QUESTION FROM ONE OF MATT’S READERS-

“I just came across your website and found it very helpful. I have a question concerning a landlord issue. We recently just moved out of a home we were leasing. We did everything the landlord asked for and followed the lease perfectly. During the time we stayed there the landlord would visit almost everyday unannounced. He would use the driveway and work in the shed behind the house. Many of his friends would just wander the yard also. He also used our water hose almost everyday. We did talk to him about this and he told us we had to get use to it. We decided we would just stick it out and not renew our lease.

Upon moving out the landlord said we had left a small spot on the back of his 32 year old pink countertop. He rented the property out right after we moved and is still using the countertop. He charged us $540 for the small spot saying it had 3 years left his loss. So he was charging us $180 a year. I read up on Indiana law and I thought it said he can only charge fair market value. I also read we were entitled to have reasonable notice when he came on the property. That we were entitled to peaceful living which we definally did not have ( I did take many pics/videos of him coming and going all the time) Do we have any rights? The 45 day deposit letter he sent us just said he was charging us $180 a year his loss. Is it vaild? He has no intention on fixing or replacing the counter plus he is still using it. Do we have any rights? He also asked us to lie for him if the county assesor came by. He is saying his wife lives in the rental under her maiden name so he can claim the homestead exemption. Is the lease vaild if he does not even own the home? The home is under his wifes maiden name only. Any input would be greatly appreciated! Thank you for your time.

Maria”

Matt’s Answer-

Landlords are not always right.  Tenants are not always wrong.  If your facts are correct, you might have a very good case.  Indiana has a security deposit statute that poses a “Zero Sum Game” for landlords.  If a landlord wrongfully holds a security deposit after the lease ends, the landlord loses.  If a landlord fails timely to provide the “45-Day Letter” and any security deposit balance owed to the tenant, the landlord loses.  So, landlords should be careful to follow the “45-Day Letter” Rule very carefully.

Sounds like this landlord is trying to cheat you,  Fight it.  Don’t let him charge you for a new countertop, when you did not even damage the old one.  Right is right, and this landlord is wrong.  You should consider going to small claims court.  I would need to see your evidence and the lease to be certain about your best options.

You might want to read this post-  Indiana’s Security Deposit Law

Good luck.

Matthew A. Griffith is an attorney, business performance coach, mentor and entrepreneur.  He coaches, advises and guides business owners, entrepreneurs, inventors, property managers, investors and real estate professionals.  Matt has nearly two decades of experience helping businesses grow.

Introduction by Matthew A. Griffith, Esq.

Here is an email-letter I just received from the Indiana Secretary of State.  Those of you who are clients of my law firm will remember that I alerted you to this fraud scheme almost two years ago in my law firm’s newsletter.  Amazingly, the fraud is still happening.

From Todd Rokita, Indiana Secretary of State

Dear Indiana Business:

I feel it is important to follow up with you on the actions taken by my office to address the deceptive letters many Hoosier businesses have received over the past several months. The letters come from “Indiana Corporate Compliance Business Division.” They attempt to secure a $125 or $150 payment in exchange for processing a company’s annual minutes. As we previously communicated to you, despite the fact these letters are made to appear as though they come from an official government source, they are a hoax and should be ignored.

In a multi-state investigation, my office tracked down the individuals behind these letters. Aaron V. Williams of Las Vegas and a Lisa Diane Brown of California are affiliated with several businesses including “Indiana Corporate Compliance.” The results of the investigation were shared with Indiana Attorney General Greg Zoeller, who recently filed a complaint against Williams, Brown and their businesses.

If the state prevails, these individuals could receive fines of over $1.5 million and be barred from doing business in Indiana. I will also continue to work with law enforcement agencies to pursue possible criminal action against these individuals.

If you have not done so already, please get in touch with our Business Services Division at (317) 232-6576 if you believe you are a victim of this scam.

Corporate images now available online for free

I am also pleased to let you know you can now access your corporate documents, business filings and any additional registrations on file with our Business Services Division instantly and free of charge through the INBiz portal found on our Web site: www.sos.in.gov/business . You will also be able to find more than 6.5 million images of business filings that date back to the 1800s for other active businesses.

