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Lender Deferment Agreements

Many lenders are providing borrowers with the opportunity to defer loan payments for a period, such as 90 days.  The clarity of these deferments or change in term agreements vary.  Lenders should clearly spell out the provisions so that the lender and borrower have no misunderstanding on what will happen. Although, not all inclusive, the agreement should: Identify the loan and the loan balance, Provide the exact period of deferment and when payments resume, The borrower should be clearly informed what happens to the deferred payments. Lenders are handling deferments differently. For example, if payments are added to the end of the loan and a larger last payment will be due, it should state that. If all the deferred payments will be due at the end of the deferment period, it should state that.  When payments recommence at the end of the deferment period how will they be applied. If the resumed payments will be applied first to interest, it should state that.  Clearly state if the length (term) of the loan is increasing. If the term of a mortgage loan is being extended, the lender may need to record a mortgage modification and get a title endorsement.    A lender will want a waiver of claims and defenses by the borrower, There should be an explanation of when an escrow shortage caused by the deferment will be due. For questions or more information, contact Sally Fox at sfox@esclaw.com or 850.433.3869.

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Three Things to Do After a Collision

No one plans to be in an automobile collision. It can be a frightening experience, especially if you or your loved ones are injured as a result. If you are involved in a collision, there are several things you should do to protect yourself. Failure to act may limit the benefits available to you under your policy.  Below are the three important things to do immediately. 1. Document the collision. If you are able to do so safely, document the details of the crash.  While you are waiting for the police to arrive, get the name and contact information for the other driver. Take photographs of the vehicles involved and the scene, including any debris on the ground. Get the names of any witnesses to the collision or anyone who stops to render aid. Make a note of any business in the area that may have surveillance of the street. 2. Get medical treatment if you are injured. If you are experiencing pain at the crash site, go to the emergency room for evaluation. Don’t be afraid to ask for an ambulance if you feel you need one. Even if you aren’t experiencing immediate pain and do not feel that you need to go to the emergency room, it is best to at least go to your doctor for evaluation. Under the current automobile insurance laws, you must seek medical treatment within 14 days of the collision. If you do not, your automobile insurance carrier does not have to pay for your medical treatment later even if it is determined that you have a serious injury.  It is important to follow your doctor’s advice after your initial evaluation and return for additional treatment as needed. 3. Report the collision to your insurance company and to the other driver’s company. Even if the crash is not your fault, you have a duty to report the collision to your own insurance company. Your company is responsible for paying 80% of your medical expenses (assuming you seek treatment within 14 days of the collision) and 60% of your wages for missed time from work. You should also report the collision to the other driver’s insurance company just in case the other driver did not. If the other driver is determined to be at fault for the collision, his or her insurance company is responsible for paying your out-of-pocket expenses not covered by your own company. You may be asked to give a recorded statement to the insurance companies. While you may be obligated to give a statement to your own insurance company, you are not required to give a recorded statement to the other driver’s company. Yes, a car crash can be frightening and a bit overwhelming. You do not have to figure it out on your own. If you need legal assistance contact, Emmanuel Sheppard & Condon at 850-444-6581. We are a full-service law firm with a team of lawyers with vast experience in handling claims like yours. Contact one of our experienced personal injury lawyers to help you through the maze of insurance companies and claims. 

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Employment Law: Employer Myths, Mistakes & Misunderstandings

