The process of buying and selling real estate can be complex and it often represents one of the most substantial investments made by an individual or a business. Although using an attorney to assist with the process will not be free, the fees are a minor expense in relation to the significance of the transaction, and is certainly money well spent.

Handling a real estate transaction without an attorney may complicate the process in the short-term and increase risks and expenses long-term.

So, how can an attorney assist you in the buying or selling process?

• Attorneys are able to negotiate the terms of the real estate purchase agreement to ensure your interests are protected, whether you are buying or selling.
• Attorneys are able to structure the transaction in a way to minimize present and future tax liability and limit personal liability for matters relating to the real estate.
• Attorneys are able to prepare agreements between partners in a real estate investment, as well as lease agreements with potential tenants.
• Attorneys are able to conduct due diligence with respect to the real estate, to help you fully understand what you are buying and identify issues ahead of time. This includes reviewing the title work relevant to the property.
• Attorneys are able to coordinate with other parties to the transaction, including real estate brokers and title companies, to ensure that the closing happens in a timely and efficient manner.

In summary, if you are buying or selling real estate, a real estate attorney will work for you to ensure you get the most out of your investment.

We’ve all probably read about the new overtime guidelines for “white collar” workers that the Department of Labor released on May 18, 2016.  But do you know what your business needs to do to be compliant with the new rules by December 1, 2016?  First, you need to understand the new rules. Information about the new rules can be found on the Department of Labor’s website: https://www.dol.gov/WHD/overtime/final2016/faq.htm#8.   These rules can seem overwhelming, but an attorney at Epiphany Law can verify that you are interpreting the law correctly.

Secondly, employers must understand how the changes will affect their current workforce and understand their options if an employee is subject to and does not meet the salary threshold. For example, in response to the new rules, employers way want to make changes to how they pay employees.

To avoid penalties or even worse, a lawsuit, we suggest you consult your Epiphany Law employment attorney before implementing any changes. The attorneys at Epiphany Law will review your classification of employees, overtime procedures and employee handbook to ensure your risk for penalties and employee lawsuits is mitigated.

Trademarks: Selecting the Right Name

One legal topic we at Epiphany Law often advise businesses on – whether a New London startup, or a Neenah multi-national company – is trademark protection. Trademarks are one of the “big three”( intellectual property rights, along with copyrights and patents.) A trademark is a brand name. Trademarks include any word, name, symbol or device used to identify and distinguish the goods/services of one business from those of another. In other words, a trademark indicates the source of goods/services (such as your Appleton, Wisconsin headquarters!). Many businesses rely heavily on their brand name, because it signifies the quality, reputation, or other characteristics of the business and its products or services. It is important for these businesses to ensure their trademarks are on solid legal ground.

The best time for a business to seek legal advice regarding the strength of a potential trademark is before the trademark is used. The relatively small upfront investment in researching a trademark is worth the peace of mind in knowing that your trademark is protectable and not already being used by someone else. Litigation and disputes about trademarks once already used in commerce can be a very expensive distraction.

Although there are many nuances involved in analyzing a trademark, the two most crucial factors are (1) likelihood of confusion and (2) distinctiveness. The likelihood of confusion essentially means that a trademark cannot be too similar to an existing trademark that is in use by another company for a similar set of goods and services. Distinctiveness means that a trademark cannot be too generic. For example, a Kaukauna bakery named “The Good Bakery” would not receive much, if any, trademark protection.

Some trademark rights can be automatically “earned” simply by using the mark. However, those rights are generally limited. For example, if your business only does business in Menasha, it likely won’t have rights in Little Chute, Kimberly or Waupaca. In order to secure stronger protection your trademark should be registered with the United States Patent and Trademark Office (USPTO.) Start by searching the Trademark Electronic Search System (TESS) on the USPTO.gov website to determine the viability of your trademark. Then contact Epiphany Law to assist with your registration. Using a knowledgeable law firm will ensure success and keep costs at a reasonable level (generally $1,000-$2,000 per trademark).

A reality of doing business is that, at some point, you’ll have a customer who can’t or won’t pay their bill. Which approach is best depends on the situation, the customer and your overall goals.

