Commercial leases are a critical source of income and financial stability for property owners, but the current evolving economic environment presents many risks. One of the primary concerns is when a tenant falls behind on...more
A guaranty secures the faithful and timely performance of a tenant’s obligations under a lease and ensures that the landlord can legally pursue the guarantor in the event of a tenant’s default. A lease guaranty can come in a...more
In Maryland the use of Indemnity Deeds of Trust are a simple path to save your borrowers $5 to $7 per thousand on their closing costs for commercial loans, but proper structuring of the transaction is essential to meet the...more
The commercial real estate industry is facing an impending tsunami of $2 trillion in debt maturities, with an estimated $929 billion coming due this year. If you will be caught in this net because the loan secured by your CRE...more
This article examines the importance of spousal consents in Arizona and New Mexico. Under Arizona law, lenders cannot enforce a guaranty against community property if the guarantor’s spouse did not consent to it. New Mexico...more
A federal court in Illinois recently denied cross motions for partial summary judgment as to franchisor 360 Painting, LLC’s claims for breach of contract by painting franchisee R. Sterling Enterprises, Inc. (RSE), and breach...more
If you are a mortgage lender who followed the recommendations in the first article in this series, then you should have a solid grasp of your mortgage portfolio. You have identified the relevant players and their respective...more
A recent opinion from the First Appellate District of Ohio is noteworthy for lenders for two reasons: (1) what language not to insert in a guaranty; (2) what information potentially needs to be relayed to a potential...more
Obligations reduced to a promissory note are often accompanied by a written guaranty. The law treats the guaranty as an independent obligation. A case recently decided by California’s First District Court of Appeal —...more
In a case litigated in the New York Supreme Court, the Court recently ruled that a private equity firm that acquired a mortgage loan made on the Maxwell Hotel in New York does not have the authority necessary to convert...more
When a tenant under an unexpired lease of nonresidential real property files a case under chapter 11 of the Bankruptcy Code, both tenant and landlord acquire rights and obligations that may contravene the terms of the lease...more
Borrower / Guarantor Liability Recourse – The borrower (or guarantor) is personally liable for the full amount of the loan, including any debt remaining after the collateral is foreclosed upon and sold. To satisfy the...more
The scenario is fairly common. A bank makes a loan to a business. The owners of the business guarantee the loan. The business defaults. The owners blame each other for the failure of the business. When the bank demands...more
On September 6, 2023, the U.S. Court of Appeals for the Second Circuit vacated and remanded a district court’s decision rejecting borrower defendants’ usury defense on grounds of waiver and collateral estoppel. The lender,...more
Many commercial landlords require that a guarantor secure the obligations and liabilities of a tenant as a prerequisite for entering into a lease. A lease guaranty is a contract between an individual or entity (guarantor)...more
The Federal Reserve's most recent Financial Stability Report addressed what many industry watchers had been convinced of for some time: the commercial real estate sector is in a precarious state. The Federal Reserve Bank...more
The Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, National Credit Union Administration, and Federal Deposit Insurance Corporation (collectively, the “Agencies”) issued a joint...more
Last summer, we wrote about New York City Administrative Code Section 22-1005, known as the Guaranty Law. This was a pandemic-era prohibition on enforcement of personal guaranties supporting commercial leases for defaults...more
The OCC, FDIC, NCUA and Fed have adopted a new Policy Statement on Prudent Commercial Real Estate Loan Accommodations and Workouts. The new policy statement updates, expands on and supersedes existing guidance from 2009,...more
Third-Party Releases are common in English law schemes of arrangement and restructuring plans, and US courts have so far indulged that approach in granting recognition. If Prospero’s plea to the audience at the...more
In the latest development regarding the validity and enforceability of keepwell deeds in the "Peking Founder” litigation, a Hong Kong court has awarded more than US$164 million by way of damages to one of the plaintiffs who...more
Recently, two important court decisions ruled that a New York City local law known as the Guaranty Law, which rendered unenforceable certain guaranties of commercial lease obligations, was unconstitutional. One month later,...more
A bill approved by the Maryland General Assembly would raise the maximum threshold amount of money that an indemnity deed of trust (IDOT) may secure on a loan and still benefit from recordation tax exemptions. House Bill...more
The saga continues now that a federal district court judge has ruled that N.Y.C. Local L. No. 55 of 2020 (also known as the Guaranty Law) is unconstitutional. The Guaranty Law, which sought to provide immediate monetary...more
In Holman Fenwick Willan LLP v Samady (2023) the High Court had to decide whether the words (contained in a payment plan agreed between a client and his law firm) "you agree and confirm that you are personally liable for and...more