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It’s Easy to be a Landlord – It’s Hard to be a Landlord and Do it Right.

Posted by calgdasilvaon December 11, 2015in Blog Posts, Front PageLeave a comment

New Jersey is a maze of trips and traps for inexperienced landlords. The regulations are strict and if not followed, the inexperienced landlord may have a tenant with no rental income.

There are any number of things to keep in mind when renting out a property to a tenant. Below we have detailed several possible complications to keep in mind when you call an attorney to advise you on your landlord duties.

The Lease:

The lease you sign with your tenant will be your main line of defense against any future conflicts between landlord and tenant. New Jersey law requires all leases be written in plain language so they can be easily read and understood. The lease will set out the term that your tenant agrees to rent the property. This term allows you to protect against your tenant leaving without notice and leaving you with an empty property. However, your tenant does not have to vacate at the end of a lease’s term. Your lease should also include details about late payment charges. You can also include a provision that requires a tenant to pay for any court and attorney’s fees that may arise if you need to take your tenant to court for eviction or disagreements. Without a clear and protective lease, as a landlord you will forfeit the protections offered by the law.

The Security Deposit:

When you do find a tenant and sign a lease you are entitled to no more than first month’s rent before the tenant moves in as well as a security deposit (one and one-half times the monthly rent) which is designed to cover any possible damages after the tenant moves out. The security deposit is very important, but it also has to be dealt with very specifically. The deposit is not the property of the landlord- it is the property of the tenant held in trust by the landlord until the end of the tenancy. By law, the lease should state where the money will be held and New Jersey law makes the security deposit untouchable until the tenant has actually vacated the property. These are only a few of the rules and regulations surrounding the security deposit, but the law is constantly changing and you should always consult a lawyer. Improper handling of the security deposit leaves you open to lawsuits and potential significant damages.

Keeping up your Property:

As a landlord you are bound by common sense requirements of habitability and safety for your tenants. If you fail to make proper repairs and keep the property in acceptable shape, the tenant can withhold rent. Landlords are not allowed to collect rent charges on rent properly withheld because of lack of repairs until the dispute is resolved. There are state, municipal and local property codes for rented establishments and they must all be followed and adhered to. An experienced lawyer can keep you abreast of any changes and help you navigate the numerous requirements.

Increasing the Rent:

Say you have a tenant you like, pays their rent on time, and seems comfortable but you need to raise the rent in order to keep making a profit. This is a reasonable request, but there are a number of rules to keep in mind before doing so. You cannot raise the rent during a lease term, you have to wait until you start a new term. A tenant also does not have to accept new lease terms. You can evict a tenant who refuses a new lease term, but you will have to go to court and prove you gave a tenant proper notice of rent increase. You also have to abide by rules and regulations of what constitutes a fair rent increase.

Overall being a landlord in New Jersey can be very profitable- or it can be a headache, a liability, and a drain on your resources. Without an experienced attorney to advise you on all of your landlord/ tenant matters from lease to eviction you could end up paying dearly- and wishing you had invested in an alpaca farm instead of a single family unit. And by the way, there are some fairly profitable alpaca farms in New Jersey as well. We can help you with the proper business formation if you decide to go that route instead.

The Many Uses of the Limited Liability Company

Posted by calgdasilvaon December 4, 2015in Blog Posts, Front PageLeave a comment

There has been a great deal of discussion in the media about why Mark Zuckerberg has chosen an LLC, or Limited Liability Company, for his new charity rather than a more traditional non-profit organization. Here at Bergmann & Good, we are big fans of the LLC because of the benefits and the freedoms it can offer. An LLC offers Zuckerberg and his wife, Priscilla Chan, a great deal of control over their money and how it will be used. As NPR reports, non-profits have limitations on their role in government lobbying and specific rules and regulations they have to follow to keep their status as a non-profit organization. An LLC has none of those restrictions. However, billionaires are not the only ones who can take advantage of the many used of the LLC. Whether you have 45 billion dollars or a small business you run from your home office, an LLC can help you.

