Avoid Disaster in Real Estate Closings.

This programme of webinars provides a short and incisive review of some key topics relating to real estate, health and safety, planning and construction in the United Kingdom. In anticipation of the Commercial Rent (Coronavirus) Bill receiving Royal Assent and coming into force in March join us for a quick review of what it means, what debts are caught and how the arbitration scheme will work.

This CLE/CPE webinar will provide tax counsel with a thorough and practical guide to structuring strategies and tax considerations for foreign investors in U.S. real estate, outline best practices for determining the purchasing entity, and review tax planning opportunities in structuring the deal. The United States remains the most popular destination for foreign real estate capital investment. Critical for tax and investment advisers representing non-U.S. persons investing in U.S. real property is a comprehensive examination of optimal structures for the ownership vehicle and the mechanics of the purchase transaction itself.

Under a letter of credit, a financial institution agrees to honor a demand for payment made by a beneficiary at an applicant's request. LCs are used in various real estate transactions: to support an underlying performance obligation such as construction, or instead of cash when, for example, an escrow is required under a mortgage loan or a security deposit is required under a lease. There are two types of LCs--commercial and standby--both follow specific rules, forms, and procedures dictated by the UCC, ISP98, or UCP. Counsel must draft and review LCs compliant with these rules and procedures and know the roles of the applicant, issuer, and beneficiary in issuing and drawing upon LCs. Counsel should also understand the different uses for LCs and how to tailor LCs to each transaction, including expiry dates and "evergreen" clauses, whether the LC should be transferable or not transferable, and whether single or multiple draws will be permitted. Listen as Buddy Baker, Vice President at Investment Banking Division, Goldman Sachs Bank USA discusses negotiating and drafting the critical terms in LCs and provides guidance through the annotated ISP98 forms. The panel will highlight using LCs in various real estate transactions and issues in making draws on LCs. The panel will also discuss alternative credit enhancements such as surety bonds and credit insurance and the advantages and disadvantages of each.

In construction loans, the lender advances a small portion (or none) of the loan at closing since the proceeds are intended to fund construction costs as incurred. The conditions for advancing funds are often complicated because there are three participants--the lender, the borrower, and the contractor--and in part, because actual costs may vary from the construction budget. Most construction loan agreements provide for shifting cost savings for one item to another item in the budget. Construction budgets will usually incorporate "contingency" to be applied by the borrower to pay for cost overruns for items in the budget, subject to certain conditions. Documents must provide for retainage for unforeseen costs to ensure the completion of the project. A construction loan is unique for title insurance because disbursements are made post-closing, and property increases in value with each disbursement. Title insurance must be in place to cover the loan amount as it is funded. Counsel to the lender must structure the loan to ensure the priority of advances and procure title insurance (including appropriate endorsements at closing) consistent with that priority. Also, the borrower will typically need to obtain lien waivers or lien subordination as disbursements are made. Listen as our authoritative panel discusses the construction loan funding process and the need for increasing title insurance coverage as funds are disbursed. The panel will discuss budgeting and construction draw provisions in loan agreements, future advance clauses, and other practices for preserving the senior position of the mortgage over mechanic's liens and the title endorsements to obtain at closing.