THE AMERICAN LAW INSTITUTE Continuing Legal Education. Modern Real Estate Transactions July 31 - August 2, 2014 Boston, Massachusets

Transcription

1 2331 THE AMERICAN LAW INSTITUTE Continuing Legal Education Modern Real Estate Transactions July 31 - August 2, 2014 Boston, Massachusets Table of Contents

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3 2333 THE AMERICAN LAW INSTITUTE Continuing Legal Education Modern Real Estate Transactions July 31 - August 2, 2014 Boston, Massachusets PROGRAM FACULTY PARTICIPANTS STUDY MATERIALS TABLE OF CONTENTS Page xiii xv VOLUME 1 ACQUISITIONS 1. Some Letter of Intent Cases and Sample Letter of Interest Provision Regarding Legal 1 Effect By Mark A. Senn Some Letter of Intent Cases 3 Letter of Interest Provision Regarding Legal Effect 6 2. Purchase and Sale Agreement By Kathryn Cochrane Murphy 3. Purchase and Sale Agreement for Real Property 35 By Peter Aitelli Table of Contents 38 Study Material 41 Exhibit A: Legal Description of the Land 78 Exhibit B: List of Personal Property 79 Exhibit C: Due Diligence Documents 80 Exhibit D: ALTA Survey Requirements, 2005 Form 83 Exhibit E: Tenant Estoppel Certificate 88 Exhibit F: Seller Estoppel Certificate 92 Exhibit G: Statutory Warranty Deed 96 Exhibit H: Bill of Sale 97 Exhibit I: Assignment and Assumption of Leases 98 Exhibit J: Assignment and Assumption of Assumed Agreements 100 Exhibit K: Assignment of Permits, Intangible Property, and Warranties 102 Exhibit L: Seller s Closing Certification 103 Exhibit M: FIRPTA Affidavit: Certificate of Transfer Other than an Individual 104 Exhibit N: Tennant Notice Letter 106 Exhibit O: Purchaser s Closing Certification 107 Exhibit P: Indemnification Agreement 108 Exhibit Q: Rent Roll 111 Exhibit R: List of Service Contracts 112 Exhibit S: Post-Closing Guaranty 113 v 7

4 Agreement for Purchase and Sale of Equity Interests in Real Property 115 By Peter Aitelli Table of Contents 118 Study Material Easements and Other Servitudes By John G. Cameron, Jr. 6. Shopping Center Acquisition Checklist 7. Insurance DRAFTING 8. Drafting By Philip D. Weller Table of Contents 234 Study Material Some Thoughts on Drafting 259 By Philip D. Weller Table of Contents 260 Study Material Writing Good, Legal Sense and More or Less By Mark A. Senn 281 MANAGEMENT AND CONSTRUCTION 11. Property Management and Leasing Agreement By Philip D. Weller 12. Asset Management Agreement By Philip D. Weller The Wonderful World of Construction By John G. Cameron, Jr. Table of Contents 316 Study Material Agreement between Owner and Design Professional for Construction Manager Projects 381 Utilizing Phased Construction By John G. Cameron, Jr. Agreement 383 Addendum to Standard Form of Agreement between Owenr and Contrator (Form A ) 424 Addendum to General Conditions of the Contract for Construction Design-Build Contract By John G. Cameron, Jr. 16. Construction Agreement By John G. Cameron, Jr. vi