A contractor’s first and best option is a construction (mechanic’s) lien. The best way to protect yourself is to make sure you follow your state’s requirements, including advanced notice to the customer, to ensure you can file one. If you cannot get a construction lien for some reason, there are generally five other options available.

 

1. Send a collections letter: A collections letter is sent by you or your attorney to the customer and details the services provided, specifies the amount due and the consequences of non-payment. It is usually the first option to use when an account becomes overdue. In some cases, a collections letter is enough to prompt the customer to pay or to start negotiating a payment plan. However, some customers will simply ignore them. The best collections letters are more than empty threats–you have to follow through on the consequences.

2. Negotiate: The chances of collecting the full overdue amount are reduced the minute the account becomes overdue. For that reason, it might be cost-effective to negotiate a deal to accept less than the full amount. This is a particularly good option if the customer is truly unable to pay the full amount or you’d like to keep their business.

3. Use a collections agency: A collections agency is a third party that will attempt to collect the debt for you. Some agencies will buy the debt from you for a percentage, while others charge a flat fee. While using a collections agency frees you up to concentrate on your business, the costs can often be high. Make sure to do your homework and find a reputable agency.

4. File a lawsuit: Collections lawsuits are often a last resort. If you’re lucky, filing a lawsuit can scare the customer into paying. On the other hand, lawsuits (even in small claims court) can be time-consuming and expensive. They can be especially frustrating if you win your case only to find out that the customer is “judgment proof” (i.e., has so little that he or she is protected from having to pay) or files bankruptcy. Lawsuits are most effective against debtors who have the ability to pay you, but won’t. And remember: if you hope to continue a relationship with your customer, a lawsuit will probably put an end to that.

5. Write off: Ultimately, there will be some debts you simply can’t collect, either because you decide it’s not worth it or because other options fail. In that case, you should write off the debt on your books and chalk it up to a learning experience.

When choosing an option, you’ll need to weigh the amount of time and effort it would take to pursue a debt and the chances of success. There are also “big picture” issues to consider: for example, you could sue every customer the day after their account become overdue, but that probably won’t help your business reputation.

Understanding your options in the event a customer doesn’t pay can help you deal with the situation efficiently so you can get back to running your business. There’s no way to guarantee you’ll get paid, but you can reduce the chances of overdue accounts and increase your chance of collecting debts if you take a proactive approach.

Regardless of which option you choose, make sure you document all of your interactions with the customer: contracts, change orders, invoices, e-mails, phone calls, and payment arrangements should all be written down. Given the nature of home improvement, it can also be a good idea to include pictures of the work you’ve done as it progresses, including “before and after” photos.

Ultimately, the most effective tool to prevent overdue accounts in the first place starts at the beginning of the relationship, with solid terms and conditions and detailed, written contracts that let everyone know what to expect. It continues with timely invoicing and consistent follow up on overdue balances. And all of the options above work best when they’re part of the system. A good business or real estate attorney can help start you in the right direction

Before you begin work for a customer, it’s crucial to have a contract in place. A contract protects you and your customer by setting out, ahead of time, the expectations you both have. While some parts of your contracts will change depending on the type of work, the size of the project, or your business preferences, there are some basic parts that should always be in your home improvement contracts.

First, you should always have a written contract with your customers. Many states actually require home improvement contracts to be in writing if certain criteria are met. For example, Wisconsin’s Home Improvement Practices Act (Wis. Adm. Code ATCP 110) requires contractors who accept payment before the job is completed to have a written contract that contains certain key parts. Regardless of whether it is required, a written contract can reduce the chance of a dispute (for example, over what work was included) later on and also serve as evidence to support your claim if a dispute does crop up.

 

So, what should be in your written contract? Many states have specific legal requirements and limitations for home improvement contracts. You should consult a local attorney to make sure you comply with your state’s laws. Generally, however, there are seven things all home improvement contracts should have:

1. Price: The contract should include the total price, plus any finance charges (particularly if you allow payment plans). If the project is for time and materials, specify the cost of materials, the hourly rates involved, and any conditions that might affect those prices.

2. Work description: A good work description lists not only what you will do, but what materials you will use. More detail is better. For example, if you install windows, identify how many windows you’ll be installing, who manufactures them, their make/model, their color and size, and so on. The work description is also a good place to note if something isn’t included. Using the same window example, you might want to note that you do not install shutters on the new windows.