EMPLOYMENT LAW:  EMPLOYER MYTHS, MISTAKES & MISUNDERSTANDINGS No. 2 – January 2019[This article is one of a series of articles intended to identify and discuss some of the mistake’s employers make and misunderstandings that employers have with respect to employment laws.  It is not intended, and should not be construed, as legal advice.]      by Brad Adams[1]  “If I have entered into an independent contractor agreement with a worker and issue the worker an IRS Form 1099, then the worker is an independent contractor under the law.”  A surprising number of employers wrongly assume that if they simply have an independent contractor agreement with a worker, the worker necessarily is an independent contractor and not an employee under the law. Not only is this assumption incorrect, but an employer who operates under this assumption may be doing so at significant risk. While an independent contractor agreement is important in defining the nature and parameters of the working relationship, it is not determinative of whether a worker is an independent contractor under the law. Instead, courts and federal and state administrative agencies consider a variety of factors, usually as part of a multi-factor test, in determining whether a worker is an independent contractor or an employee.  The test or factors applied may depend on the court or agency involved, the jurisdiction, and the law at issue. Further, it should be noted that these tests can vary markedly, even within jurisdictions. Consequently, it is not inconceivable that a worker could be deemed an independent contractor under one law and an employee under another law.  The variety of laws and tests can make determining whether a worker is truly an independent contractor a daunting undertaking. (It certainly would be much easier if independent contractor agreements were dispositive of a worker’s status as an independent contractor). While analysis of the various tests and factors that may be considered is beyond the scope of this article, following are some potential red flags that could suggest that your worker may not qualify as an independent contractor:    You control or retain the right to control how the worker performs the work The worker reports to a manager or supervisor who is your employee The worker works exclusively (or almost exclusively) for you The worker does not hold himself or herself out as providing services to the public (e.g., the worker does not have a website, advertise or have a business listing); You require the worker to personally perform his or her work for you You pay the worker by the hour rather than by the project or job You require the worker to attend company-provided training and/or meetings You require the worker to submit reports or account for how his or her time is spent You provide the worker with tools, equipment and/or materials used to perform the work The worker performs largely unskilled work You discipline the worker or reserve the right to do so You evaluate the worker’s performance; or The work performed by the worker is part of your core business. Failure to go beyond your independent contractor agreement and give broader consideration to the true nature of your company’s relationship with its workers can have significant legal consequences, in large part due to the variety of employment-related laws that are applicable if an employment relationship exists. For example, misclassification of a worker under the Fair Labor Standards Act (“FLSA”) can result in employer liability for back pay for failure to meet minimum wage and overtime requirements.  In addition, employers may be liable for an equal amount in liquidated damages as well as attorneys’ fees and costs. Civil penalties up to $1,000.00 per violation can also be imposed by the Department of Labor Wage and Hour Division for what are deemed willful violations of the FLSA.  And the FLSA is merely one law that can be triggered by worker misclassification. Damages, penalties, fees and/or costs based on the liability of worker misclassification also may be incurred under a variety of other laws such as the Internal Revenue Code, state wage and hour laws, state tax laws, state unemployment compensation, and workers’ compensation laws and the Immigration Control and Reform Act.  Further, misclassification of a worker as an independent contractor may result in the denial of certain statutory rights such as those afforded under the Family Medical Leave Act (and thereby result in employer liability).   In sum, worker misclassification can result in significant legal consequences under a variety of employment and other laws. Consequently, while independent contractor agreements are important, for some employers, they provide a false sense of security that may result in costly consequences. Independent contractor agreements should not be relied upon as determinative of whether a worker is properly classified as an independent contractor.  Instead, employers should carefully and thoroughly examine the true nature of their relationship with any worker who is engaged as an independent contractor and consider applicable laws with respect to how worker classification is determined. By doing so, employers can assess whether changes are needed either with respect to their classification of their workers or to their practices as they relate to certain workers.  [1] Brad Adams is an attorney in the Employment Law Group at Emmanuel, Sheppard & Condon. Mr. Adams has practiced in the area of employment law for the past 18 years and is admitted to practice law in Florida as well as Alabama and Georgia. Mr. Adams was previously a shareholder with Littler Mendelson, P.C., a national labor and employment law firm.      