Government should always use technology to drive down costs and increase access for taxpayers. I am proud of my staff’s work and the culture we have created here at the office of the Secretary of State to meet, and often exceed, the efficiency standards that are in place in the private sector.

Sincerely,

Todd Rokita

Indiana Secretary of State

Your business, even if you are a sole proprietor, is visible to your customers, clients and competitors, 24-7. 

At any time of the day or night, your customers can see your website, read your blog, follow your Twitter, or talk about you to other customers.  Potentially, there is someone talking about your product, service, merchandise return policy, lousy guarantee, great receptionist, rude sales person, etc., any where in the world at any time.  In that sense, you only have limited control over your brand, and that means you cannot afford to make branding mistakes.  Nor can you allow unhappy customers to perpetuate dialogue that is harmful to your brand.  What control you do have over your brand needs to be carefully and wisely exercised.  You can’t afford dumb mistakes that can be accentuated through “negative viral marketing.”

The point I’m making really struck me after an experience I had this past weekend.  I was driving north on I-65 to visit family south of Chicago for Mother’s Day weekend.  A white  Chevy Tahoe passed my car going about 90 mph, swerving in and out of traffic and nearly hitting more than one other car.  The windows of the Tahoe were covered with vinyl marketing messages (i.e., a car “wrap”), advertising an upscale painting company located in Illinois.  As I watched the driver of the Tahoe endanger other people’s lives and property, I immediately thought to myself:

“I would NEVER hire that company to paint my house.  If I can’t trust the owners to drive a car responsibly, why would I trust them in my own home?”

Welcome to the world of marketing in the 21st Century.  It’s reality, so learn how to maximize the speed by which good news travels and minimize the bad news that can damage your brand.  Actually, I like to say that good news travels fast, but bad news travels even faster.

To finish my story about the Tahoe. . . as I was driving, I called the phone number on the advertisement on the Tahoe.  I left a “colorful” message on a voicemail, and I explained that the driver’s behavior was not only endangering lives but also damaging the image of the painting company.   A few minutes later, I got this text message in response:

I’m sorry if my husband, who is driving my Tahoe, offended u w/ his driving.  I called him and asked him to be careful on the highway.  Have a nice weekend-

Although I might not hire this lady’s husband, I might hire her.  She did a good job of damage control, and she might have saved someone’s life.  Had she actually called me personally to apologize, I would have given her an “A” in damage control.  She gets a solid “B.”  After her call to her husband, he slowed down and greatly improved his driving.  No one was hurt.  No accidents occurred.  It was a good day.

Clearly, it would have been better for this lady’s husband never to have behaved like that in the first place, especially as he drove a rolling company billboard up I-65.  But she did the responsible and business-wise thing in apologizing, taking responsibility and fixing the problem.  I am sure that she would have preferred a more positive marketing message from her car wrap, but she did minimize the damage to her company’s reputation with a phone call and a text message.  My hope for her is that she learns from the experience and puts in place safeguards to prevent similar bad incidents that might harm her company’s brand.

What are you doing to control your brand image, especially when you are asleep or when you’re not there to control your employees?

There is still a way to purchase investment property, other than with cash, by buying subject to an existing mortgage, or via a land contract.  I sat down with Mortgage Planner, Mickey Brooks, recently and learned about the Home Path mortgage program.  Mickey is one of the best mortgage planners I have ever met.  I am really impressed with Mickey’s command of mortgage programs and lending rules, and asked him for a guest blog.  He sent me a summary of the Home Path program in the form a letter to his clients.  I am posting Mickey’s letter here.  Enjoy.

                                 – Matthew A. Griffith, J.D.

Mickey Brooks, Mortgage Planner

JLB Mortgage Group

11769 Whisper Bay Court

Carmel, Indiana 46033

317.218.0283 (Office)     317.679.3501 (Cell)

mbrooks@jlbmortgagegroup.com

Saturday, May 02, 2009

“Dear Valued Partner,

As we enter 2009, the crisis in the financial markets seems to be the top story on every news channel. But many of the reporters and so-called pundits don’t understand what really happened, what’s happening today…and what may happen next.

That’s why I’m excited to tell you about a series of articles I’m creating to put an end to the confusion once and for all! In these easy-to-understand articles, with help from many resources, I explain in layman’s terms exactly what caused the current financial crisis, what the almost daily news reports really mean – and what to be watching for in the near future.

