Miami Lawyer Blog

A business leasing commercial property must be careful in agreeing to and signing a lease. Beyond the dollars and cents of the agreement and the location and layout of the premises, a business leasing real estate (a "lessee" or "tenant") must consider how to protect itself before, during and after the term of the lease.

This overview addresses these issues directly, but is not an all-inclusive summary with respect to important issues facing a commercial tenant. Leasing and contract preparation requires expertise--from the lessee, from outside consultants and preferably from an experienced real estate attorney. While the author represents commercial landlords and tenants, and has substantial legal experience in real estate and leasing matters, this article should not be construed as formal specific legal advice to the reader, nor should the reader consider the author to be his/her attorney solely on the grounds of having read this article. Every tenant, every owner and every lease is unique and advice for particular circumstances really does require individual review and consideration.

Legal disclaimers aside, a lessee who wants to adequately plan for the future while protecting themselves from potential liability, unwarranted responsibilities and unnecessary legal fees should consider the issues detailed below with respect to the following five lease provisions, which commonly should be a central focus of any commercial tenant.

1. Use Limitations, Exclusive Use Provisions and Maintenance Obligations
Overview

While the intended use of the property has undoubtedly been considered well in advance of the signing of the lease agreement, it is essential that a tenant negotiate sufficiently broad limitations and inclusive language with respect to any use limitations on the premises. Due to assumptions, prior informal conversations and failure to consider potential ramifications, a tenant may overlook this important portion of any lease. Additionally, a tenant must be aware of neighboring locations within the same shopping center or similar environment which would directly compete with the tenant's business. When possible, a provision should be included barring other similar businesses that would compete with the tenant. Finally, a tenant must demand clearly defined maintenance and repair obligations.

The following considerations are recommended:

Broadly define the permitted use of the premises. The lease should broadly state what the property can be used for (ex: retail clothing and apparel store, fast-food restaurant, general non-retail office space). Ideally, the lease would allow for "any lawful use" but a landlord may demand a more narrow limitation. Regardless of oral understandings, prior use or anticipated current use, the lease should provide some detail on allowed use of the premises. A tenant must consider possible changes of modifications in their business and be sure to account for such.

Negotiate the Obligations that You Undertake. A tenant should be sure that maintenance and repair obligations are clearly defined in the lease. The agreement should clearly detail who is responsible for regular maintenance, small repairs, major repairs and any needed improvements. Typically, a tenant will be responsible for daily maintenance and potentially some small repairs, but all larger or less frequent matters should be the responsibility of the landlord.

Exclusive Use Provisions. If a tenant is moving into a large shopping center, retail facility or similar premises, care should be taken to evaluate potential competition which can be limited or eliminated with careful planning. An 'exclusive use' limitation will bind the landlord to not allow any uses on the property that directly compete with the use or business of the tenant. For example, a jewelry store that leases space in a retail shopping center can negotiate a provision that precludes the landlord from leasing out space to any other jewelry store. Exclusive use provisions are only relevant and effective where one landlord owns a large shopping center or similar facility.

2. Options to Extend the Term of the Lease

Overview

While a tenant must be careful to commit to an overly extensive term to the lease (i.e. too long), it also has an interest in securing its location and preventing an unwanted move of its business. An ideal lease term would be relatively short (2-5 years) with multiple options to extend the lease. Such an arrangement allows a tenant maximum flexibility to expand to new space if needed or to remain at the leased location for a longer period of time. The following matters should be squarely addressed in any lease extension provisions:

No Changes in Any Lease Terms. Any extension of the lease should not change any non-monetary obligations. The lease should continue on precisely the same terms, except with respect to rent and similar payments.

Applicable Rental Increase. A lease that includes options to extend the term of the lease should clearly state the amount of the rent to be charged during any extended period. Increases between rental terms should not typically exceed 5%, but cannot likely be expected to increase by an increment of any less than 2%. More complicated formulas are sometimes uses but run the risk of potential disputes or unclear definitions.

Automatic Extension or Notice to Landlord. The lease should be clear in what it takes to extend the lease. Extensions may occur 'automatically' unless the tenant provides notice to landlord of its intention to not exercise the option. Alternatively, certain defined 'notice' may be required of tenant in order to extend the lease, which if not timely provided will result in the natural termination of the lease.

