Breaking News: Bars to Re-Open Monday at 50% capacity in Florida!

This evening, the Florida Department of Business and Professional Regulation (DBPR) issued Emergency Order 2020-10, which permits bars to re-open on Monday, September 14, at 50% capacity.

Under the Order, bars and other alcoholic beverage vendors may resume sales of alcoholic beverages for consumption on premises beginning Monday, provided that their operations comply with the parameters of Phase 2 of Governor DeSantis’ “Safe. Smart. Step-by-Step. Plan for Florida’s Recovery as established in Executive Order 20-139.

On Monday, these vendors may operate at 50% capacity of the facility’s indoor capacity, allow bar service to seated patrons, and permit outdoor seating and service with the appropriate social distancing.

“In meetings with hundreds of owners of bars and breweries across the state, I’ve heard their stories of struggle, and I’ve observed their serious commitment to making health and safety a continuing priority in their businesses,” said DBPR Secretary Halsey Beshears. “It’s time that we take this step, and it’s vital that we start moving forward with this sector of our hospitality industry who have endured one of the toughest paths for sustaining a business during this pandemic.”

For more details, please see the complete Emergency Order linked below:

DBPR Emergency Order 2020-10

Source: FRLA

Uniform Commercial Real Estate Receivership Act Is NOW THE LAW IN FLORIDA

The Uniform Commercial Real Estate Receivership Act (hereinafter “UCRERA”) became law July 1, 2020, marking a new era for Florida courts.

“Of course, this couldn’t have been anticipated, but with the economic fallout from COVID, and all the closures, the first thing that will be effected when people stop paying their rent is commercial real estate.”

Florida is one of only nine states that have adopted UCRERA since 2017.

UCRERA creates a process for state courts to appoint a receiver in disputes that arise over commercial real estate, typically a default. Once appointed by the court, a neutral receiver can manage an asset and prevent it from falling into disrepair.

Florida judges have the power to appoint receivers, but before UCRERA, there was no statute that addresses the process for commercial real estate disputes.

HB 783 and a companion, SB 660 by Sen. Lori Berman, D-Boynton Beach, passed both chambers unanimously.

For more questions regarding your Commercial Real Estate investment, call Gulati Law today!

Source: Florida Bar Article

Handling Your Hotel Loans Amid the Coronavirus Pandemic

With the sudden arrival of the Coronavirus Pandemic, the hospitality industry has been hit hard. Between the fear, anxiety and social isolation of consumers and the government ordered lockdowns and no travel orders, occupancy of many hotels is down to an alarming level. It is anticipated, by the American Hotel & Lodging Association that more than half of U.S. Hotels may close before the end of 2020.

How will Lender’s respond to the crisis?

Unfortunately, we cannot predict how the Banks are going to be responding to the sudden and severe financial distress of their Hotelier Borrowers. Unless your loan agreement, note, and mortgage specifically includes a force majeure clause or a similar clause including a viral pandemic (see Gulati Law Blog Coronavirus and How it Affects your Contracts) providing some type of cure, then the Lender has the right to default you and pursue all legal remedies including acceleration of the debt and foreclosure of the property.

What Can I do to Get Ahead of the Crisis?

It is important not to wait until you receive a notice of default to take action. Reaching out to your Lender in anticipation of default is vital to reaching a resolution. Gulati Law has trained attorneys who are able to reach out to your lender to discuss forbearance, deferment of payments, or other solutions that work for both you and your lender.

Is Refinancing an Option?

Even before the start of the pandemic, mortgage loan interest rates had been at an all time low. It is the hope of the industry that these will stay low or continue to fall leaving an opportunity for hotel owners to refinance their existing loans. It is of the utmost important to have a qualified attorney review any refinance documents prior to execution. Gulati law has been successful in negotiating refinances with the best terms for our clients and can close all loans in house.

In addition to the option of refinancing, there may be other options as Congress convened over the weekend to discuss legislation intended to provide stimulus for the American economy, called the CARES Act. Stay tuned for more updates on this proposed Act.