The content for these articles comes from various services that I have invested in to stay up to date and educated, in order to always best serve as your trusted advisor. It’s important to me to stay on the leading edge as a professional, and when I saw these resources, I wanted to make them available to you as well.

Recently, I was helping a client write a User’s Manual for a new product it is going to manufacture.  I was writing warnings about injuries that could result from the misuse of the product.  Later, as I was explaining to the client why I included some fairly obvious warnings, it struck me how ridiculous the law has become and how businesses are constantly under threat from frivolous lawsuits.

Mind you that this post is not about dangerous products or unsafe stores.  Rather, this is about customers and clients blaming you and your business for obvious errors made by the client or things clearly beyond your control.  Let me give you some examples to illustrate my point.

In products liability cases, manufacturers have to tell a consumer how to use and how NOT to use a product.  Manufacturers must also warn consumers about the consequences of misusing a product.  It is not enough to assume that a consumer will use a product for its obvious and intended purpose.  Nor is it enough to assume, for example, that a consumer understands that lighting a charcoal grill in the living room might cause a house fire or dangerous fumes that might harm people’s lungs.  You have to assume, as another example, that a consumer might try to scrap paint off an old house using a weed wacker.  Sounds ridiculous, but that’s a fair view of how the law now works.

The law requires you to protect your business against the dumbest customers imaginable.  Assume that your customers will make the silliest mistakes.  Now guard against those risks.  Unfortunately, that’s how you must now operate.  You cannot assume that your customers are of average intelligence.

Please understand that there is a gap between what the law says and how it is actually applied.  The law does not actually require you to protect yourself from injuries or losses sustained as a result of a customer’s unreasonable errors in judgment, but judges and juries apply the law that way.  Bad facts, as we say, make bad law.  Sure, you can appeal.  But at what costs?

Most people have heard of the “reasonable man” or “reasonable person” standard.  That remains the law.  There is, however, the reality of what judges and juries do in actual cases.

The solution to these business risks is to prevent claims and lawsuits by assuming the worst.  Create systems, policies and procedures that guard against claims by your dumbest customers and clients.  Get insurance.  Work with a good attorney, and take my warnings seriously.  In short. . .

Hope for the Best, but Plan for the Worst. 

Guest Post by Matt Jackson, Vice President, Halakar Real Estate.

Introduction by Matthew A. Griffith:

Everyone is watching the real estate market these days, because of the strong links between the state of our economy and real estate.  What is important to remember, however, are two things:

1.  All real estate is local, and

2.  Residential and commercial real estate are very, very different markets.

I meet with experts on a regular basis to learn what they know.  So, I recently sat down with Matt Jackson, Vice President, Halakar Real Estate, to talk about the state of real estate here in Central Indiana.  Matt had some very interesting observations about commercial real estate being a barometer for how small business is coping with the recession.

After we met, I asked Matt to share more of his thoughts and observations for my blog.  Here is a guest post by Matt.  Please enjoy:

_______________________________________________________

Why Hire a Commercial Real Estate Broker

Matt Jackson, Vice President, Halakar Real Estate

Matt Jackson, VP, Halakar Real Estate

One Indiana Square
Suite 2500
Indianapolis, IN 46204
Office: 317-964-0000 Ext. 228
Mobile: 317-340-3969       
Fax:    317-964-1144
MJackson@Halakar.com

A real estate transaction tends to be one of a business owners least favorite items to deal with.  There are three reasons why:

1) Time.  A business owner or their office manager does not have the time to deal with office/industrial leasing matters because they are too busy guiding their ship.
2) Lack of Market Knowledge.  Most tenants of leased space are not in the commercial real estate business therefore they are unaware of market trends.   If a owner is proposed a 3% rent increase is this “acceptable” per market standards?  Business owners are too busy worry about their company to worry about what they should be paying per square foot in rent.
3) Cost.  We all have heard time is money and typically the owner of a business’ time is extremely valuable, therefore any time that is spent on dealing with lease negotiations is time that is spent away from building ones business.

The solution for this problem is to find a commercial real estate broker that you TRUST.

