Tag Archives: Sarasota

Insuring Against the Cost of Compliance: Ordinance and Law Coverage in Florida

Florida is the most expensive state in the country for home insurance, with annual premiums well over twice the national average. Although little can be done to change the high cost of insurance, you can take steps to ensure your premium dollars are well spent. Among other things, your insurance should include coverage for any increase in repair or construction costs as necessary to comply with the Florida Building Code.

The fact that your home may be relatively new or newly renovated does not eliminate the need for such coverage. The Florida Building Code, which governs the design, construction, and repair of buildings throughout the state, is updated every three years. The 7th Edition of the Florida Building Code will go into effect in just over a year, on or about December 31, 2020. As a result, previously completed construction may no longer be in compliance with the building code.

In the course of day to day life this lack of compliance poses no problem; the building code applies only to new construction, not existing buildings. If, however, an existing building is damaged, by fire, flood or some other catastrophic event, repairs are typically required to comply with the current building code. Moreover, if the damage is substantial, i.e., the cost of the repairs exceeds 50 percent of the building’s value, the entire building must be brought into compliance with the current building code.

The cost of compliance can be significant, especially for an older home. According to a recent Wall Street Journal article, builders estimate that compliance with the building code can add as much as 45 percent to the price of a home in some parts of Florida.

Traditionally insurance policies contained an Ordinance or Law Exclusion, pursuant to which the insurer is not responsible for additional costs incurred to comply with current building code laws and regulations. But in 1992, Hurricane Andrew provided a devastating illustration of the burden such exclusions can impose as many South Florida homeowners discovered the cost of rebuilding in compliance with the building code exceeded the coverage available under their insurance policies.

The Florida Legislature responded by enacting legislation intended to provide protection against the increased costs of code compliance. Signed into law in 1993, Section 627.7011 of the Florida Statutes requires insurers to offer law and ordinance coverage in the amount of 25 percent of dwelling coverage. In 2005, Section 627.7011 was amended to require insurers to offer law and ordinance coverage in the amount of 25 percent or 50 percent of dwelling coverage and include a description of law and ordinance coverage and flood insurance in 18-point bold type. According to the legislature, the required language is intended to encourage policyholders to purchase sufficient insurance coverage and discuss options such as law and ordinance and flood coverage with their agents.

As of 2019, many Florida insurers automatically include 25 percent law and ordinance coverage in their homeowner insurance policies while offering the policyholders the option of purchasing 50 percent law and ordinance coverage.  Other insurers, however, do not build law and ordinance coverage into their policies, choosing instead to offer policyholders the option of purchasing such coverage. Another approach, seen most often in policies intended to cover high-value properties, includes law and ordinance coverage in the amount of 50 percent, while offering a reduction in premium for policyholders selecting a lesser amount.

In an environment that frequently seems to favor the insurer over the insured, the availability of law and ordinance coverage is a rare boon to Florida property owners. Make sure you take advantage and verify that your property insurance includes such coverage in the appropriate amounts.

Bailey S. Lowther
(941) 552-2565
blowther@williamsparker.com

What Is the Right of Publicity (and Are You Violating It)?

Is there a reference to your company’s notable clients on your website, or do your company’s social media posts include the names or images of individuals? If so, you may be violating their right of publicity.

The right of publicity allows an individual to prevent the use of his or her identity for commercial purposes without permission. “Identity” can include the individual’s name, voice, image, or likeness. And “commercial purposes” under Florida law is an uncertain standard.

Florida’s right of publicity is relatively broad.  Some states only allow “celebrities” to bring a claim, and some states only allow living persons to bring a claim.  Florida gives all individuals, regardless of their celebrity status, the right to bring a lawsuit, and Florida law extends its statutory publicity right for 40 years after an individual’s death.

One area where right of publicity issues arise often is social media. If your social media posts include the names or images of individuals, it is important to consider whether their consent is required. Some Florida cases have held companies liable when using others’ likenesses in Facebook posts to promote their company or event. These recent cases have warned against the potential suggestion of any type of endorsement (without permission) in online posts by businesses.

The right of publicity is a little-known, but very powerful, right.  In today’s increasingly digital society, it is crucial to consider the right of publicity and whether consent may be needed before using another person’s name or likeness in connection with your business.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Do You Own Your Company’s Internet Presence? (The Answer May Surprise You.)