 Information Needed Prior to Reaching out to the Lender

  1. Actual Borrower Name, any Guarantor Names, Property Address and ID Number;
  2. History of good payments;
  3. Positive stories about the quality of your hotel and customer service;
  4. Occupancy issues and other current financial strains; and
  5. Possible financial payments you CAN make (if any) until the economy recovers.

Contact Gulati Law, P.L. for Assistance

We cannot reiterate enough that you should contact a qualified attorney to correspond with your lender on your behalf. Contact our office today to discuss retaining our services immediately (initial letters to your Lender may be complimentary on a case by case basis).

Remember to stay positive! We believe that once this crisis passes, we will be stronger than before!

Sources: Congress.gov, AHLA, AAHOA, Hospitality Mgmt

Coronavirus and How it Affects your Contracts!

As the number of Coronavirus (COVID-19) cases in the United States and Internationally continues to rise, many business owners are feeling the effects of quarantines, social distancing, travel bans, and more. In the short amount of time since the virus has emerged, businesses, especially in the hospitality and service industries, have experienced significant and devastating disruption.

What is a Force Majeure Clause?

A Force Majeure clause is a provision in a contract that allows for a party to suspend or terminate the performance of its obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible.

Examples of Force Majeure events include war, riots, fire, flood, hurricane, typhoon, earthquake, lightning, explosion, strikes, lockouts, slowdowns, prolonged shortage of energy supplies, and acts of state or governmental action prohibiting or impeding any party from performing its respective obligations.

Force majeure clauses must be clearly stated in the Contract and are interpreted strictly.

Is Coronavirus a Force Majeure Event?

The severe disruption to businesses around the world, resulting from the effects of Coronavirus (both physical and emotional), are clearly affecting business owner’s ability to function in the declining economy.  In approaching business operations and all the contracts that accompany the same, you may be wondering “can I get a break” and the Force Majeure clause may be the way to get just that. While unfortunately Coronavirus is not likely to be specifically stated in your clause, as it is a world event unanticipated in our lifetime, it can most certainly be argued that, depending on the business sector, the response to the Coronavirus (such as mandatory lockdowns, social distancing, and business closures) are in fact acts of government which are impeding a party from performing its respective obligations. It may not fully excuse non-performance or cancel existing contracts, but in some cases may defer or alter the terms.

What Does this Mean for Me?

For these reasons it is vital that business owners carefully review the language of their agreements, and not simply choose not to perform and expect to escape without consequences.  In entering this uncharted territory of business operations in a consumer panicked society, it is important the business leaders in the industry stay calm and solution oriented by doing the following:

Detailed Review – Review every contract you have that requires some form of fulfillment of goods or services, or some sort of financial action or commitment over the next 6 months.

Be Proactive – Reach out to your business contacts regarding the impact of the Coronavirus. It is likely that they too have felt the effects and discussing how to mitigation potential damages is valuable to all parties.

Modify your Clause – Whilst the world hopes that we never see another pandemic as tragic as Coronavirus, this should be a wakeup call for all contract participants to ensure that the Force Majeure clause is included in every contract and shall include the extreme scenarios.

Retain Legal Assistance – If you, your business, your real estate, or your pending construction is at risk, contact Gulati Law to discuss your options. As a firm with vast experience dealing with contract delays, performance challenges, payment concerns and force majeure clauses we have the skills to assist you through this difficult time and preserve your current relationships. Most importantly stay safe!

C-CORP vs. S-CORP

C-CORP vs. S-CORP

How to decide which structure and tax election is best for you?

Should you incorporate as a C-Corporation or an S-Corporation? To answer that question, you need a clear vision of your business goals. Operationally these entities are similar, yet they have significant differences when it comes to taxation and growth potential.

C-Corporations

C-Corporations, or “C-Corps,” are known as “default” corporations. These entities are the default designations given to corporations when businesses first file their “Articles of Incorporation,” a series of documents unique to each state.