Commercial real estate is not rocket science but there are certain matters of negotiation that do change on a week to week if not day to day basis.

There are some common misperceptions of negativity in hiring a commercial real estate broker that some tenants have.

Tenant: “My attorney is going to help me with my lease negotiation”.

Response: Should your attorney be involved with your leasing process? ABSOLUTELY.  In any instance that a tenant is leasing space they should have their attorney review their lease.  A lease is always written to benefit the writer (aka-the landlord).

Tenant:  “I don’t want to pay a fee to you for representing me” or “I don’t want to have to pay more for having a broker represent me”.

Response:  First and foremost commercial real estate brokers typically do not charge a fee for their services as the tenant’s representative is typically paid by the landlord… thus leading to… Tenants have a belief that if a landlord is paying a fee to their representative it will be reflected in their rental rate.  A broker’s job is to reduce their client’s overhead, not amortize their fee in a lease.  If a broker does a good job for their tenant the tenant will see a REDUCTION in their rent – not an increase.

Tenant:  “I don’t want to anger my landlord because we have a good relationship”

Response:  No one is in the business of ruining relationships and it stays true in commercial real estate.  A broker is simply the “trusted advisor” that a tenant hires to make sure they are making wise business decisions.  A landlord will not look at this negatively as 9 out of 10 times the landlord has a broker – so shouldn’t you as a tenant do the same?

90% of the job of a commercial real estate broker is EDUCATION.  At no point will you be as well versed in the market or negations of real estate as your broker but you will feel much better about WHY you are making the decisions you are.
Much like a doctor warns you of the hazards of eating fatty foods or not sleeping enough your broker should educate you on the benefits and negatives of all deal points.

Some Quick Pointers:

• As tenant are you paying “CAM charges” or “CAM pass-throughs.”  If you answered yes it might be worth discussing with your broker.  These charges are “pass-throughs” that the landlord charges above the base year, while common practice there are ways as a tenant to reduce your exposure.
• Are you a tenant who’s lease is up for renewal in 2009-2010?  Right now the going amount of free rent for a office tenant committing to a 5+ year lease is 2-6 months.  Properties and Owners differ on this lease incentive.
• Again, if you are a tenant up for renewal most landlords are willing to commit new tenant improvement (TI) dollars to keep you.  If you don’t ask, you won’t receive.

In Part I of this blog topic, I discussed how employees impact a customer’s buying experience.  In this blog entry, I’ll explain how that is the essence of your sales efforts.

This will be short, because the concept is so simple.

Your employees can sell your products or services by showing that they value customers.  Period.  End of concept.  End of post.  (almost)

‘Value our customers?”

What’s that mean?

I mean that they should really, truly value your customers.  There should be genuine concern by your entire staff to help, serve and improve a client’s status or position.  Genuine effort is required, but genuine concern is equally important.  Most customers can detect when a clerk or salesperson is faking it.  That is a huge barrier to getting repeat business, which should be the goal of every business in some form.  It’s too hard winning all new customers every day.  It’s easier to sell a customer whose already accepted your product or service.  So, do everything it takes to get the customer to return.

The first and most important element in that effort rests with your staff.  They are your company.  That one rude (or exceptional) employee, as much as anything, will be remembered by your customer the next time she is going to buy your or your competitor’s product or service.  So, hire, fire and invest in people properly.  Don’t “train” your staff.  We train dogs, seals and show horses.  “Empower” your staff with skills, knowledge and rewarding work environments.  “Develop” your human resources.

Get  this. . .  in many European countries, the success of a company is measured largely by employee retention and job satisfaction.  We treat employees quite differently here in the USA, and it shows in the lack of employer-employee loyalty.  Who pays the price for that distrust and lack of loyalty?  The customer, that’s who.

Align your company’s vision and goals with those of your staff, and you’ll be on the path to making customers happy.  My guess is that most of your staff has no clue what your company is trying to become, accomplish or excel at.  So, it is no wonder that those values aren’t translated into quality customer relations.

Do you get it?  If you don’t, your business is almost assuredly underperforming.

This is a true story.  I got fired by a client yesterday.  I don’t get fired by clients often.  In fact, I can only remember a handful of times, when I have been fired as a lawyer over the past 18 years of my law career.

