Structuring Real Estate Mortgage Covenants, Event of Default Provisions, Representations and Warranties
Drafting Provisions That Balance Borrower Protections With Lender Remedies

Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Real Property - Finance
- event Date
Tuesday, August 6, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will instruct borrowers' and lenders' counsel on structuring default provisions, representations and warranties, affirmative and negative covenants, and other provisions in commercial real estate loan documents. The panel will discuss the most recent trends and best practices.
Faculty

Mr. Homburger concentrates his practice in the area of real estate financing, development and investment, and he is particularly noted for his experience in sale/leaseback transactions and the use of advanced financing techniques. He served as an adjunct professor of law at The John Marshall Law School, where he taught a course in advanced real estate transactions. He is a frequent speaker and writer on topics such as sales and leaseback financing, commercial real estate leases and mortgages, and numerous others.

Ms. Dreyfus is a finance attorney with a practice that involves assets in every state, having represented every type of lender from large national banks and life insurance companies to small private lenders and conduit lenders. She also works with borrowers in acquisitions and dispositions as well as all their financing needs. The types of transactions for both lenders and borrowers cover the entire spectrum from straight mortgage and construction loans, CMBS loans, Fannie Mae and Freddie Mac loans, and mezzanine loans to lines of credit, syndicated loans, and sale-leaseback transactions. Ms. Dreyfus also represents clients in the selling and purchasing of loans, both individual notes along with portfolios, including an analysis of all the due diligence and existing financing documents.

Ms. O’Connell represents major investment banks, private equity funds, and other institutional lenders in the origination, acquisition, disposition, and restructuring of both mortgage and mezzanine construction, bridge, balance sheet, and securitized loans and preferred equity investments in connection with the acquisition, development, redevelopment, and refinancing of various asset classes throughout the U.S. In addition, she advises clients on structuring and negotiating complex loan transactions, from loan origination to the restructuring and work out of, and the exercise of remedies (including foreclosures and deed in lieu of foreclosure arrangements) under, such loans. Ms. O'Connell has experience working on the formation of joint ventures, corporations, limited partnerships, and limited liability companies in connection with her representation of developers, investors, property managers, and hotel owners in a variety of transactions that include the purchase, sale, and financing of various real estate assets.
Description
Strategically crafted loan documents give flexibility to the borrower and adequate protections and remedies for the lender. Carefully structured loan provisions can minimize disputes between the parties and reduce the risk of suit.
Default clauses should carefully define "default," "event of default," and the borrower's ability to cure defaults. Grace periods and notice and cure provisions may be critically important to the borrower, while the lender may want to maintain its ability to take immediate enforcement action.
Affirmative and negative covenants are often among the most negotiated provisions in a loan transaction due to their integral relationship with individual properties and borrowers. Financial covenants and material adverse change (commonly referred to as MAC) clauses have evolved over time but remain important tools for the lender to monitor property performance and trigger cash management.
Although property representations and warranties will vary among transactions, standard representations are in most loan agreements. There are also limitations (such as best knowledge) that borrowers seek to negotiate regarding the scope of representations and warranties.
Listen as our authoritative panel of real estate finance attorneys offers practical approaches for borrowers' and lenders' counsel for structuring loan covenants, event-of-default provisions, representations and warranties, and other loan provisions.
Outline
- Loan covenants
- Affirmative
- Negative
- Financial
- Default provisions
- Cross-default
- Insolvency-related events
- Due on sale; change of control
- Material adverse change
- Reps and warranties
- Relating to the property
- Non-physical aspects of the property
- Due diligence
- Loan documentation
- Other
Benefits
The panel will review these and other critical issues:
- What are borrowers' and lenders' best tactics for mitigating risk when negotiating and drafting financial covenants?
- What financial covenants are required by lenders?
- How can the borrower and lender each minimize risk when drafting or relying on default provisions?
- What are the standard property representations found in most facility agreements and what limitations do borrowers typically seek concerning representations?
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