Advantages. Some advantages include the ability to raise capital, the ability to be publicly traded, and the ability to issue multiple types of stock. C-Corps can raise a significant amount of capital because they have fewer restrictions when it comes to shareholders. These entities may have an unlimited number of shareholders and can seek financial backing globally. For these reasons, C-Corps are generally favored by larger corporations.

Disadvantages. However, there is a significant drawback when it comes to C-Corps, and that is “double taxation.” The “double taxation” of a C-Corp refers to the taxation upon the dividends paid out to shareholders individually and on the profit of the corporation itself. This drawback is typically one of the deciding factors in choosing which type of taxation is best for your entity.

S-Corporations

S-Corporations, or “S-Corps,” are different from C-Corporations in that you must explicitly elect to become an S-Corp. To be taxed as an S-Corp you must file Internal Revenue Service Form 2553, also known as “Election by a Small Business Corporation.”

Advantages.  The biggest advantage is lack of double taxation. Unlike C-Corps, an S-Corp’s profits are not taxed, only the income dispersed to the shareholders is taxed. This is the trade-off for S-Corps, in exchange for reduced size they can keep more of their profits, which is why this model is generally favored by small businesses. However, it should be noted that some states do actually “double tax” S-Corp. Those states include the District of Columbia, New Hampshire, Tennessee, and Texas.

Disadvantages. The disadvantages include the limit of a maximum of 100 shareholders, it may only issue one kind of stock, and it cannot be owned by a C-Corp or another S-Corp.

Limited Liability Company Election

Don’t be misled by the “corp” reference, an LLC can also to be taxed as either a C-Corp or S-Corp with the same advantages and disadvantages.

The question of whether to become an S-Corp or a C-Corp can be easily determined with the right guidance. Speaking with a knowledgeable Business Law firm such as Gulati Law, along with your accountant is the best way to determine which structure is best for the needs of your corporation and to set your business up for lasting success.

Gulati Law is Awarded 2019 Law Firm 500 Honoree

Gulati Law, P.L., named a 2019 Law Firm 500 Honoree for Fastest Growing Law Firms in the U.S.

Over the past 3-years, our team at Gulati Law, P.L., have been dedicated to providing excellence in customer service resulting in many happy clients. In doing so, our commitment and focus has taken us on a fabulous journey of growth – both personally and for our business.

We are pleased to announce that our law firm has been named a 2019 Law Firm 500 Honoree awarded to the Fastest Growing Law Firms in the US. Although this recognition is calculated on growth, it could not be possible without the continued operational excellence and commitment to client service exhibited by our team each and every day.

Thank you so much to our loyal clients, colleagues, family, and partners who have supported us as we have grown.

The Law Firm 500 Award is an honor for our firm to receive and a tribute to our team. Of course, we could not have achieved this truly remarkable accomplishment without our devoted team. Each in their own way has contributed to making this possible.

As we continue to grow, we encourage you to follow our progress and stay in touch!

 

About Gulati Law

Gulati Law has focused on serving their clients with more of a personal boutique style of representation. Gulati Law’s has a sophisticated mix of clients who venture in, among other things, informational technology, restaurants, media, financial services, manufacturing, retail, hospitality and lodging, and many other diverse businesses. Gulati Law’s team handles real estate closings, including commercial deals, 1031 Exchanges, and re-finances. They also assist clients with their contract preparation, small business formation’s, asset protection and set up.

For more information about our firm contact us at (407) 900-5054 or Office@GulatiLaw.com

 

Make sure your Hotel is ADA Compliant!