Updates or Redecoration of the Premises. In connection with extended lease terms, a tenant should be sure to include a periodic obligation of the landlord to update the property and provide reasonable redecoration or renovation if needed. This type of obligation might be expected to exist every ten years.

3. Non-Rent Financial Obligations

Overview

Most lease agreements include financial obligations of the tenant in addition to simple rent payments. These may include shared utilities, property taxes, common area maintenance (CAM) expenses, insurance premiums and a variety of other case-specific fees and expenses. A tenant must be sure to adhere to the following guidelines with respect to all such financial obligations:

Clarity, Clarity, Clarity: The language providing any financial obligations of the tenant must be exceedingly clear. Nothing should be left to assumption or later negotiation.
Demand Documentation: All expenses that the tenant is required to pay should be contingent upon landlord providing adequate documentation. For taxes this would include a copy of the tax bill, for utilities this would include a copy of the utility bill, for common area maintenance this would include a detailed report of incurred expenses, etc.

Clarify the Result of Non-Payment: A lease should be clear on the result of a missed payment. A tenant will prefer for any such missed payment to amount to a non-material breach of the lease. Furthermore, the lease should be clear as to the result of non-payment due to a dispute of the amount of validity of the expense. In this regard, a tenant will want to provide some right to challenge any errant or inaccurate expenses/fees.

4. Assignment and Subletting

Overview

While the initial term of the lease typically represents the anticipated needs of a commercial tenant, most business owners understand the need for flexibility. In order to avoid the unwanted position of being 'stuck' in a lease, a careful tenant will be sure to reserve and retain its ability to assign its interest in the lease or sublease the premises. Landlords often want to limit or prohibit subleasing and assignment, so this represents a key area of negotiation. A well-advised tenant will be sure to include the following provisions with respect to assignment and subleasing:

A General Right to Assign and/or Sublease. Clear and concise language should be used to grant the tenant the right to assign or sublease the premises in its sole discretion.

Limit Landlord Discretion. If a landlord requires its consent to assign/sub-lease, this language should be included which requires the landlord to use 'reasonable' discretion.

Limit Tenant Liability. In the event of an assignment or sublease, a tenant must protect its exposure to potential liability. The assignment/sublease provisions of the lease should clearly define the limits of a tenant's liability in the event that a new tenant is taking over the lease.

5. Sale of the Property During the Lease Term

Overview

Most tenants are aware of the possibility that the owner of the property will sell the property. A tenant must be sure to secure its right to lease and use the property in the event of a sale of the property. Similarly, a landlord will want to bind the tenant to its obligations in the event of a sale of the property. A landlord will additionally want to secure related rights and assurances in connection with any sale of the property. The following represents an overview of several key concepts:

Termination of Landlord's Liability: A landlord will want to terminate its lease obligations in the event that they sell the property. A tenant should be comfortable with this language and it represents a reasonable request by landlord.

Subordination and Attornment: A landlord will often include language in a lease requiring a tenant to sign a 'subordination and attornment' agreement in the event of a sale of the property. Such an agreement binds a tenant to the new owner. This provision exists solely to benefit the owner/landlord (as well and the new buyer/owner). While its existence is not entirely objectionable to a tenant, it should be understood that agreeing to continue the lease with a new landlord carries with it some potentially substantial risk.

Estoppel Certificate: A landlord will desire a tenant to execute an 'estoppel certificate' in anticipation of a sale of the property. An obligation to execute such a certificate is often included in the lease. An estoppels certificate certifies that a lease is in place, details some its terms and certifies that there has not been a breach by the landlord. The need for such a document is understandable, but a tenant should be careful to assure that only reasonable information will be requested and that a sufficient timeframe will be granted.

Transfer of Deposit: A landlord will often want to transfer any tenant security deposits to the new owner. While this transfer does not pose any problems, a tenant should be sure that the lease clearly addresses this issue and relieves the tenant of any obligations to provide a renewed security deposit.

Right of First Refusal: In some instances, a tenant may want to negotiation a right of first refusal, to purchase the property. A right of first refusal gives the tenant the right to purchase the property on the same terms as received by the landlord in a bona fide offer which they are considering accepting.

Aaron Resnick, Esq. practices in the areas of business law and real estate law. Mr. Resnick represents business as tenants in lease transactions as well as landlords and real estate investors.

