When a Lawyer’s Help Makes All the Difference
What legal
matters affect us in our daily life? A new survey of 1,000 Americans says that
nearly 20% of us faced a legal issue within the last year, According to the
survey by the legal Web site FindLaw, the top five legal issues involved:
· Real Estate (buying/selling, property disputes, landlord-tenant disputes, etc.)—21 percent
· Family Law (divorce, child custody, etc.)—17 percent
· Estate Planning (wills, trusts, settling of estates, etc.)—12 percent
· Personal Injury—11 percent
· Traffic Violations—8 percent
Respondents to the study said that they used—or could have used—the services of a lawyer when confronted by these problems.
When Do You Need a Lawyer?
A good general rule of thumb is that the more that is at stake—in terms of money, or in terms of how important the dispute is to your well-being—the more a lawyer’s help makes sense. If it involves the biggest investment you’ll ever make (your home), or what happens to all the property you’ve accumulated (your estate plan), or what happens to your children (as in a divorce), then clearly a lawyer’s help makes all the sense in the world.
One way to illustrate this is to look at the decision-making process of people who have their whole livelihood at stake, and have to think all the time about when a lawyer’s help could make the difference. For business owners, each morning brings a new set of potential legal problems. How do they decide which ones are hot (lawyers’ help needed), semi-hot (they can take steps, with their lawyer reviewing what they’ve done) and not hot (can be handled on their own, at least unless it becomes more complicated)?
The more that is at stake the more you need your lawyer's help
What you’re weighing, if you’re a business owner, is how to get the “legal” job done. The principles apply equally well to nonbusiness legal issues: (1) getting help early might save you time, trouble, and money down the line and (2) the more that’s at stake, and the higher the risk, the more you want to be sure you’re doing it right.
When the “Legal” Light Flashes
A lot of businesses are sensitive to problems that might have a legal dimension. They make it a practice to call their lawyer, set out the facts, and ask for guidance. Most of the time, at the cost of a few minutes of their lawyer’s time, they’ll learn it’s either nothing to worry about or something they can deal with by taking a few precautions. Sometimes they’ll be told it is a problem, and be able to work with their lawyer to solve it before it becomes bigger.
Specific Business Issues
And then there are the issues that surely require your lawyer’s help. Here’s a list of major business actions/transactions where a lawyer can protect your assets and help you make the best possible deal.
· Assessing and negotiating franchise agreements
· Creating standardized forms such as purchase orders and contract confirmations that the company will use in the business
· Buying or selling a business
· Negotiating loan terms
· Negotiating leases of land or equipment
· Buying or selling property
· Negotiating agreements to license others to use patents, trademarks or other intellectual property rights that you own, or negotiating to obtain a license to use rights from someone else
· Negotiating other types of contracts
· Responding to a lawsuit that’s been filed or one that is seriously threatened (responses might involve negotiating with the other side, coming up with a legal strategy, filing appropriate motions in response to the other side’s motions, conducting pretrial steps, etc.)
· Filing a lawsuit on behalf of the business
· Dealing with the government over a serious issue (e.g., something important involving how the business is regulated)
· Dealing with tax authorities over a serious issue
· Seeking new investors (raises issues under securities laws)
· Opening offices or beginning to do business in other states or countries
· Devising strategies for dealing with a business in trouble (bankruptcy and other options)
· Making provisions to pass along your business interests to family members, minimize taxes upon death (estate planning)
Not Just Problems
There’s a tendency to think about legal matters as being “problems,” but notice that a lot of the items on this list deal with opportunities—buying a new business, getting a loan to expand the business, signing up new investors, buying or leasing a new place of business. The same is true in nonbusiness areas, where such happy events as the purchase of a new home, marriage, and the birth of a child or grandchild might involve your lawyer in handling the real estate transaction or updating your estate plan.
Legal help is not just to solve problems, but to prevent problems
The point is
that the legal side of your business or the legal side of your life is much
more than putting out fires and suing or being sued. The vast majority of
lawyers spend their time outside of court. They negotiate on behalf of
clients, conduct research, deal with government agencies, counsel clients,
draft legal documents and otherwise advance transactions. A big part of their
work is keeping you away from court, and from the fuss and expense of being
embroiled in legal matters. You could benefit from their help whenever a lot
is at stake, not just when trouble is brewing.
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Protecting Yourself as a Consumer
We spend a
lot of money as consumers. New cars, new kitchens, new roofs and all the rest
can add up to tens of thousands of dollars. But what happens when you don’t
get what you bargained for? What can you do to get your money back, or get the
job done right or the product you wanted?
Your lawyer can advise you on your best course of action in a particular case, but here are some general tips to keep in mind.
The Contract is the Key
You have a chance to protect yourself right up front, by the contract you agree to. The other party will probably give you a preprinted, “standard” contract to sign, but you should read it carefully before signing. Make sure you understand every term. Bring it to your lawyer if you have doubts. (Many states have three-day cooling off periods for home improvement contracts and certain other purchases, giving you time to get out of a contract even after you have signed it, but don’t count on this protection—get help before you sign.)
