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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Thursday, February 15, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will discuss strategies for buyers and sellers negotiating survival clauses in commercial real estate transactions. Our experienced panel will offer critical insight into crucial terms for inclusion, duration, pitfalls to avoid, and how survival provisions interplay with holdbacks to minimize risks beyond closing.

Faculty

Clint Kakstys
Member
Sills Cummis & Gross, PC

Mr. Kakstys’ practice focuses on the acquisition, disposition and financing of commercial properties. He represents owners of properties throughout the U.S. in connection with purchases and sales, with particular emphasis on shopping center transactions. Mr. Kakstys also represents institutional lenders in the origination of commercial mortgage loans for their securitization and balance sheet lending platforms. His practice encompasses financing a variety of property types throughout the country, including retail, multifamily, office, hotel and industrial assets, and he has experience with a wide array of financing structures and deal features, including subordinate and mezzanine debt, 1031 and reverse 1031 exchanges, leasehold mortgages, industrial development agency interests and tenancy-in-common ownership. Mr. Kakstys also has experience representing clients in connection with loan purchases, sales and modifications and commercial leases and subleases.

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Charles H. Royce
Partner
K&L Gates, LLP

Mr. Royce represents clients in the areas of commercial real estate transactions and leasing. His practice includes representing property owners, investors, developers, lenders, and borrowers in the acquisition and disposition of commercial and public properties, drafting and negotiating purchase and sale agreements, and preparing covenants, easements, and financing documents. Mr. Royce also has experience in all aspects of commercial leasing, including office, retail, and industrial leasing and related documentation. 

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Description

The merger doctrine holds that when parties convey real property by a deed, all prior covenants, agreements, proposals, stipulations, etc., between the parties regarding the conveyance are merged into the deed and superseded. The doctrine is based on the premise that the deed represents the final and entire contract between the parties and, when strictly applied, prevents any prior promise from surviving beyond escrow. The only obligations between the parties are those outlined in the deed.

Survival clauses allow buyers and sellers to sidestep this potentially troublesome practice by providing a means to address the balance of potential risks that can only resolve after the closing has occurred. Issues like indemnification for expensing relating to a respective party's time of ownership and "true-ups" of outstanding taxes or utility expenses typically remain unresolved by the closing date and, as such, must survive.

Likewise, buyers cannot accept the seller's representations and warranties without a means of recourse for breach. Increasingly, parties are relying upon holdback provisions to address potential liability for breach of these various survival clauses.

Listen as our panel of seasoned real estate practitioners discusses critical considerations when negotiating survival clauses and how holdback provisions can impact their effectiveness in commercial real estate sales agreements.

Outline

  1. The merger doctrine
  2. Survival clauses
    1. What survives closing
    2. Duration
    3. Considerations for sellers
    4. Considerations for buyers
  3. Interplay with other provisions
  4. Holdbacks and other options for buyer remedies

Benefits

The panel will review these and other relevant issues:

  • How can parties effectively address survival language in transactions that terminate without closing?
  • How can counsel for buyers and sellers structure survival clauses for "as-is" sales?
  • What practical considerations should counsel for buyers and sellers make when negotiating the scope and duration of survival clauses?