This article is for informational purposes only and should not be construed as legal advice with respect to any particular lease, circumstance, tenant or owner.

Aaron Resnick, Esq. is one of the hosts for this Friday night's (November 2, 2012) Beats After Sunset @ the Bass. Attendees will enjoy the following exhibitions on view:

* the Launch of tc: temporary contemporary

*UNNATURAL

*Egyptian Gallery

There will be beats by djs: catorce leches, gnarley calamarley, hundreds & los manos aqui, courtesy cocktails (21+) | mixologist and a beats after party at chalk ping pong & billards lounge: beats guests get one free drink at chalk and free ping pong from 11pm - 12am!

The Bass Museum of Art is a renown art museum in Miami Beach, Florida featuring a collection of Antiquities, Renaissance, and Baroque art and also provides educational programs and teacher resources that aim to inspire a new generation of creative artists. Aaron Resnick is a member of the Silver Director's Circle and has sat on the executive committee for the Art Crowd. Currently, he also is on the host committee for the monthly Beats After Sunset @ the Bass.

The Law Offices of Aaron Resnick is one of the few South Florida firms with an Art Law division.

For more information, please contact:

melissa brown
public relations and marketing manager
bass museum of art
2100 collins avenue
miami beach, fl 33139
t 3056737530 x 1010
c 540.588.7238
mbrown@bassmuseum.org
www.bassmuseum.org

Does your company have a policy regarding social networking sites? If so, then watch out. Recently, in an order filed on October 4, 2012, Judge Ronald L. Buckwalter of the Eastern District of Pennsylvania granted summary judgment dismissing Linda Eagle's claims that she had been damaged by her former employer's theft of her LinkedIn account.

In the suit, Dr. Eagle alleges that while she worked as the President of a company she helped form in 1987 (Edcomm, Inc.), she created an account on LinkedIn--the world's largest networking site for professionals. To assist with her maintenance of her LinkedIn profile, Dr. Eagle gave her password to a fellow employee.

According to the order, Edcomm had a policy that "when the employee left the company, the company would effectively 'own' the LinkedIn account and could 'mine' the information and incoming traffic, so long as it did not steal that former employee's identity." (Order, p. 2.) Consequently, when Dr. Eagle attempted to access her LinkedIn account after being terminated by Edcomm, she was unable to do so--her password having been changed by the company, and her name and picture being replace by those of her successor. Dr. Eagle alleged that business contacts or potential customers trying to access her profile were presented with her experience and credentials, but not with her name or contact information. Dr. Eagle claimed upwards of $100,000 in potential losses due to the inability of potential customers to contact her through her LinkedIn profile.

Judge Buckwalter granted summary judgment for Edcomm, however, based primarily on the fact that Dr. Eagle provided no support for her damage claims and that most of her claims (loss of reputation, loss of business opportunities) are not technically compensable under the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030. After the grant of summary judgment on the CFAA and Lanham Act claims, Dr. Eagle only has state law claims on conversion remaining, which will continue to be heard by Judge Buckwalter under supplemental jurisdiction.

About the Law Offices of Aaron Resnick, P.A.

The Law Offices of Aaron Resnick, P.A. is a full service boutique law firm with offices in Miami, Boca Raton, Gainesville/Ocala, Jacksonville and New York City. For additional information, please go to www.thefirmmiami.com, or call 305.672.7495.

In 2005, Florida's legislature decided that commercial real estate brokers needed the protection of lien rights. To cure the problem, the legislature adopted a comprehensive statutory system by which commercial brokers could establish liens for both sales and rental commissions.

The commercial broker's lien attaches only to the net proceeds of sale, and not to the real property. That means that buyer acquires title free of lien. The lien arises only when the commission is earned. That generally means when a sales contract is signed.

The lien belongs only to the broker in the brokerage agreement. It can not be factored or sold by the broker, which means the broker can not assign the lien to a third party or sell it. It can not be waived before the commission is earned.

Commercial brokers are required to inform property owners at time a listing agreement is entered that Florida Statutes create lien rights for commissions earned by the broker that are not waivable before the commission is earned. If the broker does not provide a disclosure, the broker can not enforce the lien under the statute.