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Hurricane Readiness

WHAT IS A HURRICANE? A hurricane is a tropical cyclone, which generally forms in the tropics and is accompanied by thunderstorms and a counterclockwise circulation of winds. Tropical cyclones are classified as follows: TROPICAL DEPRESSION An organized system of clouds and thunderstorms with a defined surface circulation and maximum sustained winds of 38 mph or less TROPICAL STORM An organized system of strong thunderstorms with a defined surface circulation and maximum sustained winds of 39-73 mph HURRICANE An intense tropical weather system of strong thunderstorms with a well-defined surface circulation and maximum sustained winds of 74 mph or higher HURRICANE SUPPLY KIT Water – at least 1 gallon daily per person for 3 to 7 days Food – at least enough for 3 to 7 days for each person non-perishable packaged or canned food/juices/ snack foods foods for infants or the elderly non-electric can opener cooking tools/fuel (propane, charcoal, kerosene) paper plates/plastic utensils Blankets/pillows, etc. Clothing – seasonal / rain gear/ sturdy shoes First aid kit /medicines/prescription drugs Special Items – for babies and the elderly Toiletries/hygiene items/moisture wipes Flashlight / batteries / candles Radio – battery operated (weather radio is recommended) Cash – banks and ATMs may be closed Walkie-talkies / hard line phone (powered by the phone line directly) Keys – house / car / safe deposit box / storage facility / etc. Toys, books, and games Important documents – in a waterproof container insurance, medical records, bank account numbers, Social Security card, etc. Tools – keep a set with you during the storm Vehicle fuel tanks filled/fill extra tanks for generator use Pet care items proper identification / immunization records / medications ample supply of food and water a carrier or cage muzzle and leash FAMILY DISASTER PLAN Discuss the type of hazards that could affect your family. Know your home’s vulnerability to storm surge, flooding, and wind. Locate a safe room or the safest area in your home for each hurricane hazard. In certain circumstances, the safest areas may not be your home but within your community. Determine escape routes from your home and places to meet (rally points); including a child’s school, a neighbor’s home or other public places. Have an out-of-state friend as a family contact, so all your family members have a single point of contact. Have at least 2 ways of contact; e-mail, phone, etc. Make a plan now for what to do with your pets if you need to evacuate. Post emergency telephone numbers by your phones and make sure your children know how and when to call 911. Check your insurance coverage – flood and wind damage may not be covered by homeowners insurance. Check your insurance limits of liability. Stock non-perishable emergency supplies within your HURRICANE SUPPLY KIT. Use a weather radio. Remember to stock replacement batteries. Take First Aid, CPR and disaster preparedness classes.

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Getting Your Affairs in Order

Now is the time to get your personal affairs in order.  This includes the following documents that are properly drafted and executed: 1.  Durable Power of Attorney (POA): in which you appoint someone to act on your behalf if you are unable to do so (This is during your life. A POA ends upon your death).2. Health Care Surrogate: in which you give someone authority to make health care decisions for you, if you are unable to do so.3. Living Will: in which you instruct whether you want your life artificially prolonged by administering food and hydration if you are so ill that your quality of life is severely compromised and diminished.4. Will: in which you state what you want done with your burial and your stuff upon your death, and who you want to handle your affairs after you die. All these documents should be witnessed and notarized. Do not wait to get these documents until you become too ill to communicate your wishes or your illness is such that it is impossible for witnesses and notary to see or access you so they can do their job.   Some other things to do: 1. Ask your bank to let you sign a Payable Upon Death card which gives who you designate access to your bank account only after you die, without having to have a probate.2. Verify with your life insurance company that you have named the beneficiaries you want.3. Verify with your retirement and investment advisors that you have named the beneficiaries you want. For more information, contact Sally Fox at sfox@esclaw.com or call 850.433-6581.

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The FAQS of Title Insurance for Homebuyers

