laws will also dictate how much you are able to raise rent prices each year. When you know and are familiar with the local laws for your area, you’re more inclined to be in compliance with rent increases, evictions, building codes and everything else that comes with being a landlord.

Plan for Vacancies

As previously mentioned, many landlords depend on their rental income to cover the associated cost of owning multiple properties but even effective tenant placement services will have downtime. Therefore, it is going to be critical that you plan ahead for any potential and unforeseen vacancies, including setting money aside for such instances. As this may be your first time renting out property, it may benefit you to get some help when it comes to renting out and the idea of planning for any future vacations. Getting the right advice will save you from making mistakes that could have a negative impact on your business. By looking into something like absentee owner services bluffton, sc, you’ll be able to find a solution to this and work out how you can manage this part of being a landlord effectively. If you are having a hard time finding tenants to rent your property, you may need to consider lowering your rent prices.

As a property owner who is seriously considering looking into becoming an NYC landlord, it may be beneficial to sit down and talk to a landlord-tenant lawyer NYC to know exactly what it takes to be successful. Warren S. Dank, ESQ., P.C., has years of experience helping landlords navigate New York City landlord-tenant laws. Before you venture out on your own, contact Warren S. Dank, ESQ., P.C. today.

What to Look for in a Construction Lawyer

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Construction projects are generally large in scope and consist of numerous crew members. Depending on the size of the project, some are going to be exponentially more expensive than others. Yet, most require the use of heavy machinery and skilled people to run the equipment. All projects require a contract, permits, fees, insurance policies, and additional legal requirements.

With all these components working simultaneously, it can be in your best interest to invest in construction lawyers NYC. An attorney can help ensure that contractors, construction companies, and all other professionals working on a project are in compliance with all legal requirements. Additionally, attorneys help make sure no one working on a project unintentionally exposes themselves to formidable risk.

Because an attorney plays such an important role, here are a few things to look for to help you select the right construction attorney for your next project.

Education and Knowledge

When hiring an attorney, it is imperative you find someone that is qualified, reputable and has specific industry knowledge for your sector and region. The attorney you hire should know all the ins-and-outs of your specific area of construction and know all the relevant laws for the field.

Experience

The laws and legal requirements surrounding construction projects are often complex and ambiguous. You’ll want to find an attorney with extensive experience in both the field and the local court system. An attorney with a good track record for success is also a good indication they know their way around the construction industry. An experienced attorney will possess a broader understanding of the industry and will know how to operative effectively, mitigating the risk of inexperience.

Qualified

During a construction project, there are countless regulations you must be aware of, including fire regulations, labor issues, state building codes, state contracting procedures, insurance, and more. An attorney that is well-versed can protect your business from potential oversight.

Accessibility

Regardless of how busy or large of a workload your attorney carries, it is imperative that you be able to contact them when needed without hassle. When you are searching for a construction attorney, discuss your communication options with them and determine their standards for accessibility. You’ll want to  establish an idea of how often your attorney will be available to discuss your case when you need to. Can they only be reached via email? Do you have to set an appointment? Can you contact them on a direct phone line? Knowing the answer to these questions can help you determine how accessible your attorney will be while establishing precedence for communication before you get in the thick of things.

Know what to look for in construction lawyers NYC can help you to find an attorney that will produce results for you. If you are in need of a construction attorney that is honest, reliable, accessible. and has experience in the construction industry, contact Warren S. Dank, ESQ., P.C. today.