Category Archives: Business Associate Agreemen

Business 101…Altisource and the Forced Lien Waiver

Organics Admin
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Organics Admin

COO at Aladay LLC
Organic Farmer, Property Preservation Specialist and Custom Glass & Wood Worker. Blogger extraordinaire...
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Forced Lien Waivers…Legal or Illegal???

Contact us today for your consultation.
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Yesterday I posted an article placing All Safe Home Watch Services on the Property Preservation Industry Watch List. This was done on the premise that in my humble opinion this FIELD VENDOR AGREEMENT Exhibit 2 – Subcontractor Acknowledgment Form Contractors/Labor is being forced to sign…or what is called a Forced Lien Waiver form. Now in some places this is illegal, as is here in Nevada, a contractor cannot be forced to waive lien rights prior to starting a job. In addition to the dozen or so phone calls asking if a Forced Lien Waiver was legal,several people also sent me a copy of this “agreement” asking if was actually legal. On the surface this Forced Lien Waiver appears harmless, Is IT????

So what about other states?  The representative from All Safe Home Watch Services  stated, “We only provide work orders in Florida on Altisource Properties.” A look at the map below and beings Altisource is located in Florida one would think that at least one of the companies in Florida would know their laws, as you cannot be forced to waive lien rights in Florida either. This is definitely a subject you’ll want research Forced Lien Waivers in you area. Yesterday I caught up with Scott Wolfe Jr. . Scott is an entrepreneur from New Orleans, LA. Founder of Zlien.com, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance.

Oh by the way…they also assist with the filing liens should they be necessary in collecting monies owed to you. Scott told me that on the surface there is no rule against indemnity agreements in general. Further, it is common for companies to require other companies to sign indemnity agreements.

I asked Scott if this FIELD VENDOR AGREEMENT Exhibit 2 – Subcontractor Acknowledgment or IMHO a Forced Lien Waiver Form that All Safe Home Watch Services was forcing Contractors to sign was legal…this is what he had to say…

When it comes to agreements like this in connection with any construction services (i.e. Subcontractors or suppliers providing labor or materials to a a construction improvement project), the indemnity agreements can get a bit sticky. This is not because indemnity agreements are not allowed, but instead, it’s because they cannot be used to circumvent ordinary lien rights.

I’ve written an article about “no lien clauses” that may be applicable, here:
http://www.zlien.com/articles/who-lets-you-waive-your-lien-rights-before-payment-state-by-state-chart-and-analysis/

Now make no mistake, IMHO “circumvent ordinary lien rights”, is exactly what is going on here. I’ve said it before and I’ll say it again. Anyone asking me to waive the only business avenue I have to collect the money you owe me SCREAMS I’m going to beat you one day. As to the legality of the issue, Scott went on to say;

It is usually not possible or legal for any party to require any other party to “waive” their lien rights within a contract prior to performing work. Despite this, many attempt to craft all sorts of legal protections within contracts to reach the same effect. That does not always make the legal protections completely meaningless (it can sometimes), but it does make them meaningless to the extent they seek to eliminate a party’s lien right.

When you cut through all the noise, it is almost always the case that a party who provides labor or materials to a construction improvement, if unpaid, can pursue payment against the property through a mechanics lien filing.

So now do you still think or not an employee? Better check yourself at the door. While you’re at it check your local Forced Lien Waivers Laws. Should you need assistance with a lien get a hold of Scott and tell him we say hello the folks over there will get you squared away. However, back to the subject matter at hand. Here is a quick look at a map on lien waivers.

Are Forced Lien Waivers Legal in your state?

no-lien-clause-map
TEASER…map from Zlien article on Lien Waivers and what states allow them.

The truth is, Altisource is the biggest Offender Member as they have been behind some of the biggest cases of defrauding Labor in the Property Preservation Industry, and every time they have been informed that one of the “distributers” of their work orders is not paying Labor, do they stop sending work orders to the criminal Offender Member to be processed??? NOOOOOOOOOOOO!!!!!!! Altisource continues to supply work orders instead of freezing the account in question making them an accomplice to the fraud perpetuated upon Labor. Now they want LABOR to sign a Forced Lien Waiver.