What is title? Title is your right to own or use your property. Title also establishes any limitations on those rights.  What is a title search? A title search is an early step in the homebuying process to uncover issues that could limit your rights to the property. If a title issue is discovered, most often your title professional will take care of it without you even knowing. After the title search is complete, the title company can provide a title insurance policy.  What is title insurance? If you’re buying a home, title insurance is a policy that protects your investment and property rights. There are two different types of title insurance: an owner’s policy and a lender’s policy.  An owner’s policy is the best way to protect your property rights. Either the buyer or seller may pay for this policy. Ask your title professional how it’s handled in your area. A lender’s policy is usually required by the lender and only protects the lender’s financial interests. The buyer typically pays for this policy, but that varies depending on geography. Ask your title professional how it’s handled in your area. Why should I purchase owner’s title insurance? Owner’s title insurance protects your investment in your property from certain future legal claims regarding ownership of your property. For a one-time fee, you and your heirs* receive coverage for as long as you own your home. The owner’s policy also covers potential legal fees and court costs for settling claims covered by your policy.    What does owner’s title insurance cover? Sometimes undiscoverable defects can come up after the title search. Under an owner’s title insurance policy, you are protected against certain undiscovered errors in the title. Title issues include unknown: Outstanding mortgages and judgments, or a lien against the property because the seller has not paid his taxes Pending legal action against the property that could affect you Unknown heir of a previous owner who is claiming ownership of the property Unforeseeable title claims include: Forgery: making a false document     For example, the seller misrepresents the identity of the person who sold the property. Fraud: deception to achieve unfair gain     For example, someone steals your identity and either sells your house without your knowledge or consent, or takes out a second mortgage on the property and walks away with the money. Clerical error: inconsistent paperwork and historical records     For example, an unforeseeable discrepancy in the property or fence line can cause confusion in ownership rights. What does owner’s title insurance cost? The one-time payment for owner’s title insurance is low relative to the value of your home. A typical title insurance policy costs around 0.5% of the home’s purchase price. How long am I covered? Your owner’s insurance policy lasts for as long as you or your heirs* own your property. Your life will change over time, but your peace of mind never will.  What happens at closing? Closing is the final step in executing the homebuying transaction. It is the process that allows the transfer of ownership to occur. Upon completion of the closing process, you get the keys to your home!  Where can I get more information? The American Land Title Association helps educate homebuyers like you about title insurance so you can protect your property rights. Check out www.homeclosing101.org to learn more about title insurance and the home closing process. *This advertising offers a brief description of insurance coverages, products and services and is meant for informational purposes only. Actual coverages may vary by state, company or locality. You may not be eligible for all of the insurance products, coverages or services described in this advertising. For exact terms, conditions, exclusions, and limitations, please contact a title insurance company authorized to do business in your location.

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Florida Governor Extends, But Limits Moratorium on Foreclosures and Evictions

Gov. DeSantis extended the Florida moratorium on foreclosures and evictions again until Sept. 1, but gave some relief to lenders and landlords with obligations in default.  The Executive Order 20-180 clarifies for the Courts that this moratorium does not prevent proceeding as to commercial foreclosures and commercial evictions.  He indicates that as to single-family mortgagors or residential tenants, a lender and landlord can proceed with foreclosure or eviction, but stop short of the final action – meaning proceed through the foreclosure sale or judgment of eviction, but stop at the Writ of Possession.  This moratorium is only in place for single-family mortgagors and residential tenants “adversely affected by the COVID-19 emergency”. He defines “adversely affected by the COVID-19 emergency” as diminished wages, or business income or other monetary loss realized during the Florida State of Emergency directly impacting the ability of a single-family mortgagor to make mortgage payments. COVID-19 has adversely effected many, but there may be some single family mortgagors and tenants whose income has increased during COVID-19. For additional questions contact Sally B. Fox at sfox@esclaw.com or call 850.433-6581.

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Commercial Landlords – Practical Issues to Consider in Uncertain Times