To enforce the lien, a broker must provide a commission notice to the owner and closing agent. The notice must be sworn and signed before a notary public, and must include name of the owner, legal description of the property, name, mailing address, telephone number and license number of the broker, and effective date of the brokerage agreement. The notice must also include a statement that the statute requires the owner to dispute the claimed commission not later than 5 days after closing or the owner will be deemed to have confirmed the commission and the closing agent is required to pay the commission from the owner's net proceeds.

A notice must be delivered to both owner and closing agent within 30 days after a commission is earned and at least one day before closing. If the broker does not know who the closing agent is at the time the commission is earned, the broker must deliver the commission to the closing agent within 3 days after the broker finds out the identity of the closing agent.

After the broker delivers the commission notice, the broker may record the notice in the public records maintained by the Clerk of Court in the county where the property is located. Recording date establishes its priority with respect to any other claims against the owner's net proceeds of sale. The broker must record a release within 7 days after the commission is paid.

The Statute imposes specific duties on the closing agent with respect to the commission. The closing agent must reserve from the owners net proceeds an amount equal to the commission claimed by the broker if the owner has provided a commission notice. If the net proceeds are insufficient to pay the full commission, all of the net proceeds must be held by the closing agent.

If the broker has recorded a commission notice with the Clerk for at least 60 days, the closing agent is charged with constructive notice and must comply with the withholding requirement. Accordingly, the statute allows the closing agent to require the owner to deliver a sworn statement as to existence of terms of any brokerage agreement and the name, address, and telephone number of any brokerage who might have a claim to a commission. If the closing agent obtains this sworn statement from an owner, the closing agent must reserve from the owner's net proceeds an amount equal to the total commission disclosed by the owner, even if the closing agent did not receive a commission notice from the broker. If the closing agent determines that the owner's net proceeds will be inadequate to pay the entire commission, he must notify both owner and broker of that fact within 3 days of making the determination.

If the owner's cash from closing is insufficient to pay the commission, but the owner is getting a purchase money note, the closing agent is to reserve and release the note only as the owner and broker agree. If the owner and broker do not agree within 5 days after closing, the closing agent is required to file a court action seeking an order of disposition of the note.

Upon request of the closing agent or the owner, any broker who has recorded a commission notice with the clerk must give the closing agent a release in recordable form. The closing agent is required to hold the release in escrow until payment of the commission. The closing agent may deduct from the broker's commission recording cost of the release.

If the owner disputes the commission notice, the statute provides an expedited procedure under which the owner can apply for a court order. Under the procedure, the broker is ordered by the judge to show why the commission notice should not be discharged. If the broker fails, the broker must pay the attorneys fees and costs of the owner and the closing agent and the court will enter an order releasing the broker's.

There is no comparable statute with respect to residential real estate. In fact, Florida Statutes prohibit a broker or sales associate form recording any document which would affect title or encumber real property for purpose of collecting a commission unless expressly permitted by contract with the owner or the broker has otherwise perfected his claim through court judgment.

The statutes give commercial brokers a powerful tool for collection of commissions. They also increase the importance of reading and understanding all terms of brokerage and commission agreements. In your case, prompt action will minimize any problems. I suggest you consult with an experienced attorney immediately.

About the Law Offices of Aaron Resnick, P.A.

The Law Offices of Aaron Resnick, P.A. is a full service boutique law firm with offices in Miami, Boca Raton, Gainesville/Ocala, Jacksonville and New York City. For additional information, please go to www.thefirmmiami.com, or call 305.672.7495.

The Miami Herald last Friday reported on a Facebook Internet Cancer Scam. A copy of the article can be found here. The article discusses Cindy Choi's long-running cancer deception/scam using Facebook and underscores the dangers of predators on the ubiquitous Facebook social networking site.

Although Choi broke hearts and sometimes apparently stalked some girls, she (acting as a he) never introduced herself physically. And no underage girls admitted to sexual activity over the phone or online.

Ultimately, prosecutors could not bring a case against Choi, who deleted her accounts and a blog before investigators could preserve them. If a user deletes a page, Facebook claims, the records are gone for good, although the company admits "some information may remain in backup copies or logs for up to 90 days."

No U.S. law exists that requires Internet providers to retain records for a certain time period. Across the nation, authorities have made many arrests of Facebook users who prey on young people or defraud the sympathetic.

