The Bureau of Ocean Energy Management (BOEM) recently issued an Information to Lessees (ITL) regarding the potential applicability of new regulations issued by the Committee on Foreign Investment in the United States (CFIUS) to bids at the upcoming March 18th federal offshore lease sale (Lease Sale 254), which will offer for lease all available, unleased acreage in the Gulf of Mexico region.
A Lender in a real estate financing transaction often requires borrower’s counsel to opine on certain aspects of the transaction as a condition to the closing. Often, the negotiations between borrower and lender counsel are as contentious and extended as are negotiations regarding the loan documents themselves. The respective attorney opinion committees of the American College of Real Estate Lawyers, the American College of Mortgage Attorneys, and the Real Property, Trust and Estate Law Section of the American Bar Association have worked for years to produce opinion reports that are fairly balanced between the needs of lenders and borrowers and that can reduce the negotiations over real estate finance opinions. The first opinion report specifically addressing financing opinions in real estate transactions was the Real Estate Opinion Letter Guidelines published in 38 Real Prop. Prob. & Tr. J. 241 (2003). The next report was the comprehensive The Real Estate Finance Opinion Report of 2012 published at 47 Real Prop. Tr. & Est. L. J. 213 (2012) and The ACREL Papers 121 (Spring 2013). The Local Counsel Opinion Letters – A Supplement to the Real Estate Finance Opinion Report of 2012, 51 Real Prop. Tr. & Est. L. J. 167 (2016) directly addresses the particular issues facing local counsel in real estate finance transactions. The latest report, just published at 53 Real Prop. Tr. & Est. L. J. 163 (Fall 2018/Winter 2019), is Uniform Commercial Code Opinions in Real Estate Finance Transactions (the “UCC Opinion Report”). In addition to accessing these reports in the Real Property Probate and Trust Journal, the Legal Opinion Resource Center of the ABA Business Law Section contains these and many other opinion reports and resources.
Lenders who take security interests in securities accounts are familiar with the rules of Articles 8 and 9 of the Uniform Commercial Code that identify the governing jurisdiction for these transactions. Commencing April 1, 2017, those lenders and their counsel may also have to consult the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary (the “Convention”). While lenders involved in cross-border transactions will definitely need to factor the Convention into their thinking, a lender that believes it is only involved in U.S. financings will also need to understand the rules of the Convention.
Continue Reading UCC8, UCC9, and The Hague Convention