With our communities in the midst of the current COVID-19 pandemic and related business closures, commercial landlords and tenants find themselves in uncertain and difficult times. Although commercial tenancies are not addressed in Governor Desantis’ April 2nd order suspending evictions for the next 45 days, the Florida Supreme Court has halted the issuance of writs of possession through April 17th. As practical matter during these challenging times, an eviction for non-payment of rent of an otherwise performing tenant may not be the commercial landlord’s best long-term option. Whatever rights a landlord chooses to exercise, it is especially important for commercial landlords to keep in mind some of the following: Tenant’s Use of the Leased Premises. For those landlords with tenants that are open and operating, does that tenant’s permitted use under its lease qualify it to remain open as an “essential service” under Governor Desantis’ safer-at-home order in effect through April 30th? If not, a tenant’s unlawful use of the leased premises could subject its landlord to potential liability. Payment of Rent. In the event a tenant communicates its intention to stop paying rent, it is important for a landlord to respond in writing should it wish to challenge that non-payment. Failure to promptly do so could expose the landlord to future waiver or estoppel arguments from its tenant when landlord later attempts to recover those rent payments. In the event the parties are able to reach an agreement regarding the payment of rent (for example, rent deferment or rent abatement), it is important the parties formally adopt a lease amendment reflecting their agreement, to set clear, enforceable expectations moving forward. Provision of Services. If a landlord has suspended provision of certain services required by it under the lease due to COVID-19, it’s important to clearly communicate those suspensions and the reasons for the same in writing to affected tenants. Failure to clearly communicate and justify any such suspension of service could expose a landlord to potential liability, including a tenant’s claim for excused non-performance under its lease. Communication with Tenant. As the basic examples above show, clear communication to tenants, including status of the leased premises (e.g. open or closed), expectations regarding payment of rent, and any suspension of landlord-provided services, is critical. Those communications should be documented and archived, to keep a clear record in the event a dispute arises in the future. Finally, it is important that the parties are communicating via the channels required by the notice provisions of the lease – if not possible in the midst of the current crises, a landlord should confirm and clarify alternate communication avenues in writing with its tenant.   Adam Cobb is a board-certified real estate attorney, available to help you through any commercial leasing or other real estate issues you may be facing. He can be reached at acobb@esclaw.com or 850.361.4865.

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Term Limits for Judges Makes No Sense

Unfortunately, our Legislature is considering a constitutional amendment that would shrink the pool of quality judges, reduce diversity on the bench and erode confidence in the court system. HJR 1, which has passed in the House, and SJR 482, pending in the Senate, would impose term limits on Supreme Court Justices and Appellate Court judges and shake the foundation of an impartial judiciary. The proposal subjects Florida to a risky experiment that marks a direct attack on the independence of the third branch of government. In other words, it makes no sense whatsoever.   No other state or the federal government imposes judicial term limits at the Supreme Court and Appellate levels, and voters in three states rejected the idea when it was placed on the ballot.  The reason is simple: Judges are not politicians. They don’t select the cases that come before them or create new laws. Their responsibility is to make fair and impartial decisions based on correct interpretations of the law, even if those decisions sometimes are unpopular. Term limits would create a revolving door of inexperienced judges ill-equipped to resolve the conflicts that touch the daily lives of Floridians and would inject politics into a judicial system that relies on its neutrality to function freely and fairly for the benefit of all citizens.  Judges must be held accountable when they violate the trust we place in them, but in Florida they already are. Judges who violate judicial canons are prosecuted by the Judicial Qualifications Commission and disciplined, including removal, by the Supreme Court. Florida’s Constitution also provides for impeachment of judges by the House of Representatives and trial by the Senate.   Judges also are accountable to the people of Florida through the process of merit selection and merit retention. Judicial Nominating Commissions, comprised of lawyers and non-lawyers, carefully recruit and evaluate judicial candidates, and the Governor appoints judges from the Commissions’ recommendations. Additionally, Florida Supreme Court Justices and Appeals Court Judges must appear on the ballot for retention in nonpartisan elections every six years. The fact that Florida voters have never rejected a jurist for retention since the first vote in 1978 testifies to the effectiveness of merit selection in choosing competent and fair jurists. We don’t need to reinvent the wheel and mandate that a fair and competent judge magically becomes unable and incapable to serve the people after 12 years.   The Florida Bar and business leaders oppose term limits for the judiciary.  One of our nation’s Founders, Alexander Hamilton, foresaw the difficulty of finding people with both the skill and the integrity to be good judges. In the Federalist Papers, he predicted that a temporary term of office would discourage potential judges and would “have a tendency to throw the administration of justice into hands less able, and less well qualified, to conduct it with utility and dignity.”  Fairness, experience, competence, and consistency form the foundation of an impartial judiciary as a co-equal branch of government. We must reject the proposed term limits and preserve a judiciary that is independent and free from political pressure. Alan Bookman, a lawyer with Emmanuel Sheppard & Condon, P.A. in Pensacola, is a former president of The Florida Bar and the Escambia/Santa Rosa Bar Association.