Remember, preprinted contracts always favor the side presenting them. You don’t have to sign them if you are not satisfied. You can try to alter them by crossing out certain passages and inserting your own language, initialing the change. If the other side agrees, then the change becomes part of the contract.
When Problems Happen
Let’s say you’ve taken these precautions but still are not happy when the job is done or the product is delivered. What then? When someone breaches a contract with you, you may no longer be obligated to keep your end of the bargain. You may proceed in several ways:
· urge the other party to reconsider;
· if it’s a contract with a merchant, get help from local, state, or federal consumer agencies;
· bring the other party to an agency for alternative dispute resolution—the contract may specify that the contract will go to mediation or arbitration in case of a dispute;
· sue for damages or other remedies.
Will They Reconsider?
You may wonder what the point is of asking the other party to reconsider. It may ultimately be quicker and less expensive for you or your lawyer to send a letter or make a phone call. The other side may have breached the contract because of a misunderstanding. Perhaps they just need a little more time. Or maybe you could renegotiate. You may very well be able to come up with a solution that will leave both of you better off than if you went to court.
Starting with that offer to settle the matter, keep good records of all your communications with the other side. Once you see you’re in for a struggle, make a file. Keep copies of any letters you send and move all receipts, serial numbers, warranty cards, and the like to this file.
If you get nowhere with personal communications, try going over the other side’s head. If the dispute is between you and a merchant, you might want to contact the manufacturer of the product. If it involves a large chain of stores, contact the management of the chain. This goes for services, too.
Assuming you’re still not getting satisfaction, try contacting a consumer protection agency, either in your city or state. Getting your state attorney general or local consumer agency involved might be all it takes to get the other party to live up to its end of the bargain. Another resource is your local post office, where you can report any shady business practices that took place through the mail.
Credit-Card Purchases
These days, of course, many purchases are made with credit cards. Then the Fair Credit Billing Act may protect you. Under the Act, charges for products that you rightfully refuse to accept on delivery or that aren’t delivered according to an agreement are regarded as billing errors that the card issuer must investigate. During the investigation you don’t have to pay. The issuer may resolve the matter by granting you a permanent credit.
You may also avoid payment for shoddy or damaged goods or poor service, if you refuse payment under state law and the merchant refuses to make an adjustment. In these cases, credit cards issuers usually will intercede, making an investigation of your claim. They often classify the charge as disputed and allow you to skip payment to them, without interest, during the investigation. If the merchant refuses to cooperate, or the card issuer confirms your version of the facts and agrees that you have been aggrieved, they will credit the amount of the purchase as appropriate.
Suing for a Breach of Contract
What if none of this works? Then, you need to consider your legal options. The most common legal remedy for breach of contract is a suit for damages, usually compensatory damages. This is the amount of money it would take to put you in as good a position as if there had not been a breach of contract. The idea is to give you “the benefit of the bargain.”
There are other kinds of contract damages. In addition, you may be able to get statutory damages (legal penalties) under a consumer fraud law or in a suit for fraud. A court may also rescind (cancel) a contract that one party has breached and order the breaching party to pay you any expenses incurred; it could also order the return of goods sold.
Choosing a Landlord/Tenant
Whether you’re a landlord or someone who might become the tenant of a particular unit, your first decision in a rental relationship is whether to choose each other. Make the right choice, and both of you could be happy for years. Make the wrong choice, and you could be in for it—a “problem” tenant or a “problem” landlord usually does not improve over time.
If you are a landlord, don’t be so anxious to rent a place that you will accept a poor tenant. If you are a prospective tenant, don’t accept a poor dwelling or lease just because the place is available today. Check each other out carefully. Here are some tips on how to make a good match.
Q. How can tenants choose a good landlord?
A. If you look at a house or apartment to rent, you will naturally check out the space and the amenities. Check out the landlord as well.
The single most important question is whether the landlord will make repairs if something breaks. If possible, get the answer to this question before you move in. You can learn a lot about a landlord by asking other tenants in the building about how they are treated. You may also be able to check out the landlord with the local building management association, apartment association, Board of Realtors, the local office of the Institute of Real Estate Management, and whatever agency handles tenant complaints in your locality.
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The Mailbox Test |
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In choosing an apartment you will want to check the overall condition of the grounds and the building, the common areas, parking areas, the interior painting, cleanliness, and maintenance. Look at it at night as well as in daylight. Talk to present tenants. One quick way to judge the quality of a building is to look at the mailboxes and doorbells at the front door. Are the tenants’ names all uniform, such as generated by a plastic label gun? If so, they were probably put there by an above average landlord who cares about the appearance of the building. Are the name labels all different, as if the tenants put them there themselves? That is a sign of a landlord who is indifferent to the appearance of the building. Are the names written on the mailboxes with a felt marker or scratched into the metal? Are the mailboxes broken or lacking locks? If it looks as though the landlord and tenants don’t care at all about appearances, you should look elsewhere. |
Q. Suppose the landlord says he’ll fix anything that’s broken. Why should I believe him?
A. If you inspect the apartment and see some things that are broken or need to be repaired, ask the landlord when repairs will be made. When repairs are considerable, ask that they be made before you sign the lease and put down a security deposit. After you’ve signed the lease, paid the security deposit, and moved in, you don’t have much leverage, and the landlord does not have much incentive to make the repairs.
