Excerpts from Ball Janik’s Real Estate and Land Use E-Newsletter
Hall Joins Ball Janik LLP
Ball Janik is pleased to announce that Damien R. Hall has joined our Land Use and Real Estate practice groups in the Portland office. Mr. Hall has worked for several years representing municipalities and owners, helping them navigate Oregon’s unique land use requirements and political sensitivities to controlled growth and land development. His background is in urban planning, and he regularly assists clients with real estate transactions, natural resources law, municipal law, and formation and organization of business entities. Read more here.
Best Practices Tip
Exact Legal Names Matter
When drafting a purchase agreement, getting both the “seller” and the “property” names correct are critical. As to the “seller,” the persons or entities listed as the “seller” must be the exact legal names of the persons or entities that hold legal title to the property so that the purchase and sale agreement can be specifically enforced. This can be determined by asking a title company for the last deed transferring title to the property. As to the “property,” the purchase agreement must accurately describe the fee interest in the property being acquired and any other real property interest need for the use of the property (such as an access easement critical to the use of the property). This can be determined by a careful review of the title report and the survey for the property during the due diligence period. To the extent the description of the property in the purchase agreement does not match the property intended to be purchased, the purchase agreement should be amended prior to the expiration of the due diligence period to correct the description of the property.
Congratulations to New Seasons in Opening Their 13th Store in Portland’s First Eco-District
Ball Janik LLP is pleased to share the news about New Seasons opening its 13th store in Portland’s first eco-district. Ball Janik has been working with New Seasons to secure its leases as it expands in the Portland metro area.
SAVE THE DATE: BALL JANIK’S 2014 Real Estate and Land Use Seminar
Save the date for next our annual Real Estate and Land Use Seminar – March 12, 2014. By invitation only. Click here for more information.
Best Practices Tip
Loan Document Review – Limited Recourse
When representing a borrower in the negotiation of a limited recourse loan, there are several things to keep in mind when reviewing loan documents. First, be sure that the applicable document’s general description of when the limited recourse provisions do not apply are not so broadly drafted so as to effectively make the loan a full recourse loan. Second, review the “bad boy” carve outs to be sure that they are truly “bad boy” acts. These is especially true with respect to violations of the Special Purpose Entity provisions which often include a default being the failure to pay debts when due (and thus would effectively eviscerate the limited recourse intent). Third, the violation of a “bad boy” act should only trigger liability to the extent of the loss suffered by the lender with respect to such “bad boy” act instead of being a flip to full recourse (although many loan documents now contain a flip to full recourse for certain “bad boy” acts, with the only ones that really are appropriate for a flip to full recourse are bankruptcy events). Finally, try to tie what is typically a separate broad indemnity contained elsewhere in the loan documents expressly to the limited recourse language to prevent a lender from using a broad indemnity clause to expand a borrower’s liability beyond the negotiated for limitations contained in the limited recourse provision.
Legal Notes
Any information obtained from this correspondence is strictly informational and not to be construed as legal opinion or advice by Ball Janik LLP or its attorneys on specific facts or circumstances nor a solicitation of legal business.