Occasionally, the site provides police tips. In March, the site tipped off Florida Department of Law Enforcement agents that a 32-year-old Orlando man was seeking sex from a 13-year-old girl through the site. He was arrested.

In many more cases, perpetrators are caught after the fact.

In January 2010, a Key West man was arrested after authorities said he posed as a sorority sister on Facebook, blackmailing young women at Louisiana State University into posing nude.

Oscar Garcia, 30, was arrested in February after Miami police say he created a fake Facebook page to look at the page of a 11-year-old girl. He found a cell number on the girl's page, offering to send her photos of his penis, police said.

In one extreme case, a British registered sex offender, posing as a teen in 2009, murdered a 17-year-old girl he met on Facebook.

As for cancer fakes, a New Jersey woman was arrested last month after investigators say she posed as a cancer patient, duping supporters into giving her more than $15,000. In September, an Arizona woman was jailed for one year after she falsely claimed to have breast cancer -- using donations instead to pay for breast implants.

One recent Facebook scam, for instance, involved a fake page offering free gift cards. Together with a similar trick pulled just a few weeks earlier, more than 100,000 people fell for it.

Victims had to sign up for the supposed deal, giving their names, addresses, and other details, but the gift cards never arrived.

In another Facebook scam incident, victims were invited to complete a credit registration form, but downloading it installed malware that crashed their PCs -- but only after capturing all their confidential information.

A particularly sneaky recent Facebook scam masquerades as an antivirus service. Victims are invited to download a product called Facebook Antivirus, which then hijacks their list of "friends" and asks them to download the product too, then posts pictures on their pages.

Also, Facebook was targeted by a phishing agent inside an unsolicited email that tricked users into thinking they were resetting their usernames and passwords. They were taken to a bogus page where they had to key in their real username and passwords, information that was then used to hijack their accounts.

You'll find similar types of scams on other social networking sites.

Tips for Avoiding Facebook and Other Social Media Scams

1. Install Internet security software from one of the big-name providers and keep it up to date. Never download or install supposed security programs that purport to be linked to a specific site you use, like Facebook. Use a security program or a browser that includes an anti-phishing website checker.

2. If you follow a link that's supposed to take you to another page on the same site, check the address bar of your browser to make sure of where you really are. For example, if it's a genuine Facebook page, the address will begin with www.facebook.com.

3. When you receive emails, posts or messages, never assume they're from who they say they are -- even if they're friends.

Be especially wary if:

- They ask for money; don't send it without independently verifying the source.

- They invite you to download a program.

- They contain an attachment (most social networking site operators, including Facebook, don't send attachments).

4. Don't give your password to anyone. Make it a tough one to guess and change it frequently. See Get Tough With Computer Passwords and Secret Questions for more advice on passwords.

If, for any reason, you're asked to change your password, visit the social networking site by keying its address into your browser, not by clicking a link.

5. If you receive or hear of an offer, like a free gift card, it's often a scam. If you're not sure, go to the website of or contact the company that's supposedly offering the card and check it out with them.

Be aware of the risks of providing any personal details on a website. Only provide them to sites you're 100% sure are legit and who have a privacy policy that makes clear how those details may be used.

6. Know that if you post your picture and personal details about yourself, you are, at least to some degree, laying yourself open to a possible identity theft.

Many people do choose to do this, but you should, at least, know the risk.

Click here for the FBI's page on Internet scams.

About the Law Offices of Aaron Resnick, P.A.

The Law Offices of Aaron Resnick, P.A. is a full service boutique law firm with offices in Miami, Boca Raton, Gainesville/Ocala, Jacksonville and New York City. For additional information, please go to www.thefirmmiami.com, or call 305.672.7495.

FRAUD ALERT!!! Florida Real Estate Licensees - Agents and Brokers!!!

The Florida Department of Business and Professional Regulations- DBPR- is warning ALL Florida real estate licensees, that is agents and brokers that apparently there is an identity theft scam that is targeting real estate licensees. For more information on the warning, click here. An unsolicited email which appears to be from the Department warns of pending disciplinary action against licenses. The email directs the recipient to call a Department investigator at a toll-free number and provide personal identification information.

Of course, any email like this is meant to scare the pants off of you and throw you off guard so that your defensive mechanism steps up to take action to protect your livelihood from possibly being pushed to a stop. This is intentional.

