Category: Uncategorized

If you have not already, check out Part One and Part Two of this series.

It’s important to distinguish between the two arrangements as it will determine the rights and remedies of the licensee or tenant. Even if the agreement is titled as a ‘license,’ if it sounds like a lease, looks like a lease, and smells like a lease, then more likely than not, it is a lease and it will be enforced as such. Careful contract drafting should be utilized by commercial property owners (or their attorneys) looking to implement an effective and enforceable license regime.

For some, a license may be the best option for their business as they can operate at a lower cost versus having to rent. A prime example of this is beauty professionals using a salon suite rather than renting a chair in a beauty salon. Many salon suites come with the furniture and/or equipment needed by the beauty professional and allows them to operate with more independence and flexibility.

For others that wish to make themselves at home in their office, the security of a lease may be more appealing to you. If you’re a potential tenant/licensee looking for clarification of an agreement presented to you or a commercial property owner looking to draft a license agreement, contact our firm for assistance.

By now you know the difference between a lease and a license from Part One of this series but what makes one option more favorable than the other? What are some disadvantages?

In the shared office space context, a licensee is granted permission to enter onto the licensor’s property to make use of an office, desk, or other space or equipment for the licnesee’s business within the hours agreed to.

Usage by way of a license can have several benefits for licensees, such as: (1) flexibility to terminate the license; (2) all-inclusive price on a cost-per-month basis, with such prices typically less than rental prices; and (3) the occupation period of the property is normally shorter.

Of course, some drawbacks include absence of long-term security for the licensee, the inability to alter the licensed space, and at-will revocation of such license. Therefore, a license agreement allows commercial property owners to eliminate the landlord-tenant relationship and avoid having to go through the traditional eviction proceedings should any issues arise.

Regardless of what the agreement might be called (the title does not have much legal significance), there are characteristics to look for to determine whether the arrangement appears to be more like a lease rather than a license: (1) whether the use will be exclusive; (2) the arrangement relates to a particular piece of real property (is it for an entire office or just a desk?); (3) whether the use will be for a specific period of time; and (4) whether such use is in exchange for regular monthly payment (pricing for licenses may change month-to-month).

Considering the advantages/disadvantages of a license versus a lease, you may be wondering what your legal rights and remedies are under both arrangements and how they differ. We’ll be covering the legal aspects in Part Three of this series.

With the boom in entrepreneurship in response to the COVID-19 pandemic, many entrepreneurs are attempting to navigate unfamiliar waters with regards to finding a location suited to their business needs. Since not all businesses are one-size-fits-all, many are discovering the perks of using shared office spaces through companies like WeWork and Workbar. However, many are being presented with a license agreement, rather than a lease, and aren’t sure of the difference and implications of such.

A lease is a property interest or estate in real property that grants a tenant the right to exclusive possession of the property for their own use and enjoyment for a period of time in exchange for payment of rent. Most people are familiar with traditional leases, whether residential or commercial.

By contract, a license is a temporary right to use property for a specific purpose. A prime example of a license agreement is when you buy a ticket to a sporting event or concert – you are granted permission from the venue to occupy the seat or space for the purpose of attending the event. The permission ends when the license is revoked or the particular purpose is over or has been completed.

Whether one option is better than another depends on the particular business. The advantages and disadvantages as well as how to distinguish one from the other is further explored in Part Two of this series.

Click here to skip to Part Three of this series.

Here are some of the key points contained in the video:

• Recitals often follow the introductory paragraph of a contract.

• Recitals can play a very important role later on if there is a lawsuit.

• Recitals often show the purpose of a contract.

• Be careful and make sure the Recitals contain proper information.

If you have a contract matter in North Carolina, South Carolina, Georgia, Florida or Tennessee, we invite you to fill out our confidential potential client intake form.

Over the past several weeks, I’ve spoken with several different non-profit creators that were surprised to hear that their organizations would need a charitable solicitation license in connection with their fundraising efforts.

If an organization or individual asks the public for contributions and/or donations to help, aid, or otherwise support a charitable purpose, a charitable solicitation license is needed.

What is considered a “contribution?” A “contribution” means a promise, pledge, grant of any money or property, financial assistance, or any other thing of value in response to a solicitation (including in-kind contributions or goods or services).

Is my organization exempt from this license requirement? North Carolina General Statute 131F-3 provides for a number of statutory exemptions from the license requirement. A careful review of the statute should be conducted to see if your organization would qualify for such. To obtain an exemption, your organization would need to submit a written request with supporting documentation to the North Carolina Secretary of State Charities Division.