3. Time period: Identify the start date and completion date. If you don’t know specific dates, include the time period during which the work will take place. It’s also a good idea to note if there are factors (i.e., weather) that could alter the schedule and how that will be handled.

4. Contact information: Your written contract should include your name, address and phone number. If you want customers to contact you by email, include that as well. You should also include the name and business address of the salesperson or agent who worked with the customer.

5. Security interests/construction lien rights: If you plan to take out a lien, mortgage or other security interest (usually as part of financing), then you should make sure it’s clearly stated in the contract. Additionally, some states require certain notices be given to homeowners about contractors’ and subcontractors’ construction lien rights. A local attorney specializing in construction law can set you on the right path.

6. Guarantees and warranties: If you make any guarantees or warranties about your products and/or services, they should go in the contract, along with any conditions or, just as importantly, limitations on them. In some cases, you may also want to note or include any guarantees or warranties made by manufacturers of the products used.

7. Signatures: Ideally, you want a contract signed by both you and the customer. Ultimately, the most important part is to have the homeowner sign, as that is the party against whom you could potentially end up enforcing the contract in court.

We highly recommend that you work with a local attorney to customize your basic terms and conditions in the contract for your business.

Even with all of the advantages of having a written contract, many contractors resist them because they know that a project often changes as it goes along. The good news is that there’s a simple way to address this issue: change work orders are additional written and signed documents that can be incorporated into your contract if changes need to be made. Together, they can help you stay on the same page with your customers and protect you from disputes down the road.

Ask any business owner why they incorporated their business and one of the reasons they’ll give is “to protect myself from business liabilities.” But incorporating doesn’t mean you can never be held personally liable. Although it’s rare, courts sometimes ignore the legal protection of a corporation to hold an owner personally liable (a process called “piercing the corporate veil”).

The good news is there are steps you can take to avoid having a court pierce the corporate veil. Piercing happens when the court decides that you, as a business owner, haven’t really treated the corporation as a separate entity. In Wisconsin, the same theory applies to LLCs and their members as well. Essentially, the courts are saying that if you want the protection of incorporating, you have to follow corporation rules.

To avoid piercing:

• Always follow corporate formalities, like holding annual meetings, keeping minutes and filing with the state on time
• Never mix corporate assets with your personal ones (or those of another corporation or LLC)
• When setting up your business, make sure it’s adequately funded. Courts are more willing to pierce an “undercapitalized” business
• Always identify your business as a corporation or LLC so customers and creditors are on notice that your business has limited liability. Also identify your title so they know you’re acting on the business’ behalf
• Never use your business to engage in illegal, fraudulent or reckless activities (and get the advice of an experienced business attorney if you aren’t sure)

Having a court pierce your business’s veil can be devastating for you as an owner. But by following the rules, you won’t give the courts a reason to pierce. That way you and your business can take advantage of the protections offered by corporations and LLCs.

A huge advantage to incorporating or forming an LLC is that it protects your personal assets from business debts. But creating the corporation or LLC isn’t enough—you have to make sure you don’t waive that protection.

One way to waive that protection is to take actions that suggest you’re willing to be personally responsible for the corporation’s debts. Below are four of the most common ways business owners can, intentionally or otherwise, assume responsibility for their business’ debts:

• Signing a personal guaranty. By signing, you’re taking responsibility for paying the loan if the business can’t. Many banks require one, especially for new businesses. As you develop a good history with the banks, you might be able to get them to waive this requirement. Make sure to keep track of any personal guaranty.
• Offering personal property as collateral. A creditor can go after collateral, even if it’s your personal property. Just like with personal guaranties, a bank is more likely to require this for new businesses. Again, make sure to keep track of what you offer as collateral.
• Using personal credit cards for business expenses. You are always responsible for paying your personal credit card balances. The card company doesn’t care if you used the card for “business purposes.”
• Signing a contract personally. Always make sure you indicate you’re signing as a representative of the company (ex. President, CEO, etc.). If you just put your name on the dotted line, people will assume you’re signing as an individual and plan to be held individually responsible for the contract.

Corporations and LLCs offer great protection for business owners, but that protection isn’t absolute. Being aware of how you can become personally liable for your company’s debts can help you minimize your risk and realize all the advantages incorporating has to offer.