The broker is then told in the email to call an 800 number, provide their personal information to a " department investigator" .
The Department has confirmed that the email communication is in no way connected with the Department or its regulatory authority. This email is NOT from DBPR, the investigator is a scammer trying to get your personal information so they can steal the caller's identity.

If you get an email like this DO NOT RESPOND TO THE EMAIL and DO NOT CALL THE NUMBER IN THE EMAIL!!!!

Instead, call the DBPR at 850-487-1395 or go to the website to check on the status of your license and if there are any actions being taken on your license.

The theft of identity is a crime and should be reported to the authorities and to your local law enforcement.

The Department is currently investigating this scam and will keep updates on their website.

About the Law Offices of Aaron Resnick, P.A.

The Law Offices of Aaron Resnick, P.A. is a full service boutique law firm with offices in Miami, Boca Raton, Gainesville/Ocala, Jacksonville and New York City. For additional information, please go to www.thefirmmiami.com, or call 305.672.7495.

This Friday, October 5, 2012, the Bass Museum of Art in partnership with the Humane Society of Greater Miami's Young Professionals group, PetNet, hosts in monthly Bass After Sunset. Attendees will enjoy the following exhibitions on view:

*UNNATURAL

*John Cage: Variations VII, 1966

*Bass Museum of Art | Selections from the Collection in conversation with works by janine antoni, michele oka doner, rimma gerlovina & valeriy gerlovin, ana mendieta, anne olofsson, manny prieres and peter voulkos

*Egyptian Gallery

There will be beats by dj josef, courtesy cocktails provided by GREY GOOSE vodka (21+) | mixologist and a beats after party at chalk ping pong & billards lounge: beats guests get one free drink at chalk and free ping pong from 11pm - 12am!

The Bass Museum of Art is a renown art museum in Miami Beach, Florida featuring a collection of Antiquities, Renaissance, and Baroque art and also provides educational programs and teacher resources that aim to inspire a new generation of creative artists. Aaron Resnick is a member of the Silver Director's Circle and has sat on the executive committee for the Art Crowd. Currently, he also is on the host committee for the monthly Beats After Sunset @ the Bass.

The Law Offices of Aaron Resnick is one of the few South Florida firms with an Art Law division.

"Sandra Gamarra: At the Same Time" through October 16 at the Bass Museum of Art 2100 Collins Avenue, Miami Beach Call 305-673-7530 or visit bassmuseum.org.

For many real estate professionals, commission disputes are simply part of the business. In fact, just about every licensee's career--whether spanning several years or several decades--is likely to include at least some experience with a dispute over commissions. Of course, the origin of the dispute may vary. Maybe it involved a seller whose property you had listed, who decided before the closing that he or she didn't want to pay the listing agreement's agreed-upon commission. Or the dispute was with a broker from another firm and involved the question of whether or not you were the procuring cause of a sale.

In this blog post we will discuss the different type of commission dispute--the one that arises between brokers and their sales associates -- and some of the common questions.

Will the Florida Real Estate Commission resolve a commission dispute that exists between a broker and his or her sales associate?

No. Generally speaking, FREC doesn't resolve commission disputes. Disputes over commissions (or any other agreed-upon compensation) between a broker/brokerage firm and its sales associates are civil matters. The ultimate recourse for sales associates looking to recover unpaid commissions is to file suit against the broker/brokerage firm.

If these disputes are civil matters, then what factors would be considered by a court in determining the outcome of the lawsuit?

Generally, the "employment" agreement that exists between the broker/brokerage firm and the sales associate will be the controlling factor in determining outcome. Many brokers require a sales associate to sign a written independent contractor agreement as a condition to being allowed to place his or her license with the broker.

These written agreements typically address compensation matters such as the amount of the sales associate's commission split, when a sales associate earns a commission, the time frame in which the broker/brokerage firm is obligated to pay the sales associate, the rights of the broker/brokerage firm to deduct from the sales associate's compensation amounts due the broker/brokerage firm, as well as many other matters relating to the broker-sales associate "employment" relationship.

In addition to a written independent contractor agreement, any existing office policy manual as well as the past business practice of the broker/brokerage company and any verbal agreement between the parties that can be shown to exist may play an important role in determining a sales associate's entitlement to, and the broker/brokerage firm's obligation to pay, the disputed compensation.