IMHO they are just as guilty as Eric Miller for not saying a word while collecting his ONE HUNDRED TWENTY THOUSAND DOLLAR salary from the monies that are put forth by the thieves called Offender Members. The fact that no one stops the continuous crime spree by Offender Members of the National Association of Mortgage Filed Services, or is it the National Association of Management For Stealing. Or should I be climbing all over Labor because they continue to facilitate Forced Lien Waivers by accepting work orders from NAMFS Members??? We stopped; our world didn’t come to an end. And believe me Twenty Thousand Dollars last a lot longer when you’re not spending $105.00 to get $100.

The problem I have with companies like All Safe Home Watch Services claiming National Coverage and only subbing locally is the fact they should be actually completing the services. So one has to ask are these people are they just plain LAZY? Obviously they do not understand the fine nuances of business in Florida or they would not be demanding Contractors sign this Forced Lien Waiver.

For the most part many of the “Subbers” (as I have termed them), that I have spoken to them they actually seem lackadaisical and indifferent to physical Labor, yes they seem too lazy to work. It’s much easier milking a broken system. A system that the Offender Members started to set up starting in 2009. It was around 2011 that many of the subbers started placing Forced Lien Waivers on work orders and in fact demanding that members of Labor sign and agree to their Forced Lien waivers.

2009, that is how long I have been saying there is something wrong in Gotham.  Foreclosurepedia has been saying the same and providing some deep information to back the statements up. For the most part all anyone really wanted was for Labor to be recognized. It should be noted here that many of the efforts of Foreclosurepedia lead to Altisource no wanting verification that the lazy subbers have actually paid Labor. In that respect you tip you hat to them. However, Offering thirty cents on the dollar while not forcing the thieves to pay their bills in unconscionable. Now they are asking their vendors to have Labor sign a Forced Lien Waiver. Something illegal in the very state they conduct business in.

When they, NAMFS, made a pseudo attempt to bring labor to the table, well again IMHO, it was a feeble attempt to buy time. There is a lesson for Labor here. NAMFS almost bankrupt one of their own members that spent upwards of $100.000.00 in sponsorship fees and membership dues. How was the company thanked for asking that Labor be acknowledged? Not one National or Mortgage House that was a member would work directly with the company. No Nationals would send the work orders from their offices on the east Coast all the way across the country and in turn they were then sent back to the East Coast. Lot of fricken’ money for a token nomination and no work.

Yes this is where the conspiracy comes in. You see Forced Lien Waivers have to be discussed, all of the activities going on between the membership of NAMFS under the watchful eye of Eric Miller have to be discussed, they have to be agreed upon. Altisource doesn’t just wake up and say Let’s send work from our office to this gal over here and we’ll have her send it back to our location…No this is talked about…discussed in great detail…conspired by the fire if you will…yes all these criminal violations and blatant flaunting of Federal RICO laws have to be  orchestrated…By an Executive Director…wonder if he’s gonna make a token 11th hour appearance at the next FAST event????

admin-7About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of the Construction Finance Journal, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.

Until Next Time folks

Happy gardening

PPI Red Flags…Too Many Puts You on the Watch List

Organics Admin
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Organics Admin

COO at Aladay LLC
Organic Farmer, Property Preservation Specialist and Custom Glass & Wood Worker. Blogger extraordinaire...
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Victor Aldrey
Victor Aldrey

For some time now I have been writing articles on what Red Flags small “Mom & Pop” should be aware of in the Property Preservation Industry, (PPI) by profiling companies that are basically insolvent with this clause in their contract…”you’ll be paid when we get paid”. This should be the First in many Red Flags for not just “Mom & Pop Shops” but anyone looking for new clients. The problem with this procedure today is the same as it was 8 years ago…no transparency. The ability to tell you “We haven’t been paid yet” and you cannot check for yourself to see if they are telling you the truth, well that just open a lot of doors that you can’t walk through. So in this edition of Red Flags to look for in the PPI, I’m going to pick on a company called Imagine Service Group (ISG). Before I get started allow me to point out that I have reviewed about 70 “Memos” from ISG and taking everything as a whole…if you’re completing services for ISG, you’re their employee.