5 Subcontract Agreement 491 By John G. Cameron, Jr. Table of Contents 493 Study Material Agreement for Management and Construction Services By John G. Cameron, Jr. 533 CHOICE OF ENTITY AND INCOME TAXATION 19. Form of Limited Liability Company Agreement 569 By Philip D. Weller Table of Contents 572 List of Defined Terms 575 Study Material The Importance of Choice of Entity in the World of Planning for Entrepreneurs, and 605 Particularly Real Estate Entrepreneurs and Tammara F. Langlieb Table of Conents 606 Study Materials Acquisition, Construction, Operation and Ownership of Real Estate: Capitalized Expenditures, Amortizable Expenses and Deductible Expenses 22. Operating Agreement of LLC 23. Operating Agreement of LLC Optional Provisions 24. Like-Kind Exchanges 759 Table of Contents 761 Study Material The Like Kind Exchange: A Current Review 839, Brian J. O'Connor, Norman Lencz, and Tammara F. Langlieb Table of Contents 840 Study Material Tax Planning for Real Estate Transactions in the Current Economy 913 Tabel of Contents 914 Study Material Real Estate Preserving Capital Gains, Dealer Issues 1007 Table of Contents 1009 Study Material Investmemt Tax Credits vii

6 Low-Income Housing Credit and Rehabilitation Credit Series LLCs 1099 By Philip D. Weller Table of Contents 1100 Study Material REMIC Limitations on the Work Out of Troubled Mortgages By Louis W. Ricker amd Richard R. Goldberg 1131 VOLUME 2 FINANCING 32. Tips for Negotiating a Loan Application (With Forms) 1137 By Everett S. Ward Study Materials 1139 Appendix Appendix Appendix Multi-State Loan Checklist for Local Counsel 34. Fundamentals of Construction Lending 1163 By Philip D. Weller Study Outline 1165 Appendix: Closing Memo/Checklist Subordinate and Mezzanine Real Estate Financing By Thomas R. Fileti 36. Perfection of Security Interests in the Ownership Interests of Borrowers Under a Mezzanine Loan; Article 9 vs. Article CMSA Suggested Form Mezzanine Intercreditor Agreement 38. Mezzanine Loan Intercreditor Agreement (Sample) 39. Mezzanine Loan Intercreditor Agreements: Suggestions for Future Market Realities 40. Complex Cash Management Agreement between Borrower, Senior Lender, and Junior Lender 41. Participating Loan Agreement 42. Players in the Universe of Securitized Loans viii

7 2337 ECONOMICS 43. Understanding Real Estate Economics 1341 By Thomas F. Kaufman Table of Contents 1342 Study Material 1343 Exhibit 1: Computations and Examples 1360 Exhibit 2: Select Asset Class Performance 1362 Exhibit 3: National Council of Real Estate Investment Fiduciaries National Property Index 1363 Exhibit 4: NPI Returns and Graph 1364 Exhibit 5: Power Point Examples 1365 Presentation Slides: Real Estate Economics 1372 Presentation Slides: Real Estate Lease Accounting 1380 LEASES 44. Landlord-Tenant Relationships 1385 Table of Contents 1386 Study Material Lease Review Checklist By Philip D. Weller 46. Office Lease 47. Negotiated Build-to-Suit Industrial and Warehouse Lease Agreement By Peter Aitelli 48. Tenant Improvements and Work Letters By Jay A. Epstien 49. Construction of Base Building and Tenant Improvements By Richard A. Fineman and Richard R. Goldberg 50. Rent, Pass-Throughs, and Escalations An Overview By Morton P. Fisher, Jr. and Richard R. Goldberg 51. Retail Lease Agreement 52. Big Box Leasing Questions and Answers 53. Big Box Agreement of Lease 54. Sample Ground Lease By Kathryn Cochrane Murphy 55. Financeable Ground Leases: An Overview By Nancy R. Little ix

8 Assignment and Subleases: Have I Got the Right Form? By Mark A. Senn 57. Tenant Options and Rights of First Offer/Refusal Sample Provisions and Comments By Linda A. Striefsky BANKRUPTCY 58. Recent Trends in Real Estate Bankruptcy Cases 1791 Study Material 1793 Presentation Slides Disclosure Statements: Confirmation and Cramdown of Chapter 11 Plans 1827 By Barbara J. Houser, Douglas Wade Carvell, and Holly D. F. Meister Table of Contents 1829 Table of Cases 1831 Study Material Adequate Protection, the Automatic Stay and Use of Cash Collateral 61. Classification of Claims and Interests 1907 Table of Contents 1909 Table of Cases 1910 Study Material Confirmation of Chapter 11 Plans Consensual Plans 63. Cash Collateral Use and Use, Sale, and Lease of Property in Bankruptcy 64. Preferences and Fraudulent Transfers 65. Section 363 Sales after Clear Channel 66. Postpetition Attorneys' Fees to Unsecured Creditors 67. Bankruptcy for Nonbankruptcy Lawyers 68. Tenant Bankruptcies 69. Landlord Bankruptcies 70. Restructing Debt on Distressed Real Estate x