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Commercial Landlords – Responding to Tenant Requests for Relief due to COVID-19

The COVID-19 pandemic and resulting governmental intervention (such as social distancing mandates and Gov. Desantis’ Safer-at-Home Order which closes non-essential businesses through April 30th) have caused many businesses to close or significantly scale back operations, thus resulting in many not having the income stream necessary to meet their obligations, including the payment of rent and other lease related expenses.  Consequently, many distressed tenants have requested some form of relief or concessions from their landlords. The relief or concessions typically sought or negotiated include: Rent abatement, which essentially means rent forgiveness, for an agreed period of time. Rent deferment, which means delaying the payment of rent for an agreed period of time.  For example, the parties may agree on a deferral of rent for a period of 90 days and agree that the tenant is automatically charged with a default and a late payment fee if such deferred rent is not timely paid.    Rent amortization, which means recalculating the periodic rent over the lease term so the landlord is fully paid by the end of the term.  Amending the lease to allow terms more favorable to the distressed tenant, such as allowing for the assignment of the lease or the use of the premises for a purpose not affected by COVID-19.  Terminating the lease, which may or may not include a lease termination fee or deposit waiver. When confronted with a tenant request for relief, the landlord or its attorney should first examine the lease (the contract) as it is the guiding reference in determining the rights and obligations of the parties.  A lease examination will establish the baseline for negotiations and allow the landlord to be informed throughout the process.      In many instances, especially in light of the unprecedented COVID-19 pandemic, a lease amendment which addresses the tenant’s requests will be beneficial to both parties and allow for a prompt, definite and cost-effective resolution.  In considering a lease amendment, a landlord should: Consider requiring a confidentiality agreement at the outset to prohibit the tenant from disclosing the negotiations and terms to others (thereby avoiding a precedent for other requesting tenants). Review (again) the lease to determine which provisions may need to be modified, both to address the tenant’s requests and to protect the landlord’s interests. Review any mortgage or financing documents to determine whether they restrict lease amendments or landlord concessions (such as a covenant restricting less favorable rent terms or requiring a certain income to debt ratio).     Review both tenant and landlord insurance policies for applicable coverage, such as business interruption, civil authority, and loss of rental income coverage. Consider requiring the tenant to provide updated financials and cash flow projections to justify a lease amendment and establish the tenant’s ability to satisfy its obligations going forward. Consider requesting the tenant to seek all available governmental financial assistance (which may mitigate or avoid the need for the requested relief). Require any amendment to be in writing and signed by all parties and guarantors.  The written amendment should be specific and thorough to ensure enforcement and avoid later confusion.                                                                                                                    In return for providing relief, a landlord may seek certain concessions from the tenant.  These may include: Increased tenant financial reporting obligations; Additional remedies upon a tenant default; Additional security and/or guaranties; and Modifying or removing specific tenant rights such as purchase options, early termination rights, and rights to sublease or assign. Further, by accommodating a tenant, the landlord should consider seeking certain protections in the lease amendment.  These may include: Estoppel language confirming that the landlord is not in default; Indemnification of landlord for any liability related to COVID-19 and the use of the premises; A requirement that the parties assist each other in seeking applicable financial aid due to COVID-19; A requirement that the tenant comply with all CDC and other governmental guidelines in the occupancy and use of the premises; A requirement that the tenant pursue all potential insurance claims related to COVID-19 and fully cooperate with any claims pursued by the landlord; A waiver of all defenses of the tenant up through the date of the lease amendment; and A waiver of any and all COVID-19 related claims by the tenant. Faced with the unprecedented effect of COVID-19 on many commercial tenants, the uncertain manner in which courts will apply COVID-19 related eviction defenses, the suspension of evictions through May 29, 2020 (and possibly further), the anticipated backlog of court cases, and the potential reputational harm for attempting to evict a tenant during a national health crisis, a landlord may have an extra incentive to negotiate a viable lease amendment.     Many of the commercial lease issues related to the COVID-19 pandemic are unprecedented and unique. Prior to engaging in commercial lease negotiations, we recommend contacting your attorney for guidance and advice specific to your circumstances.  Scot B. Copeland is a board-certified real estate attorney available to assist you in commercial leasing and real estate matters.  He may be reached at scopeland@esclaw.com or 850.460.8916. 

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