Websites can make or break a business, and catchy social media posts are becoming part of a company’s brand.  Consumers look to websites and social media for company information, making the management of these digital assets crucial to a business’s success. While most companies put much effort into creating and sustaining their online presence, many do not implement policies to ensure that they own those digital assets.

Domain Names
Domain names are not traditional items of property but should be safeguarded nonetheless as vital company assets. A domain name signifies the primary identifier and addresses of a business’s website. To “own” a domain name, you must purchase it from a domain name registrar like GoDaddy. Purchasing a domain name registers it in the database of the Internet Corporation for Assigned Names and Numbers. This database keeps track of all registered domain names purchased from authorized registrars.

In many cases, companies will have employees, contractors, or IT consultants register the domain name. Often, that person will enter his or her own name as the registrant. However, this results in that person, rather than the company, being listed as the owner of the domain. If the employee or contractor ever terminates their relationship with the company, this can lead to arguments over the ownership of the domain name and the website.  There have been several cases where unhappy employees attempted to use their control of a domain as leverage against a former employer.

Social Media Accounts
What happens when a company has a well-established social media account run by an employee? Who owns the account? Who owns its content? If the employee leaves the company, what rights does the company have over the information for the account? It is important that business owners know the answers to these questions before issues arise. Leading cases make it clear that the answer to these questions depend on the facts of the case and a variety of identifiable factors.

In one case in California, an employee had managed a Twitter account used to promote its employer’s services. Upon termination, the employee refused to turn over the login information for the account or remove the company name from the account. The company sued the employee for misappropriation of trade secrets. The case eventually settled, with the employee allowed to keep all rights over the social media account and its followers.

In another case, a company hired an employee to develop websites and social media accounts to promote the company’s products. The employee signed an agreement stipulating that they would return all confidential information to the employer if employment was ever terminated. Upon termination, the employee refused to turn over the login information for the accounts. The court held that the employee was required to turn over the login information.

Protecting Digital Assets
Disputes over digital assets can be costly and time-consuming. The cases discussed above demonstrate that the best course of action is to prevent these types of issues from arising in the first place. This can be done with a with a well-drafted agreement. Many business owners have employees and contractors sign agreements ensuring that intellectual property created by the employee or contractor will be owned by the business. In the modern age of the internet, these agreements should be updated to include provisions making clear that digital assets such as domain names and social media accounts, along with their contents, are also owned by the business.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Pink October: Be Careful That Giving Does Not Cause You Grief

For many years now, the arrival of October, which has been dubbed “Breast Cancer Awareness Month,” has been accompanied by an onslaught of pink products being sold to benefit various breast cancer charities. This practice of selling products or services to benefit a charity (often referred to as a “commercial co-venture”) has become increasingly popular among business owners—in addition to the philanthropic goal of donating to a worthy cause, the use of the charity’s name will also often result in an increase in sales for the company. Because these partnerships involve claims made to consumers regarding the recipient, and use, of the funds, many states have begun to regulate commercial co-ventures to ensure that accurate information is provided to consumers and that the money is ultimately used in the manner advertised.

Unfortunately, there is little uniformity among the regulations of the various states. For example, some states require a written contract with the charity specifying exactly how the donation will be calculated. In some cases, this contract must be filed with the state. Other requirements may include registration with the state and furnishing financial statements to the charity and/or the state. In each case, the regulations across the states differ with regard to whose responsibility (either the for-profit company or the non-profit company) it is to ensure that these requirements are satisfied. Adding to the complexity is the fact that many sales involve the internet and interstate commerce, so commercial co-venturers may unintentionally, and unknowingly, subject themselves to the regulations of multiple states.

Entering into a commercial co-venture is a noble, but complicated, endeavor. If you are considering entering into a commercial co-venture, you should take steps to ensure that you are complying with all applicable laws.  Some best practices include:

  • Entering into a written agreement that grants a license to use the charity’s name in connection with sales;
  • Including an honest disclaimer of the amount being donated (including any minimums or maximums) in advertisements and on the product;
  • Keeping a detailed accounting of sales during the promotion; and
  • Consulting with a lawyer to confirm all state-specific requirements are met.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Protecting Your Company’s Brand Through Trademarks

Protecting your company’s trademarks is important to grow your brand and prevent other companies from trading off your hard-earned goodwill. Below are a few things to keep in mind when creating and protecting trademarks.

