Many clients visit or call asking me to evaluate problematic business contracts or rental agreements. Often my they are surprised about what the contract terms actually mean. Worse, there are times we discover the contract or other party’s promises are fraudulent.
Please learn this lesson from my experience with so many clients: Don’t be cheap at the beginning of a deal – Visit me, Lic. Jim Browne, to review the business contract, home purchase or lease before you sign it.
At Goodin Abernathy / Legalmente Hablendo Indy, many of our Hispanic clients admit they wanted to avoid using an attorney to save money. I understand that idea – it’s reasonable to think that way. But ALL those same clients acknowledge that if they spent a little money for a legal review before entering their agreement, it would have saved them a lot of frustration, time and money.
Many Latinos enter Rent-to-Own contracts with the idea they are slowly buying their house. The concept, as they understand, uses their rent money to pay off the house. Before signing one of these agreements, make sure the seller also legally owns the house. Do they have the legal authority to sell you the property? Last year I saw an example involving total fraud. The seller did not own the property and collected my client’s $6,000.00 down payment. When they tried to move in, the locks were changed so they contacted the seller. He lived out of state and they did not have his address. He wanted more money for them to move in. Surprisingly, the young couple paid more money. Then, the seller asked for even more money and that is what finally made them think it was a scam. You should meet the seller in person and have their address. If they do not live in the same town or state where you are buying the property, take further steps to verify the ownership. You can check the county government’s records to match the seller’s name with the property’s title. Check if there are other mortgages, liens or taxes owed on the property. If there are, you need to make sure the seller is paying those obligations. If not, the seller will have your money and the lender will keep your house. You can find more information about rent to own fraud here: What you need to know about rent-to-own deals. Then see me for a specific review of your situation.
Business Lease Agreements
Individuals and small companies usually rent office space. One type of rental agreement, or lease, includes the terms for a “Triple Net” obligation. This means the renter makes a monthly payment. Then, at the end of the year, the landlord charges the renter additional money for other costs like property taxes, insurance, mowing, maintenance repairs, snow removal and other costs. This usually amounts to three or four times the cost of the monthly rent. If my clients don’t pay, the landlord changes the locks and denies them access to their equipment or business supplies.
Kitchen Table Contracts
Frequently, individual sellers and buyers sign a short contract over the kitchen table. My buyers think the contract is sufficient to protect their financial investments. Usually the agreement fails to address equipment inventory, describe the payment plan or handle many other practical terms they should have requested for a reliable purchase. Rarely do kitchen table contracts succeed.
Loans to Friends and Family
Monthly we get calls where a client asks if he can legally collect the money he lent a friend or family member. The first question is – Did you put the loan in writing? If not, the borrower may try claiming it was a gift. Besides friends and family, I see this a lot with individuals trying to buy or start restaurants. They will invest money to become owners but not have a written agreement. Usually they lose their money and are left empty handed. Get a written loan agreement signed. It should have terms like the length of the loan, repayment plan, interest, penalties, default provisions and litigation costs.
My clients who are subcontractors start jobs expecting to get paid. Sometimes, they do not ask for written terms and hope to get paid. During the job, they pay for materials and equipment, travel and the cost of their own workers. Then when the job is finished, the contractor that hired them claims the property owner or general contractor did not pay – and often that’s a lie. These contractors frequently disrespect my Hispanic clients, threatening litigation or immigration problems. I also see this a lot with apartment complexes. They hire my clients to paint, clean or remodel many, many units. The apartment managers change and the new managers avoid paying the money owed. Or, the apartment managers claim the work was poorly done.
You work hard for your money and envision improving a future for you and your family. Protect yourself against the risk of loss.
Paying for a legal review BEFORE you enter a contract protects you against much larger heartache and financial loss later. Our legal review will be simple and communicated in terms you understand. We will help you think through the contract language that protects your business. Then, if you need me, I’ll help you negotiate the contract for a better result.
Contact Attorney, Jim Browne, by phone at (317) 843-2606 or submit an e-mail inquiry through our website.