9 Restructuring Real Estate Mortgage Debt Under the Bankruptcy Code 2069 By David R. Kuney Study Materials 2071 Presentation Slides The Landlord's Rent Claim in Bankruptcy By David R. Kuney 73. Protecting the Landlord's Rent Claim in Bankruptcy: Letters of Credit and Other 2219 Issues By David R. Kuney Study Materials 2221 Presentation Slides ETHICS 74. Sample Engagement Letter By Kathryn Cochrane Murphy 75. Advance Waivers of Conflicts By Kathryn Cochrane Murphy 76. Sample Consent to Conflict Letter By Kathryn Cochrane Murphy 77. Attorneys' Liability for Opinion Letter By Mark A. Senn Real Estate Finance Opinion Report of Submitted by Kathryn Cochrane Murphy Table of Contents 2294 Study Material 2296 xi

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11 2341 THE AMERICAN LAW INSTITUTE Continuing Legal Education Modern Real Estate Transactions July 31 August 2, 2014 Boston, Massachusetts PROGRAM Thursday, July 31, :30 a.m. Registration and Continental Breakfast 8:25 a.m. Administrative Remarks ALI CLE Staff Video Webcast Segment A 8:30 a.m. Introduction and Overview 8:40 a.m. Purchase Contracts from Letters of Intent through Due Diligence, including Survey and Title Review What representations and warranties should your client give or receive? What due diligence will the seller provide or allow? 10:30 a.m. Networking and Refreshment Break 10:45 a.m. Purchase Contracts from Due Diligence to Closing 11:30 a.m. Purchase Contracts Defaults 11:45 a.m. Income Tax Consequences of Purchases and Sales, including Like-Kind Exchanges 12:20 p.m. A Focus on Tax-Advantaged Credits, Including Low-Income Housing Credits 12:30 p.m. Lunch Break Video Webcast Segment B 2:00 p.m. Negotiating the Entity Transaction: Limited Liability Companies and Other Entities How does the money work? Who is in control? Exit Strategies 3:30 p.m. Networking and Refreshment Break 3:45 p.m. S Corporations vs Partnerships and LLCs: Tax Considerations in the Choice of Entity 4:15 p.m. Tax Planning for Capitalization vs. Deductibility of Costs 4:30 p.m. Asset Management and Property Management Agreements 5:00 p.m. Adjournment for the Day; Networking Reception for Registrants and Faculty Friday, August 1, :00 a.m. Networking Session and Continental Breakfast Video Webcast Segment C 8:30 a.m. Negotiating the Commercial Lease: The Key Provisions for the Landlord and the Tenant What is included in common expenses? What audit rights should a tenant have? xiii