Choosing a Trademark
There are a number of considerations when choosing your company’s trademark.  Among other things, you should:

  • Make sure that your mark will not infringe on an existing mark. Your trademark could infringe another trademark because it is spelled the same, looks the same, or even sounds the same.
  • Consider choosing a more “distinctive” mark to receive a higher level of protection. While marks that are descriptive of your goods or services may be desirable from a marketing perspective, they can be harder to protect as trademarks.
  • Make sure that the domain name is available for purchase. Even if the trademark has not been registered, the domain name may be in use by another company.

Registration
The best trademark protection comes from registering the mark. Where you register will depend on where the trademark is used.

  • If the trademark is used for goods sent across state lines or services that affect interstate commerce, a federally registered trademark would provide the most complete protection.
  • If the trademark will only be used within one state, state trademark registration may be a simpler alternative to consider.

Keep in mind that just because your company is registered with your state’s Secretary of State or because you have registered a fictitious name does not mean your trademark is automatically registered.

Protection
Once a trademark application has been filed and the mark has been registered, you must have a plan in place to police your brand to make sure that others are not infringing it. If someone is infringing your trademark, this could lead to a loss of business or could affect your company’s reputation and its ability to fully protect its trademark.

Evolution
As your company evolves, so must your trademarks. As you create new products and services or expand the area of your business, you may want to create new trademarks or file existing trademarks in new jurisdictions.

These are just a handful of items to keep in mind for creating and protecting your company’s trademarks. Other forms of intellectual property protection for your company may also be available through copyright and trade secret protection. For more information on using intellectual property law to protect your brand, please give us a call or email.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

New Overtime Rules for Employers to Adopt Before the New Year

Employers, the long wait is over. You finally have an answer regarding whether the federal overtime regulations are going to be changed. As discussed in previous blog posts Let’s Try this Again: Department of Labor Proposes Salary Increases for White-Collar Exemptions and Once More, With Feeling: Proposed Increase to Minimum Salary for Highly Compensated Employees, in March 2019, the U.S. Department of Labor abandoned its 2016 attempt to increase the salary threshold for exempt employees when it issued a much-anticipated proposed rule. On September 24, 2019, the DOL formally rescinded the 2016 rule and issued its new final overtime rule.

The new rule, taking effect on January 1, 2020, increases the earnings thresholds necessary to exempt executive, administrative, professional, and highly compensated employees from the Fair Labor Standard Act’s overtime pay requirements from the levels that had been set in 2004.  Specifically, the new final rule:

  • Increases the “standard salary level” from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
  • Raises the total annual compensation level for “highly compensated employees” from $100,000 to $107,432 per year; and
  • Revises the special salary levels for workers in U.S. territories and in the motion picture industry.

And, for the first time, the final rule allows employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level for executive, administrative, and professional employees (not highly compensated employees).

Employers take note, however, that the new final rule does not change the duties portions of the otherwise affected exemptions. For more information about the new final rule, you can go to the Department of Labor website.

As New Year’s Day will be here before we know it, this is a good time for employers to audit their pay practices to make sure that employees are properly classified, update timekeeping and payroll systems, and train reclassified employees on new processes before the new rule takes effect.

Gail E. Farb
gfarb@williamsparker.com
941-552-2557

This post originally appeared on The Williams Parker Labor & Employment Blog.

Filing Deadline Reminder – 2019 Florida Annual Uniform Business Reports

The deadline to file a 2019 Florida Annual Uniform Business Report for your corporation, limited liability company, limited partnership, or limited liability limited partnership to maintain its active status with the State of Florida is Wednesday, May 1, 2019. A non-negotiable late fee of $400 will be added to the state’s filing fee for entities that file their Florida Annual Report after this deadline. Failure to file a 2019 Florida Annual Report for an entity will result in the administrative dissolution or revocation of the entity in September 2019.

