NEW ARIZONA LAW PERMITS COUNTIES TO ENACT INSPECTION PROGRAMS FOR RESIDENTIAL RENTAL PROPERTIES

September 12, 2012 Comments Off on NEW ARIZONA LAW PERMITS COUNTIES TO ENACT INSPECTION PROGRAMS FOR RESIDENTIAL RENTAL PROPERTIES

A recent change to the Arizona Landlord-Tenant Act permits counties to adopt “county-wide” residential rental property inspection programs. Before an inspection program can be adopted, however, the county must notify all owners of residential rental property and hold a public hearing.

Under Arizona Revised Statutes §§ 11-1701 to 1705 (added in 2012), a county may now create an inspection program that allows interior inspection of residential rental properties if an exterior inspection (from a public street or an adjacent property after a complaint) reveals certain problems. The problems that can support an interior inspection include conditions affecting health and safety of occupants, crime associated with the property, a history of building code violations, a reasonable probability of a building code violation, and a complaint regarding the property.

Before adopting an inspection program, however, a county must hold a public hearing. All owners of residential rental properties registered with the county assessor must be notified of the public hearing by mail. Counties must rely on the county assessor’s office for the names and addresses of the owners of registered rental properties in the county and cannot adopt a separate licensing or registration system. Use of the assessor’s office avoids unnecessary duplication because (under Arizona Revised Statutes § 33-1901) owners of residential rental properties must register with the county assessor. Click here for more information on registration with the Maricopa County Assessor’s Office.

As of this posting, I have NOT found any information suggesting that Maricopa County will seek to adopt a residential rental property inspection program. If anyone has learned otherwise, please post a comment. In the event Maricopa County does seek to enact an inspection program, registered owners of rental properties can expect to receive a notice in the mail.

To contact the author of this post and for East Valley business law services, please visit the website for the Law Office of James D. Griffith, P.L.L.C. and use one of the contact options provided.

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THE INDIAN ARTS AND CRAFTS ACT: Protecting Genuine Indian-Made Arts and Crafts

September 7, 2012 Comments Off on THE INDIAN ARTS AND CRAFTS ACT: Protecting Genuine Indian-Made Arts and Crafts

The Indian arts and crafts market is known for beautiful works that were handcrafted by Indians. Unfortunately, the market has been diluted by the sale of fake Indian art- and craftworks—fraud that has been described as “rampant.” If you’re an Indian artisan or a tribal official trying to protect genuine arts and crafts made by tribal members, the Indian Arts and Craft Act can help you limit unfair competition by non-Indians, stop fraudulent activity, and preserve your cultural heritage.

The Indian Arts and Crafts Act (“IACA”) was enacted in 1935 and was significantly strengthened by amendments in 1990, 2000, and 2010. Under the 1990 amendment, an Indian artisan or a tribe (for itself or on behalf of an artisan) may file a civil lawsuit alleging misrepresentation of an art- or craftwork as an authentic Indian-made product. This provides the Indian artisan or the tribe protection against the sale of non-genuine art- or craftworks if the seller fraudulently claims the item was made by the Indian artisan or the tribe. The amendment allows for restraining orders to stop the fraudulent claims and for the recovery of monetary damages and attorneys’ fees.

An Illinois-based retailer of authentic Indian arts and crafts, Native American Arts, Inc. (“NAA”), has used the civil action to great effect, filing at least eighty civil suits since 1998. NAA filed these suits to stop competing businesses from wrongfully claiming that their products were authentic Indian art- and craftworks. NAA’s attorney has stated that “the lawsuits have been highly successful [in] obtaining injunctions in almost every case” and that “the defendants have generally complied with the injunctions.” Nonetheless, civil suits can be difficult to pursue because of the time and expense involved.

NAA’s civil suits are not surprising considering the extent of misrepresentation in the Indian arts and crafts market. In a recent report, the U.S. Government Accountability Office (“GAO”) found that the Indian Arts and Crafts Board, a federal agency established under the IACA, received 649 complaints between 2006 and 2011. Of those complaints, 48.9% originated in western and southwestern states. California (60), Arizona (49), and New Mexico (45) accounted for 154 complaints (23.7% of the total). The GAO’s report is available at http://www.gao.gov/assets/320/317826.pdf.

As a “truth-in-marketing” law, the IACA protects Indian artisans and tribes from unfair competition by non-Indians, preserves Indian culture, and promotes tribal economic development. Indian artisans and tribes may want to consider using the IACA’s civil action if they discover that another person is fraudulently claiming that a non-genuine Indian art- or craftwork was made by an Indian or a tribal member. If you would like to learn more about the IACA, please refer to the Question-and-Answer discussion on my firm’s website or contact the Law Office of James D. Griffith, P.L.L.C. using one of the contact options available on the firm’s website.