My organization isn’t exempt. What do I need to do now? If your organization does not qualify for a statutory exemption, license applications can be completed online using the Charities Division’s online filing portal.

How much is the filing fee? The license application fees are statutorily set under North Carolina General Statute 131F-8. The fees are set based on the contributions received per fiscal year.

What do I need to do every year to keep my license active? The organization will need to file a renewal application every year to keep the license active. The renewal application is due four and a half (4 ½) months after the organization’s year-end, which is the same filing deadline as the IRS Form 990.

What are the potential penalties if I fail to obtain the license? Failure to comply with the charitable solicitation license statutory requirements can result in civil and criminal penalties such as an administrative penalty up to $1,000 per act or omission which constitutes a violation, a civil penalty up to $10,000 per violation, and a criminal charge of a Class 1 misdemeanor.

What if my organization solicits contributions in other states? Many other states have some version of a charitable solicitation license and filing requirements. If your organization is soliciting funds in other states, you should speak with an attorney licensed in that state to determine if it is necessary for your organization to file in that state.

Here are some of the key points contained in the video:

• DON’T EVER lend someone money without a written agreement

• DON’T EVER create a loan without including an Attorney Fees, Court Costs and Collection Costs provision.

• In most North Carolina cases, it is difficult to collect attorney fees and collection costs unless it is specifically stated in the written contract.

• What if the loan borrower does not repay the loan?

1. The lender could spend thousands of dollars in costs and fees, not to mention time invested, with no guarantee of ever collecting the money owed.

2. If obtained, a judgment will need to be enforced against the borrower, resulting in additional expenses for the lender.

3. For lawsuits by a business entity to collect on a loan, attorney representation is required, because individuals cannot represent themselves.

If you need legal services in North Carolina, South Carolina, Georgia, Florida, or Tennessee we invite you to fill out our confidential potential client form.

Here are some of the key points contained in the video:

1. Should attorney fee and legal costs provisions be included in an arbitration clause? Examples of options:

A. Arbitration is required, but attorneys’ fees and legal costs are specifically not allowed to be recovered by the prevailing party
B. Prevailing party can recover its attorneys’ fees and legal costs from the non-prevailing party
C. The arbitrator has discretion on these issues..

2. Consider which party is more at risk of being sued and which party has more resources.

Does the type of attorney fee being charged influence these drafting decisions?
If considering a legal agreement presented to you, you should have your attorney take a look at the contract and then make a careful decision on how to proceed based on a thorough legal analysis of your situation and the proposed contract.

If you need legal services regarding contracts, business law matters, or other matters we handle in North Carolina, South Carolina, Georgia, Florida, or Tennessee, we invite you to fill out our confidential potential client intake form.

When someone visits your property – whether as a social guest or a repairman – there is always a chance that an injury could result. As a landowner, you may not know the extent of your potential liability when someone becomes injured on your property.

Some states, such as Florida, apply different standards of care on the part of the landowner depending on the classification of the injury person (invitee, licensee, or trespasser). Up until 1998, North Carolina courts did so as well. Now, North Carolina applies the same standard of care of landowners to all lawful visitors – landowners must exercise reasonable care in not exposing lawful visitors to dangerous conditions and must warn of any hidden dangers on the property. “Reasonable care” may mean cleaning up a spill on the floor or just maintaining the property in general.

In order to recover damages from a landowner, the visitor must prove that the landowner negligently caused the condition or failed to remedy the condition after the landowner knew or should have known of the condition’s existence. With regards to hidden dangers, a landowner is required to give an adequate warning of the danger’s existence – this could mean a natural condition (ex/ a hill) or an artificial condition (ex/ a swimming pool).

It is important to remember that the above standard of care is for lawful visitors. For unlawful visitors, a landowner’s duty is only to refrain from willfully harming the trespasser. However, there is a particular doctrine – the attractive nuisance doctrine – that allows a landowner to be held liable for injuries sustained by children who trespass on the landowner’s property if the dangerous condition was one likely to attract children.
Common types of premises liability lawsuits include:

(1) “Slip and Fall” – these cases commonly occur on commercial properties, such as a restaurant or grocery store. There are several issues that can arise in these cases – How long was the dangerous condition (i.e., the spill or liquid) present? Was a warning present (i.e., one of those yellow “Caution” signs)?
(2) Property Defects – these cases can involve injuries resulting from a broken railing or broken stairs.
(3) Dog Bites – a landowner may be liable for any injuries that his or her dog causes if the dog had shown dangerous tendencies in the past and the landowner (and dog owner) had knowledge of these tendencies at the time of the injury.