Getting fired yesterday was a blessing.

Here is why.  In a nutshell, I was never going to please this client.  He wanted me to tell him that the law is something different than what it actually is. 

I don’t tell my clients what they WANT to hear.  I tell them what they NEED to hear.

Lesson #1-  You are not going to please every client or customer.  So, don’t try.

Long story short, my client did not like the bad news that I delivered.  This client came to me for legal documents to complete transactions that  are generally prohibited by Indiana law.  When I explained to him that he could not do what he wanted to do, he became very frustrated.  He was disappointed that his lawyer, which was me until yesterday, would not sanction and approve his business model.  He never expected that his lawyer would discourage him from a business model that he had already spent thousands and thousands of dollars creating.  In fact, after I first met him and delivered the bad news a few months ago, he spent hours and hours on the Internet trying to prove me wrong.  He found several websites of other companies offering to do the same unlawful business that he wants to do.  So, he found it very hard to accept my advice.  Even after I printed and gave him sections of the Indiana Code that clearly prohibit his business model, he remained in disbelief.

If you are a professional services provider, your clients must have faith in you.  If they do not trust or have faith in you, they will ignore your advice or not follow it religiously.  If they do not follow your advice, they are, in essence, paying you for the privilege of ignoring your advice.  They can ignore your advice, all on their own.  If they are not accepting your advice and counsel, they are paying you for nothing.  There is no good reason for them to pay you for nothing.  That is simply a waste of their money.  So, you either need to establish a higher level of trust or terminate the relationship.

Lesson#2-  If you can’t please a client or customer, end the relationship on good terms- early.

If you do have a client or customer whom you cannot please, end the relationship on good terms now.  Don’t struggle to try to fix a broken business relationship.  There are plenty of customers and clients who need good advice, other services and products.  This is a variation of the old 80-20 rule.  80% of your problems come from 20% of your “bottom” customers.  While 80% of your profits come from 20% of your “top” customers.  Spend your time and energy on the top 20% of your customer-base.  If you spend your time and energy on the customers whom you will never please, you are doing a disservice to your best customers, that difficult customer, your employees, your business partners, and yourself.  Let the bad customers go, and add to the number and quality of your top 20% customers.

Let that difficult customer go to your competition.  You will be happier and more profitable, and your customers will be happier.

To finish my story about getting fired, I met with the client and ended the relationship on good terms.  I got paid in full for my time, and returned my client’s file to him.  I wished him the best of luck and encouraged him to reevaluate his position.  Had he asked, I would’ve helped him find another lawyer.  In fact, I spent 15 – 20 minutes with him, explaining once again that the law does not support his position.  I gave him specific examples of other cases for other clients, and even suggested that he go talk to some other lawyer-experts in this field.  I even offered to arrange a phone call with local experts, who were the chief governmental officers in charge of this area of the law.  They happen to be personal friends of mine, and I was willing to arrange private meetings with these lawyer-experts to help the client.  All to no avail, because the client is 100% committed to pursuing a plan and business model that poses significant risks to him and his business.  He is a client who cannot be pleased, and he would not remember all the efforts I made to keep him out of trouble.  The minute he gets in legal trouble, he will develop selective memory, and blame me for his refusal to follow my good legal advise.   Who needs that?

It was a blessing to be fired by that client yesterday.  I feel bad that the client is making a bad decision, but I did the right thing.  The client should have more, not less, confidence in me, but he doesn’t care about that.  He is not searching for good advice or a trustworthy advisor.  He is searching for legal confirmation that he can do whatever he wants to do.  That’s not the type of client I want to serve.  So, it is best that the relationship ended.

Can you apply these lessons to your business?  Do any of you have customers or clients whom you need to fire?  Let me hear about it.  Add a comment to this post and tell us your story.

Question from One of Matt’s Readers

“I am a landlord with several properties. I’ve been having a problem with a particular small claims court judge. He always want to put off rendering a decision on a cases. It takes two to three weeks to get a decision on any type of damage hearing. When I do receive the decision in the mail the amount awarded is always about half of what I asked for, with no explanation. I take meticulous records and proof to court and have everything documented. I’m always surprised when he doesn’t make a decision right there. Is the judge required to explain why he disallowed part of my damages. Is this something I should appeal? On what grounds?

or am I throwing good money after bad?”