Keep that in mind when should they suddenly decide to sever the working relationship with you. You can file unemployment on them.

Imagine Service Group Insolvent??? Simply put they cannot pay you unless they get paid for your work. The work you complete for them to skim a percentage of the diluted service fee because they sub out someones work orders that are subbed to them.

The following is a memo for ISG.

Date: 05/30/2012

To: ALL IMAGINE SERVICE GROUP, INC. VENDORS

Cc: Steven Lefler, President/CEO

From: Michael Bowlen II, Vice President

RE: PAYMENTS

This memo is being generated and distributed to all Imagine Service Group vendors to clarify/remind you of our payment process. Once you complete a work order you will receive payment as soon as we receive payment from our client for that specific work order. Refusal to complete previously issued work order due to the time frame of payment is completely unacceptable. Any deviation from this process could include, but is not limited to, a vendor write-up, reduction in work load or termination of contract with Imagine. If you have any questions/concerns in regards to the contents of this memo, please contact me at your earliest convenience. Your cooperation and adherence to this matter is greatly appreciated by our staff here at Imagine Service Group, Inc. Thank you for your continued support out in the field!!

 

Cordially,

Michael Bowlen II

Vice President, ext. 104

michaelb@imaginefl.com

Sorry Micheal but this is the biggest red flag in the industry….We’ll pay you when we get paid. It is the first Red Flag on insolvency. In addition you have a very insecure employee base if you have to place this in your contract…

… . The CONTRACTOR agrees not to hire any current or former employee of Imagine Service Group, Inc., without the expressed written consent of the President of Imagine Service Group, Inc. If the contractor elects to violate the terms of this agreement, the CONTRACTOR hereby agrees to pay Imagine Service Group, Inc. the sum of $100,000.00 in compensation for the training and the confidential and proprietary information that was provided to the current or former employee during the course of their employment or contract with Imagine Service Group, Inc….

I’m not even sure if that is a valid clause. Second of the Red Flags folks as this not only demonstrates some internal instability but…IMHO show poor upper-management skills. If one of their employees quits them and stumbles into your business you have to tell the person no I won’t hire you no matter how qualified you are??? I think not. Pretty sure under the right circumstances a judge would declare the clause “voidable”.

The Third of the Red Flags, their insurance requirements;

“Care/Custody/Control coverage in the amount of $50,000”.

“Personal injury/Advertising injury protection”.

In addition they demand to be “Additionally Insured” and “Certificate Holder” Something our agent will not allow. Our company will allow the Certificate Holder, to show proof of insurance but will not insure another company. To quote our agent…“Let them buy their own insurance”..In addition ISG has to approve your insurance carrier??? NOT!!!!

Excuse me but the last time I checked it is MY business that requires ME to protect our company with insurance for OUR work loads not someone else’s.

DISCLOSURE….Fourth of the Red Flags1

  1. In the event the CONTRACTOR breaches this Agreement or if such breach is shown to be an imminent possibility, the COMPANY shall be entitled to all legal and equitable remedies afforded to it by law as a result thereof, and may, in addition to any and all forms of relief, recover from the CONTRACTOR all costs and reasonable attorneys fees to the extent it prevails in any such proceeding.

  2. Except as permitted hereunder the CONTRACTOR shall make no press release or other disclosure of any kind regarding this Agreement, any discussions or negotiations relating thereto, or the Information without the prior written consent of the COMPANY.

Here is the caveat with disclosure clauses, nine times out ten times they are “severable” .

However, in the PPI many Contractorsdo not understand that should a company do like CWIS did and not pay their “Emplactors” they void their own contract. Keep that in mind when a company for whatever reason does pay according to the agreed upon term of the contract. One cannot just send a memo stating you will not be paid for 60 days while we investigate blah blah blah…Pay schedules are part of the negotiation process. In addition, these clauses above only protect ISG.  A contract is a mutuality of agreement, So in the event “The Company” does not stand behind their contract terms or violates one of them…

Next up and the Fifth of the Red Flags, is the Background Checks. I’m not going to beat this illegal process up any more the horse has been dead for over a year now. PAY ATTENTION…THIS PROCEDURE MAKES YOU ISG’s EMPLOYEE. Don’t take my word for it this is what the IRS says….