There are certain situations in which a landowner may defensibly raise the doctrine of contributory negligence, which bars recovery by the injured party if they are partially at fault. This could mean that the visitor did not properly look where they were going or failed to act reasonably at the time they became injured. Imagine a visitor going downstairs to your basement without turning the lights on and then tripping on the stairs.

Landlord/tenant laws cover rights and responsibilities each tenant and landlord has in their specific state. Because Florida is one of the best states in the country to invest in property, you may be considering buying an investment property. Before you do, you should understand Florida rental laws and consider certain aspects to better protect yourself and your investment, especially in the time of COVID-19.

I’m worried about damage to my property. What can I do to better protect myself and my investment?

So, you are concerned that your prospective tenant may cause damage beyond normal wear and tear. Or maybe you have concerns about your tenant’s financial situation. Luckily, there is no statutory cap on a security deposit amount in Florida and you are able to charge the deposit at your own discretion. Typically, Florida landlords charge the equivalent of a month’s rent. However, if you have concerns about your property or your tenant, you can charge more than that. While there is no limit, landlords will likely charge no more than two months’ rent. You should understand that charging an excessive security deposit may turn away prospective tenants so just be prepared for that.

What repairs am I required by law to make and what repairs can I hold the tenant responsible for?

You are legally required to keep the property “livable.” Under the doctrine of implied warranty of habitability, a landlord must maintain the structure of the building (stairs, ceiling, floors, etc. safety), provide hot/cold water, provide trash receptacles, exterminate bugs and rodents, etc. Therefore, maintenance and repair of any of those would be required.

On the other side, there are other repairs that you would not be required to fix by law, such as leaky faucets, grimy grout, and squeaky cabinet doors. Your obligations versus your tenant’s obligation to make these minor repairs should be addressed in the lease. I’ve commonly seen leases that require the tenant to pay for minor repairs and specify the price minimum for what constitutes as a ‘major’ repair. This means that, if the cost of a repair is less than the minimum amount of the major repair, you can require the tenant to make and pay for the repair.

The AC broke in my property. Do I have to repair or replace it?

Surprisingly, Florida law does not require landlords to provide or repair air conditioning. Rather, landlords are required, by statute, to provide functioning heat during the winter. However, most landlords do provide other appliances outside of just heat, such as air conditioner, ovens, refrigerators, etc. Therefore, the only instance in which you as a landlord would be responsible for repairs to additional appliances is if those repairs were included in the lease.

My tenant is claiming that I failed to repair a hazardous condition and is now threatening to withhold rent. Is this allowable?

Yes, however, the tenant must meet strict requirements. Under the previously mentioned doctrine of implied warranty of habitability, the landlord is required by law to make sure that the property is free of any hazardous or dangerous conditions. If you fail to repair the condition, the tenant has the option to either: (1) remain in the property and withhold rent until you fix the condition; or (2) move out and terminate the lease.

If the tenant seeks to remain in the property and withhold rent, the tenant:

• Must provide notice – the tenant must provide written notice to you of their intent to withhold rent at least 7 days before the rent is due. They may either hand deliver it or send the notice by certified mail. If mailed, the notice must be sent at least 12 days before the rent is due. After receiving the notice, you have 7 days to make repairs;
• Must be current in rental payments;
• Has the right to withhold all future payments – as long as the tenant follows the correct procedure, they have the right to withhold all future rental payments until the repair is completed.

The tenant told me that they’re moving out of the property but the lease doesn’t end for months. What are my options?

The tenant is “breaking” the lease, which is when a fixed-term lease is terminated before the end date without paying the remainder of the rent due. Some states require a landlord to mitigate their damages by finding a new tenant. However, Florida does not require this. A landlord has 3 options: (1) find a new tenant; (2) do nothing and collect rent from your tenant as it becomes due; or (3) invoke right to liquidated damages.

(1) Find a new tenant – So, this is something you could do but are not obligated to do. However, if you have a good relationship with your tenant, you could try to have them provide you with a replacement tenant.
(2) Collect the rent as it becomes due – This is basic contract law. Your tenant cannot just agree to do something and then change their mind without having some consequences. Unless there is an early termination clause in your lease (see below), the tenant will be required to continue to pay rent until a new tenant is found or the lease period ends.
(3) Invoke the early termination clause – Some leases include an early termination fee (aka liquidated damages clause). This fee is normally about two months’ rent and your tenant will need to give you at least 60 days’ notice that they will be terminating the lease early.