A customer who owes you money sends you a check for part of the amount due with the words like “paid in full” written on the check. The big question: what should you do with it? Do you have to accept? Can you accept the partial payment and try to collect the rest?

Technically, if the amount owed is undisputed, then the words “paid in full” won’t prevent you from cashing that check and pursuing the remaining balance. But if the amount is disputed, then accepting a check marked “paid in full” completely discharges the entire debt. The distinction sounds simple, but it’s difficult to apply in reality.

If you’re willing to accept the amount on the check as full payment, you can cash the check either way. That might be best if the debt is old or unlikely to be paid entirely. But if you aren’t willing to accept a lesser amount, it’s a good idea to return any “paid in full” checks with a letter explaining why you’ve returned it and inviting the debtor to send another check without the “paid in full” language. You don’t have to accept a check marked “paid in full” if it’s for an amount less than what you’re owed.

Perhaps the best thing to do is develop a policy regarding “paid in full” checks. Work with a collections attorney to decide how to track the checks, when you’ll accept them (for example, if the debt is over 5 years old or under $1,000), and how you’ll handle rejected ones. You can also address how you’ll negotiate settlements or payment plans.

Some debtors use “paid in full” checks to trick you. Others may honestly think they’ve paid the full amount. Knowing your options and being prepared can help you maximize your payment.

Winning a judgment against a debtor doesn’t mean you automatically get paid. In rare cases, a debtor may pay the judgment voluntarily (usually just to make it go away). But in most cases, you’ll need to docket your judgment to help you collect.

What is “docketing” a judgment and why should I do it?

Docketing means you formally record your judgment with the court. It creates a lien on any property the debtor owns in that county. In Wisconsin, the lien is good for 10 years.

Where do I docket a judgment?

Because a docketed judgment only creates a lien on property in the county where it was docketed, you should docket the judgment everywhere the debtor has property. For example, if you get a judgment in Outagamie County, the debtor might own a house in Brown County and a cottage in Winnebago County.  Docket the judgment in Outagamie, Brown and Winnebago County.  A business debtor might own a store in Calumet and Outagamie County.  In some cases, you may even need to docket your judgment in another state.

How do I docket a judgment?

Generally, to docket a judgment in the court where you obtained it, you’ll need to file the judgment form and pay a docketing fee. If you’re docketing a judgment in another county, there are additional steps (especially if you’re filing in another state). Unfortunately, even within Outagamie, Brown, Winnebago and Calumet Counties, the process isn’t identical.  Always work with your attorney to make sure you follow the right process.

What happens once I docket a judgment?

You could wait to see if the lien on the debtor’s property is enough—the debtor may pay up to improve their credit rating or in order to sell the property. But in the meantime, you can pursue other options, like garnishment or execution against property.

A court may grant you a judgment, but the court won’t collect it for you. It’s up to you to seek payment, so docket any judgment you have and talk to your attorney about additional enforcement options.

As a business owner, you hope to have good relationships with your employees. Unfortunately, the sad reality is that at some point in time most employers will face a lawsuit from an employee or former employee. While you can’t prevent employees from suing, here are the Dos and Don’ts to help you get through the lawsuit and protect the business you’ve worked so hard to build.

Do call your attorney as soon as possible: employment laws are complicated and often favor the employee. Your attorney will help you determine how serious the lawsuit is and whether you should fight it or settle.

Do call your insurance company: your policy might not cover employee disputes, but if it does, you need to notify your insurer immediately. Not filing a claim guarantees you won’t be covered.

Do collect and save important information: important information can come from other employees, such as supervisors, or from performance reviews and company policies, just to name a few.

Don’t panic: knee-jerk reactions can cause more problems than the original lawsuit. Instead, talk to your attorney and let them help you figure out what to do next.

Don’t apologize: it might be tempting to plead your case or smooth things over with an employee who sues, but you can bet that anything you say will be used by the employee’s attorney. On the other hand…

Don’t retaliate: retaliating (like firing an employee who sues or making it difficult for them to work for you) gives the employee another claim to add to their lawsuit and makes it look like you have something to hide.

Even if you treat employees fairly, you can’t prevent them from suing. Instead, knowing how to handle the situation if an employee does sue will protect you and your business.