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Commercial Lease Pitfalls and More Legal Advice – Free Joe Friday 7/1/11

with 2 comments


Every Friday, attorney Joe Escalante answers legal questions for free on the LegalZoom Facebook Page. Did you miss last week’s Free Joe Friday? Don’t worry. We’ve got it all right here.

Chuck: Five years ago I bought property to live on. I was told it was not in a flood plane area. Now I am forced to sell due to financial problems but I’m being told that my property is not worth as much because it IS in a flood plane. The same appraiser has been used in both cases, and he is citing the same FEMA documentation in both cases – but now my property is worth considerably less due to the flood plane determination. The FEMA documentation has NOT been updated in the past 5 years so I’m a bit confused how things changed, and whether I have any recourse to recoup my investment. If I had known this was a flood plane I would not have purchased in the first place. Thank you for your time and consideration.

Joe Escalante: That’s a tough one. Suing FEMA is not easy, but it happens. It would be more likely to be successful if you could get a lawyer to certify all the people that suffered the same harm as a class and commence a class action suit. This is happening here in California in a big way. Check this out: http://caaffe.info/

Edgar: Hey Joe, after creating a LLC, with Legalzoom what else is needed to stay in compliance with new York
State or the city legal requirements.
Thanks

Joe Escalante: I would try to stay on top of things by making myself familiar with the Division of Corporations section at the NY Department of State’s website. They give information about stuff like biennial statement filing requirements. And most importantly, have a good relationship with a knowledgable tax professional, because this is really a tax issue more than a legal thing.

Albert: Joe, we have a will that has my wife’s brother as executor. Our children are now adult and we would like to name one of them as executor. Can it be done with a simple letter stating our intent, notarized and put into the will package?

Joe Escalante: You can do it two ways. One is to make a new will, the other is to make a codicil that changes the original will and leaves everything else the same. A codicil is just a piece of paper (that probably says “Codicil” at the top) that articulates the change you desire. To ensure that it is effective, have it witnessed the same way you did the original will. Then you’re done.

Naty: The lawyer that prepared my revocable living trust has moved to another city which is about an hour drive from where I live. For convenience; I am thinking of going to a new local attorney to do an amendment (codicil) on my living trust document. Will it make any difference where I go? What do you suggest is best? Thanks in advance for your advice.

Joe Escalante: If it’s simple, like Albert’s situation [above], it wont make any difference, as long as the lawyer has 1/2 a brain. But if it’s complicated and has tax implications, it will matter. If it was simple, I’d do it myself if I were you. But if it’s not, go to a lawyer that specializes in trusts and estates.

Thomas: Can I open multiple d/b/a’s under a single LLC (Florida)?

Joe Escalante: Oh ya. You don’t have to call all your pot dispensaries the same thing, or whatever business you want to have. That’s what the DBA is there for, so you don’t have to create a new corporation or LLC for every business venture you have.

Sherri: I have a will that is several years old and was created by an attorney familiar with special needs law. My special needs child is now an adult and I am in the process of getting guardianship. Nothing will really change if something were to happen to me, do I need to change and update the will or can I just add a page describing any changes and get it notarized?

Joe Escalante: Changing a will with a codicil is pretty simple. See the answers I gave to Albert and Naty [above]. A Nolo Press book on wills or the this one will make you feel better about it, and it’s easy to read: http://amzn.to/iQzTlq

Tara: Hi Joe, Can you tell me if when going to court to fight for sole and legal custody with visitation rights, if the non-custodial parent who lives out of state and hasn’t seen his kid in 3 years, is behind on child support and claims he isn’t making any money in his business (he is self employed) if any of that will have any impact on the judges decision? What if he married his girlfriend and suddenly could give her a better life? My daughter has a learning disability, and I’m afraid her father doesn’t have stick-to-it-iveness to ensure her needs are met if he won a custody battle.

Joe Escalante: The courts are all positioned to determine, by looking at the evidence presented by the parties, the best interests of the child. Many factors are involved but the stuff you are talking about would most likely weigh against the father because generally it’s not in the best interest of the child to be in the custody of a flake. However, if circumstances change, he can always petition the court to make changes in the custody order if his circumstances change. And he has a right to present evidence against you as a parent.

Steve: HI JOe – I just copyrighted an idea with Legal Zoom. What is the critieria used to determine if it really does belong to you if challenged in a court of law?

Joe Escalante: Generally, an “idea” cannot get any copyright protection. Only the creative expression of an idea gets copyright protection. As soon as you create something, it has inherent copyright protection immediately. If it is challenged by another the court will luck at two prongs. 1. Is there substantial similarity? 2. Was there access to copy the original work?

