Commercial Real Estate Construction Finance & Banking

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7th Circuit Rules That Title Insurer Is Not Liable for Construction Liens Resulting From Lender’s Failure to Fund

The 7th Circuit has ruled that a lender is not insured by a title company for liens that arise after a construction loan became significantly out of balance and the lender stopped funding. In BB Syndication Services, Inc v....more

(US) Are Small Business Administration 504 Loans Exempt from High Volatility Commercial Real Estate Regulations?

As discussed in a prior blog , Basel III regulations governing high volatility commercial real estate (HVCRE) went into effect. The HVCRE rules require lenders to assign a higher risk weighting to loans for the acquisition,...more

Coastal Flooding and Resiliency: New Challenges and Opportunities for the Commercial Real Estate and Finance Industry

Virginia, North Carolina and other mid-Atlantic coastal communities are no strangers to severe weather and related storm surges and flooding. However, many of these communities are experiencing storm surges and tidal and...more

(US) High Volatility Commercial Real Estate: New Rules Have Effect on Cost and Availability of Mortgage Capital

On January 1, 2015, the final Basel III rules regarding regulatory capital for banks with greater than $500 million in assets and all savings and loan holding companies took effect. Basel III imposes new rules for high...more

Money, Dirt & Steel: 2014-2015 NC Real Property Litigation Update

A snapshot of noteworthy cases from the past year related to lending practices, property rights and construction in North Carolina. Money - Lending: Comprehensive waiver language in loan workout...more

BRA/EDIC Details Response to Audit

Under its newly-appointed director, Brian Golden, the Boston Redevelopment Authority and Economic Development and Industrial Corporation (BRA/EDIC) has released its 2014 Year in Review report entitled “Building the New Boston...more

Client Alert: Basel III Impact on Commercial ADC Loans

Basel III (updated capital rule) requires banks to maintain capital based in part on the riskiness of the assets in their portfolios. To the extent more capital is required to support a transaction, that transaction is likely...more

Midconstruction Refinancing: A Plunge Into The Void?

Construction loans typically do not get refinanced before a project is completed. A construction loan is short-term in nature and both the lender and its customer expect that they will stay on the project until the project is...more

December 2014 - Real Estate FOUNDATION

In this issue - The CERCLA Divisibilty Defense: Back from the Dead? - Springing Recourse for Breach of Solvency and Debt Payment Covenants? Does New York Need Cherryland Legislation? - Mid-Construction...more

General Contractor’s Prospective Waiver of its Lien Rights is Enforceable in California

In an opinion published in September 2014, entitled Moorefield Construction, Inc. v. Intervest Mortgage Investment Company, et al., D065464, the California Court of Appeal held an original contractor can contractually waive...more

Foreign Investment + Construction = Green Card

When you talk about construction and immigration it’s usually about undocumented workers and the underground economy, at least here in California and other border states. But a recent article I read wasn’t about poor, illegal...more

A Cautionary Tale for General Contractors

Construction lenders often go to great lengths to ensure their deeds of trust have priority over mechanic’s liens. Typically, as part of the construction loan process, general contractors are asked to sign documents...more

Using condo hotels for financing new hotel development: The traditional condo hotel structures as “non-securities”

A properly structured deal is critical to success - Perhaps the greatest satisfaction of working in the real estate industry is that a single transaction can produce so many winners. Properly structured deals can offer...more

Constitutional Default Interest Rate of 7% Rather Than 10% Default for Breach of Contract, Applies to Prejudgment Interest on a...

Addressing an issue of first impression, the Fourth Appellate District has determined that in a mechanic's lien foreclosure action against an innocent property owner who did not contract with the mechanic's lien claimant, the...more

Bankruptcy by the Developer/Owner: Mechanics Lien Rights May Still Prevail!

The rate of bankruptcies among construction industry participants is higher than some think. The bankruptcy of a developer creates an “automatic stay” under federal law preventing almost all collection activities, including...more

Mechanics Lien Subordination: Illinois Further Limits Construction Lenders’ Ability To Ensure Priority Against Mechanics Liens

On July 16, 2014, Illinois enacted Public Act 98-764 (Senate Bill 3023) (“SB 3023”), which amends the Illinois Mechanics Lien Act (770 ILCS 60/ et seq.) (the “Act”) to prohibit subordination of mechanics liens on Illinois...more

Will This SEC Rule Boost CRE Crowdfunding?

The Securities and Exchange Commission (SEC) recently adopted a new rule that marks good news for condo-hotel developers. In the last real estate cycle, condo hotels were popular among domestic and international investors in...more

Lender Cleared From Being Classified As a "Developer" Under the Interstate Land Sales Act

Poyner Spruill has been keeping an eye out for lawsuits where the plaintiffs attempted to lump lenders in with developers for liability purposes and we are glad to report the North Carolina Court of Appeals has refuted such...more

LIFE-CYCLE: A legal guide to developing, investing in and managing buildings sustainably (Global)

Real estate is a major consumer of resources. Everyone needs a place to live and work and we use real estate for that purpose. Modern life means that energy and other resources will be consumed in the development and...more

Reviving Construction Projects — How to Avoid Creating a Frankenstein Monster

Reviving dead or moth-balled projects presents risks and rewards. The rewards include a shorter ramp-up period. The risks include the revival of claims akin to the unintended creation of a Frankenstein monster. But those...more

Mortgage Lenders Can’t Jump Ahead of Mechanic’s Liens

In Weitz Co., LLC v. Heth, 223 Ariz. 442, 314 P.3d 569 (Ct. App. Nov. 26 2013), the Arizona Court of Appeals held that the plain language of Arizona’s mechanic lien statute, A.R.S. § 33-992(A), does not allow a lender to jump...more

In Site - Winter 2013/2014

Welcome to the Winter 2013/2014 edition of In Site. This edition covers the following topics: - Collateral warranties, third party rights and the decisions in Parkwood Leisure Ltd v Laing O’Rourke Wales and Royal...more

Arizona Court of Appeals Gives Contractor the Edge over Certain Lenders in Mechanic’s Lien Foreclosure Lawsuit

In lien foreclosure lawsuits involving lenders and contractors, priority is everything. Where you stand in terms of priority will not necessarily determine when you get paid, but rather will determine whether you get paid....more

OCC Lending Handbook Needs Parenting on Important Legal Topics

In an earlier posting, I reviewed the OCC’s new Commercial Real Estate Lending handbook . The purpose of the handbook is to give parenting – I mean guidance – on risks inherent in commercial real estate lending. On legal...more

New York Appellate Division Summaries; Real Estate.

Deed/Acknowledgment Trumps Parties Clause/Intent of Grantor: Owner, an individual, transferred property..... POA/Conveyance by Agent to Self/Will/Executor vs. Agent/Bank of America/Encumbrancer for Value/Deed Set Aside:...more

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