Even if a third party, like Cross Street Corporate Services, LLC, serves as your entity’s registered agent, it is your responsibility to file the annual report with the State of Florida. Annual reports must be electronically filed at the Florida Department of State’s website (sunbiz.org). If you need assistance, please contact us.

You may disregard this notice if your entity was formed in 2019 or has already filed a Florida Annual Report for 2019.

James-Allen McPheeters
jamcpheeters@williamsparker.com
(941) 329-6623

New IRS Guidance Makes Opportunity Zone Tax Break More Desirable

The Internal Revenue Service has issued updated regulations regarding the Opportunity Zone tax break created by the 2017 tax reform legislation. Investors have proven slow to seek Opportunity Zone investments because of ambiguities and a lack of details in The Tax Cuts & Jobs Act statute and the limited scope of initial guidance issues in October 2018. The new guidance is more sweeping and offers more definite answers to many of the open questions.

Opportunity Zone investments offer two tax benefits:

  • Deferral of capital gain recognition on other assets sold before an Opportunity Zone investment until earlier of (1) sale of the new investment or (2) December 31, 2026.
  • 100 percent elimination of capital gain on the Opportunity Zone investment itself, if held more than 10 years, or reduction of capital gain if held at least five, but not greater than 10 years.

Requirements exist regarding investment timing, legal structure, and investment characteristics. The program generally favors taxpayers with reliable access to emergency liquidity and a longer-term investment horizon.

View the IRS announcement which includes detailed guidance.

E. John Wagner, II
jwagner@williamsparker.com
941-536-2037

You’re Invited! Practical Planning for Your Legacy: Understanding Your IRA


We would be delighted if you could join us for our upcoming seminar for those seeking guidance with IRA planning. Williams Parker attorneys Colton F. Castro and Alyssa L. Acquaviva will provide the necessary knowledge to enable IRA account owners to make informed decisions about how to structure their estate plan and IRA beneficiary designations in a manner that best fits tax planning and personal goals.

Wednesday, March 27, 2019
8:30 – 10 a.m.
Art Ovation Hotel
1255 North Palm Avenue, Sarasota, FL 34236

TOPICS INCLUDE:

  • Wealth management strategies for IRA account owners
  • Minimum required distribution requirements and timing
  • Tax penalties and how to avoid them
  • Tax laws regarding the inheritance of IRAs, including rollovers and beneficiary designations
  • Charitable planning involving IRAs
  • Structuring an estate plan to maximize the benefits available to IRA account owners and their beneficiaries
Admission is complimentary and breakfast is provided; however, space is limited.

 

Please feel free to share this information with anyone who may be interested and please contact us with any questions. We hope to see you there!

The Final Section 199A Regulations Eliminate Anti-Abuse Rule from the Proposed Regulations

The proposed Section 199A regulations provide anti-abuse rules to limit the ability of taxpayers to separate a specified service trade or business (“SSTB”) from a non-SSTB. One of those rules provides that if a non-SSTB has both 50 percent or more common ownership with an SSTB and shared expenses with the SSTB, then the non-SSTB will be considered incidental to, and part of, the SSTB if the gross receipts of the non-SSTB represent 5 percent or less of the total combined gross receipts of the non-SSTB and SSTB.

The proposed regulations provide an example of this rule where a dermatologist provides medical services to patients and also sells skin care products to patients. The same employees and office space are used for the medical services and the sale of skin care products. The gross receipts of the skin care product sales do not exceed 5% of the combined gross receipts. Under the rule, the sale of the skin care products (which is not an SSTB) will be treated as incident to, and part of, the medical service SSTB. Therefore, the qualified business income, W-2 wages, and any unadjusted basis of qualified property attributable to the skin care products business will not be eligible for Section 199A purposes unless the dermatologist is under the taxable income thresholds specified in Section 199A.

Treasury received numerous comments, including from Williams Parker, critical of this rule for various reasons, including uncertainty as to the meaning of shared expenses and how to allocate gross receipts, and also the negative impact to owners of SSTB’s that create start-up businesses that are non-SSTBs. Thankfully, in response to these comments, Treasury eliminated this so-called “incidental rule” from the final Section 199A regulations.

View the final regulations.

This post is one in a series of posts on the 199A regulations. 

Michael J. Wilson
mwilson@williamsparker.com
941-536-2043