“Drive by” ADA lawsuits are once again on the rise. These professional plaintiffs and their unscrupulous lawyers know that most warranties on pool lifts installed in 2012-2013 have expired and that some pool lifts are in need of repair. Now it is more important than ever to be proactive with your ADA compliance.
hotel
These plaintiffs are hoping that you won’t take the time or spend the money to get the lifts repaired. Don’t be an easy target!  Get your pool lift inspected and repaired today. The money you spend now will save you even more money and the aggravation of a lawsuit in the future.  If your property is not ADA compliant, the question is not will I get sued, but when. We can refer you to vendors who provide ADA inspections, so don’t delay. Avoid a lawsuit now — make sure your pool lift and your entire property is ADA compliant.
Attorney Gulati is a proud Florida Ambassador of one of the largest organizations in the nation, Asian American Hotel Owners Association, representing thousands of hotel owners nationwide.
Complimentary Source: AAHOA

Why do I Need an Operating Agreement for my LLC?

While many states do not legally require your Limited Liability Company (hereinafter “LLC”) to have an operating agreement, it is not a wise idea to operate an LLC without one, even if you are the sole owner of your company. An operating agreement will help you protect your limited liability status, specify financial and management roles to avoid common misunderstandings, and in order to make sure your business is governed by your own rules, not just the default rules created by your state.

For instance, if an owner/manager contributes more assets than the others, you may want to give that person a greater share of the profits. Or you may want one or more of the owners to receive a salary for their participation and services. Most importantly, you will need to have tailored provisions on how to value an owner’s interest in the business if the owner dies or leaves the company. It will also get you to focus on issues you might not have thought through with your other business partners.

OA

A well-drafted Operating Agreement will provide the following, but not limited to:

  • Provide a framework for the settlement of disputes between members/managers;
  • Prevent a member from selling his/her interest to a third party without first offering it to existing members (rights of first refusal);
  • Provide a framework for the purchase of membership interests by the remaining members in the event a member dies or becomes legally incompetent;
  • Prevent a member from competing against the company both now when he is a member and for a number of years after leaving the company;
  • Require members to maintain the confidentiality of all customer names and other company records;
  • Prevent a member from impairing the goodwill of the company;
  • Prevent a member from soliciting customers away from the company. Provide for the indemnification of the members and officers of the company;

At Gulati Law we ensure that our clients are furnished with a tailored operating agreement drafted to suit the needs of your business and the laws of our state. Contact us today, for yours!

 

Americans with Disabilities Act Lawsuits Impacting Hotel Owners

It has come to our attention through our clients and other Hotel Owners/Hotel Management, that there has been a significant increase in the number of lawsuits against hoteliers for violations of the Americans with Disabilities Act (hereinafter “ADA”). A typical scenario is that a single plaintiff files over 50 lawsuits against hoteliers in a specific geographic region that has been inspected. In each of these cases, the plaintiff’s central issue focused on pool lift regulations. It is therefore extremely important for hoteliers to understand the ADA requirements and what you need to do to comply with the law. We have helped defend some of these lawsuits and had success helping our clients settle them, unfortunately this is something you cannot ignore.

“The United States Department of Justice has compiled a list of requirements to encourage compliance with pool lift regulations, a set of common questions and answers and checklist for lodging facilities. Knowing your rights and responsibilities is the best way for you to protect your businesses, your investments and your families from parties who are looking to exploit these issues to turn a quick profit at your expense.”

Please follow the links below to review these rules and ensure your hotel properties are compliant with the law:

ADA Pool Lift Requirements
ADA Checklist for New Lodging Facilities

As an Ambassador of the Florida Region of AAHOA and a Florida Hotel Attorney, Attorney Sarah Gulati, would love to hear all your concerns and issues regarding ADA lawsuits targeting pool lift compliance. 

hotel

Source: AAHOA bulletin~by Chip Rogers AAHOA President & CEO.

Broward County’s New Recording Procedures

journalsBroward County, Florida, has released a recent update on their new record keeping procedures. Effective January 1, 2015, Broward County will no longer assign Book and Page numbers to the documents being recorded. The new record keeping procedures will be done through an “Instrument Number” which is how the documents will be found if searched in their database. They do make an exception for large format documents. See Broward County’s Memo for further information.

Source: RTT Instrument Number Memo

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