Month: July 2020

When we are not helping clients with their business issues and insurance claims, the rest of our work involves construction issues and disputes.

Lately we have been contacted by numerous homeowners who have paid their contractors for home improvements only to learn that the contractor did not pay for materials. These clients now have liens on their property and the material suppliers are looking to the property owners to get paid.

Unfortunately, if these clients did not pay their contractor the “right” way, they’ll have to pay twice.

Home owners just do not know that there is a right way and a wrong way to pay contractors.

The “right” way protects the homeowner. The “wrong” way exposes the home owner to potentially paying twice.

How do you make payments the right way?

Know who is working on your job. Keep an eye out in the mail for something called a Notice to Owner (NTO). Subcontractors and material suppliers will be sending you a NTO to alert you they are working on your job. You also have the right to ask your contractor for a list of subcontractors and suppliers. Make this request in writing and via certified or registered mail.

Obtain Lien Releases every time you make a payment. Every time you make a payment to the contractor, make sure the contractor gives you a lien release. Also have the contractor obtain lien releases from every company or person who sent you a NTO.

Make joint payments if necessary.

If the contractor tells you he cannot pay his subcontractors or suppliers without receiving your money, then arrange to make your payment jointly to both the contractor and the sub or supplier to obtain the releases.

Most importantly, before making a final payment, obtain a contractor’s affidavit. Before making your final payment, tell your contractor you want a “Contractor’s Final Payment Affidavit”. Although you are entitled to it, a contractor will generally not give you one unless you ask for it. In the affidavit, the contractor has to tell you what subs or suppliers remain unpaid and by how much. That way, you can direct your payments properly and make sure you receive final lien releases from everyone involved.

Florida’s lien laws are very technical and the slightest mistake can cost homeowners big money. If you are going through a home improvement project, you should call us to make sure you are making payments the right way.

In the last ten days, the SBA revised the PPP loan forgiveness applications and updated the instructions. There is now a Form “3508EZ” available for some borrowers which greatly simplifies the loan forgiveness process:

*          PPP Forgiveness Application Form 3508EZ <PPP EZ application>

*          PPP Loan Forgiveness Application Instructions <PPP EZ application instructions>

How do you know if you can use this “EZ” form? If any of these three statements apply, then the EZ form is for you:

1. The Borrower is a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form.

2. The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period compared to the period between January 1, 2020 and March 31, 2020; AND The Borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period.

3. The Borrower did not reduce annual salary or hourly wages of any employee by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period compared to the period between January 1, 2020 and March 31, 2020; AND The Borrower was unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.

Here is what is clear: You can use the EZ form if you are self-employed, an independent contractor or sole proprietor with no employees.

What’s not so clear? The third statement. Never before was the concept of not “operating at the same level of business activity” included in the forgiveness process. Unfortunately there is no guidance yet as to how “business activity” will be measured or evaluated.

Do you have questions about the PPP loan forgiveness process? Or are you still in need of a PPP loan? Then call us today at (561) 361-8700 and schedule a complimentary consultation with one of our attorneys.