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About the Course
Introduction
This CLE course will examine key provisions found in a construction completion guaranty and selected points that are subject to negotiation.
Description
A principal concern for the construction lender is that the borrower will fail to complete the project on budget, leaving the lender to oversee the construction and to fund cost overruns. Under a completion guaranty, the sponsor or other qualified third party agrees to complete the project and is responsible for the payment of cost overruns.
Construction lenders will typically include a carry component to the completion guaranty, and/or a separate carry guaranty, which requires the guarantor to pay debt service and other carry costs until the project is completed or reaches stabilization or until the loan is repaid.
Listen as our authoritative panel examines various aspects of completion guaranties and provisions that are high priority concerns for lenders and guarantors. The panel will also discuss provisions that can limit a guarantor's obligations under the guaranty and factors that might affect the ability of counsel to negotiate those provisions.
Presented By
Mr. Boland concentrates his practice in all aspects of complex commercial real estate and asset-based lending. He represents institutional and private lenders of all sizes in connection with commercial mortgage loans, construction loans, revolving credit lines, syndicated loans, mezzanine and equity financing and U.S. Small Business Administration loans. Mr. Boland advises lenders on a variety of small business and middle market loans, from review of credit approval, to structuring, drafting and negotiating commitment and loan documents, through closing and funding. His practice also includes drafting and negotiating documents for purchase and refinance of commercial owner-occupied and investment properties throughout New York City and Long Island.
Mr. Hanahan’s primarily focuses on commercial real estate development and project finance matters. He has significant experience representing developers and investors in the acquisition, development, and disposition of commercial real estate projects and representing lenders on construction and permanent loans and loan workouts. Additionally, Mr. Hanahan is experienced with all major real estate asset classes, and his practice has been national in scope, involving projects in over half of the states in the U.S. His real estate development practice includes involvement in all aspects of ownership and capital structures, including joint venture relationships, private placement equity raises, common and preferred institutional equity raises, mezzanine financing structures, and conventional and program financing. In Mr. Hanahan's lending practice, he represents lenders on construction and permanent financings, including single bank deals, syndications, participations, and loan workouts and foreclosures. In addition to his commercial real estate practice, Mr. Hanahan has experience with a wide range of other matters, including general business transactions, corporate and commercial law, litigation, bankruptcy, creditors’ rights, and land use.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Live Online
On Demand
Date + Time
- event
Friday, October 25, 2024
- schedule
1:00 p.m. ET./10:00 a.m. PT
- Purpose of completion guaranties
- Defining guarantor's construction obligations
- Damages for failure to complete
- Factors impacting the scope of guaranty
- Loan funding and other conditions to completion obligation
- Limitations on liability
- Liquidated damages
- Limitation of costs: hard costs vs. costs to carry the loan
- Termination upon foreclosure or bankruptcy sale
The panel will review these and other key issues:
- The extent of the guarantor's exposure to fund construction costs
- The guarantor's ability to access unfunded construction loan proceeds and reserves held by the lender
- The construction lender's remedies, including liquidated damages provisions
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