BUSINESS FORMATIONS AND WHY BUSINESS OWNERS SHOULD CONSULT A LAWYER

September 5, 2012 Comments Off on BUSINESS FORMATIONS AND WHY BUSINESS OWNERS SHOULD CONSULT A LAWYER

Forming a corporation, a limited liability company, or a partnership can be exhilarating, frightening, and frustrating—all at the same time. But experienced businesspeople know that this anxiety can be reduced by consulting a lawyer early in the process because it can help avoid or minimize the problems related to running the business and working with partners.

You’re probably thinking, “Why should I talk to a lawyer—they’re expensive, I’m trying to start a business, and I need to control costs. Besides, the lawyer is just going to fill out a form and file it with the State of Arizona.”

First, consulting a lawyer is probably not as expensive as you think. Although big law firms will charge big law firm prices (some well over $1,000), many sole practitioners and small firms provide services to start-up businesses at very reasonable prices. And the relatively small up-front expense can avoid or minimize much more expensive problems as a later time. Pay a little now, or risk paying a lot later.

Second, a lawyer should be consulted early in the start-up process because the lawyer will do more than fill in a form. Lawyers are trained to understand how corporations, limited liability companies (LLCs), and partnerships structure the relationships between those involved in the business. A lawyer can help determine which type of business entity is appropriate based on the nature of the business venture. They also understand how corporations, LLCs, and partnerships differ in terms of the tax consequences and the potential for liability to third parties.

Third, consultation with a lawyer is valuable because the lawyer can draft articles and bylaws, an operating agreement, or a partnership agreement that fits the needs of clients. This is particularly important when two or more individuals want to work together as co-owners of a business. These documents structure the business relationship between the individuals and determine their rights and obligations if a business dispute develops between them or the business is found liable to a third party.

Finally, experienced businesspeople consult lawyers when starting a business because it establishes a relationship with a business lawyer. A lawyer will take the time to discuss the proposed business with the entrepreneurs involved and the best way to structure the relationship between them. Using a document preparer or simply completing a form supplied by the state does not address these issues. In addition, the entrepreneurs may need assistance determining whether the business is subject to regulation by the state or federal government. And it’s always possible that, at a later time, the owners of the business may need assistance with understanding and negotiating a contract or resolving a dispute with a third party.

When starting a business, think about consulting a lawyer. Doing so can avoid or minimize certain problems that can arise in running a business and working with partners—which will save money in the long run. If you’d like to learn more about starting a business, please contact the Law Office of James D. Griffith, P.L.L.C. using one of the contact options available on the firm’s website.

ARE YOU PROTECTING YOUR TRADE SECRETS?

September 4, 2012 Comments Off on ARE YOU PROTECTING YOUR TRADE SECRETS?

All businesses rely on proprietary information that is valuable specifically because it provides an economic advantage over competitors. Businesses in Arizona can protect that information under the Uniform Trade Secrets Act to prevent employees and/or competitors from, in effect, stealing it and using for financial gain or a competitive edge.

As a smart business person, you already know that you rely on valuable proprietary information in running your business. But you may not be protecting all of your proprietary trade secrets. Why? Because virtually any information can be protected as a trade secret if it is (1) valuable in a business or trade specifically because it is not generally known to others, and (2) kept secret by reasonable efforts. This broad definition can include almost any formula, pattern, technique, process, method, device, or compilation.

Need some concrete examples? The most common example is the secret formula for Coca-Cola®, but the examples are many and varied. Consider these:

•   Client lists

•   Spreadsheets used for calculating bids

•   Best seller list (prior to release)

•   All research and development, including manuals, experimental studies, and testing results (and even the knowledge in an employee’s head)

•   Mathematical or scientific formulas, such as the chemical formula for a medication

•   Recipes for many food products, such as cookies, soup, salad dressing

•   Formulas for consumer products, such as toothpaste or mouthwash

•   Formula for WD-40® (a silicon-based lubricant)

•   Processes used to manufacture products made with Teflon®

•   Techniques used on a lathe to manufacture replacement parts for airplanes

•   Financial formulas used to estimate return on investment or profit margin

•   Financial information and statements

•   Sale performance information

•   Market research

The important thing is that the information have value to the business specifically because it is not known to others (and the business took reasonable steps to protect the secrecy of the information). For more on trade secrets, see a discussion of Arizona’s Uniform Trade Secrets Act here.

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