My radio show deals with stuff like this exclusively. It’s on in a few minutes at http://www.indie1031.com/, or call me live on sunday night at KTLK in l.a. from 5 to 7 pm PST. 877-520-1150. We’ll talk about your specific issue. Thanks.

Debbie: Hi Joe, My partners & I used LegalZoom to set up our LLC, and now are wondering if you guys handle Buy-Sell Agreements?

Joe Escalante: I don’t think so. Can’t find anything on point with that. Sorry.

LegalZoom: Joe’s right, Debbie. But we can set you up with an attorney who can help. http://www.legalzoom.com/attorneys-lawyers/business-advantage-pro.html

Reuben: Hello joe .. i hear some good stories about bankruptcy filling and i hear alot of horror stories too .. im and independent contractor (truck driver) and id like to clear up credit .. should i consider bankrupcty filling ? .. bout 10 to 15k in negative on credit report .. what do you think ? thx

Michael: 10-15k IMHO not worth 10yrs of bad credit !

I did 60k, now that was worth it !

Joe Escalante: I agree with Michael Wright completely.

Pauline: i want to get custody of my two grandsons, who are stayin in vegas with my son in laws gramma right now, till my daughter gets out of jail. Ive heard some not so good stories from there…. Can i? And what do u need to do to get them… Im very worried about them…. HELP…… :\

Joe Escalante: The process varies from state to state but generally, you want to petition the court of an order of custody pursuant to the best interest of the child. This can be done over the objection of the parents if the court determines them unfit. Start at the court’s web site in your county and look under child custody forms. Also you could try to get someone on the phone from the child services department if you feel the children are in immediate danger.

Adena: Does an HOA have the right to be listed on someones Homeowners insurance as an additional insured because the current Board of Directors has an issue with the Homeowner owning a miniature Vietnamese pot bellied pig (they are not in violation of any Bylaws or CC&Rs)?

Joe Escalante: Do they have a right? I don’t know, probably not. But that’s often a way to avoid a potential problem so if you can solve the issue and keep piggy, I think it’s a great compromise. Find out how much it will cost to add them, it’s usually pretty low.

Paycheck: Hi joe my job hasnt paid us in 30 days, and said they wont be able to pay until the 15th of july, the company is a non profit day center for special needs population. The employer claim that their medicaid codes did not go through and its a fiscal year. But i believe its fraud going on. What can i do to get paid for hours worked

Joe Escalante: File a claim for unpaid wages with the Department of Labor in your area, or labor commission. That will get the ball rolling. Good luck.

David: Is it possible for a 501c3 organization to forego their 501c3 tax-exempt status and become a publicly traded company if their market or product changes as is commonplace for many evolving corporations?

Joe Escalante: There are a lot of problems with that e.g., your assets were acquired in connection with non-profit activity and they cannot be converted to a for profit entity without real problems. You would have to disgorge yourself of these assets. This is just one of the problems. Talk to a tax pro to see what all the tax implications would be (like back taxes).

Yanique: Greetings, how may i obtain restitution through murphys law in california regarding a court ordered payment for a civil case? Judge ordered my ex two year restraining order but has not paid the350 in demadges

Joe Escalante: You need a “writ of execution” from the court. After that, there’s some amazing things you can do to collect money. Check out this Los Angeles example: http://dca.lacounty.gov/tsCollectJudgement.html

Jennifer: I have an LLC operating out of my home. I am moving from one state to another (DC to VA). Can you tell me what I need to know and what not to forget in switching addresses?

Joe Escalante: You have to register with the new state as a foreign business entity. Check out the secretary of state, or department of state’s webs site for requirements for foreign corps and LLCs. Also, make sure you get advice from a good tax pro.

Megan: Which state should I base my 501c3 in? Is there one that is better than the other (for tax purposes, etc)? The NFP’s purpose is to fundraise in order to bring further awareness surrounding domestic violence, and is being set up in the name of my deceased cousin. This is my first go at something like this. Thanks in advance…

Joe Escalante: You don’t have to base it in the state that you do business in but you will have to register as a foreign corp if you you base it in a state where you don’t do the actual business. This is a tax puzzle that takes a lot of groundwork figuring out the best combination involving filing fees in state of registration and taxes for foreign corps in the state where you do business.
Delaware is a state that big corps favor. Texas is a low tax, low regulation mecca that is growing while the rest of the country suffers. But I’ve never heard of a state that is best for non-profits. You’ve officially stumped me.