12 2342 9:45 a.m. Tenant Defaults, Security Deposits, and Guaranties 10:15 a.m. Networking and Refreshment Break 10:30 a.m. Tax Planning for Tenant Improvements 10:45 a.m. Using Assignments and Subleases as Part of an Exit Strategy 11:15 a.m. Options: Expansion, Contraction, Purchase, Rights of First Refusal, and First Offer 11:45 a.m. Ground Leases Why do owners ground lease? What financing is available when there is a ground lease? What happens when there is a default? How should you reset the rent options? 12:30 p.m. Lunch Break Video Webcast Segment D 2:00 p.m. The Current Lending Market and Pitfalls in Non-Recourse and Special Purpose Entity Provisions 2:45 p.m. Construction Industry Contracts: Delivery Systems, Jobsite Safety, and Party Concerns Issues and Drafting Tips 3:30 p.m. Networking and Refreshment Break 3:45 p.m. Letters: Opinion, Engagement, and Others, including 5:00 p.m. Adjournment for the Day Saturday, August 2, :00 a.m. Networking Session and Continental Breakfast Video Webcast Segment E 8:30 a.m. Recent Trends in Real Estate Bankruptcy Cases Single Asset Cases Credit Bidding Individual Bankruptcy Cases Absolute Priority Rule Issues Sales in Bankruptcy Cases Automatic Stay 9:30 a.m. Leases in Bankruptcy Maximizing a Lease Claim Clear Channel Issues Letters of Credit 10:15 a.m. Networking and Refreshment Break 10:30 a.m. Dollars and Cents of Real Estate 11:00 a.m. Key Ethical and Professional Conduct Issues: An Update on New Rules Conflicts of Interest Identifying the Client Multijurisdictional Practice Issues Non-Lawyer Practitioners Future of the Law Practice 12:00 p.m. Adjournment Total 60-minute hours of instruction: 16.25, including one hour of ethics and professionalism. All times listed except start, break, and lunch times are approximate and subject to change. xiv

13 2343 THE AMERICAN LAW INSTITUTE Continuing Legal Education Modern Real Estate Transactions July 31-August 2, 2014 Boston, Massachusets PLANNING CHAIRS Kathryn Cochrane Murphy, Esquire Krokidas & Bluestein LLP 600 Atlantic Avenue Boston, MA Mark A. Senn, Esquire Senn Visciano Canges P.C Lincoln Street, Suite 4500 Denver, CO Philip D. Weller, Esquire DLA Piper LLP (US) 1717 Main Street, Suite 4600 Dallas, TX FACULTY Peter Aitelli, Esquire Shartsis Friese LLP 18 th Floor One Maritime Plaza San Francisco, CA John G. Cameron, Jr., Esquire Dickinson Wright PLLC Suite Ottawa Avenue, N.W. Grand Rapids, MI Richard R. Goldberg, Esquire Ballard Spahr LLP 51 st Floor 1735 Market Street Philadelphia, PA Thomas F. Kaufman, Esquire Goulston & Storrs, P.C. Suite K Street, NW Washington, DC The Honorable Margaret A. Mahoney Chief Judge U.S. Bankruptcy Court 201 St. Louis Street Mobile, AL Stefan F. Tucker, Esquire Venable LLP th Street, NW Washington, DC Michael D. Hamilton, Esquire DLA Piper LLP (US) Suite South Hope Street Los Angeles, CA Please go to for biographical information about this faculty. xv