Behavioral control refers to facts that show whether there is a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done – as long as the employer has the right to direct and control the work.

The behavioral control factors fall into the categories of:

  • Type of instructions given
  • Degree of instruction
  • Evaluation systems
  • Training

Types of Instructions Given

An employee is generally subject to the business’s instructions about when, where, and how to work. All of the following are examples of types of instructions about how to do work.

  • When and where to do the work.

  • What tools or equipment to use.

  • What workers to hire or to assist with the work.

  • Where to purchase supplies and services.

  • What work must be performed by a specified individual.

  • What order or sequence to follow when performing the work.

Pual Williams has documented how AGS has forged documents on record and the fact that NAMFS controls the background fees which is illegal for a Non-Profit organization to do.

As I stated many years ago in agreement with Foreclosurepedia on this issue, The CFPB states the people in control of money are required to have Background checks not the guy scrubbing the commode.

And this is an ILLEGAL portion of the contract:

You also agree that we may, at our complete and sole discretion, offset or reduce any monies owed to you by Claims. You, and anyone working on your behalf, agree not to levy any liens against any property for which work has been performed on behalf of Imagine Service Group, Inc. If a lien is levied against any property by you or one of your subcontractors you will be held liable to pay a penalty up to twenty-five hundred dollars for each lien filed. You also agree that we may, at our complete and sole discretion, offset or reduce any monies owed to you by Claims. If any work is late, client may cut your invoice by a percentage or cancel the work order and/or not pay for the work completed as well as possible charge-back to get the work completed by another vendor.

#1 They MAY????  The Sixth of the Red Flags

#2 YOU CANNOT BE FORCED TO WAIVER LIEN RIGHTS…VIODABLE the seventh of the Red Flags…

#3 let me see if I understand the eighth of the Red Flags, You do the work and for whatever reason you can’t get to the office and process the invoice and now you’re not being paid and you will be back charged for someone else to complete the work you just completed????? ILLEGAL. You cannot be back charged when you have not been paid for a service. Ask Five Brothers how fast I filed a lien on their property when they pulled that crap with us.

The ninth of the Red Flags….I must submit in writing to Imagine, asking to have the following counties removed from my coverage area….you need their permission on what your coverage area is????

This is what makes this section voidable or at the very least “severable”

I must also give Imagine two weeks to continue servicing the dropped area so that the client will have time to get a new vendor established in that area. Failure to comply with a two week notice/coverage will result in a two hundred and fifty dollar fine for each county being dropped. The obligations in this section shall survive any termination of this Agreement.

Again this is illegal folks…Fines are what happens in court. Not sure when this company became an All Inclusive Judiciary body.

So we have a total of Nine Red Flags that involve several illegalities in business, violations of the IRS’s Independent Contractor rules.

Now in my humble opinion everything about ISG’s contract screams RUN FOREST RUN!!!!!!!!!! I have no doubt that these are very nice people running this company but the reality of the first of the Red flags, ISG is depending on being paid for YOUR completed services to pay you. Remember that ISG has no financial liabilitiess, you do as you pay to complete services that they will be paid for. This is a procedure that screams STUPIDITY for agreeing to it.

Does this company have a surety bond in case something goes belly up and you cannot be paid? Have THEIR employees been vetted via AGS or any other form of background check as the CFPD states??? After all you’ve just seen several clauses that control your money.

In closing, this company has way too many Red Flags to even consider some sort of business agreement. The fact that every order mill company in the PPI demands you agree to THEIR contract eliminates a very integral part of negotiations, and there is no “Mutuality of Agreement” to ISG’s contract or any other order mill in the PPI.

So without  further ado…this week’s addition the PPI Watch List is Imagine Services Group.

No Matter Where You Are...We'll be Watching
No Matter Where You Are…We’ll be Watching

 

 

 

 

 

 

 

 

 

Written By; Aaron Aveiro

Pgotographs Victor Aldrey & Google Images

Opinions expressed do not reflect those of Alladay LLC Ownership