The lease with my tenant ended. How do I return the security deposit? What if there was damage to my property?

This is probably the most common issue among landlords and tenants after the lease ends. While the tenant wants their money back, you also want to get your property back in good condition. You have two options: (1) return the tenant’s security deposit in full; or (2) deduct damages from the tenant’s security deposit and return the remaining balance.
(1) Returning the Security Deposit in Full. Your property was given back in great condition and you don’t need to deduct from the deposit. Therefore, you must return the full amount within 15 days from the lease termination.
(2) Deduct Damages From the Security Deposit and Return the Remaining Balance. If there was damage to your property and you intend to deduct from the tenant’s security deposit, you have 30 days from the lease termination to notify the tenant in writing of your intent to keep part of the deposit.

• If you fail to provide this notice in writing within the 30 days, you forfeit your right to keep ANY part of the deposit.
• Additionally, statutorily, you must strictly adhere to the following or risk losing your right to withhold a portion of the deposit:

o Send the written notice by certified mail to the address you have on file. It is not your responsibility to ask the tenant for a forwarding address.
o You must state your intention to keep a portion of the deposit and the reasons why
o Inform the tenant that they have 15 days from receipt of the letter to contest the deduction in writing
o If the tenant does not object – you must deduct and return the remainder of the deposit to the tenant within 30 days of your initial letter
o If tenant does object – you can seek judicial remedies

I heard something about attorneys’ fees being a big deal in landlord/tenant matters. What’s the deal with that and do I need to be concerned as a landlord?

The landlord-tenant statute makes the award of attorneys’ fees discretionary in some instances, such as in actions to enforce rental agreement provisions and actions of possession; while in other instances, the award of attorneys’ fees are mandatory, such as actions to recover a security deposit or prohibited practices.

See the following applicable sections and notice the language contained therein (i.e., “may” versus “entitled”/”shall be”):

Section 83.48 – Attorneys fees – In any civil action brought to enforce the provisions of the rental agreement or this part, the party in whose favor a judgment or decree has been rendered may recover reasonable attorney fees and court costs from the non-prevailing party. The right to attorney fees in this section may not be waived in a lease agreement. However, attorney fees may not be awarded under this section in a claim for personal injury damages based on a breach of duty under s. 83.51.
Section 83.49 – Deposit money or advance rent; duty of landlord and tenant.
(3)(c) If either party institutes an action in a court of competent jurisdiction to adjudicate the party’s right to the security deposit, the prevailing party is entitled to receive his or her court costs plus a reasonable fee for his or her attorney. The court shall advance the cause on the calendar.
Section 83.59 – Right of action for possession
(4) The prevailing party is entitled to have judgment for costs and execution therefore.
Section 83.625 – Power to award possession and enter money judgment. The prevailing party in the action may also be awarded attorney’s fees and costs.
Section 83.67 – Prohibited practices.
(6) A landlord who violates any provision of this section shall be liable to the tenant for actual and consequential damages or 3 months’ rent, whichever is greater, and costs, including attorney’s fees.

As an attorney who routinely drafts and analyzes business contracts and a bride during the COVID-19 pandemic, I knew that there were several contractual aspects I would need to consider when entering into countless contracts with the vast array of people and vendors involved in planning a wedding, especially during a global pandemic.

While it appears that the initial “panic” of the COVID-19 pandemic has gradually decreased and many 2020 weddings have been rescheduled, the health concerns with regard to mass gatherings are still very much present and will not be going away any time soon. Whether you’re in the beginning stages of planning like myself, or attempting to navigate the contracts you entered into months ago, below are some considerations and legal concepts you may find helpful.

Refund of Deposits

Most service contracts have a deposit or fee due at booking in order to hold the date for your event. Typically, these deposits are non-refundable. Well, what if the contract wasn’t performed due to force majeure or impracticability/frustration of purpose, can I get my deposit back? It will depend on the circumstances, but maybe not. Global pandemic or not, these initial deposits are usually just to hold that date – thereby, causing the servicer (caterer, photographer, wedding planner, etc.) to turn away other events for the same date, i.e., business for them – so that part of the contract has already been ‘performed.’