If a sales associate who obtains a judgment for disputed commissions is not paid by the broker pursuant to that civil judgment, would FREC then have cause to discipline the broker if it receives a complaint against the broker?

Yes. Section 475.25(1)(d), Florida Statutes, provides that FREC may discipline a licensee where a civil judgment for a share of a commission has been obtained against that licensee "and said judgment has not been satisfied in accordance with the terms of the judgment within a reasonable time. ..."

Some commission disputes between brokers who are real estate licensees are subject to mandatory arbitration at their local Board/Association of Realtors®. Would a commission dispute between a sales associate and his or her broker, where both parties are Realtors, also be subject to arbitration at the local Board/Association of Realtors®?

Such a dispute would be subject to local Board arbitration only if both parties (i.e., both the broker and the sales associate) voluntarily agree to the arbitration in writing and the local Board/Association of Realtors® finds the matter properly subject to arbitration.

The Law Offices of Aaron Resnick, P.A.'s group of attorneys are able to assist clients in every facet of Fashion Law. For more information contact attorney Aaron Resnick,
e the norm." According to Resnick, proper legal work may have prevented this dispute.

Sen. Charles Schumer earlier this month presented a modified version of legislation that would put more teeth into copyright protection for fashion creations. To read an article on this published in Women's Wear Daily, please click here.

On September 20, the Innovative Design Protection Act of 2012 (S. 3523) (IDPA) was reported favorably out of the Senate Judiciary Committee. IDPA is a successor to the Innovative Design Protection and Piracy Prevention Act of 2010 (S. 3728), a bill also introduced by Senator Charles Schumer (D-NY), which failed to advance. Now out of committee, the bill will be placed on the Senate's legislative calendar.

IDPA would provide three years of protection for fashion designs that "(i) are the result of a designer's own creative endeavor; and (ii) provide a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs for similar types of articles." IDPA would protect designs for clothing, including undergarments, outerwear, gloves, footwear, and headgear; handbags, purses, wallets, tote bags, and belts; and eyeglass frames.

The owner of a protected design would be able to enforce its rights only with respect to a "substantially identical" design that is "so similar in appearance as to be likely to be mistaken for the protected design, and contains only those differences in construction or design which are merely trivial."

Once notified, the alleged infringer can avoid liability by curing the infringement before an action is commenced. Even if a cure is not effected, the owner of the protected design would only be able to recover damages that accrue after the infringement action is commenced.

While the revised bill is designed to provide narrow protection for the creative efforts of designers who make innovative contributions to their fields, the bill has significant opposition from manufacturers and retailers. The objections of the bill's opponents include that the bill will make it more difficult and more costly to manufacture and sell fashionable clothing to average consumers.

The companion House bill (H.R. 2511, the Innovative Design Protection and Piracy Prevention Act) was referred to the House Subcommittee on Intellectual Property, Competition, and the Internet in the summer of 2011, but the Subcommittee has taken no action to advance the legislation. Both Houses of Congress have adjourned until after the November elections, so no further action can occur on either S. 3523 or H.R. 2511. However, Congress will return for a so-called "lame duck" session following the election. While both manufacturers and retailers have opposed this legislation in the past, lame-duck sessions can be unpredictable and consequently both bills bear tracking and consideration by those in the fashion industry who are concerned about how the bills may impact their businesses.

The Law Offices of Aaron Resnick, P.A. is one of the few Florida firms that has a practice group dedicated to Fashion Law. Fashion law is a specialized area of law that deals with intellectual property (copyright and trademark law, including brand licensing), domestic and international business transactions, textiles, merchandising, employment and labor concerns, and customs (import/export issues). Traditionally, most fashion lawyers work for established fashion and luxury goods companies in major urban commercial centers such as New York City, Paris, London and Milan. Some fashion lawyers work within the company, and others work outside the company for law firms.

Fashion attorneys participate in a variety of legal activities and negotiate deals for their clients. The clients may be large retail chains, haute couture labels, high-fashion models, or an unknown designers just starting out. If and when the situation arises, a fashion attorney will litigate for his or her clients in court.

The Law Offices of Aaron Resnick, P.A.'s group of attorneys are able to assist clients in every facet of Fashion Law.