Vickie: Hi Joe – thanks for taking time out of vacation! I’m looking at my first real commercial lease agreement for a bigger space.. Lots to consider in this economy! Among the 32 pages of legalese, are there any common ‘gotchas’ that I should be looking out for?

Joe Escalante: Here’s a couple. Commercial leases usually make the “renter” pay for and care for all the outside stuff that a residential lease would require the landlord to cover. That was my first big shock when I got my first commercial lease. But sometimes this is listed as a “common area charge.” Make sure there is a cap on such charges.
Also make sure the city allows the activity your are going to do in the lease space.
Can they terminate the lease without cause? This could ruin your business.
Make sure you understand real estate taxes for which you may be liable and likelihood of increases in those taxes.
Sometimes commercial leases have language that allows the landlord to push increased expenses on to you. If so, make sure there is a verification mechanism so you don’t end up paying your landlord’s boat payment.
Who pays for building repairs?
What if the building is sold?
Can you afford the insurance the lease requires you to carry?
Commercial leases are complicated. Make sure you have a good real estate or attorney to consult with. Good luck.

Abdullo: Hello Joe, I recently registered DBA in the state of Maryland. Now, when I invoice a company do I have to use a social security number or is there any tax ID number that comes with DBA? Thanks for your help in advance.

Joe Escalante: You need the DBA, and the tax I.D. Number. Use Legalzoom!! I would. http://www.legalzoom.com/additional-business-services/state-tax-id.html

Manette: I own a home in Brownsville TX with my ex husband. the home is paid for accept for a equity loan with a balance of 10,000 . there are back taxes to be paid to. I just want to sell and pay off everything and move away. The problem is he left
2 1/2 years ago I have no idea where he is i think he is living in mexico but not sure. what can i do to sell the house I have been making all loan payments along with everything else i cant keep it up do i have options to sell the house

Joe Escalante: You go to the court in the county where the property is located and file for a forced partition sale. The court will order the property be sold. I’ll look out for this guy while I’m in Mexico and let him know what’s happening.

John: Hey Joe, I am going to start a website to generate leads, do i need to form an LLC to protect myself?

Joe Escalante: Maybe not right away. Talk to a tax pro from the get go to make sure you are doing the right thing with respect to the amount of money at stake. If you’re insured properly, you wont need the personal asset protection the LLC offers, so wait to see if this company takes off. You can start as a sole proprietorship or partnership in the mean time.

Kimberly: Why do I have to pay the state to go after my ex for child support? He is out of state,and if I had the money to pay I wouldn’t need his!

Joe Escalante: “You can’t fight city hall” to coin a phrase.

Doug: Hey Joe, I’ve got an LLC that I am the sole member of. I am partnering up with another individual to create another LLC. Is there any benefits or negatives to listing my current LLC as a member on the new LLC instead of myself? Or vice versa? How does this affect taxation?

Joe Escalante: This is a tax question mainly so you should talk to a good tax pro to figure it out for your situation.

Kathy: If a law firm is trying to collect for a company that has written off the debt. Do they need income info. Bank statements and such? We r trying to settle and/or negotiate the payoff
But the law firm insists on all this info? Is that legal? Y can’t we send a letter to company to negotiate instead of our giving out
All this personal info? Thx!

Joe Escalante: According to the Federal Fair Debt Collection Practices Act, they can’t demand such documents without a court order. Dave Ramsey is a good source of info on credit collection abuse. Check out this article. He’s got others as well: http://bit.ly/9Ito3R

Lois: I found out that my so called husband got married in another state, what can I do about it as far as my marriage goes?

Joe Escalante: Generally, your husband can be charged with bigamy, which is a criminal offense. His second marriage is invalid. But congratulations, your marriage is still “fine.”

Alicia: Hell Joe. Can you form an LLC and have multiple DBA’s under it or is there a better way to go about structuring.

Joe Escalante: Yes. You can do that. It’s better than having LLC for each company most of the time.

Kim: Hi Joe, when can you file chapter 7 bankrupty instead of chapter 13. how does income and debt play into which one you file?

Joe Escalante: There is a means test when filing for bankruptcy that will determine which type of bankruptcy you are eligible for. Generally, 7 is for those with few assets and need the discharging of debts to start over. 13 is for people that want to hang on to their house or some big asset while they take more time to pay off creditors.

LegalZoom: That’s it for Free Joe Friday, everyone! Let’s let Joe get back to his vacation. Thanks for joining us—have a safe and happy Fourth of July weekend!

Get more info and all the details and fine print about Free Joe Fridays. And join us on Facebook next Friday at 10am PT for more Free Joe!

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