Matt’s Answer

In Marion County, Indiana, there are nine small claims courts. You can appeal judgments from these nine courts to the Marion Superior Court on any grounds.  Actually, you don’t need a reason to appeal.  So, one option is for you to obtain your ejectment in the small claims court and then appeal the adverse monetary judgment to the Marion Superior Court. That will be a longer process, however. That is one option.

Another option is to avoid the small claims courts completely and file all of your lawsuits in Marion Superior Court. That is a slower and more complicated process, however. My law firm had a client who experienced the same troubles that you are experiencing. That client, out of pure frustration, filed all its lawsuits in Marion Superior Court. It costs more money and often requires a lawyer’s help.  That is a second option.

A third option would be to ask the judge for a few minutes of her time to discuss her court procedures in private. You cannot talk about a specific case in private with a judge, but a good judge would be receptive to a general discussion about her courtroom procedures and the evidence she requires. I would try to make that overture. That might not work, but it is probably worth a try.

A fourth option might be to change the way in which you present your case. If you do not provide the court with a one-page summary of all your damages, you should start doing so. I would label the summary as an exhibit and formally introduce it into evidence. I would make a “big deal” out of your summary of damages. It should be typed, include a title, and look like a formal document. Make it a serious effort.

Here’s yet another suggestion… file a motion to correct error or a motion to reconsider after your next inadequate judgment award. Describe why the court erred and provide an itemized damages calculation. There is not a formal means by which the court in small claims cases can consider a motion to correct error or motion to reconsider, but I would still give it a shot. If you try this, make sure you file this document soon after you get your judgment.

Another option is to simply keep doing what you’re doing. Frankly it is not unusual to wait two or three weeks to get a decision out of any judge in any court in any county in the state. So, I’m not surprised or alarmed that it is taking some time for you to get your judgments.

As a final thought, it might worth trying to bring an attorney to your next case. Judges tend to treat litigants differently when a lawyer is present. After that one case, you might find that the judge treats you differently.

I have given you several suggestions. You might experiment with one, two or all of these. Unfortunately, there is no single, absolute and perfect solution. It is frustrating when courts ignore the law and the facts. It is even more frustrating, when it seems that a court has its own agenda. Please be patient and diligent. Persistence helps as well. Keep trying, and keep fighting for a just result in your cases.  For your own good, assume that it is your fault that the judgments are wrong.  Assume that you could communicate your position better. In other words, don’t blame the judge for hearing you wrong. Try speaking clearer.  Present a better case. You may be perfectly right and you may be doing a good job of presenting your case, but assume you could do better. You might find that a better articulated and presented case will serve you well.

Good luck.

As the costs of litigating disputes continue to increase, litigants are increasingly settling their disputes through arbitration. Arbitration is a process in which a neutral third person (arbitrator) or panel, usually of three persons, considers the facts and arguments presented by the parties and then renders a decision. By utilizing arbitration, litigants can avoid trial, and the lengthy and expensive process of getting to trial. Arbitration usually results in a quicker decision than could be had by going to court. After the arbitrator renders a decision, that decision can be enforced by the courts. However, the courts cannot hear an appeal of an arbitration decision, except in the case fraud.

Arbitration is often preferable for the plaintiff who wants quick redress for the harm he or she has suffered, but defendants may prefer the longer and slower processes of trial and appeal in the courts. The rules of evidence in arbitration differ from those in trial. There are other differences between the two processes. Consequently, before a party agrees to submit to arbitration, thereby waiving the right to trial, careful consideration should be made as to which process is more likely to yield the better result.

How do parties choose arbitration over trial? They simply agree to arbitrate, usually in a written agreement. Written agreements to submit a dispute to arbitration can be signed before or after a dispute arises. So, for example, an employment agreement might include a provision requiring an employee to submit a wage dispute to arbitration. Nearly any agreement can contain an arbitration provision. Agreements can even be written to require mandatory arbitration only if requested by one but not the other party to the agreement.

Whether arbitration is right for you depends on a number of factors particular to your circumstances. However, all parties to an agreement in which significant disputes might arise should consider whether arbitration is a preferable alternative to resolving those potential disputes.