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15 Alabama Ms. Angela Parks Director Regulatory Programs Alabama State Bar 415 Dexter Avenue PO Box 671 Montgomery, AL / / FAX Alaska Ms. Mary Ellen Ashton MCLE Administrator Alaska Bar Association 550 W. 7 th Avenue, Ste 1900 Anchorage, AK / / FAX ashtonm@alaskabar.org Arizona Ms. Carolyn de Looper Membership Administration & Services Manager State Bar of Arizona 4201 N. 24 th Street, Ste 100 Phoenix, AZ / / FAX carolyn.delooper@staff.azbar.org Arkansas Ms. Dana L. Rowlett Arkansas CLE Board of the Supreme Court of Arkansas 2100 Riverfront Dr, Ste110 Little Rock, AR / / FAX California Mr. George Leal The State Bar of California Office of Certification 180 Howard Street San Francisco, CA / / FAX providers@calbar.ca.gov Colorado Ms. Elvia Mondragon Colorado Supreme Court Board of Continuing Legal & Judicial Education Ralph L. Carr Judicial Center 1300 Broadway, Ste 510 Denver, CO / e.mondragon@csc.state.co.us cleinfo@csc.state.co.us STATE MCLE CONTACTS Delaware Ms. Margot Millar Commission on CLE of the Supreme Court of Delaware Carvel State Office Building 820 N. French Street, 11 th Fl Wilmington, DE / / FAX margot.millar@state.de.us Florida Ms. Michelle Francis Education Compliance & Accreditation Manager The Florida Bar 651 E. Jefferson Street Tallahassee, FL / / FAX mfrancis@flabar.org Georgia Mr. Jeffery R. Davis Georgia Commission on Continuing Lawyer Competency 104 Marietta St NW, Ste 100 Atlanta, GA / / FAX hip/cle/ Hawaii Ms. Debbie Blanton MCLE Administrator Hawaii State Bar Association 1100 Alakea St, Ste 1000 Honolulu, HI / / FAX dblanton@hsba.org Idaho Ms. Annette Strauser MCLE Administrator Idaho State Bar PO Box 895 Boise, ID / x / FAX astrauser@isb.idaho.gov Illinois Ms. Karen Litscher Johnson Director, MCLE Board of the Supreme Court of Illinois 200 W Madison St, Ste 3420 Chicago, IL / / FAX mcle@mcleboard.org Indiana Ms. Julie L. Orzeske Indiana Supreme Court Indiana Commission for CLE 30 S Meridian St, Ste 950 Indianapolis, IN / / FAX jorzeske@courts.state.in.us Iowa Ms. Trinity M. Braun-Arana Asst. Director for Boards and Commissions Office of Professional Regulation 1111 E. Court Avenue Des Moines, IA / / FAX trinity.braunarana@iowacourts.gov Kansas Ms. Shelly Sutton Kansas CLE Commission 400 S Kansas Ave, Ste 202 Topeka, KS / shelly.sutton@kscle.org Kentucky Mr. Clifford Timberlake Accreditation Coordinator Kentucky Bar Association 514 W Main St Frankfort, KY / x / ctimberlake@kybar.org Louisiana Ms. Kitty Hymel MCLE Administrator Louisiana Supreme Court Committee on MCLE 2800 Veterans Memorial Blvd Suite 355 Metairie, LA / Toll Free 504/ FAX kittyh@lasmcle.org Maine Ms. Susan Adams CLE Coordinator Maine Board of Overseers of the Bar PO Box 527 Augusta, ME / / FAX sadams@mebaroverseers.org Minnesota Ms. Liz Vanderbeek CLE/BLC Administrator Minnesota State Board of CLE 180 E 5 th St, Ste 950 St. Paul, MN / / FAX lvanderbeek@mbcle.state.mn.us Mississippi Ms. Tracy Graves CLE Administrator Mississippi Commission on CLE PO Box 369 Jackson, MS / / tgraves@mssc.state.ms.us Missouri Mr. Christopher C. Janku Director of Programs The Missouri Bar 326 Monroe Street PO Box 2355 Jefferson City, MO / / FAX mcle@mobar.org Montana Ms. Kathy Powers MCLE Administrator State Bar of Montana 7 W 6 th Ave, Ste 2B PO Box 577 Helena, MT / / FAX kpowers@montanabar.org Nebraska Ms. Carole McMahon-Boies Director, Judicial Branch Education 521 S 14 th St, Ste 200 Lincoln, NE / / FAX carol.mcmahonboies@nebraska.gov Nevada Ms. Toni Sarocka Nevada CLE Board 457 Court St, 2 nd FL Reno, NV / / FAX nevadacleboard@sbcglobal.net Revised: 7/18/2014