LLC’s are easy to set up and relatively inexpensive. They also create a boundary between assets related to the business and personal assets. For instance, if you have a small business and you are sued, most likely the assets involved in the lawsuit will be those of the LLC rather than all of your personal assets that never had any involvement in the business. Although you still have financial responsibility for your business, there are a number of situations where having an LLC in place creates a legal divide between business and private assets.

LLC also offers you freedom over your business. How it is set up, run, dissolved and managed are all up to you. You can also set up an LLC to be established and dissolved on specific days, meaning you can create an LLC for temporary use and dissolve it easily. The management of the LLC and how it can be changed are all part of the Operating agreement which you write at the formation of the LLC.

Compared to corporations and non-profit organizations, LLC have more easily navigable tax requirements and more flexibility. Corporations are more protective because they mean that the business rather than the shareholders themselves are legally responsible for debts it incurs, but depending on what kind of company or organization you wish to create, an LLC may be an easier route.

Give Bergmann & Good a call if you think that an LLC could be of use to you or your business, even if you are looking to raise charitable donations rather than funds for your kid’s college education. We can help you through every step of the process- you don’t need to be Zuckerberg to make use of the Limited Liability Company!

For further information about Zuckerberg and Chan’s new LLC: http://www.npr.org/2015/12/03/458276386/facebook-founder-to-give-away-his-fortune-through-for-profit-company

Do Your Employees Work From Home?

Posted by calgdasilvaon November 28, 2015December 1, 2015in Blog Posts, Front PageLeave a comment

Working from home, or telecommuting, has evolved from a rare and special privilege granted to only a select few, to a regular occurrence for normal employees. If your business is the type that would permit your employees to telecommute either part or all of the time, make sure your business policies are equally up-to-date and address the issues that could arise.

Working remotely has obvious attractions for both employees and employers, often for different reasons, but be ready to be flexible. Your office polices will definitely need to be updated to reflect the situation and you need to be prepared for both the successes and failures that come with telecommuters.

Develop an Appropriate Remote Work Policy

Some employers develop remote work policies out of necessity, for example when a key employee relocates or has a personal situation arise that requires them to spend less time in the office. Keep in mind, however, that developing a policy as a reaction to circumstances is not ideal – it is much better to plan ahead. And remember all of the aspects of moving an employee to an out-of-the-office worker: IT issues, tax issues, insurance, privacy concerns, and a clear, evenly applied remote policy.

There is no reason to fear telecommuting. In fact, the ability to work remotely is generally viewed as a benefit by employees. Offering telecommuting to employees often means you can retain key people in your organization and your business as a whole becomes more attractive to potential employees. It is also important to remember that the Equal Employment Opportunity Commission argues that, on occasion, working from home must be considered as a reasonable accommodation option, even if the employer has no existing telecommuting program. However, all this means is do not say no to a remote working arrangement before you analyze the options. Importantly, federal courts of appeal have concluded that regular, on-site attendance is often an essential function of many jobs and, in those circumstances, an employer is not required to offer the employee the option to work at home.

Questions You May Not Have Considered

Working remotely may permit the employee’s work location to be in a different state from the employer’s business, such as here in South Jersey, so close to the Pennsylvania border. You must determine which state laws will regulate the work and to which state the employee will owe taxes. Be careful! New Jersey is a state that insists remote activity requires an employer to pay state corporate taxes. The employer should also clear remote work activity with local zoning laws or property restrictions which may either inhibit or ban commercial activity in the employees’ homes.

I Do Not Want to Pay My Employee to Sit Home and Watch Netflix

Compensating non-exempt employees can be the most challenging aspect of tackling a remote work policy. Usually work is measured and compensated by time – the amount of hours the employee is in the office. Time in the office is easy to measure and monitor with supervisors, a time-clock or computer log in records. An employer who wants to rely on more than a telecommuting employee’s say so must get creative and develop technological methods to substitute for the traditional time clock, such as a computer log-in records. There will have to be a level of trust developed and certainly the work product output should have relation to the hours logged.

What Now?

If you would like to explore a telecommuting policy to offer your employees, give us at Bergmann & Good a call to discuss the options.