Some tenants think that subleasing office space is a more attractive alternative to signing a direct lease in an office building. For example, a tenant may find better space or a shorter lease term with a sublease versus direct lease. However, tenants should consider some potential challenges to subleasing before signing a letter of intent…. View Article
HIDDEN CASH FLOW DISTRIBUTION RESTRICTIONS IN LOAN DOCUMENTS (COMPARATIVE ANALYSIS FOR BORROWERS AND LENDERS)May 8, 2018 |
When a borrower places a lien on a commercial real estate (“CRE”) asset as part of a lending transaction, part of the collateral granted includes an assignment of the rents generated by the asset (often defined broadly in the loan documents, “Rents”). Unless a CRE loan is made subject to some form of pre-default cash… View Article
CONSIDER ADVANCE PERMISSION FOR UTILITY EASEMENTS: The grant of utility easements, even if within the ordinary course of business or beneficial to a property, may fall within a transfer restriction, or other restriction, in loan/financing documents. Consider whether the following language (or other language appropriate in your circumstances) might be a helpful addition to your… View Article
Before our clients sign contracts for the purchase or sale of commercial real estate, we confirm with local counsel what the real estate tax adjustment or proration will consist of. Many parties will stick to a general boilerplate provision in a contract providing that real estate taxes will be adjusted as of the closing date…. View Article
Picture it — your client is in a rush to complete diligence on a potential acquisition and hates to pay for the cost of an ALTA survey in the event they decide not to move forward. I know many acquisition lawyers have experienced this at least once (particularly on mid-market deals). Some may assume that… View Article
In this installment of our Transaction Tip series, we offer a reminder about owner’s title insurance policies. When you (or your client) plans to transfer real estate to a wholly owned subsidiary, remember to read your ALTA title insurance jacket to confirm coverage will continue. Section 1(d) of the 2016 ALTA Title Insurance Jacket defines… View Article
In this installment of our Transaction Tip series, we share a list of some questions to consider when drafting and revising notice provisions in contracts. Are the maximum number of delivery options included? Overnight courier (without naming a specific courier), hand delivery, certified mail, fax and/or email are commonly included. In all cases, it is… View Article
The word “herein” is ubiquitous in contracts. When time permits, and your client allows, it is best practice to search for the term before executing a draft of any form of contract — loan documents, joint venture agreements etc. Often times, the word “herein” is contained in an enumerated section, paragraph or sub-section. Without using… View Article
We are pleased to announce that our Trending Report will include a series of “transaction tips” for drafting and reviewing commercial real estate and business contracts. Our first transaction tip in this series concerns representations and warranties in recorded documents. A variety of documents may be recorded in the land records where a property is… View Article
The scope of restrictions that will cause a loan default or the borrower or guarantor to have partial or full recourse liability for a loan—otherwise known as non-recourse carve-outs—has evolved and expanded, according to JR Kasman founder Jennifer Kasman. Since these transactions can have such high stakes, Jennifer gave us five tips for negotiating entity transfer restrictions in your loan documents.
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