16 New Hampshire Ms. Dana Hochgraf NHMCLE/NH Bar Association 2 Pillsbury St, Ste 300 Concord, NH / / FAX dhochgraf@nhbar.org New Jersey Supreme Court of New Jersey Board on Continuing Legal Education Richard J. Hughes Justice Complex 25 Market Street 8 th Floor, North Wing Trenton, NJ / webmaster.mailbox@judiciary.st ate.nj.us New Mexico Ms. Anita Otero Court Regulated Programs Administration New Mexico MCLE PO Box Albuquerque, NM / / FAX mcle@nmmcle.org New York Ms. Elise Anne Geltzer New York State Unified Court System 25 Beaver St., Room 888 New York, NY /NYS-4CLE ( ) 212/ FAX cle@courts.state.ny.us North Carolina Ms. Debra Holland Associate Director North Carolina Continuing Legal Education PO Box Raleigh, NC / / FAX dholland@ncbar.gov North Dakota Ms. Debbie Bowen Director State Bar of North Dakota CLE 504 N Washington St. Bismarck, ND / / FAX debbie@sband.org STATE MCLE CONTACTS Ohio Ms. Susan Christoff The Supreme Court of Ohio Commission on CLE 65 S. Front St. Columbus, OH / Christos@sconet.state.oh.us Oklahoma Ms. Beverly S. Petry MCLE Administrator Oklahoma Bar Association PO Box Oklahoma City, OK / / FAX beverlyp@okbar.org Oregon Ms. Denise Cline MCLE Coordinator Oregon State Bar SW Upper Boones Ferry Rd Tigard, OR / / FAX dcline@osbar.org Pennsylvania Ms. Sue Miller Provider Coordinator Pennsylvania CLE Board PA Judicial Center 601 Commonwealth Ave, Ste 3400 Harrisburg, PA / / FAX 800/ x3230 pacleb@pacle.org Puerto Rico Ms. Yanis Blanco Santiago Continuing Legal Education Program Supreme Court of Puerto Rico PO Box San Juan, PR / / FAX Rhode Island Ms. Holly Hitchcock, M. Ed. Judiciary of Rhode Island John E. Fogarty Judicial Annex 24 Weybosset St., 3 rd Floor Providence, RI / / FAX South Carolina Ms. Mary A. Germack The Supreme Court of South Carolina Commission on CLE & Specialization PO Box 2138 Columbia, SC / / FAX commcle@bellsouth.net Tennessee Ms. Judy Bond-McKissack Tennessee Commission on CLE & Specialization 221 Fourth Ave. North, Ste. 300 Nashville, TN / / FAX info@cletn.com Texas Ms. Nancy R. Smith Director of MCLE State Bar of Texas PO Box Austin, TX / or 800/ / FAX nsmith@texasbar.com Utah Ms. Sydnie W. Kuhre MCLE Board Administrator Supreme Court Board of CLE Utah Law & Justice Center 645 South 200 East, Ste. 312 Salt Lake City, UT / / FAX skuhre@utahbar.org Vermont Ms. Martha I. Hicks-Robinson Director MCLE Board 111 State Street, Ste 9B Montpelier, VT / / FAX JUD-AttyLicensing@state.vt.us Virginia Ms. Gale M. Cartwright Director of MCLE Virginia State Bar 1111 E. Main St., Ste. 700 Richmond, VA / / FAX mcle@vsb.org Virgin Islands Ms. Hinda Carbon Virgin Islands Bar Association PO Box 4108 Christiansted, VI / / FAX executivedirector@vibar.org Washington Ms. Kathy Todd MCLE Manager Washington State Bar Association th Ave., Ste 600 Seattle, WA / / FAX kathyt@wsba.org West Virginia Ms. Hope L. Gresham MCLE Coordinator The West Virginia State Bar 2006 Kanawha Blvd., East Charleston, WV / / FAX greshamh@wvbar.org Wisconsin Ms. Jacquelyn B. Rothstein Director Board of Bar Examiners Mail: PO Box 2748 Madison, WI Shipping: 110 E. Main St., Ste. 715, Tenney Building Madison, WI / / FAX jacquelyn.rothstein@wicourts.gov tammy.mcmillen@wicourts.gov Wyoming Ms. Marie Ellis Wyoming State Bar 500 Randall Ave. PO Box 109 Cheyenne, WY / / FAX mellis@wyomingbar.org Revised: 7/18/2014