If the landlord is not willing to do the repairs before you move in, ask the landlord to write down a list of repairs to be made and sign it, as an indication of good faith.
If the landlord makes only an oral promise to repair things, you cannot be sure of the real intention. Some things may be repaired and some may not.
If the landlord won’t even give an oral promise, it’s a clear sign that repairs won’t be made. This landlord is below average. Look someplace else.
But remember the difference between repairs and improvements. A tenant is entitled to have things in good working order. A tenant may not be entitled to a new refrigerator.
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Let’s Look at the Record |
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Your lawyer can help you
check the quality of a landlord by visiting the courthouse and checking
the public records. Has the municipality sued the landlord for failure to maintain the property up to the requirements of local codes? If there is no record of such a suit, it’s probably a sign of a good landlord (though it could also indicate an inattentive municipality). If the landlord has been sued, you should be suspicious. If a suit is pending now, run away. If the municipality has a local code inspection agency, its files may be matters of public record. Ask your lawyer to check them. A code violation in the past does not necessarily indicate a bad landlord. Not all code violations are equally serious, and many buildings will have some violations. Municipalities will issue complaints or file suits against the landlord only in cases of serious code violations and only if repairs are not made promptly. |
Q. How can landlords go about choosing tenants?
A. If you are offering a place to rent, have the prospective tenants complete a rental application. Your lawyer could prepare an application form that gets the information you are most interested in.
The two most important elements of the application are the employment history and the rental history. Get information for the past three or five years. Then contact each of the applicant’s employers and landlords for that period. If the applicant has worked at the same job and lived in the same apartment for that time, you have as good an indication as possible of a quality tenant.
A prospective tenant who undergoes such a check might well be thankful. The landlord will have checked the building’s other tenants as well, and so the neighbors will probably be reliable people.
Q. How else can landlords evaluate prospective tenants?
A. Many areas have companies that specialize in tenant records. They can tell you if someone has been evicted in the past or failed to pay the rent. Or your lawyer could examine your local court’s past and pending eviction records.
General credit bureaus can supply a history of credit payments to landlords if the prospective tenant authorizes a search of the records. This credit information will include the timeliness with which car and credit card payments have been made, bankruptcies, judgments against the tenant, and adverse information from other creditors. Prospective tenants who will not authorize a credit check should be viewed cautiously.
Q. Are there any legal pitfalls in choosing a tenant?
A. Landlords need to take special care to treat all prospective tenants in the same way. The law prohibits many kinds of distinctions that landlords used to make in selecting tenants. Fair housing laws forbid discrimination on the basis of race, of course, but go far beyond that. Ask your lawyer to brief you on the law in your jurisdiction.
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Q.
What’s the Best Length for a Lease? A. It depends. In many cases a new business owner attempts to obtain a long lease at a fixed rental rate. Although this may be a good idea for an existing business, it can be disastrous for a new business. The failure rate for new businesses is very high. If the business fails within the first year, for example, and you have a lease of five years, you are still obligated to pay the rent for the remaining four years. This is true even though you may not be using the rental space.  If you decide you want to enter into a lease for more than one
year you want to make certain you have the right to sublet the premises or
the right to assign the lease to another. Your attorney should negotiate
lease provisions concerning subletting and assignment with the landlord.
Your attorney can advise you as to what rights you have as a tenant under
state law, in addition to any rights that may be contained in the lease.
For the new business owner an alternative may be to lease for one year, with an option to renew for a longer period of time. As to rent, if your business is highly seasonal, for example a restaurant that is open full time during the summer but only partly open in the winter, you may see if the landlord will agree to a rental schedule where your business pays more during the summer months and less during the winter months. |
Q.
What’s a Single Member LLC? A. In some states a limited liability company (LLC) can have a single member. The single member LLC (sometimes called the SLLC) is a very attractive form of doing business for several reasons. First, if you’re a sole proprietor who is seeking liability protection, as the sole member of a SLLC you will enjoy the same liability protection as that of a corporate shareholder. That means that your personal assets won’t be at risk.  Second, the SLLC will be not be regarded by the Internal Revenue Service as a separate taxable entity from its member. This means that you will report your profits or losses on Schedule “C” of your federal income tax return under your own social security number. The SLLC does not file its own tax return. (In the event your state has an income tax you should consult your lawyer to determine if a separate return has to be filed for any state income tax.) Third, the fact that a SLLC is a separate legal entity allows you to transfer all or part of your interest in the SLLC to someone else, which would be impossible for a sole proprietor. Your lawyer can fill you in on what your state requires and advise you as to whether this form of business organization makes sense to you. |